A federal jury Thursday found North Carolina's largest political donor guilty of trying to bribe the state's insurance commissioner.
Greg Lindberg, who has given North Carolina political groups more than $5 million in recent years, offered Commissioner Mike Causey up to $2 million more to ease regulations on Lindberg's insurance companies.
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He didn't know Causey was recording those conversations for the FBI. There were hours of recordings from secret meetings at small airports and a closed restaurant, and more than 100 phone calls between Causey, Lindberg and his associates.
The jury also found John Gray, 69, of Chapel Hill, a Lindberg consultant with strong political ties in North Carolina, guilty of helping set up the deal. Both men face sentences now on one count of bribery and another of conspiracy to commit honest services wire fraud.
The maximum sentences would be 30 years, but they're likely to get considerably less time than that.
The jury found John Palermo, 64, a Chatham County Republican official who worked for Lindberg's empire of companies and was also charged in the case, not guilty on those charges.
Former North Carolina Republican Party Chairman Robin Hayes had already pleaded guilty in this case, admitting that he lied to federal investigators about the deal, which included money flowing through the state party but ultimately bound for Causey's campaign coffers.
Causey said in a written statement Thursday that the verdict "shows that the Office of the Commissioner of Insurance is not for sale."
"These men thought they could buy changes to North Carolina Department of Insurance personnel, policies and procedures to benefit Lindberg's businesses," John Strong, special agent in charge of the FBI's Charlotte office, said in a statement.
"The defendants devised an elaborate plan to make a hefty campaign contribution to an elected official to secure favorable action. This was not a lapse in judgment. It was a deliberate bribery attempt and a clear violation of federal law,” U.S. Attorney Andrew Murray said in a statement. “Public corruption is a threat to our way of life, and if left unchecked, it can tear apart the very fabric of our country."
Lindberg, 49, will appeal, but his conviction will reverberate in North Carolina politics. He's the single largest donor to committees backing Lt. Gov. Dan Forest's gubernatorial run. He also spent heavily in 2016 in an unsuccessful effort to re-elect then-Insurance Commissioner Wayne Goodwin, who is now chairman of the North Carolina Democratic Party.
Lindberg's companies had a deal with the Department of Insurance under Goodwin that let them to invest far more of their money in companies Lindberg himself owned than is standard for the insurance industry. When Causey came into office, the department sought to unwind that deal. Lindberg tried to ingratiate himself with Causey, and he lobbied the legislature to change state insurance laws.
The department has since taken control of three Lindberg-owned insurance companies and one re-insurance company, citing liquidity issues. There's still a separate, ongoing federal investigation into Lindberg's business dealings.
Goodwin worked briefly as a consultant for Lindberg after he left the Department of Insurance. Two of his top deputies, Louis Belo and Ray Martinez, went to work for Lindberg's empire of companies.
Goodwin is running against Causey again this year. Neither he nor Forest has been accused of any crimes, and Goodwin has said he cooperated with federal investigators.
Andrew Dunn, Forest's campaign spokesman, said Thursday that the lieutenant governor had no comment on the verdict.
"We don’t feel the need to comment on a trial that doesn’t have anything to do with us," he said.
The North Carolina Democratic Party, which got $750,000 from Lindberg in 2018, declined comment as well. Gov. Roy Cooper's campaign is making hay off the verdict, launching a digital ad campaign this week, shortly after Forest won the Republican nomination to challenger Cooper.
“Dan Forest continues to try and hide his involvement in the scandal, but reality hits hard today – his biggest donor was just found guilty on all counts for bribing a government official," Cooper campaign spokeswoman Liz Doherty said in a statement.
Republican 6th District Congressman Mark Walker has been caught up in the matter as well. He took donations from Lindberg and called Causey on his behalf. He was not charged but got a mention in Lindberg's indictment as "public official A."
Palermo's legal team said in a statement Thursday that the "lack of evidence against our client was deafening in its absence," and they thanked the jury for its hard work in reaching the not guilty verdict. Palermo was on trial with Gray and Lindberg, but the three had separate legal counsel.
"The fact remains, in over 50 hours of undercover audio and video recordings and over 100 monitored telephone calls, Mr. Palermo never engaged in an explicit quid pro quo," his attorneys said in the statement. "Mr. Palermo was simply an employee tasked with administrative functions who was in the wrong place at the wrong time."