Under the Dome

Roy Cooper won’t block GOP from diverting pipeline fund amid ethics questions

The new head of a conservative, Raleigh-based think tank says he has asked the state’s ethics commission to look into whether Gov. Roy Cooper accepted an illegal gift tied to his administration’s approval of a key Atlantic Coast Pipeline permit.

The ethics complaint came Wednesday, hours before Cooper announced he won’t block a bill that would divert money from the fund that is at the center of the complaint.

Donald Bryson, who recently became president of The Civitas Institute, on Wednesday announced that he filed the complaint against Cooper with the state Board of Elections and Ethics Enforcement. The complaint questions whether Cooper’s administration might have violated state laws when it approved a permit for the pipeline to run through Eastern North Carolina and set up a mitigation fund, to which companies building the pipeline agreed to donate $57.8 million.

“This is a serious matter of public trust and transparency,” Bryson said in a statement.

On Wednesday afternoon, Republican legislative leaders issued a joint statement calling on the Democratic governor to refrain from acting on the bill they sent to his desk that redirects the $57.8 million to schools along the path of the pipeline while also reconfiguring the state elections board and addressing school districts’ complaints about a mandate to lower class size. Lawmakers said he needed to recuse himself to avoid “a serious potential conflict of interest.”

Hours later, Cooper announced in a press conference that he’ll let the bill become law without his signature. He also accused Republican lawmakers of jeopardizing the pipeline deal by redirecting the money. He warned that the energy companies might not agree to provide the money now that it’s different from what was agreed to in a memorandum of understanding between the governor and the companies.

“The legislators manufactured a power struggle about a pipeline that they said they wanted,” Cooper said at a press conference at the executive mansion. “They raided the money that was supposed to improve the economy and bring jobs and lessen the environmental impact for the very communities that are affected.”

Cooper said that the pipeline fund would have strong conflict of interest provisions. He said qualified independent experts will determine how the money is spent for environmental mitigation and economic development.

“Of course it would be done in a way where there would be no conflicts of interest,” Cooper said. “There are plenty of ways to make sure that the money goes to the right place.”

During the press conference, Cooper said he could not recall where the idea for the fund came from. But he said it was separate from the permitting process.

Republican state Senate leader Phil Berger said Cooper’s decision to let the bill go into law without his signature confirmed that the governor has a clear conflict of interest.

“It’s clear he got his hand caught in the cookie jar and he’s doing everything he can to twist and turn and come up with an explanation that he hopes will stick,” Berger said told reporters after Cooper’s press conference.

Pipeline fund

The planned 600-mile Atlantic Coast Pipeline will carry shale gas through West Virginia and Virginia to North Carolina, where it will cross eight counties along the Interstate 95 corridor, delivering natural gas to Duke power plants as well as for residential heating and cooking.

The three-page memorandum of understanding 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.

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.

But the fund, and Cooper, have come under scrutiny since news of the pipeline permit were announced. Some are worried that the pipeline will hurt the environment and others, mostly Republicans, have referred to the mitigation fund as an illegal “slush fund.” Cooper has also come under fire for hiring a legislative affairs director who once lobbied Congress for Dominion Energy, one of the lead partners on the natural gas pipeline.

Former Gov. Pat McCrory, a Republican, has criticized Cooper for negotiating the fund. He said neither Cooper nor lawmakers should spend the money from the fund.

Bryson’s complaint contends that the $57.8 million payment wasn’t voluntary but was required for the pipeline companies to acquire the necessary construction permits from the state Department of Environmental Quality. It quotes state Rep. Pricey Harrison, a Guilford County Democrat who was quoted in a WRAL story.

“I wasn’t involved in the negotiations, but I understand that that was part of the process,” Harrison is quoted saying. “It wasn’t that they were paying $57 million or whatever it was to get the permit. It was just that that was a condition of getting the permit granted was the access to this fund that would try to undo some of the damage that was created by the pipeline...”

The Atlantic Coast Pipeline reached a similar agreement last month in Virginia and is negotiating with West Virginia, but the Virginia agreement is with the state and not an individual. A spokesman for Richmond-based Dominion Energy has said the North Carolina agreement satisfies a federal requirement to remedy harmful impacts on migratory birds and loss of forest habitat.

Noelle Talley, a spokeswoman for Cooper, described the complaint as “absurd, even in the realm of partisan politics.” She said decisions about the distribution of funds were to be made by experts through an open and transparent application process, which are subject to public records and open meetings laws.

The memorandum “expressly called for an executive order to set up the guidelines for how it would be allocated. That order and other documents setting up the fund would include strong conflict of interest provisions above and beyond what is already required by law,” Talley said.

“Only government entities and qualified nonprofits would be eligible. The Rural Infrastructure Authority and the Clean Water Management Trust Fund are examples of two places that could fulfill those goals and distribute the funds,” she said.

Bryson’s complaint comes amid many questions about what the ethics commission will look like in North Carolina several weeks after the state Supreme Court issued a ruling that would sever the commission from the state elections board.

A panel of three Superior Court judges gains jurisdiction of the case on Thursday and Cooper has asked for the judges to revert to a system similar to the one in place when McCrory was in office.

Republican legislators have tried three times since Cooper was elected to remake the ethics and elections board. The most recent attempt came this week in the bill that will become law without Cooper’s signature. It would create a nine-member ethics and elections board that would have four Republicans, four Democrats and an unaffiliated voter.

Paul A. Specht: 919-829-4870, @AndySpecht