Fact check: TV ad attacks McCrory on Tree.com without needed context

Sponsor: N.C. Citizens for Progress, a 527 group as labeled under tax code designations that can receive unlimited donations. Funded by the Democratic Governors Association.

Claim: “Tree.com: A company that paid Pat McCrory over $140,000 to sit on its board while he was mayor of Charlotte.”

Context: Pat McCrory joined the Tree.com board of directors in January 2009. He served 14 years as mayor, ending in early December 2009. The ad doesn’t specify that McCrory’s tenure as mayor and board member overlapped for only about 11 months.

According to Tree.com filings with the U.S. Securities and Exchange Commission, McCrory received $78,333 in cash payments and $62,500 in stock awards in 2009, making his total compensation $140,833. McCrory remains a board member with total compensation of $112,500 in 2011, according to SEC filings.

McCrory has defended his tenure and noted that Charlotte pays its mayor only a part-time salary.

Ruling: The ad misses context about the limited overlap between mayor and board member but accurately cites how much McCrory made from Tree.com while he was mayor.

Claim: “Its mortgage companies charged with deceiving customers, paid millions to settle.”

Context: In Arizona, a complaint from the state attorney general alleged that Home Loan Center, a Tree.Com subsidiary, deceptively advertised loans to consumers from August 2004 to July 2007. The case was settled in October 2010 with Home Loan Center paying Arizona $1.5 million but admitting no wrongdoing, court documents show.

In South Carolina, 16 district attorneys sued LendingTree, another subsidiary, in 2008, alleging it and its affiliates failed to make required disclosures to consumers on mortgage applications. The case was settled in January 2012. LendingTree agreed to pay $3 million but did not admit wrongdoing; the complaint was dismissed.

McCrory was not a board member at Tree.com at the time the alleged misleading took place.But he was a board member when the cases were settled. 

Ruling: McCrory didn’t sit on the board at the time of the alleged wrongdoing, but it is true that Tree.com’s subsidiaries faced legal action for deceiving customers and paid big-dollar settlements.

Claim: “He used his position as mayor to lobby state government for millions in tax breaks for the company.”

Context: As mayor in 2006, McCrory wrote a letter to N.C. Commerce Secretary Jim Fain asking for help keeping LendingTree’s operations in Charlotte. The letter, written on city stationary, states that North Carolina was competing against South Carolina, which had offered an incentives package estimated at $53 million. North Carolina’s state incentives, including tax breaks, were $24 million to $27 million, according to Commerce.

“While we clearly can’t match this package, I would ask that you consider any and all means available to you to increase the amount of the state’s incentive,” McCrory wrote.

The state tried to keep the company in Charlotte, but the effort fell apart. Still, the company didn’t relocate and never received any state incentives, Commerce spokesman Tim Crowley said.

The question here is what constitutes lobbying. According to the dictionary, lobbying is an act to promote or secure the passage of a matter by influencing public officials, or an attempt to influence or sway someone toward a desired action. McCrory’s letter fits this definition.

McCrory’s campaign says it wasn’t lobbying because it didn’t meet North Carolina’s legal definition, which says lobbying is influencing or attempting to influence a legislative or executive action through direct communication or activities.

Ruling: McCrory did as many mayors do – advocate for his cause with the state, which meets the common definition of lobbying. But context is missing: He wasn’t a board member at the time. Because inference is so important, the claim is half true. McCrory’s campaign contends these three claims taken together equal a charge of “pay-to-play politics.” The ad doesn’t make this claim, and such an assertion is not proved based on available information. But the ad does allege “questionable ethics” on McCrory’s part. He denies the allegation. 

The ad also raises questions about McCrory’s position on the board and the company’s conduct that are worth exploring. But it could create a false impression and lacks context.

Claim: “Its mortgage companies charged with deceiving customers, paid millions to settle.”

Context: In Arizona, a complaint from the state attorney general alleged that Home Loan Center, a Tree.Com subsidiary, deceptively advertised loans to consumers from August 2004 to July 2007. The case was settled in October 2010 with Home Loan Center paying Arizona $1.5 million but admitting no wrongdoing, court documents show.

In South Carolina, 16 district attorneys sued LendingTree, another subsidiary, in 2008, alleging it and its affiliates failed to make required disclosures to consumers on mortgage applications. The case was settled in January 2012. LendingTree agreed to pay $3 million but did not admit wrongdoing; the complaint was dismissed. McCrory was not a board member at Tree.com at the time the alleged misleading took place. But he was a board member when the cases were settled.

Ruling: McCrory didn’t sit on the board at the time of the alleged wrongdoing, but it is true that Tree.com’s subsidiaries faced legal action for deceiving customers and paid big-dollar settlements.