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Good morning to you. We have got a very damaging new report out from the North Carolina State Auditor's Office as they continue across the state of North Carolina looking into governments and wrongful and questionable spending. This new investigation into the town of Kerry, one of the state's largest municipalities, seventh largest municipality in the state, it is a suburb of Wake County, found widespread failures in financial oversight, questionable taxpayer-funded spending, and a culture that discouraged employees from questioning leadership under former town manager Sean Steagel. The investigative report, which is more than 2,600 pages released Thursday by state auditor Dave Bollick, examined Kerry's procurement card program, also known as P-CARD program, council expenditures, financial reporting practices, and the town's overall fiscal management. This is after receiving complaints alleging.
Financial misconduct by Steagl. Auditors also interviewed current and former staff members and town employees and reviewed thousands of government credit card transactions. State Auditor Dave Bollick said in a press release: the spending exposed in the town of Kerry must be addressed with the greatest oversight and accountability. Public dollars being thrown around carelessly while taxes are being raised only creates a distrust in government. This report brings spending to light and shows a true accounting of where tax dollars go and carry.
The public has a right to be frustrated, and hopefully, this will result in much-needed financial restraint and discipline in the future. The report itself highlights that Kerry issued far more government purchase cards than similar sized municipalities, maintained outdated procurement policies, failed to consistently document purchases, and allowed spending practices that the auditor said often lacked a clear government purpose. As of late 2025, listen to this: the town had issued 828 procurement cards, also known as credit cards, which account for about 62% of their employees. Similarly, sized municipalities in North Carolina only averaged around 16% in their local governments. Between January of 2024 and December of 2025, employees clocked more than 60,000 purchases on their credit cards.
Their municipal issued credit cards totaling more than $24.2 million. The largest sum of money in terms of credit card spending, according to details from the North Carolina Auditor's Office, was retail outlet services, more than $8.4 million, or 34.3% spent on credit cards issued by the town of Kerry. Followed by 17.9% of non-classified purchases. That racked up to more than $4.4 million. Business services accounted for $3.7 million.
That was about 15%. And as we continue to go down the share, $2.1 million or 8.4% for contracted services. And the percentages get smaller after that. Among the transactions highlighted by the auditors were $37,301 in graduate tuition paid on behalf of Councilmember Lori Bush before she would go on later to then reimburse the town for paying for an additional degree for her, $65,653 paid to a ghostwriter for a book about the former town manager, a $3,400 penthouse stay by the former town manager, and more than $86,000 spent on Video production for the town's 2024 retreat in Wilmington. The video included a surprise dance performance by town staff, and then there was an additional $35,000 for a documentary that told the story as to how the video itself was produced.
All in total, more than $121,000 spent on video production for the town's 2024 retreat in Wilmington. State Auditor Dave Bollick said during a Thursday press conference, that $86,000 was town staff approved, so council wasn't aware that town staff was spending that money. We'll let you draw your own conclusions about whether that's a return on investment of taxpayer dollars. The report also questioned high-end meals, $100 steaks, travel expenses, Ray-Ban sunglasses for council members totaling more than $1,600. And more than $100,000 in transactions that either lacked itemized receipts or had no supported receipts at all.
Brian Balfour, the senior vice president of research at the John Locke Foundation, said that the Kerry audit reflects a pattern of government officials misusing taxpayer dollars. Balfour told the Carolina Journal: This is an all-too-common story. Government officials and bureaucrats abusing taxpayer dollars. No level of government is exempt from this corruption, and far too many governments view taxpayer dollars as a pot of money at their disposal. To be used for personal gain with no respect to the fact that tax dollars were taken from paychecks of hardworking people trying to make ends meet.
Balfour said that the report illustrates why stronger oversight is necessary, but argued the larger solution is a continued reduction in the size and scope of government. He told Carolina Journal, Fortunately, the auditor discovered this abuse, but how much more fraud and abuse is occurring with taxpayer dollars in local and state governments, let alone federal governments? More transparency and oversight can help, but this underscores the urgent need to reduce the size and scope of government to its core function of protecting the rights of citizens. The smaller the government, the less opportunity for fraudulent and abusive wastes of taxpayer dollars will be there. End quote from Brian Balfour.
Auditors also found that the town's spending outpaced revenue growth in recent years. While revenues increased by $81 million between the fiscal year 2021 and 2025, expenditures grew by nearly $100 million. This resulted in an operational deficit in the fiscal year 23-24. Using year-end adjusted budgets, the auditor's office concluded that Kerry's fund balance fell below the town's minimum policy threshold for two years in a row, 2023 and 2024. The audit points to broader management and oversight failures within Kerry's government.
Auditors found that the town's procurement card policies had not been substantially updated since 2009. Financial reporting to elected officials was largely inadequate. And the town council often delegated major financial decisions to a small group of administrators while receiving limited information. about the town's overall fiscal condition. The report also describes a workplace culture in which employees were reluctant to question leadership.
Multiple employees reported intimidation and pressure under former manager Steagel, while the town clerk told investigators that employees, quote, could never tell him no, end quote, directly from the report. Auditors concluded that financial decision-making became concentrated within the town manager's office, which limited transparency for both employees and the elected officials in the town of Kerry. The town council placed Steagl on paid administrative leave in November of 2025 after a public records request showed a series of major expenditures that several council members, including the mayor, claim that they are unaware of. Stiegel then went on to resign one month later. Multiple criminal investigations are now ongoing.
They include groups like the Wake County District Attorney's Office, that's Lauren Friedman and her staff, as well as the State Bureau of Investigations. State Auditor Dave Bollock said his office continues to work closely with both agencies as those investigations move forward. The state auditor said during the Thursday press conference, the criminal investigation continues to move forward because this office, along with the Wake County District's Attorney's Office and the State Bureau of Investigation, is really keen on accountability and holding people accountable for their actions. The report notes that the state auditor's office. Has referred certain matters to the Wake County DA and the SBI, but declined to identify those transactions publicly to avoid compromising any potential criminal investigation.
After the 2,600-page audit, the report recommends tightening procurement card controls, requiring itemized receipts for all purchases, improving financial reporting to the town council, adopting clearer reimbursement policies, establishing council approval thresholds for major expenditures, and strengthening oversights of the town's financial conditions. The town of Kerry hosted an emergency meeting last night after this report dropped, in which town officials, including the new interim town manager, addressed not only the media but the constituents that they have in the town of Kerry, one of North Carolina's largest municipalities. One of the questions from a reporter included questioning council about About an $802 a-month car allowance in which council members were receiving on top of their salary. This was the response from a Democrat member of the Carytown Council, Carissa Kahn Johnson. for 2024 was $27,050.
That was Everything that was before thousands of dollars in taxes, right? And that is driving around a 60-square mile town. in my own car, on my own dime, on my own gas, with my own insurance, with my own cell phone, with my own electronics, on my own Internet. We don't have offices here.
So I don't think that that stipend is unreasonable. There's minimal compensation offered to council. More than $802 per month, a stipend there for employee or for town council members to essentially make their private car payment. Carry Mayor Harold Warsbach said that he spends 60 hours a week on the job, talks about how the pay is very under somebody that would spend 60 hours a week, and then was pressed a little bit as to how something like this goes unnoticed. Take a listen to his response.
municipalities pay councils in different ways. I'll just say this, you can take my entire paycheck. And it doesn't add up to minimum wage with the hours I put in.
So if you want to fault me for that, go ahead. I get paid $29,000 a year, probably work 60 hours a week. Uh and and We it's basically a stipend. The media in present at the press, the emergency press conference, the emergency council meeting yesterday pressed further as to would citizens, would taxpayers within the town of Kerry be able to get a reimbursement for some of these funds, some of this out-of-control spending? The answer is less than sufficient from the Kerry Town Council.
We will be keeping an eye on the details. As I mentioned, there are a couple of ongoing investigations: one by the Wake County District Attorney, the other by the State Bureau of Investigation. We've got more details on this more than 2,600-page report by State Auditor Dave Bollock's office. Those details are available this morning over on our website, CarolinaJournal.com. Lots of places can expose you to identity theft.
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Terms apply. Uh It's 523. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk, 107.9 FM, WBT, another legal story that we have been keeping an eye on here in North Carolina. Former FBI Director James Comey will argue that the federal criminal case against him in North Carolina should be dismissed because of selective and vindictive prosecution. The federal government accuses Comey of threatening President Donald Trump with a 2025 social media post.
Comey's lawyers filed a motion Monday seeking a federal judge's permission to submit one brief by a July the 28th deadline that would address both the issues of the selective and vindicative prosecution as they claim a local court rule requires separate briefs on each issue unless the judge grants the motion according to the court filing. The former FBI director plans to address accusations of selective and vindictive prosecution, among other motions, according to his lawyers. The federal government, quote, does not object to Comey's request according to a recent court filing. Carolina Journal reported in June that Michael Drebrin, a former U.S. Deputy Solicitor General with more than 100 arguments before the United States Supreme Court, is one of six new lawyers who joined Comey's defense team in North America.
North Carolina. He joins a plethora of other high-dollar legal officials, according to an NBC News report from a couple of months ago. Comey is scheduled for arraignment on September the 30th in New Bern, with a trial scheduled to start at October the 21st before U.S. District Judge Luis Flanagan. Flanagan issued an order in May delaying proceedings in the case.
Comey's arraignment had been scheduled for June 30th with a trial to follow on July the 15th.
So that would have already been at this point.
However, it had been delayed a couple of months. Flanagan wrote at the time, the gravity of the charges, anticipated further discovery production to the defendant, and the need to provide the defendant time to file motions based upon the same promotion needed for continuance. Implicit in the government's reported statement of no opposition is the government's agreements that the ends of justice served by this continuance for the direct benefit of the defendant outweigh the interest of the public in a speedy trial. Comey's lawyers filed a motion on May the 20th to push that arraignment back to October. As I just read through portions of, that was approved by the judge in this case.
No objection from the federal government who is pursuing these charges. His lawyers wrote at the time: Mr. Comey expects to file multiple motions on constitutional grounds seeking dismissal of this indictment.
Some of these motions may be dependent upon the discovery to be produced by the government and may require extensive briefing. Discovery is still forthcoming, and for that reason, Mr. Comey respectfully requests that the court extend the current scheduling deadlines. Comey faces two charges related to alleged threats against the current 47th President of the United States in Donald Trump. The charges are based on a 2025 Instagram post in which Comey documented seashells on a beach arranged to spell out 8647.
That has been described as many as a slang term, 86 meaning to get rid of, and the 47, of course, referring to the 47th President of the United States. Comey appeared in a Virginia federal courtroom back on April the 29th, the day after his indictment. The indictment charges Comey of knowingly and willfully making a threat to the life of or to inflict bodily harm upon the president of the United States. While in the Eastern District of North Carolina, Comey publicly posted a photograph on an internet social media site which depicted that seashell arrangement in a pattern making out 8647, which a reasonable recipient who is familiar with the circumstances would interpret as a serious expression of intent to do harm to the president of the United States, reads the federal indictment against Comey. A second car charge, a second count charges Comey with knowingly and willfully transmitting an interstate and foreign commerce communication to threaten the life of the president.
U.S. Attorney Todd Blanch said in a news release at the time, threatening. the life of the president of the United States is a grave violation of our nation's law. The grand jury returned the indictment alleging that James Comey did just that at a time when this country has witnessed violent incidents following the deadly actions against President Donald Trump and other elected officials. The temperature needs to be turned down and anyone who dials it up and threatens the life of the president will be held accountable.
The sense-deleted social media post did prompt pretty significant backlash last year with Comey writing as the caption at the time, cool shell formation on my beach walk. That picture was taken in Eastern North Carolina. Comey later deleted that post and attempted to apologize saying, I posted earlier a picture of some shells I saw today on a beachwalk, which I assumed were a political message. I didn't realize some folks associated those numbers with violence. It never occurred to me, but I oppose violence of any kind.
So I took down the post. The North Carolina case was the Justice Department's second indictment of Comey in seven months. In September of 2025, he faced an indictment on charges that he lied to and obstructed congressional testimony in 2020. That case was dropped when a judge concluded that the prosecution's handling of the case had been appointed illegally. This case is obviously very high profile, taking place in the Eastern District of North Carolina.
As the schedule stands right now, we will see this begin the process of picking up as we get into the portions of September and October. There will likely be a lot filed between now and then. We'll keep you up to date with the details over on our website, CarolinaJournal.com. And of course, right here on the Carolina Journal NewsHour. Summer is here, which means we all want to look and feel our best.
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Save up to 30% with promo code news at lifelock.com. Terms apply. It's 537. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk 107.9 FM, WBT. I'm Nick Craig.
Good Friday morning to you. Back in early June, we brought you coverage of what can only be described as a very sad hearing out of the North Carolina General Assembly, the House Oversight Committee, grilling elected officials and local officials from Charlotte and Mecklenburg County as it related to the death of six-year-old Dominique Moody. We cover that in great detail here on the Carolina Journal News Hour and over on our website, CarolinaJournal.com. And as we continue our comprehensive coverage of the recently approved and passed state budget, Andrew Pomerance joins us to describe some of the details in that budget as it relates to the Dominique Moody Safety Act. Andrew, this hearing back in early June documented a total mismanagement and failure of the Department of Health and Human Services, Child Protective Services, and officials within Mecklenburg County.
In the city of Charlotte, that allowed this six-year-old girl by the name of Dominique Moody to be found living in horrific living conditions, found dead in late December, a couple of years ago. Walk us through some of the provisions in the state budget that hopefully make sure something like this can never happen again in North Carolina. Yeah, hey Nick, good morning. Happy Friday. In the state budget, we included pieces of this Dominique Moody Act.
And as we may remember, the act itself passed unanimously out of the House back earlier in June with full support of leadership. And so that bill was stalled in the Senate quite quickly. And so there was a lot of talk about what portions of this bill would be included in the state budget. And when going through it, about $650,000 was allocated to provisions coming out of the Dominique Moody Act.
So that legislation, not yet across the finish line, but this funding in place for number one, the largest piece is this escalation team.
So a team that would receive some of these more serious cases and look into maybe some of the cases that localities like Mecklenburg don't have necessarily the resources to do so. Also to identify trends in concerning cases, whether that be repeated visits from enforcement or chronic absenteeism. And so the state budget allocates $550,000. For six full-time employees that will be deployed across the state on this escalation team. It's a full-time role.
They will receive $100,000 in specialized training. And so talk about additional funding there to really make sure that these roles are impactful across the state. I know a win for the patrons of the bill. I spoke with Representative Chesser earlier this week of Nash County, and he thought this was a great first step in addressing this issue. And after, I think as we continue to see details roll out about this case, more pieces of this legislation will eventually be enacted.
Yeah, Andrew, one of the things going back to that House Oversight Committee meeting back last month was that this was not, it wasn't the fact that law enforcement and child protective services and health and human services didn't know about what was going on with Dominique Moody. Dozens of law enforcement calls to the address, multiple alleged investigations. It's still not immediately clear whether local officials actually visited those sites. And one of the things that lawmakers mentioned during that hearing, and seemingly is reflected here in the budget, when you've got these repeated calls, it is totally unacceptable for something like that to fall through the cracks. And I guess that's going to be the responsibility of this new escalation team to make sure if there's children where calls are happening multiple times or the same address where things are happening multiple times that something like that does not fall through the cracks.
Yeah, during that hearing, we heard about this manager position that oversaw all these DSS workers and had a real authority over which cases were going to be held, what cases were going to be followed up on. And that position isn't one necessarily that was always something that had experienced extremely skilled labor or employees in it. And so I think we saw a lot of failures in that level. Four of the five reports involving Dominique Moody that should have been screened in were screened out, right? And so they weren't accepted for investigation and for further follow-through.
And the hope is that this team would kind of fill that gap and take some of those responsibilities off of that person who's managing 12 or plus DSS workers and a caseload and giving that to more specialized Caseworker who can say, All right, we've seen 10 cases now out of one household. Cops have been at the house, sheriffs have been at the house, we've not seen this individual in some sort of schooling. We should definitely follow up on this case. And so, to avoid some of those failures that happened in Mecklenburg County, and you know, as NCDHHS has found statewide, those issues are happening, right? And so, to avoid some of those failures that we're seeing, add some additional staffing with some additional expertise into that role.
One of the champions of the Dominique Moody Safety Act, and I'm sure she also had some integral role in getting some of this funding in the state budget, is Representative Carla Cunningham. She will be out of the North Carolina General Assembly as we flip the calendar over to 2027, losing her Democrat primary back in March of this year. She's recently switched her party affiliation from Democrat to unaffiliated. Andrew, we do expect lawmakers to be back in Raleigh here at the end of this month. We have seen in the past not immediately clear whether it will happen this year.
We could have a session right after the election before the turn of the year. Do you suspect, because of some of the broad bipartisan support on the larger piece of legislation, the Dominique Moody Safety Act, that we'll see some movement on that before we flip the calendar to 2027? You know, Nick, I don't know. You know, I think, you know, Representative Cunningham out of McClintock County, this is a case in her district. She will tell you firsthand the challenge that it was to get any information about this case because of the pending criminal charges.
Both Representative Chesser and Representative Cunningham worked with local officials, met with them multiple times, and were only able to receive a slim portion of the information that they were looking to gain. And so the HUSS Oversight Committee looked to fill some of those gaps and was able to fill some, but not all, and revealed, I think, to many of us some of the details that we had been searching for. In terms of what else is included in this legislation that was not included in the budget, is things like additional accountability measures for DSS workers, whether that be proof that pictures taken when they make do visits, whether that be tracking on their vehicles to prove that they did go to these houses and enter those houses, and then a predictive risk modeling system that we heard a lot about. About during that oversight meeting, that could hopefully help mitigate some of these cases before they happen and notice some of these trends. And so, whether we see this legislation come back this year or not, Representative Chester told me that he would continue to work on these issues into 2027 and as we go forward.
And I imagine Representative Cunningham, no matter if she's in the legislature or not, she was super passionate about this issue. And I can't imagine her dropping this without, even if she was no longer an elected official.
Well, Andrew, I'm glad you bring up some of those accountability measures. That seemed to be one of the things that frustrated Representative Chesser more than anything else during the more than eight-hour meeting that took place in the General Assembly last month. As apparently or allegedly, officials from Mecklenburg County had visited this address and visited this house where six-year-old Dominique Moody was living on multiple occasions. And when he pressed those local officials as to, well, did you take any pictures? Do you have any actual verification that an employee went to this address?
They kind of looked at him puzzled. They were not able to cooperate any of that data, which in this case or in many others, you could have a situation where somebody says they're going to look at a scene, says they've reviewed what the details are, but without that actual accountability or tracking measure, it's really hard to pin down, especially in a story like this when you have now seen and now, as the public is largely aware, unimaginable living conditions, holes in the side of the house. She was living in A dog kennel at one point. I mean, this could not have been a situation where there were repeated visits from child protective services or any sort of social services in Mecklenburg County. That's exactly right.
And the first images they have of her living conditions were when they removed her from care to take her to the hospital, where she unfortunately later passed away, right? And so Representative Chester says, you know, you had there's no way someone went into that residence, whether that was law enforcement officials, sheriff's officers, or DSS representatives, checked on the status of those children, and then left them in that environment to continue to live. And right, this was a kinship position, so these were her foster parents in a way in a manner.
So under state guidance and care still. And so, no way would we allow foster kids to live no matter the In conditions like this, no matter the household, right? No matter his family or not. And so he said, you know, accountability in that manner, some sort of annual reporting, some sort of constant quality checks done through the auditor's office or through DHHS to make sure that these sort of cases don't happen again if they do. We're aware of them earlier and more often.
And then also some sort of dashboard where individuals can go and see how many cases like this are pending in their counties, understand kind of the gravity of the situation, unlike we're able to do currently and cases like this continue to bubble up. And so I think something that people are going to continue to talk about then at the General Assembly into next year and in case it's really sad and hopefully beginning to wrap up in a manner that will lead to better long-term outcomes for individuals just like Dominique Moody. Yeah, unfortunately, we can't turn the clocks back and fix that situation, Andrew. But the hope would be that lawmakers can learn from this, similar to what we saw with the death and the murder of Irina Zarutska, learn from this and pass legislation, move forward laws here in North Carolina that try and make sure a situation like this can't happen again. We've got more coverage of the state budget and some of its provisions over on our website this morning, CarolinaJournal.com.
We appreciate the update. Andrew Pomerance joins us on the Carolina Journal News Hour. Lots of places can expose you to identity theft. Oh no. That's why LifeLock monitors hundreds of millions of data points a second for threats to your identity, which is way more than anyone can do on their own.
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It's 5:52. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk 107.9 FM. WBT, the North Carolina General Assembly over the last couple of weeks ahead of passing the budget, advanced legislation that would create a uniform process for municipalities and property owners to seek de-annexation. We talked a little bit about that earlier this week, a shift that many in the General Assembly have been calling for after repeated attempts by individuals across the state of North Carolina to request de-annexation from their town or municipality. The way in which the process unfolds right now is that the request has to go to the North Carolina General Assembly.
And typically, the process includes making some of that de-annexation into what is called a local bill or some other piece of legislation in Raleigh. This is House Bill 199. It's called Authorized Municipal De-annexation, and it did pass a second reading of a vote of 95 to 9 back on July the 2nd. The proposal would establish procedures allowing municipalities or qualifying property owners to initiate de-annexation requests instead of requiring the legislature to improve individual local bills in the way in which the process unfolds right now. Supporters describe the measure as a government reform that creates a predictable statewide process, while opponents say that the legislation falls short because it establishes procedures without guaranteeing relief for property owners seeking to leave municipal boundaries.
Representative Paul Scott, the Republican from Rutherford County, who is the bill's primary sponsor, said that the legislation grew out of repeated requests. He told his fellow members of the North Carolina House, this bill comes out of experiences of the House Finance Committee, where we receive de-annexation bill after de-annexation bill. Scott said that lawmakers formed a working group to develop a more consistent approach to handling those requests. As he reminded his fellow colleagues, Section 1, Article 7 of the North Carolina Constitution, the General Assembly alone is empowered to provide for organizations and governments as it relates to fixing the boundaries of cities, county, and towns. He stressed that there was nothing new in this bill that changes that constitutional duty.
North Carolina is known as a Dillon rule state under this framework, a legal principle stating that the local governments Only have power explicitly granted to them by the state legislature or those strictly implied to carry out their express duties. Scott said that the legislation establishes procedures that allow disputes to be addressed locally before reaching the state capitol, before reaching Raleigh.
However, some questioned the process and exactly how this was going to play out. Representative Mark Pless, alongside Representative Frank Eiler, raised some concerns as saying that they supported de-annexation requests that are brought by constituents, but questioned whether this process was created and went far enough. creating objective standards that required municipalities to approve qualifying requests and deny those that did not meet the bar and did not fit into the process laid out by lawmakers. Other questions included Representative Zach Hawkins, who asked whether the legislation would create a lane for developers seeking to remove property from municipal boundaries, likely either right before or during the development process. Lawmakers responded saying that will be very dependent on the individual issue and the individual case.
The debate reflects broader questions about balancing private property rights with municipal authority. While supporters argue that the bill modernizes an outdated legislative process, opponents contend that the proposal should provide clear standards guaranteeing de-annexation when property owners meet specific criteria. As I mentioned, this did receive very strong bipartisan support in the North Carolina House when its final vote there took place on July the 2nd. For now, lawmakers on both sides agree that the current system does not work. The question is: does this legislation need to go further?
Does this deal with everything that is pertinent to de-annexation requests? We are expecting lawmakers to make their way back to Raleigh not next week, but the week following the week of July the 27th. And potentially that first week of August, which will be August the 3rd, that Monday, we could see some continued movement on things like we talked about the Dominique Moody Safety Act and some of these other holdover pieces of legislation before the short session wraps up here in 2026. That's going to do it for a Friday edition of the Carolina Journal News Hour. WBT News is next, followed by Good Morning BT.
Have a great weekend. We're back with you Monday morning, 5 to 6, right here on Charlotte's FM News Talk, 107.9 FM, WBT.
