Easley's ear bent by developers

The former governor was behind a program to speed permitting process for an extra fee.

Staff WriterDecember 27, 2009 

  • Q: Records show you had a meeting with the governor at your office...

    A: Not a meeting. I had a couple of luncheon fundraisers.

    Q: They were fundraisers?

    A: Yes.

    Q: And what were the circumstances of those?

    A: I would make my room upstairs available for a few friends and donation-willing givers. We'd have a casual luncheon. Then, we went around in a roundtable and discussed issues that were bothering people... It was usually always a very productive meeting in both ways. We were able to get a good true picture of things to the governor in issues we were having that were plaguing us.

    Q: What did you want?

    A: We were not asking for something illegal or wrong. But a lot of times agencies cause harm ... [and] create hardship developing properties... A lot of times, it was just that people wanted to give the governor an ear to some of the problems in the system.

    Q: Which agency were you focused on? DENR?

    A: Mike would hear us and then put his agency head in touch with us to do a work session. We had a work session with Bill Ross. ...I think we helped him better understand some of the hardships, which he then enacted the process for pushing the applications faster and doing some things that made it more friendly for the developer.

    Q: You mean express review?

    A: That came directly from our work area. We got together between some developers and real estate people, just a coalition of people who said damn, finally a governor is down here listening to our damn problems.

    Q: How much money did you raise or give?

    A: I don't have any idea. I wouldn't begin to guess.

It was a small group, just a few businessmen and developers who gathered in Nick Garrett's conference room in Wilmington in 2002. Garrett's mother baked lunch for a special guest: Gov. Mike Easley.

The gathering, and at least one other like it, served as a political fundraiser but also gave the developers a chance to chew on Easley's environmental regulators.

We need permits faster, they told the governor. Time is money. Help us.

That meeting, and others at the top rungs of state government, shaped a dramatic new state policy. Records and interviews show that during the coastal land rush several years ago, Easley created a program to grant permits much more quickly than normal at relatively little extra cost to developers.

Known as "express review," the initiative has allowed builders, developers and property owners to pay to go to the head of the permit line. In well-known projects such as Cannonsgate - where Easley got a discounted lot - and in lesser-known developments, waiting times for developers were cut to nearly nothing.

"I hand it to Mike," Garrett said recently. "He got out there and listened to our issues."

Creation of the express-review process provides the clearest glimpse yet of how Easley used his authority to help developers who needed permits, including those at the center of questions about him. Easley , a Democrat who left office in January, is the subject of a federal investigation that includes his relationship with developers, their permits, and Cannonsgate, where he got a sweet deal on a lot, according to subpoenas issued in recent months.

Easley did not agree to interview requests.

Garrett, a friend of Easley's and a homebuilder, said talks at his office helped lead to the express review program. He acknowledged giving the governor campaign contributions while he and others discussed their needs.

Frank Tursi, the Cape Lookout Coastkeeper, said people and groups that monitor coastal development have always suspected that big developers with political influence were behind the creation of express review, but there was no way to know.

"Common sense tells you that what comes out is not likely to be as protective as if the regulators had more time to process the permits and do the analysis," Tursi said. "It's never given us much comfort that you can analyze thesevery complicated development projects in a very truncated period of time just because someone is able to afford the fee."

Quick action promised

The fee for the program is capped at $5,500, which is two or three times the cost of a normal permit review, even for multimillion dollar projects. Some pay less, depending on which of five generally sought development permits they need.

The money goes to hire extra staffers to handle the permits.

Once in the program, the state promises quick action on its review of a proposed project's impact on fragile wetlands, its ability to handle stormwater runoff and waste, and how it could alter water quality at the ocean or in nearby sounds, rivers and streams.

The state Department of Environment and Natural Resources has boasted about the quick turnaround as a result of Easley's program, which started in the state's southeastern coastal counties and near Raleigh in 2003 and has been expanded statewide since.

In the program's first years, officials highlighted that express permits dealing with stormwater runoff were being granted in nine days compared with an average of 70days under the normal review process. The time for an erosion permit review, which doesn't require public comment, was cut from 20 days to two.

Senior state environmental officials monitored the program closely, records show.

Dempsey Benton, tapped by Easley as the No. 2 official at the agency, wrote a memo in 2007 that critiqued times on stormwater permits in Wilmington.

"The average number of days for permit processing went from 30-35 days to 60 to 80 days!" Benton wrote to a division supervisor, Alan Klimek, about a period in 2006. "This program is a top priority of Governor Easley, and thus it must be allowed to function even if in atypical administrative ways. The whining must stop!"

The most recent report, from March, says that the average time to grant all types of express permits in the last fiscal year was 17 1/2 days, noting there was "still room to improve" if developers filed better applications. Regular permits take an average of 20 percent to 50 percent longer, the report says.

Benton and other agency officials say that express reviews maintain the same environmental standards as regular permits. The agency also says the most complex projects are steered away from express review.

"There were some folks in the department as well as in the environmental groups where, from a philosophical standpoint, if they could take six months or six years to review an application that they didn't necessarily like but was going to get approved, well, that was OK," Benton said. "We had to change that."

Still, there has been little scrutiny of the program's effect on the environment by the agency, the legislature or environmental groups. Environmentalists cite anecdotal evidence that it has hurt the state's ability to protect natural areas important to the coast's ecosystem.

Tursi, the environmentalist, and others interviewed said the faster process constrains the ability of the public or state regulators to better shape a project while it is on the drawing board.

One activist in Brunswick County was stunned to see express review at work.

"This is outrageous," Jan Harris of Sunset Beach wrote to a division director about a development she was following. "The decision will be made before I can even get my comments in."

Time was money

The express program was born during a run-up in coastal land sales, when projects couldn't get built fast enough and people were buying waterfront property at previously unseen prices. Developers, worried they might miss out on the heated market, were complaining of big backlogs and pushing to get permits granted more quickly.

A few of them got a meeting with Easley. "In developing, time and hardships costs money and sometimes kills projects," said Garrett, the Wilmington builder. "A lot of times, it was just that people wanted to give the governor an ear to some of the problems in the system."

Garrett knew Easley well. He had remodeled the governor's Southport home in 2001 and was appointed to two statewide boards by Easley.

Also there: Lanny Wilson, an Easley transportation board appointee and major fundraiser. Wilson helped finance the Cannonsgate development put together in Carteret County by Gary and Randy Allen, brothers who have companies in Charlotte.

Many of the Cannonsgate permits received express reviews - and at least one got attention from Easley's special counsel, Ruffin Poole. Poole made an unusual inquiry about the status of one of the project's major permits with a division director, according to records and interviews.

Another Easley friend, McQueen Campbell, has bragged that he and Gary Allen got a Cannonsgate wastewater permit in half the usual time because of political connections.

After the permits were issued for Cannonsgate, Easley bought a soundfront lot with a discount at closing of $137,000, records show.

Wilson and Gary Allen also ran into permitting problems at a separate project, Oyster Harbour, in late 2002. Their effort to secure that permit, including Allen writing a $50,000 check to the state Democratic Party, was part of testimony in a state hearing in October. Allen said he didn't make the donation in order to get the permit.

Time spent on permits is crucial for developers. Gary Allen, for example, doesn't use bank financing; instead, he raises cash privately from investors on the promise of returns of 20 percent or more in a short time. If there's a delay, he must pay those investors more for using their money.

Garrett would not say who else was at his office luncheons with Easley or how much campaign money they gave him. Over the years, Wilson and Garrett raised well over $100,000 for Easley, according to internal campaign documents and public disclosures, including at least $14,000 from the men and their family members in 2002.

Passed the Senate

Easley put the express review idea in his budget proposal that was made public in early 2003, but it found no sponsors in the state House, which dealt first with budget items that year.

The Senate included the program in its 229-page budget bill as a special provision sponsored by Sen. David Weinstein, a Democrat from Lumberton and an Easley ally. It was passed in June 2003.

Weinstein said he supported the idea, but it didn't originate with him. He couldn't recall exactly where it came from.

"It was taking six or eight months to get a permit, and this was going to make it take two or three months," he said. "So we put it in there."

Told that the actual times as reported were much less, Weinstein responded: "Two or nine days is even better than they said."

Easley said in a late 2004 speech that the permitting program was passed by lawmakers "at my request."

"We all know that in the business world, time is money," Easley said then. "And when the time a company has to wait for an environmental permit before beginning construction is excessive, the businesses suffer, the local economy suffers and the folks waiting for quality jobs suffer."

That year, lawmakers passed an Easley-backed time guarantee into law. It requires the environmental agency to estimate when it will decide on a permit. Under the law, if a developer provides the proper information, the permit is automatically granted if the agency hasn't made a decision within 60 days of the target date.

Basnight, Perdue

Garrett said getting involved in politics gave him face time and stature. It's why he gave money, he said. And he's glad it helped him with permitting.

But others, including civil engineers who handle the permit applications for developers, were expressing frustration about permitting, too, said state Sen. David Hoyle, a developer and key member of the Democratic leadership. Memos from the time show that Senate leader Marc Basnight and Bev Perdue, then the lieutenant governor, were in on meetings over permitting concerns, too.

Hoyle said development interests often had run into a roadblock: Department Secretary Bill Ross.

"It took somebody a lot higher up than someone in the General Assembly to get Bill Ross to do a damn thing," Hoyle said.

Garrett said he and about a dozen others helped form a "work group" that Ross and others from the state agency met with at Easley's request about permitting. After that, he said, the secretary was responsive and did things "that made it more friendly for the developer."

"Once he got pointed, he made himself available," Garrett said.

Ross and Benton confirmed that Garrett, Wilson and others were involved in meetings about creating the express review program. They said the agency was committed to being more responsive to development interests, but both said they were not privy to conversations Easley had with them or others prior to their involvement.

Ross, who served under Easley for both terms, wrote an open letter in May 2003 as express review was on the way, addressing "people and organizations interested in DENR permitting programs."

He wrote that the department was trying to balance "the importance of economic development" against the state's responsibility to guard natural resources. He said there would be a high priority on making permitting programs faster.

Ross said he was unsure whether the program met its ideal of providing quick decisions without harm but said, "I certainly hope that it has."

Todd Miller, who heads the N.C. Coastal Federation, a nonprofit agency focused on protecting the coast, said because of its design for speed, express review has been hard to track.

"Things happen quickly," he said, "with many of those permits."

acurliss@newsobserver.com or 919-829-4840

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service