More than just a bubble burst.

• Author: Mooneyham, Scott
• Position: CAPITALGOODS - Editorial

Ponder this: Mike Easley might be a victim of the housing bubble. No, I don't have any knowledge of the former governor's personal finances. I don't know how much of a bath he and his wife, Mary, might have taken--even with a $137,000 discount--on their now infamous purchase of a coastal lot near Morehead City. And, no, I'm not lumping the Easleys among the millions of home buyers who, through no fault of their own, woke up one day to find their houses worth less than they owed on the mortgages.

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Easley appears to have been caught up in a rush of land speculation along the North Carolina coast. In fact, he--and the state Democratic Party, when he was governor--became an investment of a clutch of coastal real-estate developers who, according to testimony before the State Board of Elections last fall, found ways to put their money to work in his administration. Understanding commerce better than most politicians, he seems to have realized that business people invest with an eye on return. Allowing developers to sidestep lengthy reviews for critical permits, he ensured they got one.

Prosecutors don't see it that way. His coziness with developers has led to criminal charges against a top aide and remains the focus of scrutinizing the two-term governor's affairs: Did regulators, responding to pressure, let the good times roll for coastal land developers? Based on subpoenas from a federal grand jury, the investigation is wide-ranging. There's the $170,000-a-year job his wife landed at N.C. State University, plus the free use of cars and flights on private planes that never showed up on disclosure forms. But repeatedly, the scandal circles back to developers who were Easley donors seeking to score as the value of waterfront property soared through most of the decade.

In 2003, some of them complained about the time it took to get environmental permits, and Easley listened. Understanding that time was money, the governor created an expedited permitting process for those willing to pay extra. The change in policy wasn't intended as a way to skirt environmental review, he said at the time, but to speed up the process at no additional expense to taxpayers. Maybe that was the idea, but by his second term, the governor was doing more than heeding developers' concerns. He was buying property from them.

In late 2005, he got a bargain, buying a choice lot in a waterfront development called Cannonsgate, on the mainland side of Bogue...