- Associated Press
Tuesday, March 25, 2014

CHARLOTTE, N.C. (AP) - Gov. Pat McCrory’s top lawyer says his administration was forced to hire an outside attorney to deal with a federal investigation into its regulation of Duke Energy’s coal ash dumps because the state’s attorney general is politicizing the issue.

N.C. Attorney General Roy Cooper is expected to seek the 2016 Democratic nomination to run against McCrory, a pro-business Republican who worked at Duke for more than 28 years.

McCrory Chief Legal Counsel Bob Stephens said Cooper has complicated the legal issues surrounding Duke’s massive coal ash spill in Eden by using the disaster to raise money for his campaign, according to a series of letters released to The Associated Press. The correspondence is the latest evidence of increasing tensions between the Republican governor and Democratic attorney general.

At issue was whether Cooper’s office should assist the state Department of Environment and Natural Resources as its employees respond to 20 subpoenas issued by a federal grand jury in the wake of the Feb. 2 spill, which coated 70 miles of the Dan River in toxic sludge.

An email issued by Cooper’s campaign last month criticizes McCrory’s handling of environmental issues and urges recipients to sign a petition demanding that the governor clean up North Carolina’s water.

The state environmental agency asked Cooper’s office in a Feb. 28 letter if it could hire an outside attorney to help collect and review the reams documents demanded by federal prosecutors.

In a March 13 response, Cooper’s office said no such recommendation from them was required. But Chief Deputy Attorney General Grayson Kelley also said he wanted to address “inaccuracies” in an earlier letter sent by Environmental Secretary John Skvarla, including that Cooper’s office “has declined to provide assistance in responding to the subpoenas.”

Kelley said that wasn’t true. He said that a lawyer from Cooper’s office had discussed issues related to the subpoenas with Lacy Presnell, the general counsel at the state environmental agency. Kelley said his staff also spent time explaining the grand jury process to employees of the state regulatory agency and answering their questions.

“It is also unclear to me why you feel the need to hire private counsel,” he said.

But in a March 20 letter, Stephens said when he asked Kelley for legal advice, “your answer was no.”

“Further, the complications created by these legal conflicts of interest are magnified by the decision of Attorney General Roy Cooper’s election campaign to use the Dan River ash spill for direct solicitation of campaign contributions,” he said.

McCrory recently criticized Cooper for saying the attorney general would fight Duke if the $50 billion Charlotte-based company tried to charge customers for cleaning up North Carolina’s coal ash pits.

Cooper spokeswoman Noelle Talley said “the letters speak for themselves” and that her office “doesn’t do criminal defense work.”

In an email Tuesday, Stephens said Cooper made a choice to assist the U.S. Attorney’s Office in Raleigh with the grand jury investigation “over his elected duty of representing the Department of Environment and Natural Resources.”

He was referring to the State Bureau of Investigation which was helping in the investigation. The agency is division of the state Justice Department, which is under Cooper’s direction.

“By doing so, he chose to create a conflict and has thereby politicized the process. His actions ultimately forced DENR to hire outside counsel, which creates additional expense to the taxpayer,” he said.

As AP reported Monday, the lawyer the agency hired this month, Mark T. Calloway, had represented Duke in a different prior criminal probe. The nation’s largest electricity company has been issued at least two subpoenas as part of that investigation.

The state regulatory agency has issued notice of eight environmental violations against Duke in the last month arising from the Eden spill and issues at the utility’s other coal-fired plants, including the recent dumping of 61 million gallons of contaminated water into the Cape Fear River.

Presnell said that he saw no conflict of interest in Calloway’s previous representation of Duke.

Legal experts said Calloway’s representation of the state agency likely doesn’t violate ethical standards, as long as Duke doesn’t object to its former lawyer now representing a client with potentially adverse interests in the current criminal probe.

Presnell said Calloway will assist with retrieving documents demanded by the subpoenas, but will not be asked to provide legal advice to employees called to testify before the grand jury.

Last week, the agency asked a judge to dismiss an agreement proposed before the Dan River spill that would have allowed Duke to settle environmental violations at two of its plants by paying a $99,000 fine with no requirement that the company actually clean up its pollution. The deal was struck after the state agency intervened last year as environmental groups sought to sue Duke under the federal Clean Water Act over groundwater contamination leaching from its 33 unlined ash pits scattered across the state.

But environmentalists have derided the now scuttled settlement as a “sweetheart deal” to the governor’s former employer. Peter Harrison, an attorney for the WaterKeeper Alliance, said the hiring of Calloway provides further evidence of the administration’s cozy ties with Duke.


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