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Report: Info Points To Improper Action By Cooper On Pipeline

North Carolina Governor Roy Cooper sits for an interview with WUNC in the Executive Mansion in Raleigh, N.C., Tuesday, Jan. 30, 2018. Cooper addressed the opiod crisis affecting the state.
Ben McKeown

North Carolina Gov. Roy Cooper appears to have "improperly used the authority and influence of his office" to pressure natural gas pipeline builders to agree to a $57.8 million mitigation fund under his control, private investigators reported Wednesday.

The report's authors, however, found no evidence that Cooper personally benefited from the fund. Cooper's office slammed the report as "full of inaccuracies and contradictions."

A Republican-controlled legislative committee hired the former federal agents a year ago to review the January 2018 side deal between the Democratic governor's office and utilities working on the Atlantic Coast Pipeline.

Cooper's environmental department announced a key water permit had been issued the same day the mitigation fund "memorandum of understanding" with the governor's office was unveiled.

The money the pipeline operators — Duke Energy, Dominion Energy and others — had agreed to pay was intended for environmental mitigation, renewable energy and economic development projects along the proposed pipeline's route in eastern North Carolina.

Cooper and his aides have said repeatedly that the mitigation package wasn't a prerequisite for the permit. But Republicans, unconvinced, turned to Eagle Intel Services to investigate, at a cost of $83,000.

The report's authors said their investigation didn't focus specifically on whether crimes happened, and an investigative agency with more powers could potentially determine that, but the report said "the information suggests that criminal violations may have occurred."

The oversight committee receiving the report lacks power to take direct action in response to the findings.

Cooper's office said the 82-page report "is wrong, and it is full of inaccuracies and contradictions that clearly ignore inconvenient facts."

"The report even concedes that the permit was done properly, that Duke believed the permits weren't dependent on the fund or the solar settlement, and that the Governor did not benefit," spokesman Ford Porter said in a statement.

Cooper and his aides have said the memorandum was drawn up the way it was because they didn't trust the GOP-dominated General Assembly to spend the money for its intended purposes, and pointed to a March 2018 law as proof.

Lawmakers agreed to essentially intercept the mitigation money and give it to school districts along the route. The state has never seen the money, however, because legal challenges have delayed construction on the 600-mile (965-kilometer) pipeline through West Virginia, Virginia and North Carolina.

Somewhat similar mitigation funds had been agreed to in West Virginia and Virginia. Duke Energy executives had said greater fuel access in eastern North Carolina meant a similar fund wasn't required in North Carolina, the report said. But in late 2017, local businesses, Cooper's office and his Department of Commerce became concerned the pipeline wouldn't create the jobs and economic development that pipeline developers predicted.

Duke Energy CEO Lynn Good said Cooper told her during a November 2017 private meeting that there was "balking" at the Department of Environmental Quality over issuing pipeline permits and environmental justice issues, the report said. Good, who was interviewed by the investigators, said Cooper asked her "to consider the creation of a fund" by the end of December.

The mitigation fund had been set at $55 million, the report said, but Cooper asked Good in a mid-January 2018 phone call to raise it to $57.8 million and Good agreed. The permit's issuance and the mitigation fund were announced separately on Jan. 26, 2018.

Cooper "continued to use his authority and influence to delay the ACP permitting process until the ACP partners agreed to increase the fund amount to $57.8 million," the report said. Good also said Duke Energy agreed to work with the solar industry to resolve a rate disagreement. That deal was announced the week after the permit and fund were announced.

Good told investigators that the ACP builders and Duke Energy didn't believe the mitigation fund and the settlement had any bearing on the water permit being issued. The pipeline was entitled to the permits, according to Good, and "Duke did not and would not pay for permits," Good was quoted as saying.

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