Some of the key negotiators in last month’s House Bill 2 compromise weren’t legislators or lobbyists: They were CEOs and other leaders from some of North Carolina’s biggest companies.
As HB2 talks between Gov. Roy Cooper and Republican legislative leaders stalled, an informal group of six executives came to Raleigh to help broker the deal, which partially repealed HB2 while limiting local nondiscrimination ordinances until 2020.
The business group included leaders from insurer Blue Cross Blue Shield, Bank of America and the Charlotte Hornets basketball team. They say they didn’t have a specific solution in mind but wanted to help elected officials reverse the economic damage to the state from HB2.
“It’s somewhat of a tradition or heritage in our state that business leaders do engage on important matters of state,” said Brad Wilson, CEO of Blue Cross and Blue Shield of North Carolina and a member of the group. “I think this is just another example of an opportunity for that to have happened.”
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The group of executives weren’t representing any chamber of commerce or formal business group. Instead, their involvement began when Wilson got a call in early February from Dale Jenkins, CEO of Raleigh-based Medical Mutual Insurance Company. “As one who cares deeply about North Carolina, I was glad to receive the call from Dale Jenkins, and he and I explored what could be done,” Wilson said.
The two CEOs then called some acquaintances in the Charlotte business community, where the HB2 saga had begun with a controversial city nondiscrimination ordinance. That effort brought together two Bank of America executives, a prominent developer and the president of the Charlotte Hornets, according to Wilson and others involved.
The group began meeting regularly with Cooper, House Speaker Tim Moore and Senate leader Phil Berger. Sometimes they’d get the major players in the same room, but other times they’d hold separate meetings, using a form of shuttle diplomacy between the Legislative Building and the governor’s office at the Capitol building.
Berger and Moore declined to be interviewed for this story, but Democrats involved with the talks praised the business leaders’ work.
“I do a lot of mediations, and I think they served more as an honest broker or neutral arbitrator,” said House Democratic Leader Darren Jackson, who’s an attorney. Jackson said the business leaders were a quiet presence at the private negotiations he attended, primarily working to keep the two sides meeting and talking.
That goal proved challenging in the days leading up to the NCAA’s deadline for North Carolina to address HB2 or lose the ability to host sports championships through 2022.
Days before the March 30 deadline, Republican leaders were pushing for what they called a “conscience protection” provision in the HB2 replacement bill. It would have allowed lawsuits against the state for anyone who believes their constitutional rights are threatened by government action. That was a dealbreaker for Democrats, who compared it to Indiana’s controversial Religious Freedom Restoration Act.
“The business community would not support it,” said Rep. Chuck McGrady, a Hendersonville Republican involved in negotiations.
But the RFRA-like provision remained on the table less than 48 hours before the NCAA deadline. Berger and Moore held a news conference on the evening of March 28 announcing that it was part of a deal reached with Cooper – but that Cooper quickly denied agreeing to.
That news conference happened shortly before the Republicans were scheduled to meet Cooper, legislative Democrats and the business group at the governor’s mansion. Berger and Moore walked to the mansion immediately after the news conference.
“It infuriated the governor,” Senate Minority Leader Dan Blue said, referring to the news conference. The meeting lasted into the night, but it ended with no deal in sight.
But the business group encouraged lawmakers to continue negotiations the following day, even as some started to lose hope that a deal could be reached before the NCAA’s deadline.
Ned Curran, a Charlotte real-estate developer and former chairman of the Charlotte Chamber of Commerce, said he and other executives were using approaches common in forging business deals.
“We would push them a little bit to try a little harder,” he said. “We shared with them that we, if needed, would be trying to push them in some uncomfortable places. ... The subject matter was too important, and it’s not surprising that there would be some rough patches.”
With about 24 hours remaining before the deadline, someone suggested scrapping earlier proposals and instead considering a moratorium on local government nondiscrimination ordinances. The negotiators interviewed for this story said they couldn’t recall who proposed the idea of including a moratorium through 2020, but legislators and the governor were open to the proposal.
That tentative agreement was reached early on the afternoon of March 29, and legislative leaders spent the rest of the day and evening working out details and persuading enough legislators in their party to vote yes. The terms of the deal were announced around 11 p.m. that night, and the bill moved quickly through the House and Senate the following day.
The business group kept a low profile, and the executives aren’t taking credit for the successful agreement. “Credit goes to Gov. Cooper, Sen. Berger and Speaker Moore for carefully listening to the ideas and recommendations of many diverse people, and continuing their dialogue until a bipartisan resolution was reached to move our state forward,” Jenkins said in an email.
Cooper said in a prepared statement that “the involvement of business leaders was one of many factors that led to a compromise that could get Democratic and Republican votes.”
But some people active in the HB2 debate are upset they didn’t have a seat at the negotiating table. Chris Sgro of the LGBT advocacy group Equality North Carolina noted that no LGBT people were involved in the talks.
“I think that when you negotiate civil rights with a group of business leaders, and intentionally leave out civil rights leaders, that’s a huge red flag,” said Sgro, who opposes the HB2 replacement law.
The business leaders, however, say their effort to stay impartial allowed them to be effective facilitators and keep Republicans and Democrats at the table.
“I think that we could use more conversations and processes where people of goodwill can come together and work hard and not quit until a hard issue is solved – and that’s what occurred here,” Wilson said.
Who was involved in negotiations?
-Ned Curran, Charlotte real-estate developer and former chairman of the Charlotte Chamber of Commerce
-Dale Jenkins, CEO of Medical Mutual Insurance Company in Raleigh and former N.C. Chamber chairman
-Brad Wilson, CEO of Blue Cross Blue Shield of North Carolina
-Andrea Smith, chief administrative officer for Bank of America
-Charles Bowman, North Carolina market president for Bank of America
-Fred Whitfield, president and chief operating officer for the Charlotte Hornets basketball team
Elected leaders and top aides:
-House Speaker Tim Moore and chief of staff Bart Goodson
-Senate leader Phil Berger, chief of staff Jim Blaine and Berger’s general counsel Andrew Tripp
-Gov. Roy Cooper, his general counsel William McKinney, senior adviser Ken Eudy and legislative director Brad Adcock
Compromises that failed
Repeal in exchange for repeal: In December, legislators held a special session after soon-to-be Gov. Roy Cooper brokered a deal between Republican leaders and the Charlotte City Council: Charlotte would repeal its nondiscrimination ordinance, and the legislature would then repeal HB2. The deal fell apart after news reports showed the city council had kept parts of the ordinance. Republicans cried foul and added a moratorium on similar ordinances to the repeal – prompting Democrats to vote no, killing the bill.
Going after bathroom crimes: In February, Cooper proposed a compromise in which HB2 would be repealed while adding stricter penalties for bathroom crimes and a requirement for local governments to notify lawmakers 30 days before adopting any nondiscrimination ordinance. Republican legislators quickly dismissed the proposal as an inadequate compromise, while LGBT advocacy groups also blasted the plan and said the focus on bathroom safety was “a distraction” from discrimination issues.
Local nondiscrimination referendums: In late February, Republican Rep. Chuck McGrady rolled out a bill that would have repealed HB2. But any local nondiscrimination ordinance would only take effect 90 days after being approved by the town or city council.
And during that time, opponents of an ordinance could force a voter referendum on it by submitting a petition with the signatures of 10 percent of the voters who voted in the most recent municipal election. Republicans said the provision would limit overreach by a city council, but Cooper and opponents said it would put civil rights up to a vote. Democrats refused to support the bill, and McGrady said he didn’t have the votes needed to proceed.
Referendums, but only for a short time: Democrats did eventually agree to support a variation on the referendum idea. A compromise version of the McGrady bill would have allowed referendums only for a short period of time after the repeal of HB2. McGrady and House Democratic Leader Darren Jackson said they briefly had enough votes and hoped to introduce the legislation around March 20, but Republican support quickly fizzled.
‘Conscience protection’: Two days before the HB2 replacement bill was passed, legislative leaders held a hastily called news conference to announce that they’d reached a deal with Cooper – but that Cooper denied he’d ever agreed to. That deal would have prevented local nondiscrimination ordinance from including LGBT protections and would have included a “conscience protection” provision, which would allow lawsuits against the state for anyone who believes their constitutional rights are threatened by government action. Cooper argued that provision was unacceptable because it mirrored Indiana’s controversial religious freedom law. A day later, Republicans agreed to drop that provision, helping the final deal proceed.