Civitas files complaint against Cooper over pipeline fund

Civitas suggested the governor could funnel money from the $57.8 million mitigation fund to environmental groups that have spent money in the past supporting his election campaigns.

Posted 5:06 p.m. Feb 14, 2018 — Updated 9:13 p.m. Feb 14, 2018

Travis Fain

, WRAL statehouse reporter

RALEIGH, N.C. — Civitas filed an ethics complaint Wednesday against Gov. Roy Cooper, questioning his role in a $57.8 million fund tied to the Atlantic Coast Pipeline that the governor plans to control.

The complaint, from a right-leaning group that has been a frequent critic of Cooper, does not directly accuse the governor of trading a key state permit on the project for access to the fund. But it quotes relevant state law prohibiting officials from accepting gifts in exchange for official action, and it describes the fund as "open-ended, unconstrained and rife with potential for abuse."

"In our opinion, these matters rise to the level of a full ethics investigation," the complaint states. "At the very least, we request the Commission issue an opinion on the ethics of the governor leveraging his official title and official position to exchange state approval of a major project for private funds that only the Governor can spend, even if the funds trickle into the accounts of his political supporters or indirectly aid in his re-election."

The complaint went to the State Board of Elections and Ethics Enforcement, which currently has no appointed members, but does have staff.

The governor's office called the complaint "absurd," even for a partisan political attack.

Spokeswoman Noelle Talley said the fund would have been governed by strong conflict-of-interest provisions beyond what's required by law and that spending decisions "were to be made by experts through an open and transparent application process – subject to public records and open meetings laws."

The three-page memorandum of understanding for the fund does not lay that out, providing only broad spending categories and saying details will come in a future executive order.

Cooper's office announced the fund Jan. 26, the same day the state announced the Atlantic Coast Pipeline planned by Duke Energy, Dominion Energy and other utilities had won a key state water permit called a 401 certification. The fund, according to the memorandum, would accept $57.8 million from the utilities, which would go into an account designated by the governor.

The governor would direct spending , with the money earmarked for as-yet-unnamed environmental mitigation projects, economic development efforts and renewable energy projects in the eight counties the pipeline will run through.

Talley said Wednesday that only government entities and qualified nonprofits would be eligible for grants, and she listed the Rural Infrastructure Authority and the Clean Water Management Trust Fund as examples of groups that could distribute the funds.

Republican leaders in the General Assembly moved quickly to counter Cooper's plan, passing a law this week that, among other things, moves the pipeline fund under their purview and would divvy the money up between school districts in the eight counties. Cooper has not said yet whether he will sign this bill.

The Governor's Office has repeatedly declined to answer questions about the pipeline fund, including how it was negotiated. It has described the fund as a voluntary contribution from the utilities unrelated to permit approval. It has also compared the fund to a similar one in Virginia, but that agreement lays out spending plans in more detail, listing entities expected to receive money.

Republican General Assembly leaders sent Cooper a list of 15 questions about the fund earlier this week and said they expect him to answer by late Thursday afternoon.

In its complaint, Civitas described North Carolina's fund agreement as "suspiciously inscrutable." They suggested the governor could funnel money to environmental groups that have spent money in the past supporting his election campaigns.

"The Governor directing tens of millions of dollars to projects and initiatives these groups support is likely to grow their influence, their ability to raise funds, their supporter base – and likely their loyalty to Governor Cooper – before his reelection bid in 2020," the complaint states.

Civitas said it filed its complaint Wednesday morning. The first sentence of its "key findings" was initially inaccurate, saying the Memorandum of Understanding creating the fund also approved construction of the pipeline.

Pipeline construction depends on a number of sign-offs, including approval the project received in October from the Federal Energy Regulatory Commission, as well as the 401 water certificate from the North Carolina Department of Environmental Quality. The 401 certificate was cemented in a separate document signed by the interim director of DEQ's Division of Water Resources, not the governor's in-house attorney, who signed the MOU on the governor's behalf.

When WRAL News pointed out the discrepancy in an advanced copy of Civitas' complaint, the group amended that section to simply note that "approval of the ACP was announced in a manner that made it appear that the payment and the permit were related."

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