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McCrory Administration Taking Unilateral Action to Sweep Coal Ash Issue Away

In the span of 3 days in March of 2016 McCrory has taken two unilateral actions to assert greater control over coal ash cleanup and then declare coal ash a non-issue.

On March 8, 2016 his administration rescinded “do not drink” orders that were in place for hundreds of residents near coal ash ponds, for over a year – over the advice of his administrations own experts.

  • Hundreds of families living near coal ash have been supplied with bottled water by Duke Energy for over a year and will continue to be supplied bottled waterdespite rescinding of order.
  • In announcing the end of the “do not drink” orders the Asst. Secretary of Environmental Quality appointed by McCrory inaccurately claimed levels of known carcinogens were higher is some municipal water supplies.

On March 11, 2016, only three days later – McCrory unilaterally disbanded the Coal Ash Cleanup Commission.

  • McCrory’s counsel offered contradictory statements about the need for the commission in the wake of a Supreme Court decision about appointments to the commission.
  • The Coal Ash Commission was originally created in 2014 by Republican legislators concerned that the Governor’s office could not effectively enforce coal ash laws given his history of conflict-of-interest around Duke Energy
  • The Republican Senate Leader, Phil Berger, specifically cited McCrory’s desire to “avoid an independent barrier between his administration and former employer” as the reason for the need for the commission.

The governor’s actions to sweep away the coal ash issue is just the latest example of the Governor putting Duke Energy’s interests before his public duties – McCrory worked for Duke Energy for 29 years and they are his largest political contributor.

Rescinding Do Not Drink Orders Near Coal Ash Ponds

HEADLINE: “Well owners in disbelief about state’s decision to lift tainted water warning”(Winston-Salem Journal, 3/20/16)

After do not drink warnings issued in 2015, state health director and assistant state secretary for environment sent new letters to hundreds of residents lifting the warning.  “Hundreds of well owners near Duke Energy coal ash pits received letters last spring from state health officials warning them not to drink their own well water. Last week, a letter signed by Randall Williams, the state health director, and Tom Reeder, the assistant state secretary for the environment, lifted the warning.” (Winston-Salem Journal, 3/20/16)

Winston-Salem Journal review of emails showed that “administrators at DHHS and DEQ are overriding their own experts” while explaining lifted do-not-drink warnings.  “A Winston-Salem Journal review of emails from staff members within the N.C. Department of Health and Human Services and Department of Environmental Quality, as well as interviews with environmental experts and sources close to state health staff suggest that administrators at DHHS and DEQ are overriding their own experts as they try to explain why they are lifting some of the do-not-drink warnings.” (Winston-Salem Journal, 3/20/16)

Rowan County environmental health supervisor: “The water isn’t any different… If you were worried about the water before, you should be worried about it now.”  “Graham isn’t buying the state’s word.  Rather, she sought a second opinion after she got the letter last week. Graham went to Tad Helmstettler, the Rowan County environmental health supervisor.  ‘The water isn’t any different,’ he said. ‘If you were worried about the water before, you should be worried about it now.’ […]  ‘I wouldn’t drink it,’ said Helmstettler, who said he has talked with Graham and several residents who received letters telling them to ignore the earlier warning.” (Winston-Salem Journal, 3/20/16)

“Duke has been supplying bottled water for residents… even though Duke argued the water was safe.”  “The decision to reverse the state’s recommendation that people not drink from their wells comes nearly 10 months after the Department of Health and Human Services first began issuing the warnings.  Duke (NYSE:DUK) has been supplying bottled water for residents near their plants impacted by the “do not drink” warning from DHHS, even though Duke argued the water was safe.” (Charlotte Business Journal, 3/8/16)

  • Duke spokeswoman: “Water in (the tested wells) is just as safe or better than the public water supplies millions of people in the nation rely on.” “Spokeswoman Paige Sheehan says Duke is continuing to deliver bottled water now, but will be talking with residents in the coming weeks about their water supplies. ‘Today’s news is certainly welcomed to well owners, but it’s terribly unfortunate the state took almost a year to give them certainty that their water is safe to drink. Water in (the tested wells) is just as safe or better than the public water supplies millions of people in the nation rely on.’” (Charlotte Business Journal, 3/8/16)

Duke “is continuing to deliver bottled water for now” after state rescinded do not drink warning.  “Spokeswoman Paige Sheehan says Duke is continuing to deliver bottled water now, but will be talking with residents in the coming weeks about their water supplies. ‘Today’s news is certainly welcomed to well owners, but it’s terribly unfortunate the state took almost a year to give them certainty that their water is safe to drink. Water in (the tested wells) is just as safe or better than the public water supplies millions of people in the nation rely on.’” (Charlotte Business Journal, 3/8/16)

Assistant Sec. of DEQ Tom Reeder “not entirely accurate” in comparing municipal water supplies level of hexavalent chromium. “Back at the Lee County meeting, Reeder also said every city in North Carolina has hexavalent chromium above the screening level of 0.07 parts per billion. That’s not entirely accurate, either, according to a review of EPA sample data for Winston-Salem, Charlotte, Raleigh and many other cities. In fact, water samples provided by the city of Winston-Salem last week show that levels of hexavalent chromium rose in October slightly above the screening level of 0.07 parts per billion but have been well below it since then, and a large majority of samples show that the contaminant remains below the level.”

Rowan County environmental health supervisor has talked with several residents who received the letter rescinding the warning and said, “I wouldn’t drink it.”  “Graham isn’t buying the state’s word.  Rather, she sought a second opinion after she got the letter last week. Graham went to Tad Helmstettler, the Rowan County environmental health supervisor.  ‘The water isn’t any different,’ he said. ‘If you were worried about the water before, you should be worried about it now.’ […]  ‘I wouldn’t drink it,’ said Helmstettler, who said he has talked with Graham and several residents who received letters telling them to ignore the earlier warning.” (Winston-Salem Journal, 3/20/16)

McCrory’s “unilateral action” to disband independent coal ash commission

HEADLINE: “Demise of NC coal ash commission raises issues” (News & Observer, 3/18/16)

McCrory shut down independent coal ash commission, “returning oversight solely to his administration.” “Gov. Pat McCrory’s decision to shut down a commission that the legislature created to independently oversee coal ash cleanup, returning oversight solely to his administration, raises legal questions and concerns.  The McCrory administration says its decision was based on its interpretation of a state Supreme Court ruling in January in the governor’s separation-of-powers lawsuit against legislative leaders. When that ruling was made, the governor’s own attorney was among those who presumed that to comply with it, the governor must be given the power to appoint the majority of the board’s nine members, not disband the panel.” (News & Observer, 3/18/16)

  • McCrory General Counsel wrote letter to Commission Chairman informing him “that his group has been disbanded.”  “In a letter dated March 11, McCrory General Counsel Robert Stephens informs Commission Chairman Michael Jacobs that his group has been disbanded.  ‘This letter is to advise you that as a result of the Supreme Court’s decision, the Commission no longer exists as a legal entity and does not have any legal authority to take any further action,’ Stephens wrote.” (WRAL, 3/17/16)
  • McCrory shut down commission set up by legislature, shifting responsibility for overseeing cleanup to DEQ, “an agency overseen directly by McCrory.”  “Gov. Pat McCrory has shut down the Coal Ash Management Commission, a group set up by lawmakers to oversee the cleanup of unlined coal ash pits across the state.  For the time being, that work will shift to the Division of Environmental Quality, an agency overseen directly by McCrory. The governor had challenged the creation of the coal ash commission in court because it intruded upon his executive authority.” (WRAL, 3/17/16)

McCrory Administration’s contradictory stories about whether to shut down commission

At time of court ruling, McCrory’s own attorney thought compliance achieved with governor’s power to appoint majority of members, not by disbanding the panel.  “Gov. Pat McCrory’s decision to shut down a commission that the legislature created to independently oversee coal ash cleanup, returning oversight solely to his administration, raises legal questions and concerns.  The McCrory administration says its decision was based on its interpretation of a state Supreme Court ruling in January in the governor’s separation-of-powers lawsuit against legislative leaders. When that ruling was made, the governor’s own attorney was among those who presumed that to comply with it, the governor must be given the power to appoint the majority of the board’s nine members, not disband the panel.” (News & Observer, 3/18/16) 

As of February 2016, McCrory’s counsel said new members would need to be appointed to coal ash commission. “In February, Bob Stephens, the governor’s counsel, said new members would have to be appointed to the commission to replace the six members the General Assembly appointed. He said new appointments also would have to be made to two other commissions declared unconstitutional by the ruling: the now-defunct Mining and Energy Commission and its replacement, the Oil and Gas Commission.” (News & Observer, 3/18/16)

March 11, 2016: McCrory’s counsel informed chair of commission that the group “no longer exists” and for no further action to be taken by the commission.  “On March 11, Stephens wrote to the chairman of the coal commission informing him that as a result of the Supreme Court ruling the commission “no longer exists.” Stephens directed the commission and its three-member staff to take no further action. The executive director has resigned and the contract with the general counsel has ended, according to the department. An administrative assistant is awaiting reassignment.” (News & Observer, 3/18/16)

  • DEQ spokesman said NC Supreme Court ruled the commission unconstitutional and claimed “there will be absolutely no change” in CAMA implementation under DEQ. “The North Carolina Supreme Court made it clear that the commission is an unconstitutional body that cannot take any action,” said Mike Rusher, a spokesman for DEQ. “However, there will be absolutely no change in the Department of Environmental Quality’s implementation of the Coal Ash Management Act, which is the first comprehensive law in the nation to deal with coal ash.” (WRAL, 3/17/16)

Supreme Court Ruling didn’t rule commission Unconstitutional

NC Supreme Court vacated lower courts ruling that independence provision of coal ash legislation was Unconstitutional.  “McCrory’s lawsuit also challenged a requirement in the legislation that required that the commission be independent of the governor’s administration. The Supreme Court said that question was moot because it had already ruled on the appointments provision. At the same time, the justices vacated a lower court’s ruling that had found the independence provision unconstitutional. It’s unclear whether that means the commission is legally viable, but it does mean the panel should be independent.” (News & Observer, 3/18/16)

Court ruling did not address whether creation of commission was unconstitutional, only that governor has authority to appoint majority of members.  “The administration says it based its action on an interpretation of the court ruling, which held that the governor has the authority to appoint the majority of commission members. The ruling didn’t directly address whether the legislature’s creation of the commission was unconstitutional.  But the McCrory administration says that since the appointments provision in the 2014 law that created the commission was found to be unconstitutional, the commission itself is unconstitutional.” (News & Observer, 3/18/16_

Republican Lawmakers express even less confidence in McCrory administration’s ability to enforce coal ash law against McCrory’s former employers after unilateral action.

Republican Lawmaker Chuck McGrady: “I have no more confidence now.  In fact, I’ve got less confidence in DEQ’s ability to manage this issue.”  “This action surprised lawmakers who said they set up the commission to oversee coal ash removal because of possible conflicts of interest between the McCrory administration and Duke Energy, the power company that generated the bulk of the ash that exists in North Carolina.  ‘I have no more confidence now. In fact, I’ve got less confidence in DEQ’s ability to manage this issue,’ said Rep. Chuck McGrady, R-Henderson.” (WRAL, 3/17/16) 

  • McGrady said lawmakers were informed of “the governor’s action” by memo after commission executive director resigned.  “McGrady said he and other lawmakers were informed of the governor’s action by a memo from legislative staff that was drafted after commission executive director Natalie Birdwell informed them she had resigned.  ‘The governor is taking unilateral action,’ McGrady said, adding that he didn’t know how lawmakers would respond.” (WRAL, 3/17/16)
  • In 2014 lawmakers said they were “concerned” DENR had “failed to prevent the spill or push for the cleanup” and cited McCrory’s ties to Duke as “potential conflict of interest.”  “In mid-2014, lawmakers laid down the rules for coal ash cleanup and created the Coal Ash Management Commission to oversee the work. At the time, lawmakers said they were concerned that what was then the Department of Environment and Natural Resources, now DEQ, had failed to prevent the spill or push for the cleanup and containment of coal ash ponds across the state. They also pointed to McCrory’s more than two decades as a Duke employee as a potential conflict of interest.” (WRAL, 3/17/16)
  • McGrady: “The governor is taking unilateral action.”  “McGrady said he and other lawmakers were informed of the governor’s action by a memo from legislative staff that was drafted after commission executive director Natalie Birdwell informed them she had resigned.  ‘The governor is taking unilateral action,’ McGrady said, adding that he didn’t know how lawmakers would respond.” (WRAL, 3/17/16)

McCrory’s background of conflict concerning his former employer Duke Energy

Dan River Spill Response

Duke coal ash pond pipe collapsed, dumping toxic ash.  “On Feb. 2, a pipe running under a coal ash pond collapsed at Duke’s Dan River Steam Station in Eden, coating the bottom of the Dan River, near the Virginia border, with toxic ash up to 70 miles downstream.” (Associated Press2/19/14)

DENR has “tense press conference” defending botched response to report of Dan River Coal Ash Spill. “Skvarla then launched into a long defense of his department. He said it had been unfairly characterized as being an adversary to environmental groups trying to protect state waterways from ash ponds at Duke’s 14 operating and retired coal plants around the state. But he and particularly Tom Reeder, head of the Division of Water Resources, were repeatedly forced to explain why the department has not moved faster to stop leaks at Dan River and other sites. Reeder said the department was following procedure and had taken Duke to court. He acknowledged the department had the authority to demand swifter action in some cases. But his contention that the leaks – other than the massive accidental spill – were improper but did not threaten the environment simply brought a new fusillade of questions from numbers of reporters. ‘We try to determine the potential threat to the environment,’ he said in explaining his division’s reasoning. ‘The surface water seepages are negligible compared to the amount already allowed under authorized discharges.’” (Charlotte Business Journal, 2/19/14)

Berger: McCrory wants to “avoid an independent barrier between his administration” and Duke. “The governor’s primary concern appears to be a desire to control the coal ash commission and avoid an independent barrier between his administration and former employer.” (News & Record9/15/14)

McCrory’s Relationship with Duke Energy

McCrory has Deep Financial Connections to Duke Energy as a Stock Holder and Former Employer, Duke is McCrory’s Largest Political Contributor. “McCrory worked at Duke 28 years before retiring to make his first run for governor in 2008. In that time, campaign finance reports show Duke Energy, its political action committee, executives and their immediate families have donated at least $1.1 million to McCrory’s campaign and affiliated groups that spent on TV ads, mailings and events to support him. On a state ethics form last year, McCrory indicated that his investment portfolio includes holdings of Duke stock valued in excess of $10,000, though he is not obligated to disclose the specific amount.” (AP2/14/14)

McCrory misstated when he sold Duke stock on state ethics form, but later revealed he sold it after coal ash spill.  “McCrory worked for Duke Energy for 29 years. This past August, it was revealed that he had misstated when he sold his Duke stock, originally claiming it was before the coal ash spill, when, in fact, he had sold it after.” (WUNC2/2/15)

  • McCrory said he sold Duke stock between February and April of 2014.  “According to state ethics forms he signed, McCrory initially reported that he sold more than $10,000 in Duke stock before the end of 2013.  He now says, due to an error made by his attorney, that he actually sold the stock between February and April of this year.” (WUNC8/14/14)

Duke Energy contributions to Republican Governors Association increased during coal ash fiasco to more than ten times their previous annual highest amount. 

“Duke Energy sharply increased its contributions” to groups backing McCrory.  “Duke Energy sharply increased its contributions to the Republican Governors Association, which backed Gov. Pat McCrory’s 2012 campaign, as coal ash problems ensnarled the company last year.”  (Charlotte Observer4/11/15)

Duke gave RGA $275,000 while legislators debated policy regarding coal ash cleanup.  “A Duke power plant in Eden spilled up to 39,000 tons of ash into the Dan River in February 2014. Four months later, as state legislators debated ash policy, Duke gave the governor’s association $275,000.” (Charlotte Observer4/11/15)