Politics & Government

Budget writer: McCrory’s administration should have consulted on prison contract extension

A top legislative budget writer said Monday the administration of Gov. Pat McCrory should have consulted with the General Assembly about renewing private prison maintenance contracts that were awarded to a McCrory friend and campaign contributor.

On Saturday, The News & Observer and The Charlotte Observer reported that Gov. Pat McCrory arranged a meeting in October 2014 between prison officials and Graeme Keith Sr., who proposed that his company take over private maintenance contracts at North Carolina’s 57 state prisons.

The McCrory administration took no action on expanding the contracts but did renew Keith’s private maintenance projects at three prisons on Dec. 31, 2014, over the objections of top prison officials.

On Monday, Rep. Nelson Dollar, a Cary Republican and the chief budget writer in the chamber, said he believed the McCrory administration should have met with a powerful legislative committee known as Gov Ops before extending the contract.

“They could have consulted with Gov Ops and they chose not to,” Dollar said. “Or they could have easily come to Gov Ops in January after the fact, to explain their actions.”

Instead, the contract was renewed after a behind-the-scenes series of meetings within the McCrory administration.

Dollar’s comments highlight a provision in the state’s 2014 budget that says the Department of Public Safety shall consult with the Gov Ops committee before signing any private prison maintenance contracts.

Dollar’s wife, Lorrie, a lawyer and chief operating officer for the department, wrote a legal opinion last year that said the department must consult Gov Ops before extending such contracts. Her memo said the legislative Fiscal Research Division backed that view.

But a top legislative lawyer wrote in a memo on Monday that the Department of Public Safety did not run afoul of the budget law in extending the contract, drawing a distinction between current contracts and new ones.

“We think the (budget law) is silent regarding how DPS is supposed to handle existing private prison maintenance contracts,” wrote Kory Goldsmith, Director of Bill Drafting, in a memo obtained by The News & Observer. “As such, existing contracts can be renewed or extended according to the terms of those contracts and any other applicable laws.”

Lorrie Dollar no longer works at DPS. She was pushed out last month in a departmental reorganization.

The newspapers’ article reported on an Oct. 28, 2014, meeting called by McCrory, who attended along with Keith, his son Greg Keith, and four top prison officials. According to a prison department memo that describing the meeting, Keith opened the gathering by stating “he had been working on this project ‘private prison maintenance’ for over ten (10) years and during that time had given a lot of money to candidates running for public office and it was now time for him to get something in return.”

In an interview Friday, McCrory did not dispute that Keith made those comments but said he did not hear them because he was involved in a side conversation.

Keith, a Charlotte developer and retired banker, and his son and business partner, contributed $12,000 to McCrory from 2008 through 2012. One of his companies, TKC Management Services, provides private prison maintenance at three state prisons.

Keith has called the memo a misrepresentation.

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