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North Carolina GOP Chairman Faces Charges Related to Insurance Regulation

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The chairman of North Carolina’s Republican Party was indicted, alongside the owner of a multinational insurance firm, for allegedly planning to pay hundreds of thousands of dollars in corrupt campaign contributions to the head of the state’s insurance regulator.

(Related: Life Insurance Company Owner Faces Wall Street Journal Scrutiny)

Robin Hayes, a former five-term congressman, conspired with North Carolina entrepreneur Greg Lindberg to bribe the insurance commissioner to replace a deputy who was critical of Lindberg’s company, Global Bankers Insurance Group, according to the indictment, unsealed on Tuesday.

Hayes and Lindberg, who is also the founder and chairman of the investment firm Eli Global LLC, made their initial court appearances before U.S. Magistrate Judge David Keesler in Charlotte. Two other men charged — John Gray, a consultant for Lindberg, and Eli Global executive John Palermo — appeared as well. Neither Global Bankers nor Eli Global was charged.

The plan was to have the deputy commissioner dismissed or replaced by Palermo, the U.S. said. Mike Causey, the elected commissioner of the state’s insurance department, who wasn’t charged, reported the attempt to law enforcement in January 2018, according to the U.S. attorney’s office.

The regulator didn’t immediately return a call seeking comment.

’Crossed the Line’

Lindberg, Gray and Palermo secretly met with the commissioner at a regional airport as well as at Lindberg’s home to discuss removing the deputy in exchange for campaign contributions, the U.S. said. It said Lindberg offered as much as $2 million, and that Hayes transferred a “down payment” of $250,000 to the commissioner’s re-election campaign from money Lindberg had previously donated to the North Carolina Republican Party.

“These men crossed the line from fundraising to felonies when they devised a plan to use their connections to a political party to attempt to influence the operations and policies of the North Carolina Department of Insurance,” FBI Special Agent John A. Strong said in a statement.

Republican Rep. Mark Walker, who wasn’t indicted, was also swept up in the probe, according to a report in Politico, in which he denied wrongdoing.

Hayes “steadfastly denies the allegations” and looks forward to clearing his name, his lawyer, Kearns Davis, said in a statement. Davis said Hayes has a “long and distinguished career in public service” and “volunteered his time helping to support the party.”

Lindberg “is innocent of the charges in the indictment and we look forward to demonstrating this when we get our day in court,” Anne Tompkins, Lindberg’s attorney, said in a statement.

Alexandra Davidson, an attorney for Palermo, didn’t immediately return a call seeking comment.

The charges against Lindberg and Palermo “pertain to the conduct of those individuals, not the actions of Eli Global or its portfolio of companies,” Eli Global said in a statement.

The portfolio of companies includes Colorado Bankers Life and Bankers Life Insurance Co. of Florida

Global Bankers, which manages several insurance companies from its headquarters in Durham, said it’s been cooperating with the U.S. Attorney’s Office in its investigation. “We are focused on continuing to serve our policyholders, distribution partners, clients and businesses, as usual,” Global Bankers said.

Jeff Hauser, a representative of the state GOP, declined to comment.

The charges include bribery and conspiracy to commit honest-services wire fraud. Hayes is also charged with three counts of lying to the FBI.

On Monday, the party announced that Hayes, 73, would retire as chairman effective June 8, citing a recent hip surgery.

The party was already embroiled in controversy. North Carolina’s elections board in February ordered a new vote in a U.S House district because of evidence that the results in November were tainted by fraud. The move followed the board’s probe of claims of absentee-ballot fraud orchestrated by a political operative on then-GOP candidate Mark Harris’s payroll during last year’s midterm election.

According to the indictment, during a meeting between Lindberg, Gray and the commissioner in February 2018, Lindberg complained that the deputy commissioner “was deliberately and intentionally and maliciously hurting my reputation with other regulators.” Lindberg and Gray requested the deputy be replaced or supervised by Palermo, the U.S. said.

Palermo emailed Lindberg last July to say he believed the commissioner would “make the changes we agreed to,” according to the indictment. “I do not think he will walk away from the opportunity in front of him,” Palermo allegedly said in the email.

By then, Causey was already cooperating with investigators.

— Read Global Bankers Affiliate Makes $120 Million Life Insurer Purchaseon ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.