Ethics panel may probe Hilton, LaRoque loans

RALEIGH — A leading state House Democrat wants a Republican lawmaker investigated by his colleagues about two economic development nonprofit groups that he operates and were scrutinized by an outside advocacy group this year.

Now the House's leader says he'll ask an ethics panel to review situation to determine if an investigation is needed after N.C. Rep. Stephen Laroque provided loans for two state lawmakers including Catawba County's N.C. Rep. Mark Hilton.

House Minority Leader Joe Hackney, D-Orange, asked House Speaker Thom Tillis on Wednesday to create a bipartisan commission to review the activities of LaRoque, R-Lenoir.

"I believe the House of Representatives and the public deserve a fuller examination of the allegations made against Rep. LaRoque," Hackney wrote Tillis, adding that recent media reports have raised questions about LaRoque's business practices. "We should hold the members of our chamber to a higher standard of behavior to help build public faith in government."

Hackney said the media reports "appear to point to a pattern of violating several guidelines for nonprofits as well as the rules" for the loan program in which LaRoque's nonprofits participate.

But Tillis, R-Mecklenburg, wants more specific allegations from Hackney about LaRoque's conduct, said Charles Thomas, Tillis' chief of staff. In the meantime, Tillis will forward Hackney's letter to the General Assembly's permanent ethics committee, Thomas said.

The Raleigh news and Observer reports that Tillis didn't comment directly on LaRoque during a town hall forum in Morrisville.

"We'll have the legislative committee on ethics look at it and decide on whether it's in their purview," he said. "If not then we'll determine what action, if any, that we'll take."

LaRoque is the executive director of East Carolina Development Co. and Piedmont Development Co., which has received more than $8 million through a U.S. Department of Agriculture small-business lending program, according to the group North Carolina Policy Watch. He received annual compensation as much as $195,000 through one of the nonprofits, according to the group.

In August, he defended having family members on the board of directors and making loans through the nonprofits to two lawmakers — Sen. Debbie Clary. R-Cleveland, and Hilton. Policy Watch also questioned a loan one of the nonprofits made to LaRoque's for-profit development company.

He declined to comment to The Associated Press on Wednesday at his Raleigh legislative office. But the co-chairman of the House Rules Committee criticized the Policy Watch investigation during an August news conference and called the group "a liberal propaganda tabloid."

The 12-member Joint Legislative Ethics Committee is comprised of six House and six Senate members. There are an equal number of Democrats and Republicans on the committee, but two Republicans are co-chairmen. Hackney requested a new House commission with bipartisan leadership be formed to examine LaRoque's actions. State law also allows the permanent ethics committee to initially investigate LaRoque behind closed doors.

"An open bipartisan review of the allegations ... best serves the people of North Carolina and our fellow House members," Hackney wrote.