When car-wash magnate Bunkey Morgan won a seat on the Chatham County Commissioners in 2002, his campaign was clouded with controversies: legal challenges over whether he lived in his district; complaints that he funded his own run and later recouped costs in post-election donations to hide his special-interest support; and questions about a real estate deal in which he profited more than $30,000 that one watchdog group alleged was an under-the-table campaign contribution.

Morgan for Commissioner, The Sequel, is shaping up similarly. But there’s a twist on the real estate deal: This time around, using land transactions, the candidate is providing personal financial assistance to two politically connected African-American leaders who serve on the county planning board and who are both well-positioned to shore up Morgan’s campaign on several political and geographical fronts.

“Bunkey is politicking. Bunkey wants to win again, and he’s been courting the black vote in the south and the west, particularly, for some time,” says Commissioner Patrick Barnes, who is not up for re-election.

Commissioners are elected countywide but must live in their districts. A little over a year ago, Morgan, who represents District 4 in central/western Chatham, changed his “official” residence from the bungalow in Silk Hope–the address he used as a District 4 candidate four years ago–to a townhouse in Siler City, also in District 4. He says he moved there in September 2004. Meanwhile, Morgan continues to own the luxury home on 13 acres that he shares with his wife near Apex, in District 1, as well as the 30-acre Silk Hope property that was the center of both the residency question and the land deal four years ago.

In an e-mail interview, Morgan would say only: “The multiple residences were addressed and settled in 2002.”

Four weeks ago, on Dec. 27, Morgan deposited $50,000 of his own money into his campaign coffers–significantly more than the total he spent last time.

“I just wanted to make sure enough funds were available in case I don’t receive enough contributions,” Morgan says, noting he still owes himself about $9,000 from 2002. “You will have to admit I have faith in myself and I can afford to carry the campaign if needed.”

As the most powerful of three commissioners up for election on the five-member board this year, Morgan’s re-election–or his ouster–will be a referendum on the future of Chatham County, pitting grassroots citizen forces calling for growth controls and land-use planning against real estate developers, builders and other members of the county’s sprawl lobby who back Morgan.

While his early and hefty loan to his own campaign account signals a heated political season, it’s Morgan loaning his pocketbook to planning board members Martin Mason and Clyde Harris that has Barnes and other county leaders questioning his principles.

“I certainly think it’s unethical, to say the least,” says Chris Walker, who serves on the planning board with Mason and Harris.

Three months ago, public records show, Morgan accepted promissory notes of $12,000 from Mason and $4,500 from Harris, using land each man owns as collateral to secure the deeds of trust. It’s unclear from the public documents whether Morgan accepted the promissory notes in exchange for actual cash or some other asset or favor. Morgan says in both cases, he co-signed private bank loans to help “friends.” Harris used the money to pay his son’s college tuition, Morgan says, and Mason to expand his family child care business. Morgan says he asked for the promissory notes in exchange for personally guaranteeing the bank loans because “any good businessperson will ask for collateral under these circumstances.”

But in Mason’s case, the collateral Morgan accepted is a piece of land worth barely a tenth of the amount of debt it secures. And at the same time he was receiving private help from the county commissioners’ chairman, Mason was actively seeking taxpayer-funded assistance to expand his day care center as well–assistance that Morgan eventually will be asked to vote on in his public role as a commissioner.

“Everything was done the correct way and above board to make sure we could answer truthfully these types of questions,” Morgan says. “It is not a conflict of interest helping friends even if they are on boards and committees, especially if the help is legally done.”

Both Mason, who was appointed directly by Morgan, and Harris, who was appointed by former commissioner Margaret Pollard, consistently vote in favor of development proposals on the planning board, a citizen body that’s been a hotbed of debate since Morgan’s narrow victory helped open Chatham’s landscape to unchecked residential and commercial development. Mason also is active in the county’s Democratic Party and serves on the county’s water advisory board, which is overseeing a multi-million-dollar expansion of the system designed to accommodate the building boom enabled by the development-friendly majority that swept into power with Morgan’s win.

As African Americans, both Mason and Harris are members of a constituency that Morgan, a former Republican with a generally conservative platform, has worked hard and spent thousands to cultivate. During the 2002 campaign, Morgan made large private donations to African-American churches throughout Chatham.

Asked whether helping Mason and Harris recently was a new prong to this strategy, Morgan says: “I make generous personal contributions to a lot of people, nonprofits and churches of all color . . . I cannot believe you attempt to bring racism into these questions.”

Five days after the deed of trust was recorded between Morgan and Mason and his wife, Mary, Mason’s Child Care Center relocated from its longtime quarters in the couple’s home to a large new downtown space, expanding its capacity to enroll 160 children, according to records at the N.C. Division of Child Care.

Morgan says he originated the idea of moving a day-care center into the space that had been vacated by the Joint Orange Chatham Community Action program and supported Mason’s business expansion both politically and personally because “it was good for the community.”

“Everyone agreed it could be a win-win situation,” Morgan says. “Mr. Mason obtained a loan from a bank and I believed enough in him to guarantee the loan. He offered me the collateral and I accepted.”

Mason, however, hung up in the middle of a phone interview when asked to explain the deed of trust.

“That has nothing to do with anything. He’s a good guy, let’s just put it at that. It’s really my business,” Mason says angrily, just prior to disconnecting the line. “It’s just something that happened between me and him.”

Both deeds of trust were recorded at the Chatham County Register of Deeds office on Oct. 27, 2005, less than a minute apart. In another twist, the legal paperwork was prepared and filed by yet another member of the planning board, Siler City attorney Jennifer Andrews. A self-employed lawyer who also serves on the county’s Economic Development Commission, Andrews and her relationship with Morgan raised eyebrows last summer when the chairman successfully pushed a majority of commissioners to retroactively pay Andrews $10,000 in public dollars for legal work she had originally done as a volunteer in her role as a member of the economic development board.

Morgan says Andrews, whom he appointed to both the planning board and the EDC, represents him in a number of legal matters and that it’s not a conflict because he pays her “fair fees” and it’s good for the local economy.

“It is my goal to spend as much of my dollars in Chatham County as I can,” Morgan says.

Andrews did not return phone calls.

County tax and land records show the parcel covered by the deed of trust between Morgan and Mason has a 2005 fair market value of only $1,380. The vacant lot is less than a quarter-acre, has no road frontage and is probably not buildable under zoning laws, county officials say.

“Our opinion of the value is that it’s only worth about $1,300,” says county tax administrator Kimberly Horton. “Whoever let him borrow $12,000 against it sure didn’t call us to ask what it was worth.”

Asked specifically why he accepted as collateral a piece of land worth so much less than the debt it secures, Morgan says:“You cannot put a value on friendship.”

Land records show that Mason acquired the sliver of land off Harold Andrews Road in January 2003, paying $865 for it at public auction following the county foreclosing on the previous owners for defaulting on their property taxes. Mason promised to repay the promissory note to Morgan by March 11, 2006.

At the same time that Morgan was helping Mason privately, Mason was also seeking public assistance, talking to the county economic development commission president, Tony Tucker, about applying for county funds to expand his day care, according to Tucker.

About a year ago, the commissioners set aside $250,000 for a small business assistance program to be administered as a revolving loan fund through Tucker’s office. The fund can make loans of between $5,000 and $20,000 to Chatham residents, Tucker says, with a maximum repayment window of five years and half of the total funds set aside for minority applicants. Mason is one of “four or five” businesspeople currently working on applications, Tucker says.

A citizen review board will consider the applications and make recommendations to the EDC, on which Morgan sits. The EDC’s recommendations will then be considered by the commissioners. That means Morgan could wind up voting–twice–on whether to give a publicly financed loan to the same businessman who’s privately indebted to him for $12,000, and Mason could repay the loan Morgan helped him secure with money borrowed from the Chatham County government.

Morgan declined to say whether he considers this scenario a conflict of interest since Mason had not applied for the county funds yet.

“If he does, I will be glad to inform you of my position at that time,” Morgan says.

Upon learning that Morgan, the loan program’s chief cheerleader, personally helped Mason with private funding for the day care’s expansion three months ago, Tucker says: “You’re talking about something I don’t know anything about. That’s outside my arena.”

Before the loan program was established, there was a widespread misunderstanding that the money would be given out as grants. Potential applicants flooded Tucker’s phone line and were unhappy to hear the grants did not exist.

“We had a lot of people that did think it would be grants, and it’s unfortunate it got out that way,” Tucker says. Asked whether Mason was one of the disappointed, he says he had “more than 100 phone calls” and couldn’t say for sure if Mason was among them.

While declining to discuss his private financial dealings with Morgan, Mason is effusive about Morgan’s public leadership.

“He’s one of the smartest commissioners to ever come through Chatham County,” Mason says. “He’s moved a lot of obstacles out of the way in order to get things done.”

With his seats on the planning and water boards and a record of activism in county politics–serving as the Democratic chair of the Albright precinct and helping run former County Commissioner Uva Holland’s unsuccessful bid to return to office in 2004–Mason’s opinion may well boost Morgan’s campaign both in Siler City and in the African-American community countywide.

“I’ve gotten to know Commissioner Morgan very well, and he’s a doer–he gets things done,” Mason says. “If anybody asks me, I’ll be more than glad to tell them he’s a good guy and he’s done a lot of good for this county.”

In the second deal, Clyde and Deborah Harris put up an interest in their primary residence, with a value of $114,281, as collateral for the $4,500 they borrowed from Morgan. The loan is due to be repaid in full by September 2007.

Harris, the retired principal of the Eastern N.C. School for the Deaf and a resident of the southern Chatham hamlet of Bear Creek, could not be reached for comment. His wife said a reporter’s question was the first time she’d heard of the loan–though her signature appears on the paperwork.

“The family needed help paying college tuition,” Morgan says, adding that he has also funded “scholarships” for other Chatham citizens and set up “a college endowment.” He declined to provide specifics on either the endowment or other recipients of his help, except to say one “may be a relative of a former elected official.”

The planning board chairman says Morgan’s actions are no cause for concern.

“If Bunkey Morgan chooses to loan money to whomever, based on his ability to do so, I have no problem with it,” says Charles Eliason, a surveyor by trade who regularly has to recuse himself from votes on projects because the applicants have paid him for professional services. “This connection you’re making is just absurd. People have business relationships regardless of politics.”

For example, Eliason and his wife have a deed of trust on file with former Commissioner Rick Givens, from whom the couple bought several buildings in 2002 and for whom Givens provided $75,000 in owner financing–a deal in which real estate actually changed hands.

The board’s code of ethics addresses conflicts of interest when members have personal or financial relationships with individuals and corporations who have business before the board. But it is mum on the topic of financial relationships between members of the board and the elected officials who appoint them, and to whom they make recommendations on development proposals and other matters in the public’s interest.

Barnes, who was elected in 2004 in a victory fueled by citizen outrage over the growth-at-any-cost approach of the 3-2 majority Morgan holds, calls Morgan’s deals with Mason and Harris “underhanded and unethical.”

“Why would a commissioners’ chairman be co-signing notes for planning board members?” Barnes asks. “That’s an error in judgment. It just doesn’t sound ethical to me.”