Indicted financier raised millions for N.C. Democrats

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RALEIGH, N.C. — Peter Reichard has spent more than a decade raising money for North Carolina Democrats, including three of the biggest names in state politics: Mike Easley, Erskine Bowles and Gov. Bev Perdue.

He operated largely behind the scenes until two weeks ago, when a Wake County grand jury indicted him on charges of obstruction of justice. The indictment alleges that Reichard paid a Perdue aide $32,000 through his own company in a scheme to keep some campaign expenses hidden.

Two other Perdue associates face criminal charges as part of a months-long investigation into the governor’s 2008 campaign finances. Juleigh Sitton, the aide paid by Reichard and former director of the governor’s western office, and Trawick “Buzzy” Stubbs, a major Perdue financier, were charged with obstruction of justice and causing the filing of false reports.

But more than the others named, Reichard’s indictment raises questions about pay-to-play politics and shakes a fragile Democratic establishment still recovering from Easley’s felony conviction last year and the legal case of former U.S. Sen. John Edwards.

Since the indictment, divergent portraits of Reichard have emerged. Friends and allies say he’s an upstanding guy with a history of community service. But records compiled by state investigators show that Reichard was better at raising money than accounting for it.

Reichard, 54, declined an interview request but agreed to answer written questions screened by his lawyer and two public relations consultants. He refused to answer inquiries related to his pending case.

But in his answers, he struck an apologetic tone.

“I was always under pressure to make quick decisions and to problem-solve — many times on the basis of incomplete information,” he said. “Did I always make the correct decisions? No. But I tried my best to do a good job. I will be accountable for my decisions.”

Reichard’s entry into the Democratic Party’s fundraising circle began with a call 13 years ago from a friend of Easley, according to Reichard and news reports from the time.

Easley, then attorney general, had his eyes on the governor’s mansion. Join the campaign, the caller said. Help us raise money. Get in early on a winning ticket.

Reichard was president of the Greensboro Area Chamber of Commerce, where he had endeared himself to many and risen quickly. It’s also where he met his wife, Linda Hiatt.

His life was built on connections, but he had never worked in politics.

A month later, he became the Easley campaign’s statewide finance director and first paid staffer.

“I saw it as a way I could participate in the political process,” Reichard said. “The truth is that no one likes to do political fundraising. But I was willing to work hard and learned to have a thick skin.”

At the time, he described his job to a Greensboro newspaper as “raise money, dummy.”

But trouble from his tenure as chamber president tainted his role on the campaign.

The controversy exploded weeks before the 2000 election with the release of an audit that revealed a financial crisis, leadership problems and bad accounting at the chamber. Under Reichard’s watch, the report revealed, the chamber hemorrhaged money and ran a deficit by the time he left.

Easley distanced Reichard from his campaign’s finances but called him a “very tenacious” fundraiser.

The audit found no criminal wrongdoing, though questions swirled. Reichard said he took responsibility for the problems, which he believes were outweighed by successes.

Charles “Chip” Hagan III, the former chamber chairman and local Democratic Party leader, vouched for Reichard when Easley called about it.

Hagan, the husband of U.S. Sen. Kay Hagan, reiterated his support in a recent interview. “I think very highly of Peter,” he said. “He’s a dynamic guy.”

In the end, Reichard raised $11 million, then a record for a North Carolina gubernatorial campaign. And Easley won.

Reichard’s stock quickly appreciated.

He helped raise money for a new state Democratic Party headquarters and soon moved to the 2002 U.S. Senate campaign for the seat vacated by Jesse Helms, working as finance director for Bowles in the race against Republican Elizabeth Dole.

He operated under the radar in Bowles’ campaign. His resume touts raising more than $10.5 million in the most expensive U.S. Senate race in the nation in 2002, but the campaign’s total included more than $6 million of personal wealth Bowles put into the race. Bowles lost.

For the 2004 election cycle, as Easley sought re-election and Bowles challenged again for the U.S. Senate, Reichard took no official campaign job.

Reichard said Easley’s campaign asked him to return, but he declined. Other campaign aides suggest a rift between the two men that lingered from the 2000 campaign.

“I did not see political fundraising as a career,” Reichard said. “Though I was good at it, the reality of constantly asking people for money on behalf of a candidate wears on you.”

Reichard instead focused on raising money for his own business, launching a series of venture capital firms in 2002 that collected investors’ cash to boost startup companies and others with growth potential.

His latest business is Tryon Capital Ventures, a Chapel Hill investment bank. One of the firm’s most prominent deals is the acquisition of A Southern Season, a gourmet food store in Chapel Hill. Reichard sat on the company’s board but resigned after the indictments, said Clay Hamner, whose firm Carrboro Capital was a partner in the deal.

Reichard also served on a number of major boards and commissions, using his political connections to bolster his credentials.

His resume — which still appears on the N.C. Economic Development Board website — highlights his political work along with his business ventures. Perdue appointed him to the board after being elected. He resigned the day of his indictment.

Reichard didn’t stay away from politics for long. And controversy soon followed.

Perdue, who was then the lieutenant governor, hired him in 2006 as finance director for her gubernatorial campaign. He quickly assumed a prominent role, even issuing attacks against her Democratic primary opponent, Richard Moore, who was then the state treasurer.

By now, Reichard was considered an uber-fundraiser in the North Carolina political world, thanks to a gregarious personality that allowed him to sell the candidate.

Not all liked his glad-handing persona and aggressiveness. At the same time, others admired his talent.

“When you ask people for money, you are told ‘no’ many more times than you are told ‘yes,’ “ said Scott Falmlen, former executive director of the state Democratic Party. “That takes a different kind of internal fortitude.”

Behind the scenes, Reichard played a key role in getting donors to fly Perdue on private jets for campaign events across the state.

During the campaign, dozens of flights went unreported on campaign finance documents, as required by state law, according to the state elections board. The campaign needed to pay for the flights, or return money to the aircraft owners who had already given the maximum contribution.

As questions about Perdue’s campaign finances began in late 2007, Reichard stepped down from his role as finance director.

The official word from the campaign suggested he needed to spend more time with his family. But the move came as Perdue pledged to make staff changes amid the campaign finance reporting problems.

Still, Reichard stayed involved, serving in a finance chairman role. He continued to arrange help with contributor meetings and controlled a loyal network of donors. On his résumé, he notes the $18 million he raised for Perdue’s successful effort.

When the State Board of Elections launched an investigation into Perdue’s campaign finances, Reichard was at the center.

Investigators found that Reichard, who flew with Perdue often to events, “did not think about the fact that air travel needed to be properly paid or accounted for” even though the campaign had forms to track the flights, records show.

Amid the cloud, Reichard continued to represent Perdue and make the rounds at political fundraisers as he returned to his venture capital firm. Earlier this year, he provided fundraising advice to Perdue’s 2012 re-election campaign.

But in recent weeks, Reichard knew his window was closing. On Nov. 29, a day after his indictment, he posed for a mug shot.

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(Staff researchers Teresa Leonard and David Raynor contributed to this report.)

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©2011 The News & Observer (Raleigh, N.C.)

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