Legislative report: ‘Criminal violations may have occurred’ in Governor’s handling of pipeline permit

Legislative report: ‘Criminal violations may have occurred’ in Governor’s handling of pipeline permit
Governor Roy Cooper listens to a question from WBTV Chief Investigative Reporter Nick Ochsner regarding the ACP permitting process. (Source: Corey Schmidt)

RALEIGH, N.C. (WBTV) – A report released Wednesday morning by investigators hired by an oversight committee of the North Carolina General Assembly concluded that “criminal violations may have occurred” in the process used by Governor Roy Cooper and his staff to issue a critical permit for the Atlantic Coast Pipeline in early 2018.

The report, which did not specify either possible crimes or any person who may have committed them, was prepared by investigators with Eagle Intel Services, who were hired in December 2018 following a bipartisan vote of a subcommittee of the Joint Legislative Commission on Governmental Operations.

Earlier in 2018, the commission voted to form a subcommittee to investigate the circumstances by which a key permit for the Atlantic Coast Pipeline was approved by the North Carolina Department of Environmental Quality.

Within days of the ACP permit being approved, the Governor’s Office also announced a memorandum of understanding between the office and Duke Energy for the company to pay more than $57 million into a mitigation fund controlled by the governor for unspecified economic development purposes and, separately, Duke Energy reached an agreement with the solar power industry that would, effectively, mean Duke purchased more solar power at a higher rate from the producers.

Duke Energy is one of two major owners of the ACP.

In January, a WBTV investigation found the pipeline permit was directly linked to Duke Energy reaching an agreement with solar producers on the deal to purchase more power.

At the time, Cooper and his staff denied such a link, despite documents produced by the Governor’s Office showing that was the case.

The investigative report released by the legislature Wednesday confirmed that link and also said the permit was directly tied to the $57 million payment agreed to in the MOU between Cooper and the ACP.

“In late 2017 and into early 2018, North Carolina Governor Roy Cooper, acting in his official capacity, affected the outcome and process of matters concerning Duke Energy (Duke) a North Carolina based company,” the report said.

“The Governor requested Duke to provide a $57.8 million fund through the ‘Mitigation Project Memorandum of Understanding,’ under terms that the Governor would control,” the report continued. “The Governor also caused a settlement agreement to be rendered, between Duke and the Solar Industry that ultimately could reduce the proposed saving within HB589 by $100 million.”

According to the report, investigators found that Cooper and his staff at the Governor’s Office took control of the ultimately decision making on whether to issue the permit, a process that would typically be left to mid-level managers at the Department of Environmental Quality, an agency that reports to Cooper.

A major focus of the 79-page report is a meeting held in late November 2017 between Cooper and Duke Energy CEO Lynn Good. According to the report—which includes information provided by Duke and an interview with Good—Cooper asked to speak privately with only Good and said he wanted to resolve the ACP permit issue, a mitigation fund and the solar energy dispute by December of that year.

The report notes that employees working on the ACP project wanted the pipeline permit to be issued by December 2017 in order to begin clearing trees from the pipeline’s right of way during a narrow window in 2018 in which trees could be cleared that ended in March.

Investigators found that Good instructed her staff to begin working to resolve the solar issues and create a mitigation fund for Cooper one day after her meeting with Cooper, in which he tied the two issues to the approval of the ACP permit.

The report also notes a number of statements made by Cooper’s chief adviser, Ken Eudy, during testimony before the committee earlier this month that differ from other witness interviews and records obtained by investigators.

Specifically, the investigative report notes, Eudy told the committee that he never asked a Duke lobbyist to write a letter saying that Duke volunteered to create the $57 million mitigation fund and that he testified that Cooper never asked Good to solve the solar and mitigation fund issues on the same timeline as the Cooper administration was considering the pipeline permit.

Eudy was one of two staffers from Cooper’s office to testify before the legislative committee earlier this month. Lawmakers also asked Cooper and his general counsel, Will McKinney, to testify but they declined.

The report also details a series of steps the Cooper administration took to block state employees from being interviewed by investigators.

Cooper’s Chief of Staff, Kristi Jones, has also questioned the validity of the legislature’s investigation.

Cooper repeated those talking points about the veracity of the report when asked about the findings during a media availability on Wednesday afternoon.

“Well, this is a partisan General Assembly that is distorting facts. I know this, that the facts are on our side. And the republicans know there was nothing wrong with this fund because they took it and spent it themselves. It’s all about their control,” Cooper said.

During the media availability, Cooper also disputed meeting privately with Lynn Good, the Duke CEO, in late November 2017 and having a conversation in which he tied together the timing of the ACP permit being approved with the MOU being finalized and Duke reaching a deal with the solar industry.

According to the report, Good provided details of the conversation.

“That’s not true. Absolutely did not happen. And I’ll tell you this: the facts are on our side,” Cooper responded when asked specifically about what the report details Cooper saying during his one-on-one meeting with Good.

But Cooper wouldn’t answer follow up questions about why Good told investigators a different chain of events.

“Lynn Good told the investigators you had a one on one meeting with her in which you said you wanted to get all three of those issues done at the same time, which was the same timeline by which you staff knew Duke needed that permit to begin work on the pipeline,” a WBTV reporter asked.

“The facts on our side,” Cooper responded.

Cooper also did not respond directly to questions from a WBTV reporter about statements made by Eudy, his senior policy advisor, that are noted in the report to be at odds with other witness accounts and documents gathered by investigators.

“We have released tens of thousands of documents on this, we made our people available, we have answered all of their questions, there is nothing there,” Cooper said. “The facts are on our side. I haven’t heard about the things you’re saying because I haven’t read the report.”

In response to follow-up questions, Cooper doubled down on his claim that members of the Cooper Administration were made available to speak with investigators, which the report notes numerous times did not happen.

“You said you made your people available but the report notes a number of witnesses that the investigators asked to talk with who specifically said they were instructed not to speak with investigators so?” a WBTV reporter asked.

“Those people spoke with investigators. They went over and interviewed all of the people at DEQ and there was no link,” Cooper responded.

“That’s not what the report says so, again, are the investigators lying?” the reporter asked.

“I’ll have the read the report!” Cooper said, before announcing he would not take any further questions.

While the report concludes crimes may have been committed, the report stops short of identifying any specific individual that may have committed a crime and does not specify any laws that may have been violated.

“The investigation was not conducted for the purpose of identifying criminal violations, and the information has not been evaluated to determine if specific criminal statutes have been violated,” the report said. “However, the information suggests that criminal violations may have occurred. An investigative agency with the authority to compel cooperation and the production of documents could potentially obtain additional information to identify violations of criminal statutes.”

In the report, investigators also state that there is no evidence Cooper or any of his family have benefited or stand to benefit personally from the solar energy deal.

Cooper has previously been listed as a partner, along with his brother, in companies that own and lease land in eastern North Carolina to solar companies.

Lawmakers will detail the contents of the report at a hearing scheduled for 2:00 on Wednesday afternoon.

Copyright 2019 WBTV. All rights reserved.