"The State Ethics Commission has the authority to investigate complaints against those persons covered by Chapter 120C of the North Carolina General Statutes, “The Lobbying Law,” for alleged violations."
"Complaints involving allegations related only to potential reporting and registration violations should be reported to the Secretary of State’s Lobbying Compliance Division."
Signed complaint form attached.
Key Allegations:
1. Undisclosed Conflicts of Interest & Improper Influence
DGI's 1/30/2025 Bi Annual report (attached) states;
"The Bellemeade Parking Deck is another area where DGI has been instrumental in working with all business owners impacted by its imminent removal. This includes relocating existing tenants and working to identify new development opportunities."
And;
"DGI engaged with City staff, Boards, Commissions, and City Council on issues that impact the BID area stakeholders, including Depot activation and renovation, public safety, road construction, Bellemeade Parking Deck demolition, persons experiencing homelessness, parking and transportation, GPD, BHART, city ordinances and codes, and items related to our 2030 Strategic Vision Plan."
On February 18, 2025, Zack Matheny moved, voted and signed for GENERAL BUSINESS AGENDA item I.1; "2025-130 Resolution Approving Bid in the Amount of $2,354,000 and Authorizing Execution of Contract 2024-0610 with D. H. Griffin Companies, LLC. for the Demolition of the Bellemeade St Parking Deck".
https://www.youtube.com/live/5KWl3t1ia1U?si=xc-NQJfwe6XK-cum&t=12041
Zack Matheny voted on June 3, 2025, to approve the transfer of city-owned Bellemeade property to Roy Carroll’s company, despite clear conflicts:
https://www.youtube.com/live/oc73M2bFEpg?si=iZzjqexaj2f_o3GA&t=11978
In the Bellemeade Street Deck deal, Roy Carroll's company essentially received a $570,000 windfall by purchasing property appraised at $2,420,000 for only $1,850,000, while simultaneously leaving taxpayers to absorb a $504,000 loss when the city paid $2,354,000 for demolition but only recovered $1,850,000 from the sale. This arrangement effectively transferred over half a million dollars in public value to a private developer while also forcing the city to eat additional costs, creating a double benefit for Carroll at the expense of Greensboro residents who saw their tax dollars used to subsidize a profitable real estate transaction.
Roy Carroll and his wife each donated $5,000 to Matheny’s 2022 campaign.
Craig Carlock, a Carroll Companies executive, sits on DGI’s Board, while Matheny serves as DGI’s President—creating a direct financial and political relationship.
https://www.downtowngreensboro.org/about-us/board-of-directors/
I was forwarded Downtown Greensboro Inc.’s FY 2023–2024 financial records released by the City on Greensboro May 21, 2025 (attached). I don't have FY 22-23 or 24-25. The City and DGI have not released the other information to date, in non-responses to information requests. It appears the ledger was released by mistake.
https://www.youtube.com/live/oc73M2bFEpg?t=3156s
Greensboro Public Records Request #29695 Ledger Attached.
DGI (under Matheny’s leadership) has Carroll affiliated expenditures of $4,313.53 in taxpayer-funded grants and expenses (FY 2023-24), attached, including:
$2,500 façade grant to Park View Development LLC (Carroll-owned).
$1,762.96 for a "Carroll meeting" at Postino.
$50.57 for "Lunch Roy Carroll" at Green Valley Grill.
2. Potential Bribery or Quid Pro Quo
The sequence of Carroll's campaign donations in 2022, followed by taxpayer funded DGI spending in return and favorable city council votes reveals a clear pattern of reciprocal influence that raises serious questions about money's role in municipal decision-making.
Matheny’s failure to recuse himself from Carroll related votes appears to violate NCGS § 14-234 (Conflict of Interest) and possibly NCGS § 14-217 (Bribery of Public Officials).
3. Unregistered Lobbying & Misuse of Public Funds
DGI (led by Matheny) used taxpayer money to wine and dine city officials who later voted on Carroll’s projects:
$43.08 for City Manager at Liberty Oak (9/27/23).
$62.49 for Mayor Nancy Vaughan at Car Bar (9/29/23).
$55.53 for Councilmember Nancy Hoffmann at Print Works Bistro (3/7/24).
Matheny, Rob Overman or Downtown Greensboro aren't registered as lobbyists, yet DGI actively shapes policy benefiting Carroll and other donors, violating NC lobbying disclosure laws.
There are no entries under lobbying within DGI's available IRS form 990s (attached).
4. No-Bid Contracts & Lack of Transparency
The Bellemeade property transfer handed Carroll a $570,000 windfall through a no-bid deal that bypassed competitive processes, violating public trust and procurement laws while forcing taxpayers to absorb an additional $504,000 loss on the demolition costs.
Requested Actions:
Criminal Investigation into potential violations of:
NCGS § 138A-32(e): Prohibited gifts to public officials.
NCGS § 163-278.12: Undisclosed lobbying. Secretary of State’s Database Confirms Noncompliance. Searches for "Matheny," "Downtown Greensboro," and "Overman" (DGI VP) return zero registrations
North Carolina law (N.C.G.S. § 14-234) prohibits public officials from voting on matters that financially benefit their associates.
NCGS § 14-234 (Public officials benefiting from contracts).
NCGS § 14-217 (Bribery of public officials).
NC lobbying disclosure laws (DGI/Matheny failed to register and report).
DGI's IRS form 990, attached, states; "FUNDS ARE USED TO POSITION THE DOWNTOWN BUSINESS IMPROVEMENT DISTRICT AS AN ATTRACTIVE, VIBRANT DESTINATION FOR THOSE WHO WORK, PLAY AND LIVE HERE THROUGH PUBLIC SPACE MANAGEMENT, ECONOMIC DEVELOPMENT INITIATIVES, MARKETING SERVICES, SPECIAL EVENTS AND ADVOCACY ACTIVITIES."
Misuse of public funds (DGI’s questionable expenses without explanation of who and why).
Attached;
DGI's 1/30/2025 Bi Annual report proving lobbying activities which states;
"DGI has been instrumental in assisting with the navigation of various City departments as this project has unfolded."
"Ongoing assistance with the Carroll Companies and the anticipated Marriott AC Hotel"
"Our Economic Development Staff-comprised of the President/CEO, Vice President and our Economic Development Analyst-held 242 economic development and planning meetings in Q1 and Q2."
"DGI is currently working in conjunction with the City Manager’s Office, Parks and Recreation, GDOT and various other city departments on a major placemaking project at the J. Douglas Gaylon Depot..."
"DGI is always working to recruit new businesses to downtown through various avenues, including ...advocacy, serving as a liaison with city departments... Currently, DGI is working with several developers to facilitate ongoing development in the center city."
"DGI continues to serve in an advocacy capacity for our downtown business owners. Most recently, we provided valuable feedback to GDOT on the proposed fee increase for downtown parking and cited potential concerns related to the impact of those increases."
"In our role as a connector, DGI serves as a liaison between builders, developers, and investors and the appropriate stakeholders and governmental departments, including Economic Development, Permitting, Water & Sewer, Planning, GPD, GDOT, and GFD. Our economic development staff continue to meet regularly with developers and investors, helping them navigate the development process and connecting them with critical resources to advance their projects."
It was made clear at the meeting that illegal gifts have been flowing to City staff and elected officials from DGI and Matheny;
Greensboro City Council Meeting 6/3/2025
I said; "Their ledger shows over $40,000 in spending on perks: Haunted House tickets, Oyster Roast tickets, Swarm, Tanger, Grasshoppers, and Wyndham events. Then there’s meals with city officials, nonprofit leaders and Matheny political donors at Green Valley Grill, B Christopher’s, Pura Vida, Natty Greene’s, Undercurrent, Lucky 32, Print Works, Sushi Republic, Postino, Inka Grill and more. All on the public’s dime, paid for with our tax dollars."
https://www.youtube.com/live/oc73M2bFEpg?t=13206s
https://www.youtube.com/live/oc73M2bFEpg?t=14655s
If Zack Matheny and DGI spent a total of $60,000 on event tickets over the last three years, with tickets averaging $65 each, they could have distributed approximately 923 tickets ($60,000 ÷ $65 = 923.08). This represents a significant volume of event access that could influence relationships and create networking opportunities between public officials and private interests.
Matheny has been CEO of DGI since July, 2015.
https://www.linkedin.com/in/zack-matheny-27473613/
Zack Matheny has been a City Councilman since for the second time after resigning in 2015 to take his DGI position in 2015 to avoid a conflict of interest;
"A few months ago, I expressed interest in leading Downtown Greensboro Incorporated and have interviewed to become the organization's next President and CEO. Due to the nature of the discussions and my desire to avoid any perceived conflicts of interest, as of today, I plan to resign from City Council at the June 16 meeting."
And then;
"At the time, Matheny was advised by the city attorney that he could not serve on the City Council and as president of a nonprofit organization that received funding from the city."
"Chip Roth has announced he is running for the District 3 seat, and when it was rumored that Matheny was going to run for his old seat, Roth sent out a press release attacking Matheny for having a conflict of interest as the head of DGI."
https://www.rhinotimes.com/news/zack-wants-his-old-city-council-seat-back/
Meaning;
Violation of North Carolina Gift & Ethics Laws
A. NCGS § 138A-32 (Gift Ban for Public Officials & Employees)
Prohibition: Public officials and employees (including city council members and staff) cannot knowingly accept gifts from a "person" (including organizations like DGI) that:
Do business with the city (e.g., DGI receives taxpayer funding).
Lobby the city (if DGI advocates for policies benefiting specific developers).
Have financial interests affected by the official’s duties (e.g., Carroll’s property deals).
B. NCGS § 14-234 (Conflict of Interest for Public Officials)
Prohibition: Officials cannot participate in votes or decisions that financially benefit themselves, family, or business associates (e.g., Matheny voting as a Councilman on Carroll projects while a Carroll employee sat on DGI's board, while DGI funds Carroll’s ventures with taxpayer money after accepting campaign contributions).
Penalties: Class 1 misdemeanor (up to 120 days jail) or felony charges if corruption is proven.
C. NC Lobbying Laws (Unregistered Lobbying)
If DGI (under Matheny) is influencing city policy without registering as a lobbyist, it could violate NCGS § 120C-101.
Gifts to officials from unregistered lobbyists are explicitly banned.
If DGI is a city contractor (receiving taxpayer funded grants or managing downtown projects with public money), its meals for officials could be expressly forbidden.
3. Potential Criminal Implications
A. Bribery (NCGS § 14-218)
If gifts were given to influence official actions (e.g., DGI wining/dining officials coincident with Carroll-related votes), this could constitute bribery (a Class F felony).
On December 5, 2023, Zack Matheny charged a $300 lunch at Undercurrent Restaurant to his DGI American Express card for a meeting with powerful real estate developers and city contractors including Samet, Dick, Carroll, Hoyle, Baxter, Waldeck, and Smith, suggesting DGI was facilitating access between these private interests and the city councilman who votes on their projects.
B. Misuse of Public Funds (NCGS § 14-254)
If DGI used taxpayer money (e.g., city grants) to pay for officials’ meals, this could be embezzlement or fraud.
Zack Matheny misused taxpayer-funded DGI resources to wine and dine key city employees - spending $42.30 on December 21, 2023, to take Parks and Recreation's Josh Sherrick to Mellow Mushroom, and $44.30 on February 22, 2024, for a meal with Parks and Recreation Director Phil Flieshman at Cille & Scoe, essentially using public money to cultivate relationships with the very city staff who implement policies he votes on as a councilman.
Key Takeaway:
The repeated pattern of DGI (led by Matheny) funding meals for officials who later vote on Carroll’s projects creates a strong appearance of quid pro quo corruption. At minimum, this violates ethics laws; at worst, it could justify criminal charges.
If DGI staff, friends, or family members used event tickets purchased with taxpayer or organizational funds;
A. Misuse of Public Funds (NCGS § 14-254)
If DGI receives city funding (taxpayer money) and uses it to buy tickets for personal use (e.g., staff, friends, family), this could be considered embezzlement or misappropriation of public funds.
Example: If DGI used a city grant to buy concert/sports tickets and gave them to employees’ relatives instead of for official business, this could be illegal.
B. Violation of IRS Rules (Taxable Income)
Gifts of tickets to employees/friends may count as taxable income (IRS "fringe benefit" rules).
If DGI didn’t report these as income on W-2s/1099s, it could face IRS penalties.
Nonprofit Compliance Issues (If DGI is a 501(c)(3) or (c)(6))
Private Benefit Doctrine: Nonprofits cannot use funds for private gain (e.g., giving tickets to board members’ friends without a valid business reason).
IRS Form 990 Reporting: DGI must disclose related-party transactions (e.g., tickets given to insiders), which appears to not have happened if so.
If City Attorney Chuck Watts (who accepted at least $64.17 DGI-funded meal on 11/9/2023) advised Zack Matheny that he could vote on a Carroll-related matter—despite clear conflicts—this raises serious concerns about:
If Watts knew Matheny had a conflict (due to DGI’s financial ties to Carroll) but still approved his vote, this could be obstruction.
Obstruction of Justice (NCGS § 14-221)
Violation of NC State Bar Rules (Legal Ethics)
Rule 1.7 (Conflict of Interest): Watts had a personal conflict (he took DGI gifts) but still advised Matheny—a clear ethical breach.
Rule 8.4 (Misconduct): Knowingly giving bad legal advice to enable corruption violates attorney ethics.
Conspiracy to Violate Ethics Laws (NCGS § 14-223)
If Watts and Matheny colluded to bypass ethics rules, they could face felony conspiracy charges.
DGI’s Financial Ties to Carroll = Clear Conflict
DGI (led by Matheny) gave Carroll $4,313.53 in grants/meals.
Carroll donated $5,000 to Matheny’s campaign.
Carroll’s employee sits on DGI’s board.
Matheny voted to give Carroll city property (Bellemeade) at a loss to taxpayers.
NCGS § 138A-32 prohibits officials from voting on matters benefiting donors/business associates.
.
.
Watts' inaccurate comments at the end of the meeting;
https://www.youtube.com/live/oc73M2bFEpg?t=18028s
Watts’ Own Conflict (DGI Meal) Disqualifies Him
He cannot impartially advise on DGI/Matheny ethics issues because he took taxpayer funded gifts from the same organization.
He should have recused himself and let an independent attorney review the matter.
The Greensboro City Council should have hired an outside attorney (not Watts) to investigate.
When a city attorney has a conflict of interest due to receiving gifts from an organization under ethical scrutiny, yet fails to recuse himself and instead provides legal advice that clears that organization, it raises serious questions about;
Article 30 - Obstructing Justice (N.C.G.S. Chapter 14)
Various obstruction statutes could apply if Watts knowingly provided biased legal advice to impede proper investigation of ethics violations.
https://www.youtube.com/live/oc73M2bFEpg?t=8994s
https://www.youtube.com/live/oc73M2bFEpg?si=L-yfOdA-yZsShc1v&t=9926
The second link covers items G.11 and G.12.
N.C. General Statute 14-234 (Self-Dealing/Conflicts of Interest)
If Watts received gifts from DGI while providing legal advice that benefited them, this could apply.
N.C. General Statute Chapter 138A (State Ethics Act)
The Ethics Act establishes conflict of interest standards, a ban against the acceptance of certain gifts by covered officials, and restricts the use of official positions for private gain. This would cover the gift acceptance and potential misuse of official position.
Article 31 - Misconduct in Public Office (N.C.G.S. Chapter 14)
This covers misconduct in public office Chapter 14 - Article 31 and could apply to a city attorney failing to perform duties impartially due to personal interests.
Professional Conduct Rules
North Carolina has special conflicts of interest rules for current government officers and employees Special Conflicts of Interest for Former and Current Government Officers and Employees that could create attorney disciplinary issues for Watts.
The most directly applicable would likely be N.C.G.S. 14-234 for deriving benefit while administering government matters, and the State Ethics Act for gift acceptance and misuse of position.
The Pattern of Misconduct;
Watts received gifts from DGI, then provided legal advice clearing DGI and Matheny of ethical violations, while failing to disclose his conflict or recusing himself. This creates an appearance that he used his official position to protect an organization that provided him personal benefits, potentially obstructing proper oversight of public officials.
The city council's failure to recognize this obvious conflict and hire independent counsel suggests either negligence or complicity in allowing a compromised attorney to clear his own benefactors.
If the less detailed DGI meeting minutes show Zack knew he was lobbying, it suggests he deliberately began concealing his activities to avoid documentation that could expose illegal lobbying conduct. The sudden reduction in detail after his reelection indicates consciousness of guilt - he recognized that his dual role as both councilman and DGI leader created lobbying violations, so he started hiding the specifics of DGI's interactions with city government to avoid creating a paper trail of evidence. This pattern of concealment actually strengthens the case that he was aware his conduct violated lobbying laws and was attempting to cover his tracks.
Thanks,
g
