The Atlantic Coast Pipeline that would run along I-95 through North Carolina comes close to several properties owned or co-owned by Gov. Roy Cooper, but his staff says he will take steps to ensure he and his family would not directly benefit from a special $57.8 million fund for environmental mitigation, economic development and renewable energy promotion.
The fund issue may be moot now that the legislature has passed a bill that, among other things, would redirect the money to school districts along the pipeline’s route. The House voted 104-12 Tuesday to send the bill to the governor. Cooper hasn’t made a decision on whether he will sign or veto it.
Cooper grew up in Nash County, and he and his brother, Pell, a district court judge, own roughly 375 acres spread across 13 properties. The governor also owns two other properties totaling 44 acres. Most of these properties are within two miles of the pipeline's projected path. Land records show nearly all of the properties have been held in the family well before plans for the 600-mile natural gas pipeline were announced. Much of it was passed down from the governor’s late parents.
Cooper, a first-term Democrat, disclosed the limited liability companies he and his brother had formed to manage the properties in his ethics statement. They had formed Sapony Creek Properties in November 2014, and Roy Cooper had formed Barrel Rider Properties a month later, N.C. Secretary of State records show. The governor reported in his ethics statement the properties provide at least $5,000 rental income. Roy Cooper is also a partner in a commercial property in nearby Rocky Mount.
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Pell Cooper is also a co-owner in another company, Will Clark Properties, that has leased part of a 54-acre tract in Nash County to Strata Solar, which put up a solar farm in 2013. That property is several miles east of the projected path of the pipeline.
As landowners near the pipeline, the Cooper brothers' properties could potentially benefit from the $57.8 million fund. The governor's staff says the fund was negotiated independently of the permitting process that led to the pipeline's approval. Half of the $57.8 million is supposed to go toward mitigating the environmental damage the pipeline will cause to wetlands, streams and wildlife habitats. The rest is designated for economic development and renewable energy projects.
The state would receive half of the $57.8 million once the Federal Energy Regulatory Commission has approved the pipeline; the rest would be paid upon its completion.
Noelle Talley, a spokeswoman for Cooper, said the Coopers would not be eligible to apply for the funds, and never had an intention to seek money from the fund.
"Decisions about distribution of the fund were to be made by experts through an open and transparent application process for government entities and qualified non-profits," Talley said in an email message.
A three-page memorandum of understanding between the governor and the pipeline builder states that the money is to be deposited in an escrow account and managed by a third party. It also references a forthcoming executive order that would lay out the "guidelines and directives" for the allocation of the money once the permitting is in place.
"Robust conflict protections would be in that order," said Sadie Weiner, Cooper's communications director.
She said the Rural Infrastructure Authority and the Clean Water Management Trust Fund are two agencies that could distribute the funds, and the process would be subject to public records and open meetings laws.
The special fund has drawn controversy. Environmental advocates upset at the state's initial approval of the pipeline questioned the ethics of accepting money for a special fund at the same time. Republicans in the legislature characterized it as a slush fund for the governor.
On Thursday, state Republican leaders who control the legislature announced a bill that would direct that money to school districts along the pipeline's path. That legislation passed the Senate on Friday by a 37 to 5 vote. The legislation includes money to help school districts reach the legislature’s directive for reduced class-sizes in kindergarten through third grade, and changes to the state elections and ethics board.
The state's ethics law prohibits officials from using their positions for direct financial benefit. That hasn’t happened with the special fund’s creation, said Norma Houston, an attorney and lecturer at UNC-Chapel Hill's School of Government who served as a top aide to former Senate leader Marc Basnight, a Manteo Democrat.
"At this point, he has not taken any action that would result in a financial benefit to him or his immediate family," Houston said of Cooper.
She said if money from the fund was to be spent in a way to directly benefit the Coopers' properties, then the governor would have to disclose that conflict and recuse himself from any decision on the allocation.