Prison contract scandal enters political arena
Posted November 10, 2015
Updated November 22, 2015
Raleigh, N.C. — In a likely harbinger of 2016's campaign season, state House Democratic leader Rep. Larry Hall called a press conference Tuesday to take several swings at Gov. Pat McCrory over a prison contract scandal and attempted to paint Republican legislative leaders as part of it.
Hall, D-Durham, called on McCrory to "come clean, to come forward" to address his involvement in the deal that netted a $3 million contract extension for campaign donor Graeme Keith over the objections of Department of Public Safety Secretary Frank Perry and his staff.
Hall noted that the federal investigation into the deal is the third federal probe of a state agency this year.
"With each new scandal that comes up, the implication is really clear for all of us who are sitting here watching this happen and the investigations that are happening: There's a pay-to-play rule," he said. "People have in their minds – donors and other folks who contract with the state of North Carolina and want to influence legislation have in their mind – that they have to pay to play, and that if they pay, they can play, and that the executive branch will respond to those overtures."
Hall suggested that McCrory had moved an October 2014 meeting on the contract from Raleigh to Charlotte for Keith's convenience and said he had "heard" state aircraft were used to transport DPS staff to the meeting.
"It’s obvious [the McCrory administration] went to great lengths to ensure that this contractor had special access and opportunity," Hall said.
McCrory spokesman Josh Ellis contended that the governor was already in Charlotte that day for an economic development announcement and supplied state aircraft invoices that show only Department of Commerce staff, not DPS staff, were on the plane.
Hall also called on House Speaker Tim Moore and Senate President Pro Tem Phil Berger to recuse themselves from the upcoming Governmental Operations oversight committee hearing on the matter. He said the two have admitted they agreed behind closed doors to remove from the final budget a provision related to the prison contract scandal.
The provision in question would have banned any prison contract extensions without the approval of the Joint Legislative Commission on Government Operations. Berger, R-Rockingham, told The News & Observer newspaper last week that he struck the provision after getting a call from Keith about it, but he said Keith did not mention that he was a campaign donor, and he was not aware that a federal investigation was underway into Keith's contract extension.
The provision was passed in both the House and the Senate versions of the budget, so according to Hall, under legislative rules, it should not have been reconsidered in final negotiations. House members, Hall said, were not informed of its deletion.
"Anyone who had knowledge it was removed had an ethical duty to tell us," Hall argued. "There's no basis for us to violate and go outside the regular order of business except impropriety, which appears to have happened here."
Spokeswomen for Berger and Moore, R-Cleveland, rejected that claim in a joint statement issued Tuesday.
"Given Rep. Hall’s repeated failure to investigate crimes during Gov. (Mike) Easley's administration and scandals during Gov. (Beverly) Perdue’s administration, it’s easy to understand why he’d doubt lawmakers’ ability to provide legislative oversight," the statement read. "Unlike Rep. Hall, Sen. Berger and Speaker Moore take their oversight responsibilities seriously, so if Rep. Hall or any other member would prefer to focus on playing politics, then they should recuse themselves.”
Berger spokeswoman Amy Auth said Hall is incorrect about the legislative rules. "There’s no such rule that if a provision is in both budgets, that it must be in the final budget. At every level of review from sub-chairs to full chairs to conferees, there’s an opportunity to revisit each provision of the budget," she wrote.
The Governor's Office also reacted strongly to Hall's allegations.
“The smear campaign and lies by the left-wing Democrats continue in order to deflect attention away from an improving economy along with a government that’s more efficient," Ellis responded by email. "Rep. Hall’s comments are ones of desperation and destructive politics in order to regain power to implement past failed policies. It’s obvious his goal is to seek misleading stories and false headlines in an effort to fool the people of North Carolina.”