Improper Use of Public Funds and Apparent Quid Pro Quo Campaign Finance Violations
RESPONDENTS:
Zack Matheny - City Councilman and CEO of Downtown Greensboro Inc (DGI)
Andy Zimmerman - DGI Board Member and AZ Development Owner
Downtown Greensboro Inc - 501(c)(6) organization receiving taxpayer funding
Mike Haley - THE MICHAEL W HALEY FOUNDATION INC
FACTUAL ALLEGATIONS:
Since Zack Matheny took over as CEO of Downtown Greensboro Inc. in 2015, at least 17 months of DGI expenditures have never appeared in public audits—creating a long-standing gap in oversight that raises serious questions about how taxpayer funds were spent and why those records remain unexamined.
The City of Greensboro bears its own share of responsibility for this lapse. Despite providing substantial taxpayer funding to Downtown Greensboro Inc., the city repeatedly failed to ensure full and timely audits of the organization’s finances. By neglecting to verify how every taxpayer dollar was used, the city abandoned its duty to provide meaningful oversight, leaving a gap in accountability that likely enabled even more waste, abuse or worse.
I. MISUSE OF TAXPAYER FUNDS
Public Fund Source: DGI receives taxpayer funds through a contract with the City of Greensboro for Downtown Business Improvement District services.
Improper Expenditures: Respondent Matheny, acting as DGI CEO, used taxpayer-funded resources to pay for expensive personal meals for DGI board member Andy Zimmerman in Wilson, Wyoming:
Dinner #1: $181.76
Dinner #2: $281.26
Total taxpayer funds used for private benefit: $462.02
Taxpayer-Funded Meals for Mike Haley;
08/15/2023: $74.85 at Undercurrent Restaurant (classified as "Development")
10/19/2023: $82.59 at Undercurrent Restaurant (classified as "Lunch")
Total Misused Funds: $157.44
Private Benefit Violations: These expenditures provided direct personal benefit to Zimmerman and Haley, private individuals, using public funds without legitimate public purpose.
FY 24-25 DGI Ledger has yet to be released.
II. APPARENT QUID PRO QUO ARRANGEMENTS
Campaign Contributions: On February 13, 2025, following receipt of taxpayer-funded benefits, Zimmerman made a substantial $2,500 campaign contribution to Matheny's campaign.
Haley Family Political Donations to Matheny;
4/30/2025; Lynn Haley (Director, Haley Foundation): $6,400
2/15/2025; Michael Haley (Business Executive): $6,400
Total Linked Contributions: $15,300
Timing and Pattern: The sequence of taxpayer-funded benefits followed by large campaign contributions suggests a deliberate quid pro quo arrangement.
LEGAL VIOLATIONS:
A. Municipal Ethics Violations
Conflict of Interest: Matheny violated his fiduciary duty by using public position and taxpayer funds for personal political benefit.
Abuse of Public Trust: Systematic use of taxpayer resources to cultivate campaign supporters.
Violation of Contract Terms: Breach of City of Greensboro Contract #12155, Section 8 (Conflict of Interest provisions)
B. Campaign Finance Violations
Unlawful Corporate Contributions: DGI's taxpayer-funded expenditures on meals for board member Andy Zimmerman ($462.02) and Mike Haley ($157.44), followed by their substantial campaign contributions to Zack Matheny ($2,500 and $12,800 respectively), constitute unlawful indirect corporate contributions under North Carolina campaign finance law. As a 501(c)(6) corporation receiving public funds, DGI is strictly prohibited from making any contributions - direct or indirect - to political campaigns under N.C.G.S. § 163-278.19. By using taxpayer money to provide private benefits to individuals who subsequently made large donations to Matheny's campaign, DGI effectively funneled corporate resources to influence an election.
Unreported In-Kind Contributions: The meals represent unreported in-kind campaign contributions that should have been disclosed
The sequence of events demonstrates how DGI's misuse of public funds created an improper conduit for campaign support, circumventing contribution limits and disclosure requirements that ensure transparent elections.
C. Public Records & Transparency Violations
Misclassification of Expenses: Personal meals falsely reported as legitimate business costs.
Failure to Disclose: Lack of transparency regarding benefits to board members and connected political donations.
D. Potential Criminal Violations
Misappropriation of Public Funds (N.C. Gen. Stat. § 14-92)
Honest Services Fraud (18 U.S. Code § 1346)
Bribery & Illegal Gratuities (N.C. Gen. Stat. § 14-217)
The evidence demonstrates a clear pattern of misconduct:
Matheny abused his position to funnel taxpayer money to political supporters.
Zimmerman and Haley reciprocated with campaign donations, suggesting quid pro quo arrangements.
Disclaimer:
The details outlined in this document are drawn from financial records, public filings, and the timing of related events. They are presented for the purpose of raising legitimate questions of public concern regarding the use of taxpayer funds and potential violations of ethics, campaign finance, and criminal statutes. All named individuals and entities are entitled to present evidence or explanations refuting these assertions, and no final determination of wrongdoing has been made by a court of law. These allegations are based on currently available information; additional facts may clarify, expand, or contradict the matters described herein. The intent of this report is to prompt transparency, accountability, and formal investigation where warranted, not to prejudge the outcome.
Public Records Request – “Downtown Greensboro, Inc. Compliance Review (June 20, 2025 for FY 2024–25)”
Dear Internal Audit Director Len Lucas,
I respectfully request electronically, if possible, the following records pertaining to the Internal Audit Division’s Compliance Review of Downtown Greensboro, Inc. (DGI) conducted on June 20, Fiscal Year 2024–25
The complete audit report, including findings, exhibits, and conclusions.
As part of this request, I am specifically seeking a detailed ledger of all expenditures and income related to Downtown Greensboro, Inc. (DGI) as reviewed in the City of Greensboro’s June 20, 2024–25 audit. This should include all supporting financial records used or referenced during the audit process, including but not limited to disbursement records, receipts, deposits, grant allocations, and any city funds transferred to or from DGI during the relevant fiscal year. Please provide these records in electronic format, itemized by date and transaction type, with sufficient detail to identify the source and purpose of each entry.
All communications (emails, memos, correspondence) between City staff, auditors, DGI representatives, or other stakeholders related to this audit.
Draft versions and working documents, such as audit plans, work papers, data analyses, and reviewer notes.
Any presentations or briefings provided to City officials, Council members or DGI leadership about the audit.
Records of any responses or comments submitted by DGI or City staff regarding the audit's findings.
Please include metadata (e.g., date, sender/recipient) for all documents. If any portions of the requested records are exempt from disclosure, please provide the remainder and cite the applicable exemption with specificity.
Please send the ledger ASAP, as it should be in the City's possession. Immediately please.
Thanks,
g