Gov. Pat McCrory is complaining that a story published Saturday attempted to give the impression that something improper or illegal was done when the governor personally intervened on behalf of a friend and political donor seeking to renew $3 million in prison contracts over the objections of top prison officials.
In a news release late Saturday afternoon, McCrory complained about “distorted” headlines and some information in the articles, which ran on the front page of The News & Observer and The Charlotte Observer.
The articles discussed how the McCrory administration renewed private maintenance contracts for a company owned by Graeme Keith Sr., a prominent Charlotte real estate developer and retired banker, and his son and business partner, who have given $12,000 in campaign contributions to McCrory.
News & Observer Executive Editor John Drescher rejected the criticism and defended the story.
“Our story was accurate, fair and complete,” Drescher said. “The story was based on public records, including emails and text messages, and on-the-record interviews. None of Gov. McCrory’s criticism of our report stands up to scrutiny. The FBI has interviewed key participants. We will continue reporting.”
The newspapers reported that McCrory arranged a meeting in Charlotte a year ago of his friend and political donor with top state prison officials to discuss the prison maintenance contracts. McCrory attended the meeting.
McCrory said Saturday that the newspapers “clearly attempted to give the impression that something improper or even illegal was done. Clearly, just the opposite occurred.” He said his administration went through “an ethical process and made a sound, business-like decision that was in the best interest of public safety as well as the taxpayers of North Carolina.”
The N&O and Charlotte Observer are owned by McClatchy and often work together on stories, as they did on the story published Saturday.
Here’s a look at the criticism from McCrory’s office:
▪ That the headline “McCrory held meeting to extend donor’s contract” was “absurd and false.”
That headline was used in The Charlotte Observer. The N&O used a different, but similar, headline: “McCrory brokered meeting to extend donor’s contract.”
McCrory’s release complained that the meeting was not conducted to decide the contract extension and that the headline gives the false impression that The Keith Corp. got the meeting as a result of campaign contributions.
The contract was not extended at the meeting, and the story didn’t say that it was. The newspapers reported that the meeting put into motion the events that led to the contract being extended after prison officials had planned to let it expire.
According to a prison department memo, Keith opened the Oct. 28, 2014, meeting by stating “he had been working on this project ‘private prison maintenance’ for over ten (10) years and during that time had given a lot of money to candidates running for public office and it was now time for him to get something in return.”
Secretary of Public Safety Frank Perry, a retired high-ranking FBI official, was at the meeting and said the memo was accurate. Perry said Keith made similar comments to him in another meeting and on the telephone.
In an interview Friday, McCrory said he did not hear Keith make the comments about political contributions. The governor said he believed the prison officials at the meeting were telling the truth when they said they heard Keith say he deserved the contract because of his political contributions.
At the meeting, Keith made a proposal to extend the contracts at three prisons and expand the company’s work to all 57 state prisons. After the meeting, Keith emailed Perry asking that the existing contracts be extended.
▪ The governor’s office complained about this summary headline: “Over objections of prison staff, Charlotte developer Graeme Keith got extension of $3 million-a-year maintenance deal.”
The governor’s office said the headline omits the fact that McCrory asked State Budget Director Lee Roberts to review the data and make a recommendation on how to resolve a dispute between Department of Public Safety and the Keith Corp.
The headline is accurate. Perry, Commissioner of Prisons David Guice and other prison officials objected to the renewal of the contract. The article discussed Roberts’ role in depth, relying on public records and three interviews with Roberts; it included information about McCrory asking him to figure out whether public or private maintenance provided the best value.
The governor’s office also said Roberts conducted “a thorough, comprehensive review of the available data.” The N&O is posting a copy of that one-page document at newsobserver.com. Roberts said that is the only written analysis produced by his office.
▪ The governor’s staff complained about a headline stating “A governor’s testimonial” above a graphic showing part of a promotional slideshow The Keith Corp. posted on the Internet.
In the 2011 tribute, McCrory praises Graeme and Greg Keith for “adhering to the highest standards of ethical and moral integrity, service to their clients and civic leadership.”
“The comments about Keith Corporation were from Pat McCrory when he was a private citizen and not holding any elected office,” McCrory’s press release stated. “It’s obvious the use of “Governor” was another attempt to mislead their readers and to further promote a false narrative that something improper was done.”
The article stated that McCrory made the tribute in 2011. He began serving as governor in 2013. The testimonial was still available for viewing on the Internet on Sunday.
The governor’s office did not complain about a sentence in the article that is corrected in Monday’s paper: “As Charlotte’s mayor, McCrory had no qualms about singing the Keiths’ praises.” That sentence incorrectly implied that McCrory was mayor when he wrote the testimonial.
▪ McCrory also complained about this sentence in the article: “The Office of State Budget and Management used metrics preferred by the Keith Corporation in the OSBM analysis.”
The metrics center on measuring the square footage of the prison buildings. The Keith Corp. used gross square feet – the area of all the buildings on the prison grounds. The state budget office adopted this method. The governor’s office said the use of gross square footage is the industry standard.
Prison officials used net square feet, primarily because the prisons maintained by The Keith Corp. each have 30,000-square-foot buildings that are empty and unused, roughly 6 percent of the total square footage. The buildings were to house inmate-staffed factories, but the plans were shelved during the economic downturn. The buildings are empty, have gravel floors and need virtually no maintenance.
The three prisons staffed by state employees each have functioning factories that must be maintained: a woodworking and upholstery factory, a sewing plant and a packaging plant. Prison officials subtracted the square footage of the empty buildings when comparing the costs of private maintenance versus maintenance by state employees.
Prison officials also pointed out that state employees maintain the security systems at the Keith-maintained prisons: video surveillance, telephones and the Electronic Intrusion System, which detects motion along the perimeter fence.