Raleigh, N.C. — Six months after taking over as North Carolina's top environmental regulator, John Skvarla's former company won a $1.2 million contract from the agency he now leads.
Since 2010, the Department of Environment and Natural Resources has awarded millions of dollars in state contracts to Raleigh-based Restoration Systems for environmental mitigation work. State records show the private company received another contract on June 7 for a project tied to the Neuse River.
Skvarla left his position as Restoration Systems' chief executive officer in January to join Gov. Pat McCrory's cabinet, and DENR spokesperson Drew Elliot says Skvarla took ethics measures to remove himself from that potential conflict on advice from the McCrory administration.
"Any time a public official has a previous interest in something that he regulates, there's going to be a perception of a conflict of interest, and we didn't want even that perception," Elliot said.
Elliot said Skvarla sought and followed a State Ethics Commission opinion citing a "potential for a conflict," sending out a memo to staff removing himself from contract decisions. As laid out in Skvarla's economic interest statement, a law firm manages his Restoration Systems financial interest in a blind trust.
Jane Pinsky, who leads the watchdog nonprofit North Carolina Coalition for Government and Lobbying Reform, praises the secretary for creating separation between his agency and his old company.
"The first rule of government ethics is that you shouldn't benefit financially from your job," Pinsky said.
She said Skvarla's case is less concerning than the case of former Health and Human Services Secretary Lanier Cansler, who was hired in 2009 by Gov. Bev Perdue.
He left a lobbying firm representing a company that won a multimillion-dollar contract with DHHS just days before his appointment. Cansler set up firewalls within the health department to oversee the contract and said he had never actively lobbied for that particular client.
Pinsky said the steps Skvarla took show "due diligence," but she pointed out that diligence could go further if Skvarla would sell off his interest in Restoration Systems.
Although the secretary's finances with the company are held in blind trust, Elliot said it's fair to say that, when the company does well, so do Skvarla's interests. "I think it's fair to say the secretary wants his former company to do well," Elliot said.
Pinsky said North Carolina ethics rules could do more to ensure political leaders aren't benefiting financially from their jobs. She wants a law change that would allow for the electronic filing and viewing of all economic interest statements through the State Ethics Commission.
“We should never get to the point where people can’t go from the private sector to government," Pinsky said. "But what I think we need to do is make it clear to the people who are making the transition is that they need to be as transparent and open as possible."
CORRECTION: A previous version of this story incorrectly reported that the wife of former DHHS Secretary Lanier Cansler ran his former lobbying firm after he was appointed to the governor's cabinet. She did not run the firm. A previous version said she continued to work with another lobbyist hired by the firm that won a contract with DHHS days before Cansler's hiring. In an email to WRAL, Cansler said this is also inaccurate and that she had no relationship with the company.