GREENVILLE — Nearly five hours of testimony Tuesday by former state Rep. Stephen LaRoque came down to two statements he made on the stand.
One, “There’s no doubt in my mind I made mistakes,” and two, “It was my pay — it was money owed to me.”
In between, defense counsel and LaRoque himself worked to show he was as transparent as could be in dealing with the U.S. Department of Agriculture, the IRS, the federal investigation and anyone else.
The prosecution, in turn, made one more attempt to prove LaRoque purposefully tried to hide payments to himself and used them for the benefit of himself and his family.
Tuesday marked the beginning and end of the defense’s direct examination period, and LaRoque spent most of the day in the witness chair. The meat of his defense goes back to a disputed 1999 contract entitling LaRoque to either 3 percent of East Carolina Development Company’s total assets — as the defense claims — or 3 percent of the loans administered — as the prosecution claims.
Asked by defense attorney Joe Cheshire whether he was sure he had a contract in 1999 outlining his compensation, LaRoque said there was.
“I know for a fact I did because we both signed it,” LaRoque said, referring to himself and then-ECDC President John Melling.
He said he kept a running total of the amount of money owed to him monthly by taking the total number of assets under the ECDC banner, multiplying it by 3 percent and dividing it by 12.
Saying he birthed the company and viewed ECDC as a parent-child relationship, LaRoque stated he left money owed to him in the company’s accounts because he wanted it to grow so it could help more ENC businesses. He said he didn’t mind sacrificing his money so the company could prosper.
No copy of the contract signed in 1999 is known to exist. LaRoque said he searched every nook and cranny of his office looking for it during the investigation, but came up short.
During the testimony, Cheshire entered into evidence an N.C. Policy Watch story from Sept. 7, 2011, regarding allegations he stole $200,000 from ECDC. LaRoque confirmed that the first questions from federal investigators followed the narrative of the piece.
He also said documents referenced in the piece were handed to former state Rep. Van Braxton’s attorneys as part of the discovery process in LaRoque’s defamation suit against Braxton and the N.C. Democratic Party.
Sarah Ovaska, who wrote the piece, told The Free Press the background materials she used in writing the story were public documents, not something that would have been handed to her by a party or parties in the case.
Several times, both under questioning by Cheshire and Assistant U.S. Attorney Dennis Duffy, LaRoque admitted he made mistakes in the management of ECDC, the keeping of records and the reporting of records.
Part of the reason, he said, was that neither the USDA — which was sending loans to ECDC to distribute among area small businesses — nor anyone else raised any serious questions about the organization’s operations.
With LaRoque holding fast to his statement regarding the 1999 contract and compensation agreement while admitting his shortcomings on management and records, cross-examination resulted in LaRoque and Duffy offering two different interpretations of the same facts.
The prosecution entered into evidence the path money took as it originated in checks from ECDC, then going through different bank accounts before ending in a final destination — that included purchasing LaRoque’s share of Bladez on Ice, a Zamboni for the ice rink, Fabergé eggs and jewelry and a rental home for his stepdaughter and her children.
LaRoque didn’t dispute the checks, saying the money was owed to him from ECDC to begin with, and it was all documented so there was no attempt to hide anything.
Closing arguments
The prosecution and defense give their closing arguments this morning, with a time limit set for an hour to an hour and 15 minutes each. The case is anticipated to go to the jury for deliberation before noon.
Wes Wolfe can be reached at 252-559-1075 or wes.wolfe@kinston.com. Follow him on Twitter @WolfeReports.