Final of three parts

Voters sent former state Rep. Richard Morgan packing last year, but he vows that Moore County and North Carolina have not heard the last of him.

"I haven't forgotten who the enemy is," Morgan says. "The enemy is outside this county. They have hoodooed a lot of folks in Moore County. There'll be a day of reckoning on this."

Among others, Morgan was referring to Art Pope, a former state representative from Wake County whose company, Variety Stores, contributed hundreds of thousands of dollars to an anti-Morgan group called the Republican Legislative Majority of North Carolina (RLM) from 2004 to 2006.

"They spent $600,000 to defeat me," Morgan says.

Morgan, who had represented Moore County since 1990, was defeated by Joe Boylan, a political newcomer and hair salon owner, in a bitter Republican primary last May. He had a lot of outside help, including the leadership of the state party itself.

Pope says he doesn't consider Morgan an enemy. He refers to Morgan as "an opponent" because of his deal that kept former House Speaker Jim Black in power. Pope and Boylan both say Morgan lost because of his own actions and that he could not defend his record.

And the Morgan-Pope feud may not be over just yet.

Last year, Morgan filed a complaint with the State Board of Elections, accusing RLM of accepting illegal corporate contributions from Pope's company for a coordinated campaign that targeted Morgan and some of his allies for defeat in Republican primaries. He contended that RLM violated a new state law restricting the use of corporate contributions for electioneering within 30 days of a primary election. Morgan argued that one of the direct-mail pieces that asked voters to "Call Morgan Out" amounted to express advocacy.

The state board rejected Morgan's complaint last year, so Morgan filed an appeal in Wake County Superior Court. He has since dropped the appeal.

"RLM and Variety Wholesalers did not violate the law," Pope says. "His [Morgan's] allegations were without merit. We complied with the law Morgan got passed in the middle of the night."

Pope says it is ironic that Morgan would raise such allegations, considering that he and his allies formed a similar nonprofit group in 2004, the North Carolina Republican Main Street Committee. That group promoted his leadership and disparaged his foes. Those kinds of groups are what are also known as "527s," after a section of the law.

"There was nothing RLM did that Main Street didn't do," Pope says.

Morgan rebuts that.

"What we did at the time was legal," he says. "The law changed. We [the General Assembly] tightened things up. I shut mine down after 2004."

'More Bang'

Morgan says he dropped his appeal of the state board ruling because the U.S. Supreme Court is expected to issue a ruling in April on a case similar to his complaint regarding RLM last year.

"What was the purpose of me spending my dollars on this?" Morgan says. "I get more bang for the buck spending my resources in the political arena."

Pope doesn't buy that argument.

"That is merely an excuse for dropping a lawsuit without merit," Pope says. "He no longer had an attorney being paid for by the General Assembly that was authorized by Jim Black."

Morgan had asked the state to fund the legal expenses he encountered after being subpoenaed as a witness for the federal grand jury. The legislature granted his request.

A private trust fund was set up to cover Morgan's legal expenses to appeal the state elections board ruling. A number of undisclosed donors ponied up $50,000 to $100,000 for the cause. Morgan says that money has been returned. He says he does not know the identities of all who gave money to the trust, which is private and will not be disclosed.

"These are people who believe in me enough personally to give money to a legal defense fund," he says.

Pope questions why Morgan even requested help with his legal expenses, since he had more than $583,000 in his campaign fund. Morgan has also been criticized for transferring his campaign into his name last fall, days before a new law prohibited lawmakers from converting those funds to personal use. Morgan loaned that money back to the campaign fund. But it is now his money.

Pope says that transaction was not right, even if it was legal.

"These are people who gave him hundreds of thousands of dollars for his campaign, not for his personal use," Pope says.

Morgan has defended the transfers, saying that he would rather "have control over the resources I have raised over my political career than have the government dictate to me how I can use them."

Accused of Betrayal

The dueling "527s" came about as the result of the deal in 2003 that made Morgan and Jim Black, a Mecklenburg County Democrat, the first co-speakers in state history.

With the House evenly divided 60-60 among Republicans and Democrats after then-Rep. Michael Decker defected from the ranks of the GOP, Morgan and four of his closest allies forged the power-sharing arrangement.

That deal brought down the wrath of the state Republican Party, which accused Morgan of betraying the party and selling out for his own personal gain. Morgan and his allies countered that the bipartisan arrangement allowed the General Assembly to move forward and that it worked well, pointing out that the state budget was adopted on time.

Many of Morgan's Republican enemies accused Morgan of voting for a budget that included a billion dollars in tax increases and backing a redistricting plan that hurt the GOP and in some cases pitted some of his enemies against each other in primaries to eliminate them.

They said he used his power to "cajole" money out of lobbyists and special interests and that he and Black were engaged in "pay-to-play." Morgan raised nearly $1 million the two years he was co-speaker, most of it coming from special interests and lobbyists. That was more money than he raised in the four previous years and his final two years in office, combined. Morgan was speaker pro tem during his last two years in the General Assembly.

Lightning Rod

The state Republican Party declared war on Morgan, offering to help anyone who would try to defeat him.

Morgan had survived some close calls in primaries earlier in his political career -- a result of a long-running feud within the Moore County Republican Party. That feud worsened in the early 1990s when the party nearly split in two -- much the way it is now. As was the case back then, Morgan seems to be the lightning rod.

But the heat was turned up considerably on Morgan in the 2004 election.

To combat all the allegations that were flying against him, Morgan and some of his allies formed the Main Street Committee to promote Morgan's accomplishment as co-speaker and to attack his opponents.

Morgan's foes formed a nonprofit group of their own, RLM. Pope's company, Variety Stores, contributed $200,000 to the group.

Morgan narrowly won a bitterly contested Republican primary battle with political newcomer Peggy Crutchfield. In that election, Democrats regained a majority of seats in the House, and Morgan was demoted to speaker pro tem.

Two years later, in the 2006 elections, Morgan simply could not hold off the growing groundswell of opposition -- even outright hostility -- within his own party, stemming mainly from those two years as co-speaker.

Pope's company gave more money to RLM. State party leaders came to Moore County to campaign for Boylan.

But Boylan says RLM's activities probably hurt him more than they helped him in winning election.

"I think RLM cost me votes," Boylan says. "I would have beaten him by even more votes. My campaign was against his record. Richard could not defend his record. He needed a distraction. Art Pope was that distraction. He was able to throw that out there -- that I was under his [Pope's] control. That is absolutely not the case."

Close to Home

Morgan is now settling into life out of politics as the investigation into Black's campaign and political actives continues to evolve.

Black resigned his seat in the House last month He admitted in state court that he had bribed Decker with $50,000 and a job for his son to get him to switch parties. That came a week after he pleaded guilty to federal corruption charges for accepting $29,000 from three chiropractors, sometimes in restrooms, in exchange for inserting a measure in the 2005 state budget to help their profession.

Black is now cooperating with investigators in hopes of avoiding prison time. His sentencing on the federal charge is set for May 14.

The investigation has hit close to Morgan on two fronts in recent days. Sabra Faires, his chief of staff during his two years as co-speaker, was subpoenaed to testify before a federal grand jury last week.

This week, The News & Observer of Raleigh reported that a federal grand jury is looking into campaign contributions from beer and wine wholesalers to Morgan and Black. A special tax break, worth about $4 million to the wholesalers, was partially restored in 2004 after being eliminated the year before. Beer and wine wholesalers had stepped up their giving to Morgan and Black, who had the power to restore the break.

Beer and wine wholesalers also gave money to a nonprofit political group formed by Morgan and his allies in 2004.

Morgan is not commenting about the continuing state and federal investigations that have snared five other public figures connected to Black. He insists that he "has done nothing wrong."

Last August after Decker pleaded guilty to a conspiracy charge, Morgan told The Pilot that he was unaware of the deal between Black and Decker.

Morgan himself was subpoenaed to testify before the grand jury in December. Investigators wanted information and documents from Morgan about his relationship and about a $100,000 contribution in 2004 from a small Virginia tobacco company, S&M Brands, to Morgan's Main Street Committee. The contribution came after Morgan killed legislation that he said arbitrarily assisted big tobacco companies. He contends that the donation had nothing to do with the legislation.

Morgan said at the time that he appeared only as a witness and that he was not the target of an investigation

'Will Have to Wait'

Morgan remains mum on his political future or just how he plans to use his hefty campaign war chest. He says his options could including running for another office in the future or supporting candidates who care about the Republican Party.

He accuses his political enemies of "subjecting representatives to this purification standard, or litmus test. If you don't believe like them, you are not a good representative. That is not good for the legislative process. Many representatives have called me to say that they believe in what I'm doing, that I have stood up to some powerful people. I believe in being inclusive, that there is room for all in our party."

Don Beason, a lobbyist for such companies as BB&T, Bell South, Cingular Wireless and S&M Brands who has given more than $7,100 to Morgan, says he would like to see Morgan run for another office. The two served in the administration of former Gov. Jim Holshouser, who lives in Pinehurst.

"I wish he were back up here," Beason says. "He was an effective legislator."

Beason specifically mentioned lieutenant governor or state treasurer, positions that will be open in next year's election.

But Morgan must know that his political rivals would certainly be lying in wait should that happen.

Morgan reiterates that for now, his priorities are working on his health and enjoying some quality time on his cattle farm in Eagle Springs. He also has his insurance company and outdoor advertising business.

"I am chomping at the bit to do some reconciliation with my out-of-town enemies," Morgan says. "But that will have to wait until it shows up on my priority list, and that just isn't now."

David Sinclair can be reached at 693-2462 or by e-mail at dsinclair@thepilot.com.