Under the Dome

Feds look at stimulus grants tied to Hagan

The U.S. Department of Energy for nine months has been investigating a commercial project in Yancey County that used federal stimulus money, records obtained by The News & Observer show.

As part of that investigation, a federal agent with the Department of Energy has inquired about a project that involved relatives of former U.S. Sen. Kay Hagan in Rockingham County, according to a WRAL report.

The latter project, involving a building owned by JDC, a company owned by Hagan’s husband, Chip, and two of his brothers, was the subject of news media and regulator scrutiny and political TV ads during Hagan’s loss to Republican Thom Tillis in her re-election bid in 2014.

A company formed by Hagan’s husband and son was involved as a subcontractor installing solar panels at both projects. Questions were raised about the contracts for that work because the family had a stake in parties on both sides. The Hagans deny any impropriety.

Records The N&O previously obtained show that the federal agent, based in South Carolina, in 2015 asked Gov. Pat McCrory’s administration for copies of its files on the Mountain Heritage Expo Center project in Burnsville. The administration complied and also sent the agent extensive records about the unrelated Reidsville project, saying it was doing so because Carolina Journal, a publication of the conservative John Locke Foundation, had published in-depth stories on both projects.

WRAL reported this week that newly obtained records show the Department of Energy agent asked the state auditor’s office in September for an opinion about whether the Reidsville project improperly used federal stimulus grant funds to pay family members as subcontractors. The auditor’s general counsel said that raised concerns, but he said he didn’t know enough about it to say for sure, WRAL reported.

The counsel also said that if state regulators knew about the family relationships then it would be difficult to hold those involved accountable for wrongdoing. The Hagans have said regulators knew about all the contracts, and that everything was done properly. A spokesman for the auditor said Thursday that the office didn’t investigate because it didn’t want to interfer with state environmental regulators’ review of the JDC contract.

“Frankly, this entire process has been baffling,” said JDC representative Bill Cary. “Since the first day this grant was awarded, JDC cooperated with the state energy office, answering every question and providing every piece of documentation ever requested. In fact, the state energy office administered this grant and approved all actions taken by JDC over the course of the project. We remain confident that JDC has acted appropriately at every turn, and are hopeful that this will be resolved in a timely manner.”

The Reidsville project, upgrading a warehouse in part with a $250,000 grant, became an issue in the final weeks of the 2014 Senate campaign and was used in TV ads against Hagan.

Records The N&O received from a public records request indicate the matter came to the attention of North Carolina regulators in October 2014, when a policy analyst for the Library of Congress requested information on the warehouse project at the request of “a congressional office.”