Federal grand jury probe of DENR-Duke Energy relations begins Tuesday

03/17/2014 9:22 PM

03/18/2014 12:10 PM

Federal prosecutors have issued at least 23 grand jury subpoenas in their criminal probe of the relationship between Duke Energy and the state environmental agency tasked with regulating the country’s largest electricity provider.

A federal grand jury is set to meet behind closed doors from Tuesday to Thursday in the federal courthouse in Raleigh to examine documents, video and other materials with the Duke executives and 18 current and former N.C. Department of Environment and Natural Resources employees summoned to the hearing.

In the federal court system, unlike North Carolina’s state courts, grand juries can conduct investigations as well as decide whether to indict a person or company on alleged criminal activity.

What is discussed behind closed doors with the grand jury might not immediately become public. But there must be a record of the proceedings, either written or electronic.

U.S. Attorney Thomas Walker has declined to discuss specific targets of the criminal probe launched in mid-February, nor has he detailed how the investigation got started.

Subpoenas were issued the second and third weeks of February after a Duke Energy coal ash spill left the Dan River so polluted that people were advised to avoid contact with the water.

Since then, there has been a hue and cry from environmental organizations and others for a cleanup of ash ponds at 14 sites across North Carolina and for a deeper probe of the relationship between DENR regulators and Duke Energy.

Last week, three former DENR employees met with The News & Observer’s editorial board and reporters, and at that meeting they contended that the U.S. Justice Department had stepped into an environmental enforcement role that DENR and the U.S. Environmental Protection Agency had been sidestepping.

“There are rules on the books that are probably outdated,” said George Mathis, 60, a co-founder of the River Guardian Foundation who worked at DENR for more than three decades in various technical and managerial positions.

Amy Adams, a former DENR regional office supervisor, whose personnel files were subpoenaed, said she had talked with federal investigators after the subpoenas were issued. However, she has not been called before the grand jury.

Adams said initially she was enthusiastic about DENR Secretary John Skvarla’s call for a more efficient regulatory process. Some change made sense, she said, such as removing some of the redundancies between land-management and stormwater program reviews. Occasionally, Adams said, a violator would get hit twice for the same violation, once by the land-management regulators and again by the water-quality program.

But Adams said last week she resigned from her post in the Surface Water Protection Section last year because she saw a shift away from water-quality protection.

The federal government through the EPA lays out goals for water-quality protection, she said, and it often is up to the states to draft the regulations for meeting those goals.

But Adams, Mathis and John Dorney, 61, a former DENR employee who worked for decades in a unit that integrates updated science into regulatory programs, said they did not think the EPA released the “gorilla in its closet” often enough.

“The legislature is rolling the dice,” Mathis said. “They don’t think the EPA will do anything.”

“It’s up to the Justice Department to release that gorilla,” Dorney added.

Mathis said he hoped the federal probe would go beyond the questions about coal ash regulation.

“I don’t think they’re looking deep enough myself,” Mathis said. “Just in DENR activities themselves. There’s a lot more deals that have been made. There’s no back room, smoky-room deal. But they go on all the time. ... They went on when we were employed there. Some are minute. Some are large.”

Amid the federal probe, Skvarla has defended how his agency has handled the threat of pollution from the coal ash spill.

His staff has blamed the previous administration of Gov. Bev Perdue for lax enforcement and interpretations of state law that have troubled environmentalists.

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