Full disclosure: This story involves at least one company that has been an advertiser in the News & Record - although this is probably not the kind of attention they want.

From a story in today's paper:

Southern Showcase Housing is one of several names under which Phoenix Housing Group of Greensboro does business.

The N.C. attorney general has sued Phoenix along with two other companies — K&B Home Builders, whose incorporation documents show a Connelly Springs address, and W.R. Starkey Mortgage of Plano, Texas — claiming the three companies sucked low-income clients into misleading deals and mortgages they couldn’t afford.

Documents filed in Wake County Court show the companies would place advertisements on billboards and in local publications such as the News & Record to lure customers with the promise of buying a new manufactured house for $500 down.

According to court filings, the companies would inflate the price of the houses so customers owed more on the mortgages than the homes were worth.

The complaint also alleges the companies put together mortgages — including federally backed loans — based on faked financial statements.

A Wake County judge issued a temporary restraining order against K&B Homes and four individuals connected with that company last week. A spokeswoman for the attorney general’s office said that company was actively engaged in the kind of practices the lawsuit sought to stop.

Phoenix was not named in that restraining order but is still the subject of the attorney general’s suit. As well, the N.C. Commissioner of Banks has summoned officials for Phoenix and the other companies to a February hearing into “unlawful mortgage fraud.”

Click here to read the whole thing.

For those who would like more background, click the following for:

• Attorney General's news release on Phoenix et al (MS Word) This has a detailed description of all the individuals subject to the suit as well as the companies involved.
• Attorney General's court filing (PDF) This is the legal motion filed with the court. It does not include all the affidavits, which make the file quite lengthy.
• Commissioner of Banks summons regarding Phoenix et al.(PDF) This is a separate action in addition to the AG's suit.
• Statement from Phoenix Housing (PDF) When I called Phoenix Housing on Friday, this is the response the company wanted to give.
• Phoenix Housing's website (Link)
• Affidavit of Joshua Lang of Snow Camp (PDF) I spoke with Lang for the story.
• Affidavit of Timothy Harvey Part I and Part II (PDF) I couldn't find a good phone number for Harvey, but his story is typical of those in the case file.

The RNC can read Sen. Kay Hagan’s mind, at least that’s the impression you’d get from a web ad targeting the Greensboro Democrat.

The ad, a copy of which is posted below, features images of Sen. John Kerry delivering his “I voted for it before I voted against it” line from the 2004 campaign. It then goes on to accuse Hagan of plotting a similar flip-flop on the health care bill.

In the U.S. Senate, at least 60 senators need to vote to start debate on a bill or it goes pretty much nowhere. The RNC says that Hagan is plotting to vote to start debate but against the final version of the bill.

Well, they’re at least half right.

“Senator Hagan will vote to proceed with the debate,” a Hagan spokeswoman wrote in an e-mail late yesterday.

However, she’s not made her intentions known as to the final bill. In fairness to the RNC, it’s perfectly possible that Hagan will vote against the final package.

But if you consider her recent history, Hagan would be more flip-flopping if she didn’t vote to proceed. That’s because when she had the opportunity to vote on a predecessor of the current health care bill in committee, she voted for it.

Update: When asked about the ad, Hagan Spokeswoman Stephanie Allen said, “As Senator Hagan has been very clear about her support of health care reform, it looks like the RNC's attempts to read the tea leaves have failed again.”

Here’s the ad in question, complete with pictures of House Speaker Nancy Pelosi, President Barack Obama and a “call Kay Hagan” phone number:

As previously reported, John Faircloth and Paul Norcross have declared they’ll run for the House District 61 seat. (Those reports are here and here.) A third Republican now says he’ll run to replace Rep. Laura Wiley, a High Point Republican who is retiring from the legislature at the end of the 2009-10 term. From a Grubb news release:

Gerald T. Grubb will enter the Republican race for the North Carolina House District 61. Mr. Grubb has lived in the district for more that 40 years. Gerald is the owner/broker of Southern Cross Mortgage Company which he has operated for the last 12 years.

Mr. Grubb states that he has begun to organize his election team and looks forward to an exciting race. Gerald wishes to serve district 61 by being an “active listener” to the people he seeks to represent. Gerald and his wife, Patty, are long time members of Green Street Baptist Church in High Point.

The revelation that some prison inmates who are serving “life sentences” for murder, rape and the like could get out of jail due to a quirk in the law has been the subject of much consternation over the past couple months. (Background here.) Update: Click here for the AP story on this.

Today, Gov. Bev Perdue announced that all of those prisoner’s sentences had now been recalculated and that the earliest unconditional release date would come in 2054. I’m pretty sure that’s not what the prisoners’ lawyers had in mind when they filed their particular lawsuits.

From Perdue’s release:

RALEIGH – Gov. Bev Perdue today announced that the Department of Correction is putting in place a plan to comply with the decisions of the appellate courts in the State v. Bowden case. The Department has calculated unconditional release dates for the affected inmates. According to these calculations, the earliest unconditional release date is scheduled for 2054. 

“I will continue to pursue all legal means of preventing the release of these inmates without any review by the parole board or any post-release supervision,” said Gov. Perdue. “I have asked Sec. Keller to review all records to ensure that the inmates are not awarded any credits for which they are not eligible.”

 Pursuant to the court decision, DOC has calculated unconditional release dates for those prisoners sentenced to life imprisonment for crimes committed between April 8, 1974 and June 30, 1978. For this group of offenders, records had previously shown release dates of “LIFE,” reflecting that no unconditional release was thought to be available to them. These sentences must now be treated as statutory life sentences of 80 years.

 DOC Secretary Alvin Keller has directed that for each life sentence imposed for crimes during this time period, the unconditional release date shall be calculated as 80 years minus applicable jail credit earned while the prisoner awaited conviction and sentencing.

 As has been the practice of the DOC for at least 50 years, Secretary Keller will continue awarding good behavior credits for prisoners with life sentences only for purposes of earning a more favorable custody grade, for becoming eligible for parole or when the Governor commutes a prisoner’s sentence. Such credits will not be awarded for purposes of calculating an unconditional release date. This has been the procedure of the Department of Correction since at least 1955, during which time the head of the corrections agency has held statutory authority to establish rules and regulations as to grades of prisoners, rewards and privileges applicable to the classification of prisoners and allowances of time for good behavior.

 The Fair Sentencing Act passed in 1981 excluded Class A and B felons from receiving good behavior credits for purposes of unconditional release from prison [15A-1340.1 (a)].

 “I cannot see any meaningful difference between prisoners with statutory life sentences of 80 years and Class A and B felons under the Fair Sentencing Act in that their crimes are similarly heinous,” said Keller.

 The DOC has filed an affidavit from Secretary Keller explaining this release date calculation in Cleveland Superior Court for the State v. Wilbur William Folston case. Similar affidavits will be filed in the Bowden case and others where judges have ordered release dates to be calculated for similarly situated inmates.

From a story in today’s paper:

RALEIGH — Elected Republican leaders, state party officials and activists are debating a proposal that would close the party’s primaries to all but registered members of the GOP.

Currently, unaffiliated voters may choose whether to vote in the Republican or Democratic primaries or to vote in neither. The Republican executive committee is expected to consider a change to the party’s policy Saturday.

Proponents of the change say open primaries have diluted the Republican brand, yielding candidates who do not always cleave to the party’s conservative ideals.

“I don’t want our party’s nominees to be watered down by someone who is outside the party. I want to give folks in the general election a solid conservative candidate,” said Bill Wright , chairman of the Guilford County Republican Party. “If we’re going to stand for something, then let’s stand for something.”

Click here for the whole thing.

Reaction from (Democratic-leaning) Public Policy Polling: “It would seem this movement is being driven by emotions rather than facts.” Click here.

Reaction from (Republican-leaning) N+R Editorial Writer Doug Clark: “Uh-oh, Republicans. You could make a very bad mistake here. Better wise up.” Click here.

In the past week, North Carolina Senators Kay Hagan and Richard Burr have weighed in on the Obama administration decision to hold a trial for terrorists linked to the Sept. 11, 2001 terrorist attacks in New York City. (Hagan is here; Burr is the second item here.)

Today, Rep. Howard Coble, a Greensboro Republican, shared his thoughts during one-minute speeches on the House floor:

“Mr. Speaker, it’s not uncommon for presidents and administrations to commit blunders. But of the several blunders that have been forthcoming from this administration, the one that stands out most prominently is the decision to authorize prosecution of the 9/11 terrorists in New York City.

“This decision, Mr. Speaker, violates reason and common sense. The cost will be overwhelming, the risk not insignificant and the defendants will enthusiastically embrace the circus atmosphere to espouse their radical views. I hope it is not too late to rescind this flawed decision and conduct prosecutions before military tribunals.

“Of the several blunders committed, this one must be awarded the ultimate blue ribbon. Mr. Speaker, let’s hope it’s not too late rescind it and move forward.”

This weekend I wrote about S 510, the food safety bill moving in the U.S. Senate. (Click here for that.) The Senate’s HELP Committee passed the bill yesterday. From the DesMoines Register:

The Senate health committee, headed by Sen. Tom Harkin, D-Ia., approved an overhaul of the Food and Drug Administration, which regulates 80 percent of the food supply, virtually all products other than meat and poultry.

Harkin said the bill "comprehensively reforms our current food system, yet is adaptable enough to keep pace with an evolving industry."

The legislation now goes to the Senate floor. If approved there, it will have to be reconciled with a similar but slightly tougher bill that the House approved this summer.

Click here for the full story. (More here.)

Sen. Richard Burr was a co-sponsor of the bill and offered an amendment he said would address many of the concerns of small farmers, who worry local food economies could be hurt by the bill. From a Burr release:

“Americans are all too familiar with the nationwide outbreaks and recalls in recent years that have resulted in illnesses across the country.” Senator Burr said. “In addition to the health concerns, these incidents also had a significant economic impact on American growers and producers across our nation. I applaud the hard work of my colleagues on the HELP committee in addressing this issue and making food safety legislation a priority. This piece of legislation is essential to protect our nation’s food supply and keep Americans safe and healthy.”

Specifically, the FDA Food Safety Modernization Act would improve the ability of the FDA to detect and respond to food-borne illnesses by evaluating safety threats at food facilities, increase scrutiny of imported foods, and explore ways to track fruits and vegetables in the case of an outbreak. It would also give the FDA the authority to issue a mandatory recall of an article of food if it determines that there is a reasonable probability that it is adulterated and will cause serious adverse health consequences or death to humans or animals.

This bill also includes a bipartisan amendment by Senator Burr, cosponsored by Senator Bennet (D-CO), that would address concerns expressed by farmers and small businesses by ensuring consultation, education, and outreach on behalf of the FDA with farms, businesses, and farmers who sell directly to consumers to help them understand and comply with produce safety requirements. This amendment, which would require the FDA to hold public meetings in various locations across the country, has been endorsed by the American Farm Bureau Federation.

But the Register story says there is still some concern:

The Senate bill included provisions to address objections from small-scale and organic farmers about new regulations. However, the bills could still be an unnecessary burden on thousands of small farms, said Ferd Hoefner of the Sustainable Agriculture Coalition. The legislation also needs to fund training for small farms and processors, he said.

More information on the bill itself is here.

Sen. Kay Hagan held her regular Wednesday conference call with reporters this morning. The focus of her opening remarks was on jobs and the economy. She said that North Carolina's Employment Security Commission would be getting a $946,000 grant from the federal stimulus program. The grant will pay to catalogue and promote so-called green jobs in the state.

"The number one issue on everyone's mind by far is jobs - jobs, jobs, jobs," Hagan said.

Even though the health care debate has eaten up the lion's share of time and attention this year in Congress, some polling has shown that employment - or lack thereof - is an equally pressing concern for a lot of folks. So it's not surprising to see Hagan and other Democrats shift their attention to jobs. (More here and here.)

You can hear more of the jobs discussion below.

I asked Hagan about two unrelated matters that have been lurking around my notebook for the past couple weeks.

First, Mel Watt has been getting a fair amount of attention for his work with a bill that would open the door to audits of the Federal Reserve. From A Bloomberg News story:

U.S. Rep. Mel Watt has denied gutting legislation to audit the Federal Reserve, as the bill's sponsor, Texas Republican Ron Paul, charged.

The proposal, which has 308 co-sponsors, would allow audits of the Fed's monetary policy deliberations. Fed officials oppose the bill.

The Fed has drawn scrutiny from Congress and the public after it bailed out financial institutions and doubled its balance sheet to $2.16trillion in the last 14 months to stem the deepest recession since the 1930s and unlock frozen credit markets.

"We don't want to have politicians second-guessing the Fed on monetary policy," said Watt, a Democrat from Charlotte. He wouldn't say what specific changes he made in the legislation. "When Ron Paul says I gutted the bill, he's exaggerating. I support auditing a number of transactions."

Click here for the whole thing.

I asked Hagan where she was on the matter.

"That's one of the issues - with health care, climate change, the jobs, the recession - that I know we will be taking up more in the first of the year. I am looking at different factors having to do with that and I have not come to a decision on that at this point, but I'm studying it," Hagan said.

Also, my Washington Watch column this week I reported Sen. Burr had some fairly strong objections to bringing terror suspects connected to the Sept. 11, 2001 attacks to New York for trial.

“These are some of the most dangerous terrorists in the world,” Burr said in a written statement. “I find it shocking that the administration would choose to bring the self-proclaimed mastermind of the September 11 attacks to our shores." (Click here and see the second item.)

I asked Hagan her thoughts.

"I think they definitely need to be brought to justice. These are monsters that have killings in our country and I'm pleased that the administration is bringing them to justice. I think they've been sitting for years and years and it's about time we take them to court," Hagan said.

The follow up question asked whether she had misgivings about bringing them to mainland U.S. soil for those trials.

"Regardless of what court they're tried in, they've got to be brought to justice," she said.

Click on the audio player below to listen to the full call. There are a couple patches toward the end of the recording where she was doing Q+A where you'll hear "dead air." Because of how this was recorded, my voice doesn't carry onto the tape.

As widely expected, Senate Democrats elected Sen. Martin Nesbitt their majority leader today.

“Nothing earth-shattering has happened,” the Buncombe County Democrat told reporters immediately after emerging from a closed-door session with the caucus he’ll now help lead.

Nesbitt quickly confirmed what we all suspected: he would not serve as rules chairman as his predecessor, Sen. Tony Rand, did. This indicates that power will be shared a bit more broadly in this new iteration of the Democratic caucus. President Pro Tempore Marc Basnight did not give any hint who he might appoint to chair the powerful rules committee.

Nesbitt took issue with news reports that described him as a “more liberal” or “less business friendly” figure than Rand.

“In today’s world, labels just don’t work…I’m a mix,” Nesbitt said. Although, he did allow as how “mountain populist” might just fit.

“I do do this, I try to view the world through the eyes of that average person who is trying to make it,” Nesbitt said, adding that “making it” in today’s world is getting tougher.

Nesbitt, 63, turned 33 the year he took his mother’s seat in the North Carolina House. He served there until 1994 when he (and lots of other Democrats) were ousted as part of the Newt Gingrich-lead Republican wave that brought the GOP to power in Washington and elsewhere.

That experience will inform his work as he assumes his role as a lead fundraiser and strategist for Democratic efforts to hold onto the state senate.

“I saw ’94 up close and personal,” Nesbitt said, adding that there may not be anyone more qualified to help shepherd the caucus through what looks on paper to be a tough election cycle.

Nesbitt returned to the House for the 1997-98 session and switched to the Senate in 2004.

He is married, with one son and one stepson. His stepson, Chad Nesbitt, leads the Carolina Stompers, a conservative group formed in 2007 that has taken aim at the state and national Democrats.

Another point of well-known trivia: Nesbitt serves as crew chief for his son, Mart's, stock car racing team.

Click on the player below to hear more from Nesbitt as he talked to reporters today.
 

A second Republican has entered the race to replace Rep. Laura Wiley in House District 61. (Background here.)

Paul Norcross, 44, of High Point, told me on the phone today he would file to run, joining council member John Faircloth in the field of GOP contenders.

Norcross is a logistics consultant to DHL who is in the process of starting his own logistics business. And he is a cofounder of Phoenix Academy, a charter school in High Point. An active member of the Rotary, Norcross is married and has two children in High School.

When I spoke with him, Norcross said those two experiences shaped his desire to run for office. Improving education and creating educational choice for parents would be a key goal for him, as would developing the Triad into a logistics and freight hub.