Federal grand jury summons six NC county commissioners for secret testimony
A federal grand jury that recently obtained hundreds of records related to $50 million in state funds for dredging and affordable housing projects has now subpoenaed six North Carolina county commissioners to testify.
The Dare County commissioners were in office when their board approved contracts for two businesses linked to the same person: Jordan Hennessy, a former Republican legislative aide turned businessman.
Hennessy had been working for EJE Dredging Service – later becoming CEO – and was listed as a principal in Coastal Affordable Housing.
EJE formed shortly after lawmakers approved the $15 million for dredging in 2018, while Coastal formed shortly before lawmakers approved the $35 million for affordable housing in 2021.
The budget provisions included unusual conditions for spending the money, and emerged in final versions of the state budgets, timing that gave lawmakers little time to evaluate the awards and forced up or down votes.
One Dare County contract for the spending was terminated after local opposition emerged and the other has run into federal regulatory trouble.
In April, Dare commissioners walked away from the contract with Coastal after several Dare County towns filed a lawsuit against the state over a 2023 state provision – also inserted into the final version of the state budget – that gave them no say on where the housing would go.
In September, the U.S. Army Corps of Engineers suspended the dredging after finding that EJE had repeatedly dredged outside of the designated channels in the Oregon and Hatteras inlets.
The Corps has since allowed the county and EJE to resume dredging under two permits, with the fate of others dependent on EJE showing it can continue to comply with Corps requirements, according to agency spokesperson Jed Cayton.
Number of subpoenas growing
In the investigative series Power + Secrecy, The News & Observer this year has reported on several examples of state spending and policy inserted late in budget bills, a practice that diminishes accountability and transparency.
Since June, federal authorities have also issued subpoenas to the state Department of Public Safety and UNC-Wilmington demanding records that involve Hennessy and Marion Warren, a former director of the state Administrative Office of the Courts who was hired as UNC-Wilmington’s legislative liaison last year.
Hennessy and Warren co-wrote detailed legislation that state lawmakers passed in 2020 providing $3.5 million in COVID-19 relief funds to a newly formed nonprofit, Caitlyn’s Courage. The subpoena to DPS focuses specifically on that spending. Warren is a member-manager of Coastal Affordable Housing.
Grand jury proceedings are secret so the specific focus of any investigation spawning the subpoenas is not clear.
Last month, a grand jury subpoenaed the full Dare County board of commissioners, ordering it to produce correspondence, bills, contract materials and other records related to the dredging and affordable housing. The grand jury also subpoenaed records from the county’s Oregon Inlet Task Force, which had worked to address the dredging needs. County Public Information Officer Dorothy Hester said those records have been provided.
Dare commissioners who received the latest subpoenas calling on them to testify include Chairman Bob Woodard, Vice Chairman Wally Overman, Rob Ross, Danny Couch, Steve House and Ervin Bateman, Hester said.
The county was not given copies, she said. No other county officials received subpoenas, she said.
Commissioners who did could not be immediately reached on Tuesday. Commissioner Bea Basnight, who wasn’t on the board at the time of the dredging and affordable housing votes, told Hester that she had not received a subpoena, Hester said.
Hester on Monday asked commissioners to provide copies of the subpoena, a public record, at The News & Observer’s request, and received them from Ross, Bateman and Couch.
All were issued Oct. 29, and require Ross to appear this week before the grand jury, which has been meeting in Raleigh. Couch and Bateman were told to appear in mid-December.
The subpoenas don’t specify what the grand jury is seeking, but they subpoenas show Assistant U.S. Attorney Dennis Duffy obtained them. He is also the prosecutor named on the subpoenas for records from Dare County, DPS and UNC-Wilmington.