Frank Ballance: Your Money Was His Money

Updated July 8, 2009

Early Career
First elected in 1982 to the North Carolina House, the Warren County defense lawyer moved to the NC Senate in 1988. Earning recognition as one of the legislature’s most liberal members, Ballance fought the death penalty and stymied legislation protecting homeowners from criminal or civil liability for shooting a criminal breaking into their house. Ballance also pushed measures against racial profiling by the Highway Patrol. In 1997, he assumed a position in the Senate Democratic Leadership as Deputy President Pro-tem. Then, when his friend Eva Clayton retired from Congress in 2002, Ballance won her seat in the US House.

Downfall
Frank Ballance’s fall began almost immediately upon his arrival in Washington. Amazingly for a politician who rarely missed a chance to raise a tax, news broke that a non-profit organization chaired by Ballance hadn’t filed its required tax returns.

Named for the first elected black Congressman from North Carolina, the John A. Hyman Memorial Youth Foundation’s mission was purportedly to support anti-drug programs. It drew virtually all of its funds from the state coffers, even while Ballance was serving as a co-chair of the Senate Appropriations Committee, which directed $2.3 million to the Foundation from 1994-2003. The Department of Corrections told the Carolina Journal that they merely passed the money through to the Foundation without any control or oversight provisions attached.

The Hyman Foundation was run by the Frank Ballance’s friend and pastor, who also held a $66,000 per annum job directing the North Carolina Human Relations Commission.

Preachergate
According to the Carolina Journal, Ballance found a myriad of ways to share the wealth of taxpayers. After receiving $25,000 in campaign contributions from a number of ministers, twelve of their churches were awarded $140,000 in “grants” from the Hyman Foundation. He also diverted more than $100,000 in taxpayer funds allocated for the Foundation to his mother, his son & daughter, his church, and his law firm, all while serving as a state senator with oversight over the allocation of those funds.

State Audit
With questions swirling around the Hyman Foundation, State Auditor Ralph Campbell opened a probe that delivered a blockbuster report in 2003. The Raleigh News & Observer reported that Campbell “has located a sinkhole into which has flowed thousands of Tar Heel taxpayers’ dollars. Of $2.1 million the John A. Hyman Youth Foundation has received over the past decade, at least $325,000 went for questionable purposes.” Campbell went on to recommend that as the Foundation's founder, chairman and chief check writer, US Rep. Frank Ballance now must be held accountable for his “cavalier” handling of public money.

Paying close attention, the US attorney would use Campbell’s findings in the Congressman’s indictment, which included charges:

• That much of the spending of the Hyman Foundation, including $231,000 in gifts to various churches over a three-year period, had no direct connection to substance abuse or treatment, as was stated in the original mission of the organization.
• That Ballance, a nine-term state legislator who was then elected to the US Congress in 2002, gave grants and rent money to individuals who contributed a total of $25,273 to his political campaigns.
• That Ballance spent taxpayer funds for items that created direct conflicts-of-interest, including $5,000 that he paid to his daughter’s company for computer services that were never rendered and funding for the Bertie County Rural Health Association that was used to pay his mother’s salary.

Indictment and Plea
After resigning from Congress for what he cited as “health reasons,” Frank Ballance pleaded guilty to mail fraud in a federal court. In his statement, the US attorney explained that, “According to the indictment and evidence presented in court, Frank Ballance, while serving as a state senator, defrauded the state … and its citizens of their right to his honest services by using his office to obtain over two million dollars in appropriations for the Hyman Foundation, which he controlled, knowing that more than one hundred thousand dollars in Hyman Foundation funds were going to [his own] personal benefit [and to] members of his family and the church where he served as Chairman of the Board of Deacons.”

The indictment also alleged that Ballance “forged or caused to be forged the notarized signature of the Executive Director of the Hyman Foundation on 10 official disbursement requests to the State of North Carolina, as well as a statement of conflict of interest policy submitted to the state,” and that Ballance had deliberately concealed his fraudulent schemes. The Congressman was sentenced to four years in a federal penitentiary.

There Goes the Judge
The Congressman’s son, Warren County District Court Judge Garey Ballance, was also named in the indictment and he ultimately joined his father in the pokey, drawing a nine-month sentence for failure to file a tax return reporting the $20,000 he got from the Hyman Foundation to buy his Lincoln Navigator luxury SUV. He resigned from the bench.

Legislators Conveniently in the Dark
Speaking to reporters after a grand jury appearance, Senate President Pro-tem Marc Basnight said he didn’t know much about his Deputy’s Hyman Foundation. After all, $2.3 million is nickel & dime stuff in the grand scheme of things, right? But the publicity surrounding the whole mess shone an unfavorable light on lawmakers, and they subsequently agreed to increased reporting by the 8000 non-profits that are currently soaking up $850 million a year of taxpayer’s money.

Civil Rights Hero?
In a not entirely unexpected epilogue, some of Frank Ballance’s constituents hailed him as a hero in a going away to prison party. As the News & Observer reported, “Former US Rep. Frank Ballance walked into a spartan community center Wednesday night a felon who admitted diverting public money to his law firm, family and church. But the more than 100 people who greeted him there saw him as nothing less than a civil rights hero who has been unjustly sentenced to four years in federal prison.”

Ballance used the opportunity to raise money to pay the enormous legal bills he had accrued over the duration of the investigation and sentencing, telling partygoers that he had paid all fines and restitution with his own money. But not everyone was welcome. When Don Carrington, who exposed Ballance’s misdeeds for the Carolina Journal, introduced himself to the former Congressman, he was ordered to leave. “Everybody’s invited but you,” said Ballance.

Ballance then informed the crowd that Carrington had not been fair in his reporting, but he was unable to point to any factual errors in the Carolina Journal series of stories.

A second tribute in Murfreesboro was billed as a “People's Freedom Rally,” taking on the feel of a church service with gospel songs and Bible quotations such as “Let he who is without sin cast the first stone.”

According to the News & Observer, some attendees “wore orange ribbons to symbolize the jail sentences that minorities are serving and dabbed their fingers in orange paint to symbolize the injustice they see in the court system.”

Ballance told his adoring crowd, “I've not done anything that deserves four years in prison.” 

The former congressman was released from the federal penitentiary on March 23, 2009, but remained under house arrest until June 23.  He is now on two-years probation.  But in an interview with WRAL-TV on July 7, Ballance insisted that he didn't get a fair trial.

Problem is, there was no trial.  Ballance pled guilty to avoid one.  But he told WRAL that he only did so in response to "veiled threats" by federal prosecutors.  "You know how these guys operate," he proclaimed, going on to say that he hopes to get his law license reinstated and start another non-profit foundation which will help other prisoners who are unfairly convicted.

Frank Ballance is a man completely without remorse.

Sadly, when corruption is tolerated, corruption will flourish.