State Politics

Federal authorities conclude probe of governor in prison contracts case

Federal authorities said Wednesday they have closed their probe of private prison maintenance contracts that went to a major political contributor without bringing charges against Gov. Pat McCrory or the contributor.

A spokeswoman for the U.S. Attorney’s Office in Charlotte said in an email that McCrory’s general counsel had been informed of the decision previously, but did not say when that happened.

The decision first became public during Tuesday night’s gubernatorial campaign debate between McCrory and Attorney General Roy Cooper in Raleigh after Cooper said the FBI was investigating the matter. McCrory denied it, and in a post-debate news conference said the FBI told him it was no longer investigating.

Asked to confirm on Wednesday, the chief federal prosecutor in the Charlotte region issued a statement through her spokeswoman:

“Western District of North Carolina U.S. Attorney Jill Westmoreland Rose previously advised Gov. Pat McCrory’s attorney that all matters related to the Governor’s alleged involvement with state prison contracts have been closed by this Office with no action against the Governor.”

McCrory’s re-election campaign and Republican leaders followed the debate on Wednesday by repeating that Cooper should resign and apologize for characterizing it as an ongoing investigation. The controversy broke out during the debate when Cooper countered claims the governor was making about campaign contributions.

“If he wants to talk about political contributions, he had a contributor who said he wanted something for his contribution,” Cooper said. “In return, Gov. McCrory gave him a private prison contract over the objections of his staff.”

Cooper went on: “So if you want to talk about political contributions, governor, you’re the one who now has an FBI criminal investigation as a result of your -- ”

McCrory cut him off: “As attorney general you should resign right now for saying that. That is absolutely not true.”

After the debate, McCrory continued to call for Cooper to resign, telling reporters he had spoken with the FBI.

“Yes, I have, and clarified all the issues,” he said. “Everything’s fine, which I clarified to the media. I’ve always told the media it was a story about nothing and it was. The attorney general should be a little more careful since he is still attorney general. ... God, we can’t let him become governor if he’s going to make those types of reckless remarks as attorney general.”

As state attorney general, Cooper has no authority over federal investigations or prosecutions.

Ford Porter, Cooper’s campaign spokesman, reacted to the federal prosecutors’ conclusion.

“After all the damage already done to our state’s reputation, it’s a relief that North Carolina won’t also have to see its governor brought up on federal charges,” Porter said by email. “This is an important reminder of the consequences of pay-to-play and the troubling culture of quid pro quo at the McCrory administration.”

The News & Observer and The Charlotte Observer reported in October that McCrory personally intervened on behalf of a friend and major political donor who wanted to renew $3 million in private prison contracts over the objections of the governor’s top prison officials.

McCrory said he did not hear Charlotte businessman Graeme Keith Sr. at a meeting in 2014 when Keith said he had given a lot of money to candidates over the years and now it was time for him “to get something in return.”

The FBI gathered documents and interviewed at least a half-dozen state employees, according to several people interviewed. Keith has called the accusation a “gross misrepresentation.”

The U.S. Attorney’s Office said in a separate email Wednesday afternoon that all matters related to Keith and The Keith Corp. have also been closed.

McCrory’s chief spokesman said the governor learned of the U.S. attorney’s decision earlier this year, and said he would try to find out when.

State GOP officials called a news conference Wednesday afternoon to say party attorneys were reviewing Cooper’s remarks and are likely to file complaints with the State Ethics Commission and the State Bar.

N.C. GOP Chairman Robin Hayes said Cooper made a false statement when he said there is now a criminal investigation, rather than using the past tense.

“This is not your common misspeak or misstep,” GOP Executive Director Dallas Woodhouse said, “and it was purposeful, it is untruthful and it is libelous.”

Hayes and Woodhouse didn’t address how Cooper would have known that the investigation had ended before Tuesday night. They said they didn’t know how long ago McCrory learned that he was no longer under FBI scrutiny. Woodhouse said it wasn’t necessarily the governor’s responsibility to publicly announce that he had been cleared.

Craig Jarvis: 919-829-4576, @CraigJ_NandO