SBI investigating City Council member’s construction firm ownership after DA’s request
Charlotte City Council member James “Smuggie” Mitchell faces a state investigation into his disputed ownership stake in construction company RJ Leeper after a request from the Mecklenburg County district attorney.
“Yes, we’re investigating,” N.C. State Bureau of Investigation spokeswoman Anjanette Grube told The Charlotte Observer in an email Monday evening.
Grube referred additional questions to the DA’s office.
District Attorney Spencer Merriweather confirmed to the Observer he asked the bureau to help determine “the status of Mr. Mitchell’s ownership stake” in RJ Leeper and “whether that purported business arrangement is inconsistent with” North Carolina law, which says a city can’t conduct business with a company if a member of the city’s governing board owns more than 10%.
“As with any criminal inquiry, a request for an investigation is not — in and of itself — a confirmation of the existence of criminal wrongdoing,” Merriweather said in a statement to the Observer. “In the meantime, we will not comment further while we await findings from SBI.”
WFAE first reported Merriweather’s request late Monday afternoon.
Mitchell told reporters Monday evening he welcomed the SBI investigation and looks forward to the outcome.
City Attorney Patrick Baker’s memo
The specter of criminal penalties over Mitchell’s RJ Leeper ownership most recently was raised prior to him being sworn into office in a memo from City Attorney Patrick Baker, the Observer previously reported. In the Aug. 30 memo sent to council members and city staff, Baker said he received “inquiries from a number of you” about ownership-related conflicts. Baker said the criminal penalties would apply to Mitchell rather than city government at large.
After the memo’s release, Mitchell said he was excited to be sworn in and expected a clarification from Baker.
“I remain focused on upholding my oath to those that elected me and will allow my legal team to handle the matter in the proper forum, as I want nothing more than for this to be behind me,” Mitchell said in an emailed statement.
RJ Leeper and its attorneys met with Baker in February to assure him Mitchell divested from the company, but Mitchell has told Charlotte news outlets he retains 25% ownership.
Mitchell told the Charlotte Business Journal in May he would be willing to reduce his ownership stake below 10% if elected.
His dispute with RJ Leeper is tied to a $375,000 loan he received from the company in 2020 that it demanded he pay back in December.
Bright Hope Capital, an investment firm that purchased the company, considered Mitchell as failing to pay back the loan in subsequent weeks until saying it took control of Mitchell’s stake in the construction company, the Observer previously reported.
This story was originally published September 12, 2022 at 5:36 PM.
