State legislative leaders, on Tuesday, called out Gov. Roy Cooper for a letter sent from his chief of staff refusing to answer the litany of questions posed to his office over the $58 million fund, fed by energy companies constructing the Atlantic Coast Pipeline. The fund was intended to be placed under Cooper’s control, which the announcement of came alongside news that a crucial water permit for the project had been approved, ahead of schedule.
In the letter, Cooper’s Chief of Staff Kristi Jones called the questions “political in nature” and “moot” as the legislature voted to instead direct the funds to rural school districts in the path of the pipeline and not to the fund that Cooper said would be for economic and environmental projects, though how it would be spent was not well defined as of yet.
The legislature voted in bipartisan votes in both chambers of the General Assembly to re-appropriate the funds as part of HB90. Senate Rules Chairman Sen. Bill Rabon (R-Brunswick) and House Rules Chairman Rep. David Lewis (R-Harnett) issued a joint statement Tuesday saying, “Gov. Cooper’s refusal to answer simple questions surrounding the $57.8 million he obtained from the energy companies building the Atlantic Coast Pipeline just before granting them a key permit to advance it is deeply disturbing and frankly unacceptable. And his staffer’s disrespect and dismissal of North Carolinians’ legitimate ethical concerns over the appearance of pay-to-play as ‘political theater’ is beyond the pale. The little we know so far about what many are referring to as the governor’s personal ‘slush fund’ doesn’t pass the smell test, and his continued secrecy is only making things smell worse.
“His administration is shaping up to be one of the least transparent and most secretive that we can remember, and we can’t help but wonder: what is Roy Cooper hiding? The easiest way to get us to stop asking these questions is to answer them. By continuing to dodge them, the governor is only dragging this out. The public deserves answers, and their elected representatives will exercise every tool at our disposal to get to the bottom of this.”
The statement also says that the General Assembly has the authority under state law to “compel testimony and obtain public and private records when necessary and when they are not voluntarily given.”
The statement from Rabon and Lewis followed three requests to get answers to their questions, including the original House and Senate Appropriations/Base Budget meeting where legislators sought answers from Cooper’s recently hired Director of Legislative Affairs Lee Lilley on the topic.
Lilley recently worked as a lobbyist for Dominion Energy, which is one of the companies constructing the pipeline.
The questions were first brought to Lilley over how the fund was provided to the state at the meeting where he said he was unprepared to discuss that but said he would answer the questions following the meeting, but that has not yet happened.
Rabon and Lewis said that the communications they have received from Cooper’s administration on the topic have been “evasive, incomplete and insolent.”
But Cooper has more to worry about than just questions from the legislature over the fund, last week the Raleigh News & Observer reported that Cooper and his
family possibly stand to profit from the $58 million fund as the owners of close to 400 acres of land in the pipeline’s projected path, as well as a story in the Carolina Journal reporting on an agreement to build a solar farm on Cooper family property near the future pipeline that was not disclosed in the governor’s Statement of Economic Interest.
The legislators said that Cooper could have stood to profit from the $58 million fund for the farm that was not listed on his statement of economic interest.
In addition to that there is also an active ethics complaint against Cooper, filed by the president of the Civitas Institute Donad Bryson, calling into question whether Cooper violated the North Carolina State Government Ethics Act in accepting the $58 million fund under his control.
“This is a serious matter of public trust and transparency,” Bryson said. “The Cooper administration has provided so few details about this unprecedented new slush fund. It’s critical the people of North Carolina know exactly what happened and whether any of Cooper’s actions violate ethics laws. We hope the Ethics Commission will provide details and issue a clear opinion on the governor’s actions.”
Bryson said that if the ethics board were to give the okay for this type of agreement to take place it would set a terrible precedent for what elected officials in the state can do outside of the constitutional process.
Below are the questions state legislators were seeking to have answered from the Cooper administration regarding the fund.
1. Did Gov. Cooper personally bless the arrangement creating the $58 million fund?
2. Were the negotiated offers made in writing or in person? Are there other drafts you can share? Were other matters beyond the pipeline addressed during negotiations? If so, what matters?
Is the governor aware that state and federal law already require utilities building the Atlantic Coast Pipeline to meet environmental mitigation requirements before the project can receive approval? Is he aware of recent reports from WBTV indicating the pipeline companies made additional payments totaling $11 million for mitigation purposes?
3. Why does the governor’s office call this a “voluntary contribution” when Democratic Rep. Pricey Harrison said it was “a condition of getting the permit granted” and the governor’s own spokesman has called the arrangement “negotiations,” which by definition are not voluntary? Did anyone in the executive branch or governor’s office, or with direct ties to the governor directly or indirectly ask Rep. Pricey Harrison to retract her statement that the fund was “a condition of getting the permit granted?”
4. Would the private parties involved in the negotiations agree with the governor’s assertion that this was a “voluntary contribution” completely unrelated to the permitting process?
5. Does the governor’s office think this type of activity – requesting large contributions from private businesses wanting to do business in our state – encourages economic development in North Carolina?
6. Do you think the solicitation and acceptance of this money by the governor erodes the public’s trust in the permit approval process?
7. Why does the governor’s office compare this agreement to actions taken in Virginia when the Virginia agreement was signed by the Commonwealth’s chief environmental regulator and went to specifically designated mitigation projects, while Gov. Cooper’s deal gives him unfettered control of an extra-governmental fund outside of the normal appropriations process allowed by the North Carolina constitution?
8. Is this arrangement an illegal and unconstitutional violation of the separation of powers or a violation of due process?
9. Does this arrangement run afoul of state ethics law that prohibits elected officials from using their office and title to solicit funds for personal benefit?
10. You stated that discussions about the fund “began in 2017.” When in 2017? And when, specifically, did the actual negotiations take place? Did Gov. Cooper personally participate in and/or sign off on the negotiations?
11. Your statement, “never was the Governor contemplated to be the decision maker as to which projects were funded,” directly contradicts the last whereas clause of the MOU, which states “the Governor, through his agents and assigns… has the authority to direct the disbursement of funds contemplated in the MOU.” Please explain this inconsistency.
12. You stated the governor’s deal with the Atlantic Coast Pipeline’s builders may now be in peril. Have you heard this from the pipeline builders, or are you implying the governor will no longer accept the funds if they are used to help poor, rural Eastern North Carolina schools?
13. Why doesn’t the governor believe investing $58 million in our children’s public education in the eight poor, rural Eastern North Carolina counties impacted by the pipeline will help economic development and job creation in that region?
14. You mentioned “the Rural Infrastructure Authority and the Clean Water Management Trust Fund are examples of two grantmakers operating under these guidelines that could fulfill the administrative process and accomplish the goals.” Aren’t these entities the subject of a lawsuit filed by Gov. Cooper claiming they are unconstitutionally constituted because he lacks sufficient
dominance of the board appointments to exercise real control over the boards’ actions? Why would he support these funds being administered by two entities he is challenging in court? And why does he claim these boards are independent at the same time he is seeking complete control of them from the Democratic-controlled Supreme Court?
15. Your response, “as to whether shareholders or ratepayers would cover the cost of the fund, that is a decision for the utilities developing the pipeline,” contradicts the News & Observer report that “Duke and other utilities will seek to recover the full cost of the pipeline – which includes construction, permitting and environmental compliance – from their customers through their utility bills.” Why did Gov. Cooper fail to negotiate a requirement that these payments come out of corporate profits, rather than from rate-paying customers?