AP NewsBreak: NC investigator disputes audit claim

RALEIGH, N.C. (AP) — The former investigator who led an audit into ex-North Carolina first lady Mary Easley's university job disputed Friday the state auditor's account of why the probe was halted.

Frank Perry said in an interview with The Associated Press that he never told State Auditor Beth Wood that federal authorities were probing the matter, arguing that he didn't know of any federal involvement until after he left the auditor's office. Wood's office contends she decided to suspend the Easley audit in March when Perry, a former FBI agent, told her that the FBI was looking into the issue.

"If she claims that it was done because of knowledge of an FBI investigation, that is false," Perry said. "It's a misunderstanding at best and a lie at worst."

Wood ceased the audit's work just a couple months after the Democrat inherited the investigation from Republican predecessor Les Merritt. Perry, who left the auditor's office in April, said he learned of a federal probe in May after media outlets began reporting subpoenas were delivered to state agencies.

Wood said Wednesday she testified before a federal grand jury that she initially had concerns about the audit's veracity, and her office said she first wanted investigators to continue working the issue at N.C. State before Perry told her about the work of federal authorities. She said she didn't want to get in the way of such an investigation and didn't face any political pressure to keep it private.

"Frank's work is being criticized as not being up to snuff — and believe me, it wasn't, I saw it — so it doesn't surprise me that he's not taking it kindly," said Wood spokesman Dennis Patterson. Perry and Merritt now work together.

Perry declined to discuss the audit's findings but said the report was conducted by a team of investigators with decades of experience in the office spanning several administrations. He said Wood halted the audit over his objections.

"I thought it was very well done. I thought it was quite supportable," Perry said. The investigators "are people of outstanding reputation and accomplishment."

Two other officials who attended the disputed March meeting did not immediately return a call seeking comment.

Perry declined to say whether he's been subpoenaed to discuss the matter.

Federal investigators have sent several subpoenas to a variety of state agencies seeking information about former Democratic Gov. Mike Easley, his wife's job and their travel. Authorities have focused on Mary Easley's $170,000-a-year work at N.C. State.

Mary Easley has since been fired, with the university saying her job was cut because of budget problems. Three other university leaders have resigned amid questions about their role in Easley's hiring.

Copyright 2009 The Associated Press.