RALEIGH — A long-running legal dispute involving $12 million paid by Smithfield Foods to the state since July 2019 has ended, with a judge ruling against Attorney General Josh Stein’s use of the funds for environmental grant projects.
Wake County Superior Court Judge A. Graham Shirley ruled against Stein, stating the money collected in the Smithfield Foods settlement must be appropriated by the General Assembly and used for environmental enhancement in public schools.
“Any money received by the State from Smithfield Foods pursuant to the Agreement must be appropriated by the General Assembly in such a manner as to protect Smithfield Foods’ purpose,” Shirley wrote. “The purpose of these payments is environmental enhancement.”
Citing the state constitution, the order notes such funds “shall be faithfully appropriated by the General Assembly … to be used exclusively for maintaining free public schools.’”
“The Court Declares that all funds received from Smithfield Foods after July 1, 2019, must be used for the purpose of environmental enhancement in public schools,” wrote Shirley. The 2019 date refers to the change in state laws requiring such payment types to be deposited in the state treasury.
The money comes from an agreement made in 2000 between Smithfield Foods and then-Attorney General Mike Easley requiring Smithfield to pay $2 million annually for 25 years. The agreement was made after hog waste pits overflowed due to the impact of Hurricane Floyd.
Over the years, critics have described the diverting of the settlement money as a slush fund for the North Carolina attorney general’s office to pick and choose winners and losers for the environmental grants.
The lawsuit, filed by a Randolph County pastor on behalf of the Randolph County School Board, argued that the funds should be used for environmental enhancements in public schools rather than an environmental grant program controlled by Stein’s office.
The Randolph-brought case is part of a series of legal challenges to the use of these funds, with previous attempts to direct the funds to schools rejected by the state Supreme Court.
Multiple requests for comment on the ruling went unreturned by Stein’s office.
