NC House Speaker Tim Moore’s legal contract with start-up raises questions
In March 2016, a top aide to House Speaker Tim Moore asked a state Department of Environmental Quality official about two underground storage tanks removed from a former chicken processing plant in Siler City that was up for sale. One of those tanks had leaked gas.
“Mitch Gillespie is asking about the status of the Siler City UST (underground storage tank) issue,” Caroline Daly, DEQ’s legislative liaison, wrote in the March 2, 2016, email to the section chief who oversees underground tank regulations. “Do you know what this is about and can give me an update to share?”
That triggered several emails within the department. Within hours, DEQ officials reported back that the site had the green light for entry into a state program that subsidizes the cleanup costs for underground tanks. Daly then relayed the decision to Gillespie so he could pass it along to the property owners, who ultimately received $22,000 from the state. Among them: his boss, Speaker Moore.
Christina Schroeter, a DEQ hydrogeologist, said in one of the emails that she had pulled for review the property owners’ application for the underground tank cleanup subsidy that week, and was working on a draft acceptance letter. “There are no issues in eligibility. . . . Just let me know if Mr. Gillespie has any other questions,” she wrote.
Gillespie’s involvement in the environmental issues adds to questions swirling around the two-term House speaker’s public responsibilities and private business. The Wake County district attorney has requested the State Bureau of Investigation conduct a noncriminal inquiry into Moore’s private legal work for two clients — one who won favorable state legislation after Moore handled a regulatory matter, and another who hired him after winning favorable legislation.
Gillespie’s inquiry came two months before Moore and his partners in a business called Southeast Land Holdings struck an agreement to sell the property to Mountaire Farms, a major chicken processor based in Delaware. In a three-year period, they turned an $85,000 land purchase into a $550,000 sale, or roughly six times what they paid for it.
The records indicate Southeast needed closure from DEQ on the underground tank issue so Mountaire could redevelop the property under the state’s Brownfields program, which allows for a less expensive cleanup and a substantial property tax break.
The DEQ’s and Gillespie’s handling of the environmental issues at the chicken plant are now expected to be the basis of a follow-up ethics complaint by a Washington, D.C., watchdog group that had first raised questions about DEQ’s handling of the chicken plant property 10 months ago. The Campaign for Accountability said the state ethics board should investigate whether DEQ had given Moore, by virtue of his role as one of the state’s three most powerful elected officials, and the other property owners special treatment as it oversaw their cleanup of the plant. After The News & Observer’s report was posted Tuesday, Moore released a letter from the ethics board that found no unethical behavior between Moore and DEQ staff in that earlier investigation.
Gillespie’s involvement turned up in a series of emails released to the watchdog group in late November. The News & Observer obtained them from DEQ three weeks later.
Daniel Stevens, executive director for Campaign for Accountability, said the newly released DEQ emails are the basis for an amended or additional ethics complaint his group expects to file within days.
“There’s certainly some questions about whether DEQ acted appropriately in how they handled this case, but there are also some real questions about whether Mr. Gillespie acted appropriately in intervening with DEQ.”
One of the emails, written by another DEQ hydrogeologist four months after the sale closed, points to “legislative inquiries” that played a role in DEQ’s approval for the Brownfields program. But the hydrogeologist, Clark Wipfield, said Southeast’s contractor had not followed DEQ instructions for reporting cleanup efforts.
He said in the email dated Jan. 10, 2017, that he had requested the contractor provide “risk-based samples” for review. Instead, the contractor sent a “limited site assessment” report that examined environmental risks.
“I don’t know why they didn’t collect risk-based samples or why they submitted the (limited site assessment) immediately,” Wipfield wrote. “But then, legislative inquiries were coming in because they thought (the underground storage tank program) was holding up the process into the Brownfields program.”
As a result, he wrote, the site was “put on the fast” track for Brownfields acceptance.
State records show that Mountaire in July 2016, or four months after Gillespie’s inquiry, requested the site be accepted into the state’s Brownfields program. That program shields buyers from much of the potential liability in redeveloping contaminated sites without having to perform a total cleanup. They have to commit to cleaning up and containing any remaining pollution to the degree that it can’t leave the site or harm anyone working there. The site has since been accepted into the program.
The state also offers substantial property tax breaks to entice businesses to redevelop contaminated sites under the Brownfields program.
Buying and selling the chicken plant
Southeast Land Holdings, meanwhile, received $22,414.29 from the state Underground Storage Tank trust fund, which covered slightly more than half of the $42,414.29 cost of removing the tanks and roughly 400 tons of gasoline-contaminated soil, state records show. The tanks stored gasoline and diesel.
After the House elected Moore speaker in early 2015, he brought on Gillespie as a senior policy adviser for environmental issues. Gillespie is a former Republican state lawmaker from McDowell County who had served as an assistant DEQ secretary under Gov. Pat McCrory, only to later be demoted to a position handling environmental matters in the western part of the state. He stayed in that position for one week before joining Moore’s staff.
Gillespie has since left the speaker’s staff, and did not respond to messages to his home and cellphone. Moore, a Cleveland County Republican, did not respond to messages to his cellphone or his legislative email. Moore has hired former Wake County District Attorney Colon Willoughby to represent him on the unrelated SBI inquiry over his private legal work. An effort to reach Moore through Willoughby was also unsuccessful.
A day after the story was published online Tuesday, Moore said he didn’t know if Gillespie had gotten involved.
“I can’t tell you about whether a call was made or not,” he said. “I didn’t know anything about it until I read the article.”
Moore has said in prior interviews that he keeps his private business separate from his public duties. In March he called Campaign for Accountability’s initial complaint a “meritless election-year political ploy.”
In an interview last October, Moore said he wasn’t involved in Southeast’s purchase of the chicken plant property, had no role in obtaining public money to help with Mountaire’s purchase of the plant and did not make money from the sale.
“That profit rolled into the company, and some of the other owners had made some outstanding loans to the company and they were being paid for those,” he said. “But I actually did not make any income. I’m glad to see that it’s sold and it’s productive property now.”
He said as the company’s attorney he handled the removal of the underground tanks. He said he and the other owners weren’t aware of them when they purchased the property.
It took some time to remove them, Moore said, because they didn’t know exactly where the tanks were. Once they found them, they had to move power lines to get at them.
Previously reported DEQ email correspondence showed Moore’s company getting fee waivers and deadline extensions related to its cleanup of the two underground storage tanks at the plant.
Moore’s company registered the tanks several months late, which came with a $5,880 late fee. DEQ officials waived that fee, and gave Moore’s company another month to deal with the cleanup.
That one-month extension ended Nov. 2, 2014, but months later on April 24, 2015, emails from environmental regulators said Moore’s company still hadn’t submitted any documentation proving it was moving forward with the cleanup.
Moore later got back in touch with DEQ, email records show, and told an inspector his company planned to sell the property, and the buyer would take care of the problem. Other emails show the inspector wrote that she told Moore his plan “was not considered a proper corrective action” and so it would be “unlikely” to get another extension and avoid being fined.
Moore still asked for an extension and got it two days later.
When The N&O reported on those issues last March, a DEQ spokesman confirmed that the email records were legitimate but declined to answer other questions or make any statements about the issue, stating that “we have no additional comment.”
State employees and ‘public purpose’
State ethics laws prohibit lawmakers from using their positions to benefit their personal interests.
The correspondence does not show Moore directed Gillespie to inquire about the site. It does show DEQ officials knew Moore was seeking the environmental approval and that Gillespie worked for him.
From 2013 to the end of 2016, Republicans controlled the legislature and the governor’s office. During that time they pushed for a more business-friendly department by cutting environmental regulations. They also cut DEQ staff.
There is no state law that specifically addresses state employees working on their bosses’ private interests, but the state constitution’s “public purpose” clause requires that public funds be expended for a public purpose, and that includes employee salaries. Over the years, lawmakers have interpreted that clause to mean that legislative staff can’t work for their bosses’ re-election campaigns on state time or with state resources.
“The same constitutional principle would hold if a legislative employee was working on behalf of a legislator’s private business interests while using state resources and/or on state time,” Norma Houston, a lecturer in UNC-Chapel Hill’s School of Government and a former chief of staff to retired Senate leader Marc Basnight, said in an email. She was not addressing the specifics of Gillespie’s actions.
State ethics officials had been looking at Moore’s interactions with DEQ officials over the chicken processing property since March, when the Campaign for Accountability filed its complaint. The letter Moore released Wednesday showed the board found much of the concern raised in DEQ emails had to do with Moore’s lack of communication of the efforts Southeast made to clean up the site.
The letter, dated Dec. 28, made no mention of Gillespie’s actions, which didn’t surface publicly until late November. Pat Gannon, a spokesman for the ethics board, said staff could not answer whether the board knew about Gillespie’s involvement. State law requires the board to keep complaint investigations secret.
The watchdog group had also raised questions about state grants awarded to a startup that initially sought to purchase the property and later to Siler City for sewer improvements that Mountaire needed at the site. The ethics board wrote in a letter issued to the watchdog group, dated May 24, that the board found no evidence of impropriety with those grants, but said it was continuing to look into DEQ’s handling of the environmental issues.
DEQ records show that two months before Mountaire bought the property from Southeast, Mountaire filed an application to win a Brownfields designation. Wipfield said in the email that the Brownfields program was the “best fit” to clean up the groundwater and soil on what he had previously determined was a “low risk” site.
Plant opening soon
DEQ spokespeople provided records and technical information but have yet to comment publicly on the larger issue of whether the company may have received any special treatment. Several of the staffers and managers involved in the decision-making process back then, who were contacted by The News & Observer last week, did not respond, said they had nothing to add or declined to comment.
Wipfield and Vance Jackson, who was the head of the UST Trust Fund Branch at the time and was involved in the email thread about the plant, didn’t respond to email requests.
Schroeter said in an email that she had since moved to another division within DEQ and no longer had access to a database needed to answer questions about the site.
Daly said in an email that she could not recall details of her interactions related to the chicken plant. She later declined comment when reached by phone.
Daly served a short stint as legislative liaison in DEQ at the time she took Gillespie’s request. She had previously worked as an intern and research assistant for Moore’s predecessor, Thom Tillis, a Republican who is now a U.S. senator. She left the executive branch shortly after Democrat Roy Cooper was elected governor, and now works as a policy adviser to House Speaker Pro Tem Sarah Stevens, a Mt. Airy Republican.
Catherine Bassett, Mountaire’s communications director, said the Southeast property was one of five parcels Mountaire purchased to build the $170 million processing plant in Siler City.
“Negotiations took place through a Realtor, not directly with the property owners,” she said in an emailed statement. “The company was unaware that the Speaker of the House was involved in one of the properties. Mountaire worked directly with North Carolina’s Brownfields Program on each parcel.”
She said the redevelopment will ultimately create roughly 1,100 jobs in Chatham County and millions of dollars in economic development. Mountaire expects to open the plant later this month.
This not the first time Gillespie, the former adviser to Moore, has faced questions over his work for the speaker. In 2016, The News & Observer reported that he and Edgar Starnes, a legislative liaison to the state treasurer, had replaced a range hood and took down two bathroom mirrors as Moore was fixing up his Raleigh condo.
Gillespie denied doing the work to the N&O, but Moore later paid Gillespie and Starnes, who also is a former Republican lawmaker, $67 each for their labor. Starnes and Moore said Gillespie and Starnes did the work because they are friends with the speaker.