Investigators say Cooper improperly used his office to get pipeline money

Report says criminal violations may have occurred

North Carolina Gov. Roy Cooper speaks with reporters after testifying before the House Natural Resources Committee hearing on climate change, on Capitol Hill in Washington, Wednesday, Feb. 6, 2019. (AP Photo/Cliff Owen)

RALEIGH — A report on the Cooper administration’s handling of the Atlantic Coast Pipeline, released on Nov. 20 by Eagle Intel Services, concluded that the governor “improperly used the authority and influence of his office with regard to a $57.8 million ‘mitigation fund.’” The report also says that “criminal violations may have occurred.”

Eagle Intel Services is the independent investigative firm hired by the General Assembly through a bipartisan vote by the Joint Legislative Commission on Governmental Operations.

The governor’s office denies Cooper leveraged the mitigation fund or permit process and maintains that the fund was established independently of DEQ’s permit process. The report’s findings, however, underscore lawmaker concerns that Cooper was more involved than he claimed to be with regard to both the permitting process and the mitigation fund.

During a press event on the day the report was released, Cooper said that this is “a partisan General Assembly that is distorting facts. I know this, that the facts are on our side.”

The summary and report state that while the governor did not personally benefit from the deal, that Cooper “while acting in his official capacity, affected the outcome and process of matters concerning Duke Energy a North Carolina based company.”

“The report is wrong, and it is full of inaccuracies and contradictions that clearly ignore inconvenient facts,” said a press release from the governor’s office, which also characterizes the report as “conspiracy theories.”

Although the report’s conclusion did not name what potential criminal charges might be filed, the report says that an “investigative agency with the authority to compel cooperation and the production of documents” would be able to identify any criminal violations.

The day following the report’s release, Lt. Gov. Dan Forest called for the FBI’s Public Corruption Unit to investigate.

“Governor Cooper’s top aide left an email and text trail that shows the Cooper administration lied. The CEO of Duke Energy says she met face-to-face, alone, with the Governor; the Governor denies such a meeting took place. Someone is lying,” said Forest.

Investigators found that Cooper and Duke Energy CEO Lynn Good had a private meeting in November 2017 that included discussions of the ACP permit approval and the finalization of the mitigation fund. Discussions also included Duke reaching a deal on a disputed section of HB 589 with the solar industry.

The disputed section of HB 589 became known as the nameplate dispute, and in November 2017, Duke and the solar industry could not come to an agreement, because the N.C. Utilities Commission Public staff wouldn’t approve a deal where settlement costs could be passed to ratepayers.

The report says that the governor “caused a settlement agreement to be rendered, between Duke and the Solar Industry that ultimately could reduce the proposed savings within HB589 by $100 million.”

The findings go on to say that text messages between Cooper’s top adviser, Ken Eudy, and his chief counsel, William McKinney, show the governor held up signing the mitigation fund’s MOU until the nameplate dispute settlement was complete.

“The Governor controlled the 401 Water Quality Certification, process and timing of issuance at the North Carolina Department of Environmental Quality, being sought by the Atlantic Coast Pipeline partnership, in which Duke was a partner,” says the report.

That water quality permit was announced a day after the ACP memorandum of understanding for the mitigation funds was signed.

Just four days after the permit was approved, Cooper announced the hiring of Lee Lilley to be his new legislative director. Lilley was a lobbyist for Dominion, Duke’s partner in the pipeline.

The investigation uncovered that on Feb. 8, 2018, Cooper adviser Ken Eudy asked Duke Energy to create a letter saying Duke had voluntarily created the mitigation fund. That same day, Lilley had given testimony to a legislative committee that Duke Energy’s mitigation fund was “voluntary.”

According to the ACP report, Eudy called Duke lobbyist Kathy Hawkins after the Feb. 8, 2018 hearing to request that Duke prepare a letter stating that the $57.8 million fund was voluntarily provided on behalf of the ACP. Hawkins told him that they “were not doing that.”

On Nov. 8, 2019, Eudy testified before the Joint Legislative Commission on Governmental Operation Subcommittee on the Atlantic Coast Pipeline and said he did not ask Duke for a statement declaring the fund was voluntary.

Sen. Harry Brown (R-Onslow) asked Eudy: “Did you ask Duke to provide a statement regarding the voluntary status of the MOU and fund?” Eudy responded, “No, Sir.”

A press release from Brown after the report’s release highlighted new information countering the governor’s claims he did not improperly interfere.

Included in the new findings are communications between Eudy and Hawkins on Dec. 19, 2017 indicating that the governor would make the final decision on the permit Duke needed for the pipeline and not DEQ.

Hawkins then relayed that information to Duke CEO Lynn Good writing that “Ken Eudy said [the] Governor will make this decision versus Regan.”

Cooper’s influence on the mitigation fund was also found in a Jan. 17, 2018 phone conversation released by the governor’s office between Cooper and Good during which Cooper asked for an increase in the amount of the fund.

Three days before that call, Cooper’s staff rescinded state approval of a tri-state agreement permitting tree felling for pipeline construction to begin in Virginia. The day after the call with Good, the approval for the tri-state agreement was granted, and approval for the ACP permit was also scheduled.

The report notes that the date of the Jan. 17 call was mislabeled as taking place 10 days earlier than it actually occurred.

Further investigations are possible based on conclusions in the report that “additional information potentially exists with government agencies, private companies” regarding “individuals that have not fully cooperated.”

The reference about cooperation could be referring to Cooper’s chief legal counsel, William McKinney. He was listed on the agenda for testimony at the Nov. 8 meeting of the ACP subcommittee along with Eudy and deputy chief of staff Julia White but did not appear.

About A.P. Dillon 1134 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_