Request for more 'flexible' regulations followed Lindberg donations

A lobbyist for at least one of indicted mega-donor Greg Lindberg‘s companies pitched a series of insurance reforms at the statehouse last year within months of Lindberg associates offering hundreds of thousands of dollars in campaign donations to funds controlled by General Assembly leaders.

The proposal called for more flexibility in the state's complex insurance regulations, including changes in rules that limit the ways insurance companies can invest their money.

A lobbyist for the state Department of Insurance and a DOI senior deputy commissioner met with Senate staffers on the measure, killing off key provisions, according to sources familiar with those conversations.

In the prior months, Lindberg had donated nearly $300,000 to a campaign fund supporting House Republicans, and an associate had offered similar donations to a fund for Senate leadership, which were rebuffed.

In an indictment unsealed this week, federal prosecutors said Lindberg, frustrated by the way the DOI regulated his businesses, pushed the state's insurance commissioner throughout much of 2018 to fire an unnamed senior deputy commissioner at the department and replace her with one of his own people.

Commissioner Mike Causey had been working with federal agents, though, recording conversations that are now key to the bribery charges against Lindberg, two of his associates and North Carolina Republican Party Chairman Robin Hayes, who is accused of routing money to Causey through the state GOP to get around campaign finance laws.

Lindberg's insurance businesses enjoyed a better relationship with the DOI under Causey's predecessor, Wayne Goodwin, who now chairs the North Carolina Democratic Party. The Wall Street Journal reported extensively in February on the way Lindberg's insurance companies moved money around, investing much higher percentages in other businesses he owned than is normal for the industry.

The Journal suggested this allowed him to expand his empire of hundreds of companies and to buy multimillion-dollar homes and a yacht, accusations Lindberg has pushed back against through spokespeople.

The Journal also reported that North Carolina regulators under Goodwin made "a rare exception" for one of Lindberg's companies, letting it invest up to 40 percent of its assets in Lindberg affiliates instead of the usual 10 percent.

Causey said this week that, when he replaced Goodwin at the DOI in early 2017, he "heard concerns from staff" that one of Lindberg's companies was treated differently than other businesses the department oversaw.

Normally, regulators who needed to talk to a company simply reached out to the company, Causey said. With Global Bankers Insurance, all correspondence flowed through Ray Martinez, who was a senior deputy commissioner under Goodwin.

"There may have been a valid reason, I don't know," Causey said.

Martinez left the DOI and joined Global Bankers Insurance as the head of regulatory and strategic affairs in February 2017, soon after Causey took office. Martinez resigned from the company in February of this year. Attempts to reach him, including attempts through Global Bankers both before and after his resignation, have not been successful.

A spokesperson for Global Bankers said Friday that Martinez wasn't the department's "sole contact" for the company under Goodwin and that executives "frequently communicated with individuals at various levels of NCDOI during this time period.”

Martinez is one of two deputy commissioners under Goodwin who went to work for Global Bankers, and Goodwin has confirmed he did consulting work for Lindberg after leaving office.

Goodwin has denied any wrongdoing and said in repeated written statements that he's cooperated with federal investigators and been told he's not a target of their inquiry. He has refused repeated WRAL News interview requests on his dealings with Lindberg, including requests made months before the indictments came down in March or were unsealed this week.

In a statement released Friday by a personal spokesman, Goodwin said Causey was "trafficking in innuendo" when he named Martinez as the department's go-between for Global Bankers.

"Commissioner Causey is deflecting from the disaster within the Republican Party related to their chairman allegedly attempting to bribe a public official; the people of North Carolina deserve better," Goodwin said in the emailed statement.

Legislative proposal

The legislative package that Global Bankers lobbyist Rod Perkins shopped in the state Senate before last year's short session complained that North Carolina had "less flexible standards governing the investments of insurance companies" than other states.

A bill draft that the DOI said came in on behalf of all of Lindberg's insurance companies would have made significant changes to state codes governing the ways insurance companies can invest their money.

States regulate insurance investments because companies need to keep enough money on hand to pay claims.

In the end, the DOI backed some of the proposals as part of a modernization effort that passed the General Assembly, but its team convinced legislative staff not to move forward on others.

"There were a couple of minor things that DOI supported," a source with knowledge of those conversations said this week. "The bulk of the ask was something DOI had major problems with."

Causey said it was clear that a lot of work went into the proposal and that he'd heard from a lot of people in the insurance industry that North Carolina needed to modernize its statutes. He said he was willing to listen, but the package was too grandiose to do at once.

Causey also said there were things in the proposal "that no one on our team agreed with," including language that pertained to the affiliated investments issue detailed in The Wall Street Journal's report.

Attempts to reach Perkins, the Global Bankers lobbyist, have not been successful. He registered with the state again this year to lobby for Global Bankers, and he was listed on the company's website Friday as the company's government relations leader.

But his company email bounces back as undelivered, and the telephone number listed on his lobbyist disclosure forms rings to an electronic directory that he doesn't seem to be in.

Other lobbyists registered for Global Bankers, now and last year, either didn't return messages seeking comment or declined to comment for this piece.

A Global Bankers spokesman has not answered specific questions about the legislative package but issued a statement saying the company "supported insurance modernization and reform legislation that would make North Carolina a more competitive domicile for insurers."

Those reforms were "generally consistent" with model insurance law provisions backed by the National Association of Insurance Commissioners, the spokesman said.

Unlimited donations

From late September 2017 to early January 2018, Lindberg gave $290,000 to a House Republican Caucus fund.

The fund can take unlimited donations, is headed by House Speaker Tim Moore and supports Republican election efforts in the state House.

Lindberg had been a political unknown, but he quickly made a name for himself by writing six- and seven-figure checks to North Carolina political groups. His previous giving had gone mostly to a PAC that supported Goodwin's unsuccessful re-election campaign in 2016, but Lindberg's 2017 donations went mostly to Republicans.

Also, in late 2017 or early 2018, a Lindberg associate approached the state Senate Republican majority's fundraising operation, offering donations similar to what went to the House fund, a source involved in those conversations said this week. That offer was declined, the source said, because "it just didn't feel right."

Global Bankers brought its legislative proposal to the Senate around the same time, according to a separate source familiar with those talks. There was "no indication that there was ever a direct connection between donations and that ask," the source said.

The proposal sat without action for months, the source said, until the DOI reached out to discuss it. After conversations with the DOI killed off much of the package, "I don't think anybody tried to resurrect it," the source said.

Several lawmakers involved in crafting insurance legislation said this week they didn't recall Global Bankers' request or that they remembered it only vaguely.

The DOI team seems to have met primarily with Senate staff, advising against things they didn't like and rolling other issues into House Bill 382, a 40-page bill that described itself as "an act to incorporate (National Association of Insurance Commissioners) model language" into the state's insurance code.

Rep. Dana Bumgardner, R-Gaston, the bill's sponsor and one of the chairmen of the House Insurance committee last year, said he remembered the proposal from Lindberg's company only vaguely.

"I know they requested some things," he said, adding that he didn't think the proposal went anywhere and that he didn't know whether the DOI had a position on it.

Moore said he didn't recall the package.

"I don't even remember seeing any bills," he said this week.

Sens. Rick Gunn, R-Alamance, and John Alexander, R-Wake, both Senate Insurance committee chairmen, said Thursday that they didn't remember the package at all. Senate President Pro Tem Phil Berger declined to say whether Lindberg or his associates ever asked for anything from the legislature, saying he didn't want to comment during an open federal investigation.

Bumgardner said no one tried to offer him anything to pass the legislation.

"Wouldn't do them any good if they did," he said.