Updated March 16 with a response from the governor’s office and more context.
Gov. Roy Cooper intervened with Duke Energy on behalf of a solar energy company that previously paid him rent for Nash County land – and still rents from his brother – and considered the dispute resolution as a “possible Atlantic Coast Pipeline mitigation option,” records show.
The negotiations over a solar farm regulatory issue between Strata Solar, Cooper’s administration and Duke are detailed in public records recently released by the governor’s office in response to requests from legislators and news organizations. The solar matter is now a key focus of a legislative oversight committee’s investigation into the Cooper administration’s handling of Atlantic Coast Pipeline permits.
In addition to internal discussions about the solar dispute, the public records also show that Cooper’s government staff routinely included the top consultant for Cooper’s re-election campaign in email and text message discussions about the natural gas pipeline.
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The records also show Cooper took a close interest in whether Virginia and West Virginia would issue pipeline permits – and may have delayed the permits based on actions in West Virginia – even though each state must follow its own separate regulations and processes.
Cooper has previously said that the solar discussions – and a $58 million mitigation agreement with the pipeline developers, also under investigation by legislators – were separate from the permitting process led by the N.C. Department of Environmental Quality.
Asked if resolving the solar dispute was a condition for Duke to secure pipeline permits, Cooper spokesman Ford Porter said in an email that “the Governor’s Office hoped that the announcement of the (mitigation fund) and a resolution in the impasse over HB 589 (the solar energy legislation at the core of the dispute) would coincide with DEQ’s issuance of ACP environmental permits in order to give North Carolinians a broad view of the energy landscape.”
The legislation, House Bill 589, was designed to expand solar power in the state. But it resulted in solar companies challenging Duke’s policies for how new solar farms would connect to the electric company’s transformers.
Campaign consultant’s role
But the governor’s office did not respond to a series of follow-up questions from the NC Insider, including questions about the Cooper family’s business relationship with Strata Solar and the role of Cooper campaign consultant Morgan Jackson in the official business of the governor’s administration.
After this story was published in the NC Insider and later in The News & Observer, Porter emailed a statement to the N&O. “This article props up outlandish political attacks by the right-wing John Locke foundation and legislative Republican, essentially reprinting false Republican attacks without context or merit,” Porter said. “For that reason, the Governor’s office chose not to respond.”
Jackson, of the consulting firm Nexus Strategies, led Cooper’s 2016 campaign and is managing his re-election bid. He was copied on numerous emails and text messages among senior staffers in the governor’s office discussing the pipeline permits, but he does not weigh in with opinions in any of the records reviewed by the NC Insider.
Many elected officials keep their campaign organizations and government staffs separate, but laws governing the political activities of state employees don’t directly address whether a politician’s government-funded staffers can communicate with their campaign. The law simply says that a state employee cannot “engage in political activity while on duty or within any period of time during which he is expected to perform services for which he receives compensation from the State.”
Asked about Jackson’s role in the pipeline deliberations, Porter said that he “is a political consultant for the Governor and it’s not unusual for him to provide feedback and advice on issues facing the state.” When asked if Jackson has a formal paid role for the governor’s administration in addition to his campaign role, Porter did not respond to multiple inquiries over several weeks.
Among other discussions, Jackson is included in a Jan. 24, 2018, group text between Cooper’s senior staffers in which deputy chief of staff Julia White tells senior adviser Ken Eudy that “boss” – presumably Cooper – “wants to know quantification of solar projects value including which ones are located in pipeline path. His Call in 10 min.” It’s unclear who the referenced phone call involves; Cooper’s schedule for that date and time does not list any calls or meetings related to the pipeline.
Legislative Republicans have zeroed in on the solar issue, arguing in a letter to Cooper that the records “appear to reveal that your business partner asked you to personally intervene with Duke Energy on a matter impacting his solar company profits that is unrelated to the ACP.” That assertion hinges in part on an undated memo labeled “Possible ACP Mitigation Options.” The memo lists several possibilities, including an option that would have Duke agree “to revisit the use of higher capacity transformers to allow for more renewable energy projects to access the grid.”
That’s the regulatory issue of concern to Strata Solar, which prompted CEO Markus Wilhelm to write to Cooper in 2017 to request that the governor make “a call to Duke leadership.” Governor’s office memos detailing the issue say that Duke’s rules governing the use of transformers for solar farms would cost companies like Strata “millions of dollars.”
The issue remained part of the internal discussions for months, and a few weeks before the pipeline permits were announced, Eudy texted Cooper general counsel William McKinney, “Not sure we should sign ACP agreement unless solar deal works,” in a message first reported by WBTV.
The deal between solar companies and Duke Energy was announced a few days after the permits were issued. The day before the permit was issued, billionaire environmentalist Fred Stanback wrote in an email that he’d spoken with Cooper about the pipeline, and the governor “said he negotiated several concessions from Duke Energy,” according to records released by the Cooper administration. Stanback said in an email to the Insider this week that he could not recall details of the conversation with Cooper. Asked if Stanback’s email was inaccurate, a Cooper spokesman did not respond.
Cooper’s business relationship with Strata Solar dates back to 2012, when the then-attorney general and his brother Pell leased Nash County property to Strata for a solar farm, according to a 2018 report in Carolina Journal, a publication of the conservative John Locke Foundation. The Cooper brothers owned the land through an LLC, Will Clark Properties, and Roy Cooper left the LLC several years later and no longer lists a financial stake in his ethics disclosure forms.
The governor continues to be a partner with his brother in a separate LLC that owns surrounding Nash County property, and Will Clark Properties continues – as recently as 2018 – to list a Raleigh post office box previously tied to Cooper as Will Clark Properties’ “principal office mailing address.” Porter, the Cooper spokesman, did not respond to a question about whether the governor and/or his family members still receive regular rent payments from Strata.
In addition to the solar issue, Cooper and his staff also closely watched the permitting processes in Virginia and West Virginia, the other two states along the pipeline route.
In one text message to Cooper, an unnamed staffer tells the governor that he spoke to the Virginia governor’s chief of staff, who “can’t imagine a scenario where (Virginia) doesn’t approve ACP. He promised to let me know if things changed.” And in another text message released by the governor’s office, someone says the administration is “holding on ACP because WV pulled their permits” – an indication the process was delayed in response to West Virginia’s regulatory actions. The sender of that message isn’t named in the released records.
Asked about the discussions of other states’ actions, Porter told the Insider that “throughout the process, the Governor’s Office was informed about the timing of decisions impacting the project, including the timing and rationale of decisions in other states. While environmental permits in North Carolina were left to DEQ to rise and fall on their own merits, the Governor’s Office recognized the need to be responsive to both supporters and opponents of the project who were reacting to decisions in all three states impacted.” Porter did not respond to a request to identify the unnamed individuals on the text messages released in the public records documents.
Private investigators hired by a legislative oversight committee are currently looking into the pipeline permitting process, but it’s unclear when their work will be complete. The committee’s chairmen, Sen. Harry Brown, R-Onslow, and Rep. Dean Arp, R-Union, have said they expect to hold a public hearing on the investigators’ findings, but no hearing has been scheduled yet.
Cooper’s chief of staff, Kristi Jones, has called the investigation an “extraordinary open-ended political fishing expedition” and said that the Republican Party, rather than taxpayers, should be paying for the private eyes.