Another ethics complaint against Gov. McCrory involving Duke Energy

A grassroots environmental group filed a complaint with the North Carolina Ethics Commission last week asking for an investigation into whether Gov. Pat McCrory (R) and his appointees violated state laws against the exertion of undue influence and the use of state resources to benefit a political campaign.

On June 24, the Blue Ridge Environmental Defense League (BREDL), an environmental advocacy group based in North Carolina, lodged a complaint that relates in part to a June 1, 2015, dinner meeting at the governor's mansion in Raleigh that involved McCrory, Duke Energy CEO Lynn Good, and N.C. Department of Environmental Quality (DEQ) Secretary Donald van der Vaart, a McCrory appointee. Also present were McCrory's chief of staff and general counsel, and the company's general counsel and president of its North Carolina operations.

Two weeks before the dinner, Duke Energy had pleaded guilty to environmental crimes and agreed to pay a $102 million fine for the February 2014 coal ash spill into the Dan River. Four days after the dinner, DEQ issued permits allowing Duke Energy to move ahead with controversial plans to move coal ash from leaking impoundments at its coal-fired power plants into open-pit clay mines in Lee and Chatham counties near communities reliant on drinking-water wells.

On June 7, 2015, BREDL submitted public records requests to DEQ for information about agency staff meeting with Duke Energy representatives. When DEQ responded to the group's requests in late August and September 2015, it did not include anything about the June 1 meeting. The dinner meeting also went undisclosed by DEQ during a Dec. 7 hearing that was part of the discovery process related to a lawsuit over coal ash disposal permits.

BREDL found out about the dinner like the rest of the public: through a Jan. 6, 2016 news report by WRAL TV based on the news station's review of official calendar entries and other records.

"To date, the purpose of the June 1st meeting has not been disclosed," the BREDL complaint states. "Conversation could have included ongoing investigations of Duke Energy, ranking of coal ash pits pursuant to the Coal Ash Management Act, fines, the issuance of the Lee and Chatham County coal ash landfill permits, 'do not drink' advisories and many other issues of vital importance to the people of North Carolina."

BREDL's complaint notes that the dinner meeting came not long after state health officials began sending those do-not-drink warnings to residents near Duke Energy impoundments after tests found wells contaminated with risky levels of health-damaging pollution including hexavalent chromium, a carcinogen found in coal ash. Earlier this year, state health officials reversed themselves and began rescinding the warnings even though the levels of contamination in the wells had not changed.

A deposition of a state epidemiologist in a lawsuit over coal ash disposal revealed that McCrory spokesperson Josh Ellis and Duke Energy had pressured the health officials to withdraw the warnings, which were based on science explicitly approved by the Centers for Disease Control and Prevention.

BREDL's complaint also points to press releases and blog posts by DEQ staff that tout actions by "the McCrory administration" — a trend that began this election year, according to BREDL organizer Therese Vick, who reviewed DEQ releases since 2015. The group's complaint included more than a dozen official DEQ statements using such language (examples here, here, and here). Pointing out that preparing releases and blog entries use state money and staff time, BREDL charges that they "at best skirt the law" against using state resources for political campaigns. McCrory is in a tight re-election race against Roy Cooper, the state's Democratic attorney general.

"This year, an election year, DEQ has produced a plethora of puff pieces that benefit Gov. McCrory," Vick said. "We are asking the Ethics Commission to take a hard look at the activities of the governor and his appointees."

Earlier complaints focused on disclosure problems

This is not the first time McCrory has faced an ethics complaint over disclosure failures — nor is it the first complaint involving his relationship with Duke Energy, where the governor worked for 28 years before taking office in 2013.

The exact number of ethics complaints made against McCrory is unknown because the state commission keeps them confidential, so the public learns of them only when they're announced by filers or when the individual named in the complaint authorizes the commission to release information. But there have been at least two other formal ethics complaints against McCrory, filed and announced publicly by Progress North Carolina Action, a liberal political advocacy group.

The first, submitted in January 2015, cited news reports to allege a pattern of McCrory failing to fully disclose his financial interests on required state disclosure forms, which is a criminal violation. The complaint charged McCrory with failing to accurately report ownership of at least $10,000 in Duke Energy stock on his 2008 and 2014 statements, of failing to disclose more than $185,000 in income from dividends and director fees from the financial services company Tree.com on his 2014 form, and of failing to disclose his membership on Tree.com's board of directors in 2013.

The January 2015 complaint also made allegations related to McCrory's connection to McCrory & Co., a Charlotte-based sales consulting firm founded by his brother. The complaint noted that the governor was listed in federal filings and on the consulting company's website as a "partner" with the firm, while in the disclosure forms he described himself only as a consultant or contractor. By doing so, McCrory avoided the requirement to disclose that his brother's company had material business dealings with North Carolina since it counted among its clients companies with state contracts.

McCrory's attorney, Bob Stephens, took the blame for the incorrect filings, which McCrory signed. The governor's office submitted updated statements.

In its second ethics complaint against McCrory filed in March 2015, Progress NC Action cited his failure to report travel paid by the Republican Governors Association, which is funded by corporate interests including Duke Energy. State ethics rules require officials to disclose any "scholarship" of more than $200 to attend a conference or event. The same day Progress NC Action filed the complaint, Stephens filed supplemental statements disclosing trips valued at over $13,000 in 2013, saying he misunderstood the disclosure requirements.

The Ethics Commission dismissed the complaints last October, saying it had "determined that probable cause did not exist." Of the commission's eight current members, three were appointed by McCrory, four by the General Assembly, and one by former Gov. Beverly Perdue, a Democrat.