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Cooper 'improperly' used influence on pipeline, investigation started by GOP concludes

The (Raleigh) News & Observer logo The (Raleigh) News & Observer 11/21/2019 By Dawn Baumgartner Vaughan and Dan Kane, The News & Observer (Raleigh, N.C.)

Updated Nov. 20, 2019 to correct the length of the Atlantic Coast Pipeline.

An independent investigation started by Republican General Assembly leaders into the state’s approvals for the Atlantic Coast Pipeline found that Democratic Gov. Roy Cooper “improperly used the authority and influence of his office” but did not personally benefit from those decisions.

The report was released Wednesday, almost two years after GOP leaders first questioned the governor’s office about the appearance of a “pay-to-play” or “pay-for-permit” after the Cooper administration approved a permit for the pipeline in 2018. Cooper’s administration at that time also announced the pipeline companies would provide $57.8 million to a fund under the governor’s control to be used for environmental mitigation, economic development and renewable energy in areas affected by the pipeline.

At a meeting Wednesday of a legislative oversight committee, Republicans asked questions pointing to evidence suggesting Duke Energy had to jump through hurdles it shouldn’t have with the mitigation fund, as well as with a settlement with solar companies, in order to win the pipeline permit.

“I don’t think anybody feels that a business of any type should have to go through this type of process in order to get a permit,” state Sen. Harry Brown, a Jacksonville Republican, said after the meeting. “And what started out to be a request for a (pipeline) permit ended up to be quite a bit more. I think just the facts behind that kind of speak for themselves.”

Cooper’s office has described the investigation as a “sham” based on “half-baked conspiracy theories,” and said the fund was negotiated separately from the permitting process.

Duke Energy likewise said the pipeline companies didn’t see the permit as conditional on the fund, both in comments cited by the report and in a statement to the News & Observer on Wednesday.

“The ACP project also has mitigation agreements in place in the two other states along the project’s route. Each agreement for all three states was negotiated in good faith and independent of any regulatory permitting processes,” Duke Energy spokesperson Tammie McGee said in the statement. “We are a strong partner in North Carolina for environmental protection and economic development, and the mitigation fund for this project is an example of how we advocate for the best interests of our company, customers and communities.”

On Wednesday, Cooper’s office released a statement from spokesperson Ford Porter saying: “The 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.

“Legislative Republicans are mired in deep ethical problems and they’ve lied to the public, the courts and their own colleagues and you can’t trust a word they say about anything, much less the Atlantic Coast Pipeline. Governor Cooper has worked to bring economic prosperity to rural North Carolina, and these fake Republican attacks aren’t backed up by facts or reality.”

The investigation by Eagle Intel Services, LLC, cost the state $83,000, Brown told the legislative oversight committee.

Pipeline and mitigation fund

The Atlantic Coast Pipeline project of Dominion Energy, Duke Energy, Piedmont Natural Gas and Southern Company Gas is a planned 600-mile underground natural gas pipeline that would cross North Carolina, Virginia and West Virginia.

The pipeline’s route roughly follows Interstate 95 and goes through the counties of Northampton, Halifax, Nash, Wilson, Johnston, Sampson, Cumberland and Robeson, where it ends.

“From the information presented in this report it would be reasonable to conclude that Governor Cooper improperly used the authority and influence of his Office to cause the ACP partnership to commit to a $55 million ‘Mitigation Fund’ that the Governor placed under his complete control,” the report’s conclusion states. “Governor 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 also referred to a separate regulatory dispute between Duke Energy and solar-energy companies over how Duke buys solar power from the companies. The dispute stems from House Bill 589, a law passed in 2017 that weakened renewable energy providers’ hand in selling power to utility companies. The report referred to it as the “nameplate dispute.”

The report says of that deal that “it would be reasonable to conclude that Governor Cooper used the influence and authority of his Office to pressure parties involved in the Nameplate Dispute, to enter an agreement that favored the solar industry at the cost of $100 Million to the ratepayers of North Carolina.

“No information was identified from the investigation to show Governor Cooper personally benefited from the creation of the Mitigation Fund or from the Nameplate Dispute settlement,” the report stated.

The investigators gave a roughly 30-minute PowerPoint presentation to the oversight committee Wednesday. Much of it focused on the sequence of events involving the permitting process for the pipeline, the negotiations for the mitigation fund and the efforts to settle the dispute between Duke and solar providers over HB 589.

‘Criminal violations?’

The investigators — S. Kevin Greene, Thomas Beers and Frank Brostrom — work for Eagle Intel Services. Greene and Beers are former longtime IRS agents, while Brostrom is a former longtime FBI agent.

Though they concluded the governor had acted improperly, their report carried a caveat Democrats seized on.

“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.”

Asked about that statement, Beers said it was based on “inconsistent statements and actions.”

State Sen. Don Davis, a Pitt County Democrat, and others questioned that position.

“If you’ve not evaluated it and if you weren’t hired per se to identify it, and by your own admission you haven’t evaluated, well, how did you conclude this sentence?” Davis said in an interview after the meeting.

State Sen. Mike Woodard said the report did more to clear Cooper than muddy him.

“It was pretty clear to me that Duke was not coerced, that DEQ was not coerced in issuing the permit, Gov. Cooper was cleared of any wrongdoing or benefiting in anyway,” said Woodard, a Durham Democrat. “And we ended up getting what I think is a pretty reasonable fund to support economic development and mitigation or potential mitigation in the path of this pipeline.”

On whether the actions surrounding the pipeline constituted a crime, Brown, the Republican lawmaker, said: “You’re above my pay grade on that, honestly. I don’t know.”

Cooper’s predecessor as governor, Republican Pat McCrory, accused him of demanding the fund in exchange for the permit. Cooper denies that, but McCrory says more scrutiny is needed. “If I asked for $10 for a permit I’d be in jail and it would be front page news every single day,” he said while speaking at a GOP fundraiser in Cary Wednesday evening.

“It’s total corruption when you put politics and permits together in the same meeting, or within 24 hours of the same announcement,” McCrory said in an interview afterward.

The legislative committee took no action. Senate leader Phil Berger and House Speaker Tim Moore said the committee members should take time to sift through the report and then discuss what to do at a future meeting.

Staff writer Will Doran contributed to this report.

For more North Carolina government and politics news, listen to the Domecast politics podcast from The News & Observer and the NC Insider. You can find it on Megaphone, Apple Podcasts, iHeartRadio, Stitcher or wherever you get your podcasts.

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©2019 The News & Observer (Raleigh, N.C.)

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