08/08/11 — LaRoque denies any claims of impropriety

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LaRoque denies any claims of impropriety

By Staff Reports
Published in News on August 8, 2011 1:46 PM

State Rep. Stephen LaRoque is denying accusations of impropriety at the two nonprofits he heads in Kinston. Speaking Thursday after an N.C. Policy Watch investigation was published on the group's website Wednesday, LaRoque said he felt the report had been politically motivated.

N.C. Policy Watch is a part of the progressive non-profit anti-poverty organization, and LaRoque is a Republican from Lenoir County.

"They are run by an openly liberal advocacy group and I've been an outspoken conservative legislator," he said. "The report is full of, at best, misstatements, and at worst, outright lies."

He added that many of these issues had come up during the 2010 campaign and were shown to be unfounded then.

"There was nothing to it then, and there's nothing to it now," he said.

Among the issues LaRoque is criticized for in the group's report are his $100,000 to $195,000 a year compensation, his having immediate family members on the board of directors, and his funneling federal loan funds to close associates, and for his making loans above the USDA cap.

However, LaRoque said, the compensation he receives is based on a contract, and from that he pays his salary, as well as the salary and benefits of an employee. And, he added, no federal money goes into that compensation package or the groups' operating costs -- it all comes from interest and fees.

He also explained that he is the sole owner of the LaRoque Management Group, the for-profit company that runs the two non-profits, the East Carolina Development Co. and the Piedmont Development Co.

He also said that while he does have family members on the board of directors, he doesn't believe that violates any USDA or IRS rules.

"As far as I'm aware, there's nothing wrong with it," he said. "There are other people on the board as well."

And while they are often people who have received loans -- chosen because they understand how the process works -- he said all those loans were given and repaid prior to anybody taking a seat on the board.

And, finally, as to the issue of loans above the approved limit, he said that simply stemmed from a misunderstanding of how federal dollars that had been repaid could be loaned out again -- an issue, he said, has affected other similar economic development nonprofits.

"I don't see there's anything wrong with what we do. I have an annual audit every year and there's nothing improper going on," he said.