RALEIGH — Kieran Shanahan, who has been head of the states public safety agency since the first of the year, will resign at the end of the month, saying he was unable to juggle the job with his outside business interests.
His abrupt resignation, delivered Thursday afternoon in a letter to the governor, came on the same day that another top official in the state Department of Public Safety, Chief Operating Officer Edward Sonny Masso, also unexpectedly resigned after only five months in the position.
There was no indication that the dual resignations were connected. But the turmoil in the upper ranks left a team of deputy secretaries to run the 26,000-employee department until replacements are named. Shanahans decision was announced Friday.
Shanahan, a former federal prosecutor and once a member of the Raleigh City Council, came under scrutiny earlier this year after The News & Observer reported that he was continuing to do legal work for clients at his law firm. Shanahan said he was doing the work on his own time, and that it was always his intention to phase out the moonlighting.
He said his firm didnt handle criminal cases, which might have posed a direct conflict of interest since three law enforcement agencies are under the Department of Public Safety. The Shanahan Law Group owned a one-lawyer firm that did criminal defense work, but in January that firm ceased operation, and the sole attorney formed his own practice, according to a partner in Shanahan Law Group.
Less than two weeks after The N&O article, his law firm announced that Shanahan had severed ties altogether by taking a leave of absence from the firm and from practicing law while he held public office. The firm had represented clients before the General Assembly and governmental agencies, but Shanahan said they stopped after his appointment.
Even the name Shanahan Law Group posed a problem as state bar rules prohibit lawyers who hold public office from using their names in the name of a law firm during any substantial period when the lawyer isnt actively practicing with the firm.
Shanahan couldnt be reached for comment Thursday or Friday. In his letter to the governor, he said, stepping away from my business interests has proved to be more challenging than originally anticipated.
He also reminded the governor that the two had discussed from the outset that the length of my tenure would be affected by both my wifes Navy career and my ability to step away from my business interests, including my law firm.
His wife, Christina Shanahan, is a career Navy Reserves officer who is about to become a rear admiral stationed in Portsmouth, Va. Shanahans letter says he wants to have the time to support her endeavors.
McCrory, asked at a news conference Friday about Shanahan, repeated Shanahans reasons. McCrory said the six-month mark was a good time to evaluate whether the arrangement was working. But the governor also said they hadnt discussed the matter before Thursday.
Alternately mispronouncing Shanahans first name as Sharon and then Karen, the governor said it was a mutual decision.
It was a joint dialogue between us, and him recognizing all the other issues on his plate, McCrory said. I consider (him) a friend. I think we were lucky to have him. I wish him the best, especially he and his wife in the future, especially with her new promotion.
Christina Shanahan has been a lobbyist for the firm that she and her husband started, CompassNC, which is closely tied to the law firm. She is also a nationally ranked competitive equestrian.
The couple live in a 5,000-square-foot, $1.8 million house they built in 2002 on 10 acres in northeast Raleigh with an elegant horse barn, designed as a mini replica of the couples house. Shanahans salary, established by state law, is $135,000 a year.
In putting together his first management team, Shanahan brought in Masso, a retired Navy rear admiral, to be his chief operating officer at a salary of $140,000.
Masso could not be reached for comment Friday.
Shanahan gave less than a weeks notice that he would be resigning. But it wasnt clear whether he would continue to work until Wednesday. Massos resignation was effective immediately.
Their departures prompted Frank Perry, who heads the division of law enforcement, to issue an email Friday morning directing the Emergency Management division and state National Guard to report directly to him rather than Masso.
Perry was Shanahans interim COO as he put together his first management team after taking office in January. He is a former FBI agent and supervisor who also directed investigations for the state auditor and the state ethics commission.
Staff writer Lynn Bonner contributed.