A federal judge has rejected efforts to dismiss charges against North Carolina businessman Greg Lindberg and two associates in what would be the state’s biggest case of political bribery.
Thursday’s ruling by U.S. District Judge Max Cogburn Jr. came just over two weeks before the scheduled Feb. 18 start of a trial in Charlotte.
Lindberg and associates John Gray and John Palermo, along with then-GOP Chairman Robin Hayes, were indicted last spring on charges of conspiracy and bribery for their alleged attempts to bribe Republican state Insurance Commissioner Mike Causey. They pleaded not guilty.
The indictment described a scheme to funnel $2 million to Causey’s reelection campaign to persuade him to dump a senior deputy commissioner who oversaw regulation of one of Lindberg’s companies. Some of the money was to go through the state Republican Party.
Hayes, 74, pleaded guilty in October to lying to federal investigators and faces up to six months in prison. His sentencing is expected after the upcoming trial.
Lindberg is a major Republican donor who owns Durham-based Eli Global LLC, an investment company, as well as Global Bankers Insurance Group, a managing company for several insurance and reinsurance companies.
For his part, Causey has cooperated with the FBI throughout the case.
In a 16-page order, Cogburn systematically rejected defense arguments to dismiss the charges.
▪ Attorneys argued prosecutors failed to show the three defendants offered Causey a thing “of value . . . in connection with any business.”
“It strains credulity to suggest the funds placed in the Commissioner’s campaign account do not hold ‘value’ for the Commissioner,” Cogburn wrote.
▪ Lindberg’s lawyers relied on a 2016 case in which the U.S. Supreme Court overturned the bribery conviction of former Virginia Gov. Bob McDonnell and established higher standards for proving corruption.
The high court said the definition of “official acts” was too broad. Lindberg’s attorneys said: “The government’s entire case . . . turns on a legally flawed understanding of what constitutes an ‘official act.’”
Cogburn disagreed. He cited a case where federal appeals judges rejected a similar argument.
“(S)taffing decisions generally — and the decision to assign an employee to regulate GBIG in particular — are a formal exercise of official power,” he wrote.
▪ Defense attorneys also argued that the indictment failed to show that Causey actually “made a decision or took an action ‘on’ [the staffing change] or agreed to do so.” Cogburn disagreed.
“Once Palermo and Lindberg noted the Commissioner would receive $2 million in campaign contributions for the change, the Commissioner ‘confirmed’ he would ‘make the switch when . . . the check cleared’,” Cogburn wrote. “. . . Therefore, the indictment alleges sufficient facts to find that the Commissioner agreed to take official action.”
▪ He also shot down the argument that the First Amendment allows people to use campaign contributions “to advocate for particular policies.”
“To be sure, the Constitution protects a donor’s right to support a candidate ‘on the basis of their views and what they intend to do or have done’,” Cogburn wrote, adding that courts have allowed regulation of campaign contributions to prevent “quid pro quo corruption or its appearance.”
“Thus, the First Amendment will not serve as a safe harbor to protect defendants from being prosecuted for quid pro quo corruption,” he wrote.
▪ He rejected several claims made separately by Palermo, including an allegation of “prosecutorial misconduct” and alleged entrapment.
Cogburn called that “a last-ditch effort.”
“The evidence does not clearly establish entrapment,” he wrote.
In an email, Jack Knight, an attorney for Gray, said, “We respectfully disagree with the court.”