Dear SEANC members,

Last night I joined more than 30 of my fellow SEANC members in a protest in front of the home of Ken Eudy, where Senate Democrats were gathering with donors for a fundraiser in their honor. Who's Ken Eudy, you ask? He's the CEO and co-founder of Capstrat, a lobbying and public relations firm in Raleigh.

Eudy stopped registering as a lobbyist in 2007 when ethics reform put restrictions on lobbyists' gifts and money to legislators. But he runs a lobbying company. Now he criticizes SEANC for calling him out as engaging in what looks an awful lot like “pay-to-play.” Capstrat was awarded a huge contract in April of this year by state appointees at the NC Ports Authority. While numerous state employees will receive pink slips this year, the state managed to find money for Capstrat’s public relations and advertising contract – a $375,000 a year contract renewable for five years. A surprising move considering the economic climate and the fact that the NC Ports Authority lost $6 million last year.

Worse yet, while the House leadership in the General Assembly wanted to prohibit state contractors from donating to politician's campaigns, the Senate Democrats refused to prohibit this practice, known by most as "pay-to-play." So now, a mere four months later, the CEO of Capstrat hosted a fundraiser at his home guaranteeing one-on-one access to Senate President Marc Basnight and Senate Majority Leader Martin Nesbitt. So Eudy thinks SEANC is wrong to call him out on this behavior? Come on! Capstrat got a rich contract. They hosted a huge fundraiser. This does not pass the smell test. And like Blue Cross' no-bid, sweetheart secret contract with the State Health Plan, state employees are not afraid to call you out on it.

Sincerely,

A.D. Hall
District 11 Member
Department of Transportation

SEANC Executive Director Dana Cope and SEANC members will protest Blue Cross and Blue Shield of North Carolina contractor Capstrat CEO Ken Eudy’s “pay-to-play” fundraiser for Senate Democrats on Aug. 24.

SEANC members are concerned about political influence over state contracts in light of Blue Cross’ no-bid, cost-plus sweetheart contract with the State Health Plan. The Blue Cross contract allows the SHP to be billed for everything from the CEO to public relations efforts. Capstrat also holds government contracts with the N.C. State Ports Authority, UNC-Pembroke and a multi-million dollar contract for a teen tobacco use prevention and cessation program.

“It’s hypocritical for politicians to take campaign contributions from government contractors while at the same time pounding their chests talking about the ethics bill and how they’ve cleaned up government,” Cope said.

Last week, Cope called on Sens. Marc Basnight (D-Dare) and Martin Nesbitt (D-Buncombe) and former Gov. Jim Hunt to cancel their participation in Tuesday’s fundraiser.

State employees and retirees are asked to join SEANC for the protest on Tuesday, Aug. 24, from 6 - 7 p.m. at 807 Harvey Street, Raleigh. Contact SEANC Political Director Kevin LeCount at 919-833-6436 or with questions or to let us know you’re coming.

Directions: From Capital Blvd. (downtown Raleigh), take the Wade Ave exit, take a right on St. Mary’s St. and a right on Harvey.  Please note that Harvey Street is closed at Glenwood Ave due to construction.

On Aug. 19, SEANC Executive Director Dana Cope spoke out in front of the General Assembly calling for the cancellation of a “pay-to-play” fundraiser with government contractor Capstrat CEO Ken Eudy. The fundraiser scheduled for next Tuesday will benefit Senate Democrats.

“This fundraiser gives state employees and the public the impression that this is a “you scratch my back, I’ll scratch your back” event,” Cope said.

Cope called on Sens. Marc Basnight (D-Dare) and Martin Nesbitt (D-Buncombe) and former Gov. Jim Hunt to cancel their participation in Tuesday’s fundraiser and announced that SEANC members will protest outside the event.

An Aug. 11 Wilmington Star-News article reported that Capstrat CEO Ken Eudy, a government contractor, was asked by a member of the North Carolina State Senate to host the fundraiser.

SEANC is concerned about political influence over state contracts in light of Capstrat client Blue Cross and Blue Shield of N.C.’s no-bid, cost-plus sweetheart contract with the State Health Plan. The Blue Cross contract allows the SHP to be billed for everything from the CEO to public relations efforts. This sends an alarming message that campaign contributions from government contractors like Capstrat unfairly influence who receives the state’s business – regardless of what’s best for taxpayers and the state’s working families. Capstrat’s government contracts include the N.C. State Ports Authority, UNC-Pembroke and a multi-million dollar contract for a teen tobacco use prevention and cessation program.

Cope also said he has heard from legislative folks in the General Assembly about possible lobbying by Eudy, who is not a registered lobbyist. On Wednesday, Cope sent public records requests to Sens. Marc Basnight (D-Dare) and Dan Blue (D-Wake) and Rep. Hugh Holliman (D-Davidson) asking for copies of any electronic and written correspondence between the legislators, their staff and Eudy between Jan. 1, 2008, and when the request is fulfilled.

State employees and retirees are asked to join SEANC for the protest on Tuesday, Aug. 24, from 6 - 7 p.m. at 807 Harvey Street, Raleigh. Call SEANC Political Director Kevin LeCount at 919-833-6436 with questions or to RSVP.

Dear SEANC members,

On July 24, the statewide EMPAC met and made an important decision to not endorse any legislative candidates for the November 2010 election. I want to share with you why that decision was made in a nearly unanimous vote.

In a budget deficit year where there was no money for raises, COLAs or benefit enhancements, legislators kept telling SEANC members they were supportive of state employees and working families – specifically supportive of moving the State Health Plan oversight away from control of the General Assembly to an executive agency. But no one had the courage to schedule a vote!

Lack of oversight by the General Assembly has allowed Blue Cross and Blue Shield of North Carolina to raise our health care out-of-pocket costs and reduce our benefits. It started with a no-bid, secret contract that allows Blue Cross to charge basically whatever they want to the state and to have us, the taxpayers, pay for it.

It would have cost legislators nothing to make the change—except for campaign cash from Blue Cross and Blue Shield of North Carolina. Legislators took a walk on state employees and retirees when they chose Blue Cross over working families. Now it’s EMPAC’s turn to take a walk.

Legislators never seem willing to ask Blue Cross to give up even a dime in tough economic times; they only look to state employees and retirees. When it came time to vote on transferring health plan oversight, the Democratic House and Senate leadership said it wasn’t the right time.

For the legislative leaders, it’s never the right time to fund the pay plan, provide affordable family health insurance and certainly not the right time for collective bargaining. I’ve been hearing this for 15 years – even in times of economic prosperity.

Isn’t it odd that it never seems to be the right time for legislators to do the right thing, except when it’s time to interview for an EMPAC endorsement?

We are aware that this decision may be controversial to our contributors who have built EMPAC into a force to be reckoned with in North Carolina. As a result of this decision, we should have more than $1 million to support our true friends in 2012, and individual legislators will have two years to decide who is more important—working families, big insurance or their legislative leadership.

Although EMPAC is making no legislative endorsements this year, we are encouraging the area EMPACs to provide opportunities for our members to get to know the legislative candidates in their areas through interviews or forums. In late August, the statewide EMPAC will be interviewing the candidates for North Carolina’s US Senate seat with plans to make an endorsement.

Thank you for helping to make EMPAC one of the largest political action committees in North Carolina. I hope you will support this bold decision and help us send a loud message to the legislative leadership in November.

Thank you,
Mark Dearmon
State EMPAC Chairman

SEANC is perplexed that Gov. Bev Perdue, who says jobs are her top priority, is looking at privatizing the state’s information technology infrastructure.  Privatization will surely lead to job cuts, including the state’s 600 IT employees, and most likely will ship those jobs overseas, where many IT operations are outsourced.  SEANC urges the governor to keep North Carolinians working and to rely on the experts already in state government to look for efficiencies and opportunities to streamline resources.

The 2010 legislative session finished Saturday, July 10, at 5:32 a.m. As legislators sought and passed ethics reform, SEANC successfully worked to maintain important employee protections and personnel information during investigations.

This session, in the midst of another budget deficit, SEANC was able to avoid broad-based furloughs, pay cuts and major layoffs for state employees. In addition, SEANC helped ensure that the university system makes quarterly reports of personnel actions and pay increases to OSP and OSBM, which will prevent favoritism such as Mary Easley’s 88 percent pay raise in 2008. SEANC was also able to prohibit privatization of prison maintenance staff and help the deaf and blind schools restore Sunday night services and staff for their residential students.



July 9, 2010
Legislators Set to Wrap-Up Session
See Budget Provisions Affecting State Employees and Retirees Below

Legislators are planning to finish up final business this weekend and are reportedly heading home Saturday. SEANC lobbyists are working long hours, continuing to push hard for employee protections through legislation and, as always, in defensive mode to keep harmful, last-minute provisions out of legislation at the eleventh hour. Look for more next week in a wrap-up of the session.

The House and Senate finalized the state budget on June 30, and Gov. Bev Perdue then signed the budget into law before the July 1 fiscal year began.

SEANC was able to fight off a mandatory 20-hour furlough for all state employees that legislators considered late last week. This would’ve been a blow to state employees who last year experienced double-digit increases in out-of-pocket State Health Plan costs.

Another victory includes SEANC’s work to ensure that the university system makes quarterly reports of personnel actions and pay increases to OSP and OSBM, which will prevent favoritism such as Mary Easley’s 88 percent pay raise in 2008.

SEANC is outraged by a proposed 1 percent budget cut to all agencies, giving managers flexibility to make these cuts. Managers need to cut administrative costs and vacant positions (except those that would jeopardize public safety) before sending North Carolinians to the unemployment line. These cuts would take place beginning July 1, 2010, even though Congress may provide $519 million to North Carolina that would make these cuts unnecessary.

SEANC was able to prohibit privatization of prison maintenance staff, however legislators are directing DOC to develop a pilot program on privatization of probation services.

Other issues of concern for SEANC include:
-Reducing retirement system contributions by $139 million, resulting in a lower employer contribution and jeopardizing the funding level of the pension fund
-Granting furlough authority at universities

Watch a video from the June 17 House Insurance Committee, where Democratic legislators refuse once again to take action and move oversight of the State Health Plan away from the legislature.

Today North Carolina’s Supreme Court reversed a July 2008 decision of the North Carolina Court of Appeals regarding SEANC’s public records lawsuit against former State Treasurer Richard Moore. SEANC initiated the public records request and subsequent February 2008 lawsuit after a March 2007 Forbes magazine article, “Pensions, Pols, Payola,” featured Moore, insinuating a “pay-to-play” system in the then-$75 billion pension fund.

“This ruling is a victory for state employees’ retirement security, open government and public accountability from its elected officials,” said SEANC Executive Director Dana Cope.

At issue was whether or not SEANC had filed “a claim upon which relief can be granted,” known as a 12(b)(6) from the North Carolina Rules of Civil Procedure when the association sued Treasurer Moore under the Public Records Act. On March 23, the Supreme Court of North Carolina heard oral arguments in SEANC’s public records lawsuit against Department of State Treasurer and former Treasurer Moore.

The case now heads back to the trial court where SEANC will continue to request the remainder of the documents sought and determine if investment decisions were made based on politics or the people of North Carolina.

SEANC was supported in its appeal by the North Carolina Association of Broadcasters (NCAB) and the North Carolina Press Association (NCPA) with Friends of the Court briefs.

SEANC continues to advocate in the General Assembly to end the sole fiduciary system where one person makes all the investment decisions. Less than a handful of states still use a sole fiduciary to oversee their pension fund. SEANC has been a leading voice to move North Carolina from a sole fiduciary system to one where a board makes investment decisions, thus eliminating the possibility of investment-related favoritism or political gain.

Mildred Bartley-Fox, who’s suffered debilitating effects from multiple sclerosis and is a former state employee herself, knows first-hand the value of the Department of Health and Human Services’ Vocational Rehabilitation and people like her rehab specialist Kim Stewart. She shared her story with 400 SEANC members, who rallied at SEANC Lobby Day in Raleigh today, to save Stewart’s job and other services that are in jeopardy due to the state’s budget deficit. Stewart’s job will end soon due to reduction-in-force cuts at DHHS if the legislature doesn’t act to save it.

“Because of these independent living services, I have freedom, I have hope,” Bartley-Fox said to a cheering crowd. “I’m no longer bound to the confines of my four walls.”

SEANC member Jimmy Davis, a surveillance officer, warned of the dangers of privatizing probation and parole. The House has a provision to study privatization of those services.

“Companies put profits over people,” said Davis, who told of two medium-security prisons that failed due to privatization because they were cutting corners to maximize their profits. “When you are a state employee, your loyalty is to the people of North Carolina.”

“I’m not a quitter, and neither are you,” Davis told SEANC members. “So ask the General Assembly to not quit on us, either – ask them to fix the problems, don’t privatize!”

N.C. State employee Marcelle Kennedy knows the strain of budget cuts – the cashier’s office where she works has already lost four positions over the past few years, while enrollment has continued to climb. And the university system is facing up to 1,700 more cuts this year.

“Our students are our customers and we want to provide them with the best customer service possible – it’s a matter of pride among employees,” said Kennedy, who said there is often a long wait on the phone or in the office because of fewer staff members.

SEANC Executive Director Dana Cope told members that legislators will say there’s no money this year. “Tell legislators to open up their secret contract with Blue Cross and ask them to stop paying out millions of dollars to private contractors,” said Cope.

The U.S. Senate may vote as early as this week on a bill allowing public safety workers across the nation the right to collectively bargain with public employers. The bill would have the most impact in North Carolina and Virginia, where collective bargaining of public employees is not allowed.

“The public safety bill could mean savings for North Carolina citizens who pay more than $500 million in annual turnover costs for public employees due to below market wages,” SEANC Executive Director Dana Cope said.  “Less turnover in public safety jobs means more experienced professionals in these positions and safer communities which is the ultimate goal.”

To ask Sen. Hagan's support for the bill, you can call her office at 202-224-6342.

More than 250 people participated in the North Carolina House Appropriations Committee meeting Monday night at NC State University to provide their input into the House budget proposal due out in June. With the backdrop of $800 million in budget cuts to be made to balance the budget, several groups requested to keep spending cuts to a minimum.

SEANC Legislative Affairs Director Ardis Watkins attended the meeting, but noted that only about 25 percent of the budget writers had attended. “Asking for public comment is great,” Watkins said, “but people aren’t here to hear it.”

Watkins urged the House to reconsider proposals allowing the University of North Carolina system to furlough workers, while at the same time spending hundreds of thousands of dollars for a consultant to recruit a new UNC president. SEANC also spoke out against the proposal of a pilot program to study privatizing probation services – a waste of money that could put our communities’ safety at risk if privatization occurs.