NC senator seeking money from program he created

According to the Department of Commerce, the direct grant to Jackson's farm would help finance what is estimated to be a $1.7 million project. If the application were approved, it would be the seventh funded by the "Ag Gas" program, and the second largest in terms of public funds awarded.

"I have taken no money," Jackson said Monday, saying he applied for the grant because he had heard other farmers encountered difficulty with the program. "I heard so many folks talking about how hard it was to apply to this program. I decided the best way to find out was to apply and see how it works."

Had he landed the grant, Jackson insisted, he would have declined the money, saying he was surprised during a November Joint Legislative Agriculture Resources Oversight Committee meeting to see his farm on the list of projects that were being considered for the program, which he called "my brainchild." He is a co-chairman of that panel and plays an outsized role in agricultural issues at the legislature due to his status as one of the few working farmers serving in the General Assembly.

He also is a co-chairman of the Senate Appropriations and Base Budget Committee, making him one of the key gatekeepers for what does and does not make it into the state budget.

"I thought my application was dead until I saw it on the screen that day. We had heard nothing from them in months," he said.

Jackson and his wife have owned their farm for 35 years.

"Our mainstay has always been watermelons, cantaloupes, strawberries, broccoli – and then we added sweet potatoes," Jackson said. "In amongst all that, we have corn, soybeans, wheat, peanuts and tobacco."

Jackson's grant application seeks assistance in order to cure tobacco and sweet potatoes. Curing is a drying process that prepares the products out of the ground for sale.

Although Jackson's actions are likely not illegal, good-government advocates say the application raises questions about conflicts of interest for a lawmaker with a tremendous amount of influence over how taxpayer dollars are spent.

In an interview Monday, Jackson acknowledged "the optics" of the situation and said he could see members of the audience react during an oversight committee meeting when his farm was listed as one of those being considered for the grant.

"I could see it in the room," Jackson said.

The Expanded Gas Products Service to Agriculture Fund, known as Ag Gas by those who manage it, was created by Senate Bill 379 in 2013, and Jackson was the primary sponsor of the legislation. Utility companies generally make decisions on extending services such as gas lines based on their ability to recoup the cost. However, extending those sorts of lines to rural areas where they may just have a handful of customers is a money-losing proposition for the gas companies. But individual farmers tend to balk at shouldering the cost of an expansion, even when it provides the access they need.

The Ag Gas program helps bridge that difference. It sets aside $5 million a year to help extend natural gas lines or construct large propane tanks on farms that gas lines cannot reach.

"The grant is awarded to the recipient, who then writes us a check for what is deemed to be the uneconomical portion of that line," Bill McAulay, a lobbyist with PSNC, said during the oversight committee meeting.

In Jackson's case, the $925,000 would be the "uneconomical portion" of the line, while Jackson's farm, the gas company or both would pay the remainder of the project cost.

As a collateral benefit, other farms, houses and businesses along the newly established pipeline can also tap in, spreading gas service to more than just the direct recipient of the grant.

"We need to get natural gas into rural North Carolina if we're going to keep those communities growing," Jackson said.

In 2016, Jackson tweaked his creation. He was the lead sponsor of Senate Bill 770, the NC Farm Act, which among other things adjusted the language of the original Ag Gas program to loosen its requirements.

"When it was first written, it was for an economic development project that would expand production or processing capability," said Mark Poole, a finance specialist with the Commerce Department who oversees the Ag Gas program.

At least two projects, Poole said, had been rejected in the early years of the program because they would not have led to expansions.

Jackson said lawmakers never intended to create an expansion requirement, so this year included changes to that rule in Senate Bill 770. Those changes said that a farming operations only had to "request" new gas service, but did not have to show they would expand their production capacity.

"If there was transparency, he's fine," said Jane Pinsky, executive director of the North Carolina Coalition on Lobbying and Government Reform, which serves as watchdog on conflicts of interest among government officials.

North Carolina's current ethics laws, she said, require lawmakers to recuse themselves from voting on a bill if their particular businesses would benefit. If a bill treats all businesses the same, she said, it's not a legal conflict.

On Monday, Jackson said his farm is one of 17,000 farming operations in the state, all of which could apply for the assistance. But Jackson could still face questions about whether he knew he was creating a program for which his farming operation might apply.

"I would think he should have recused himself, or at least should have disclosed he could benefit form it," Pinsky said.

Poole said he could not comment on whether the potential for a conflict of interest for Jackson had arisen in Commerce Department reviews related to his grant application.

At the time he created the program, Jackson said, he had no idea that he would apply for the grant.

Although he did not think of it at the time he applied for the grant, Jackson said he has since sought an ethics opinion from the Legislative Ethics Committee to ensure he had not run afoul of state laws and legislative guidelines. While he has not withdrawn his farm's application for the grant yet, he said, he would if the ethics committee told him to do so. If he does win a grant, Jackson said, he would not take the money.

"It would not be right for me to take this money when some other growers could get it as well," Jackson said.