How the investigation was done

N.C. Policy Watch investigative reporter Sarah Ovaska spent two months looking into N.C. Rep. Stephen LaRoque’s financial connections with his non-profits before publishing this report. Data came from a host of sources—interviews with officials at the U.S. Department of Agriculture’s Rural Development office, past and current board members, experts in the laws governing non-profits as well as some of the borrowers themselves.

For this report,  LaRoque was contacted well before the publication and asked for comment, and to provide any information relevant to the inquiry. LaRoque refused to answer questions, saying he felt that the investigation would not be fair to him, but did agree to answer questions submitted to him in writing. He was provided 16 detailed questions about his two non-profits, the East Carolina Development Company and Piedmont Development Company.

He has since said he will not answer those questions.

In addition to the interviews, Ovaska reviewed federal tax forms known as I-990s for LaRoque’s organization, corporation filings at the N.C. Secretary of State’s office, and property records in several North Carolina counties. Court records of two lawsuits LaRoque was involved in—a 2006 defamation suit filed against him by Republican donor Art Pope and a pending defamation lawsuit LaRoque filed against his Democratic opponent from the last election— were also reviewed.

In addition, USDA records requested under the federal Freedom of Information Act were also reviewed, including annual audits of each non-profits and reports of field visits USDA staff made to LaRoque’s office.

Below are links to some of the public documents used in the investigation:

• IRS non-profit tax forms, called I-990s. For East Carolina Development Company, 2002-09; Piedmont Development Company, 2006-09.
• 2010 report on the Intermediary Relending Program from the USDA’s Office of Inspector General
• LaRoque’s applications to USDA for initial funds, East Carolina Development Company and Piedmont Development Company
• Client list of LaRoque’s non-profits generated by the USDA’s Rural Development office in North Carolina.
• USDA documents listing loan amount to Susan LaRoque’s former carpet business, State Sen. Debbie Clary, State Rep. Mark Hilton, Diener Law Firm, and board member Ricky Lanier’s Global Construction business.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or [email protected]

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