Republican lawmakers grilled a top aide to Gov. Roy Cooper on Thursday about a $57.8 million fund Cooper privately negotiated with the Atlantic Coast Pipeline and announced on the same day the interstate project won a key state environmental permit.
Lee Lilley, Cooper’s legislative affairs director as of Jan. 31, spent nearly an hour before a joint appropriations committee, deflecting a barrage of questions about the ethics and legality of the fund, the terms of which give Cooper spending control. Lilley agreed to respond to written questions at a later time.
Democrats fumed over Lilley’s harsh treatment, saying he was invited to introduce himself to lawmakers and lured into a trap.
“In 10 years I’ve never seen anything as shameful as what has happened today,” said Rep. Darren Jackson of Wake County.
“Unfortunately that’s what the politics of our state has become,” Jackson told his GOP colleagues. “You decided to ambush him and I think it’s just disgusting.”
After his questioning, Lilley marched out of the hearing room without responding to questions. Cooper’s office did not respond to requests for comment.
After Lilley left, the lawmakers adopted a provision that would remove the fund from Cooper’s control and would direct the $57.8 million to public schools located along the pipeline route. The pipeline will pass through eight counties and run along the Interstate 95 corridor, delivering natural gas to Duke Energy power plants and other uses.
Lilley, 34, came under fire because of his past employment with lobbying powerhouse McGuireWoods Consulting. One of his clients was Richmond-based Dominion Resources, the holding company for Dominion Energy. Dominion is one of the lead partners on the 600-mile interstate pipeline, along with Charlotte-Based Duke Energy. Republican legislators demanded information from Lilley about the environmental mitigation fund and his role in the negotiations for it.
In the few questions Lilley answered Thursday, he said he lobbied for Dominion on federal issues before federal agencies. He claimed limited familiarity with the contested fund, which is broadly designated for investment in renewable energy, environmental remediation and on economic development. Legislators were skeptical.
“He was a lobbyist for Dominion during this process,” Republican Sen. Harry Brown of Jacksonville said after the hearing. “His knowledge of that pipeline is as good as anybody’s, I would argue.”
Brown, the Senate Majority Leader, added that a governor lacks the legal authority to create such a fund without legislative oversight. Brown said the fund also raises ethical questions about how environmental permits are awarded in the state.
“The real question here is, does anyone think this was a gift?” Brown said. “You get the permit the same day you allocate the gift.”
Critics on both sides have said the fund appears like a fee paid by Atlantic Coast Pipeline in exchange for a permit. Republicans are further irate that Cooper would control the funds, which they said would be politically motivated and awarded to environmental organizations that form Cooper’s political base.
Last week, after environmentalists and Republicans both questioned the ethics of the fund, Cooper spokesman Ford Porter denied that the fund was a pay-to-play scheme, saying: “The permit was not contingent on the fund agreement.”
On Thursday, GOP lawmakers asked Lilley if he truly believed the payment was voluntary and unconnected to the permit, as Cooper’s office has stated.
“Tell me, is this going to become a normal practice?” Cabarrus County Republican Sen. Paul Newton asked. “Do you agree it has a chilling effect on job creators? Do you think it promotes economic development in North Carolina?”
Republican Rep. Justin Burr of Albemarle told Lilley “there is a question of integrity ... when we allow public officials to take very large sums of money outside the normal course of business in the state.”
Lilley repeatedly stated that the environmental permit, which will allow the pipeline to cross more than 300 creeks, marshes and and other bodies of water, is unrelated to the fund.
Lawmakers reacted as if they did not hear him.
“It’s undeniable it’s in connection with state permits,” said Republican Rep. Dean Arp of Monroe. “The appearance of evil is insurmountable.”