North Carolina Lawmakers Will Hire Investigators to Probe Governor’s Natural Gas Pipeline Fund

by | November 19, 2018

By John Murawski

North Carolina lawmakers voted Wednesday to hire private investigators to look into whether Gov. Roy Cooper's administration improperly issued a state permit to the Atlantic Coast Pipeline this year on condition of securing a $57.8 million contribution from the energy consortium that's building the natural gas pipeline.

While Cooper's office dismissed the move as a political stunt, the lawmakers were praised by an environmental activist group that has fought the Atlantic Coast Pipeline and has been frustrated by Cooper's silence.

The Republican co-chairs of the subcommittee that focuses on the pipeline said a professional investigation is required because Cooper's office has refused to answer key questions this year on how and why the deal was negotiated. Lawmakers said the deal's time line, as reconstructed through public records, suggests the pipeline permit was initially withheld by the N.C. Department of Environmental Quality to strong-arm the Atlantic Coast Pipeline to pay for a "slush fund" that the governor could dole out for pet projects.

"These questions are serious," said subcommittee co-chairman Sen. Harry Brown, a Republican representing Onslow and Jones counties. "They go to the very heart of honest government."

Under the pipeline deal, Cooper, or anyone he delegated, would control the $57.8 million environmental mitigation fund, which would finance economic development projects and would also finance environmental reclamation projects to compensate for natural habitat damage caused by building the underground pipeline. However, the Republican-controlled state legislature dismantled the governor's fund earlier this year and redirected the money to be paid to schools located along the pipeline's planned path in eight counties.

Even though the fund is now moot, lawmakers have pressed the issue and created the special subcommittee. The Atlantic Coast Pipeline is a $6 billion project being jointly developed by Charlotte-based Duke Energy and Richmond, Va.-based Dominion Energy. Tree-clearing and property leases are already well under way, but the project, which is more than a year behind schedule, has been stalled by lawsuits and court rulings intermittently blocking progress on construction.

The governor's office has described Atlantic Coast Pipeline's agreement to the fund as "voluntary," and not contingent on the issuance of the permit, which allows pipeline construction to cross through or under 320 creeks and other waterways in the state. On Wednesday, Cooper's office denounced the subcommittee's hearing and action as a charade.

"With Republicans clearly unhappy over election results and Governor Cooper in Washington to secure [Hurricane] Florence help, Republican leaders staged another bizarre kangaroo court to score political points," Cooper spokesman Ford Porter said in an email.

"The fact remains that legislative Republicans hurt eastern North Carolina when they chose for political reasons to raid an economic development fund that would create jobs," the statement said. "Eastern communities still need jobs and Republicans in the legislature should focus on bipartisan hurricane recovery and funding public schools and less on kooky whodunit capers that just make them look silly."

One of the lawmakers who voted against hiring an investigator was Democratic Sen. Floyd McKissick Jr., who represents Durham and Granville counties. He said it's not clear what authority an investigator would bring that the lawmakers don't already have, and noted that the subcommittee did not set a budget limit for the investigator.

While McKissick expressed confidence that knowing the full story would exonerate Cooper of wrongdoing, he agreed the facts remain unknown.

"I agree we need information," McKissick said. "I understand the need to get clarity to understand what happened and how it happened."

One of the environmental organizations that has fought the pipeline, the Blue Ridge Environmental Defense League, endorsed the subcommittee's decision. Therese Vick, the group's research director, said Cooper's office has not responded to questions her group has repeatedly asked about the fund.

"This project deserves the answers and I'm glad someone is asking the questions," Vick told the lawmakers during a public comment session.

After the meeting, Vick said: "We're Twitter-shaming the governor. Repeatedly we've had our lawyers send them a letter. It does not look good, let's just put it that way."

The interstate pipeline would carry natural gas from fracking fields in West Virginia and Pennsylvania to generate electricity at Duke Energy power plants, and for heating homes and businesses in North Carolina. About a third of the Atlantic Coast Pipeline would pass through eight rural counties in North Carolina along the Interstate 95 corridor.

Another subcommittee member, Sen. Paul Newton, is a Republican representing Cabarrus and Union counties. Newton had worked at Duke Energy for 25 years, ending his career there in 2015 as President of Duke Energy's North Carolina operations.

"We're dealing with the perception that the governor used this discretionary fund as a lever over the Atlantic Coast Pipeline partners to acquiesce to his terms and conditions and monetary amount before he would allow the Department of Environmental Protection to issue a permit," Newton said before Wednesday's hearing. "I've never seen this before in my business career."

(c)2018 The News & Observer (Raleigh, N.C.)