Politics & Government

Top Democrat: GOP leaders should recuse themselves from prison contract hearings

File photo: Sen. Phil Berger (R), President Pro Tempore of the N.C. Senate, left, and Rep. Tim Moore (R), Speaker of the House at a joint press conference in early 2015.
File photo: Sen. Phil Berger (R), President Pro Tempore of the N.C. Senate, left, and Rep. Tim Moore (R), Speaker of the House at a joint press conference in early 2015. cliddy@newsobserver.com

Senate President Pro Tem Phil Berger and House Speaker Tim Moore, the two most powerful members of the General Assembly, should recuse themselves from overseeing an inquiry into controversial private prison maintenance contracts, a leading Democrat said Tuesday.

In September, Berger and Moore, both Republicans, agreed in a three-minute closed-door discussion to remove a budget provision banning future private prison maintenance contracts, even though the full House and Senate had earlier approved the same provision.

Berger said last week he removed the provision after a phone call from Graeme Keith Sr., the owner of the private maintenance company and a friend of and major contributor to Gov. Pat McCrory, a Republican. Berger consulted with state budget director Lee Roberts before acting.

The FBI began an inquiry into the contracts in the spring, but Berger says he didn’t know that until recent newspaper reports.

Berger and Moore chair the legislative oversight committee that is scheduled to look into the contracts at a Nov. 18 meeting.

Rep. Larry Hall, the House minority leader, said at a press conference that Berger and Moore should recuse themselves from discussing the contracts because they did not disclose that they had deleted a provision not in controversy.

“They took only three minutes to violate the rules and change the budget,” Hall said. “They did not take three minutes to inform us of that.”

In a preview of what voters can expect in the 2016 elections, Hall took aim at what he called the “pay to play” culture in a state government controlled by Republicans. The Durham Democrat cited criminal investigations into sole-source contracts at the Department of Health and Human Services and political contributions by the video sweepstakes industry.

In a joint statement, Berger and Moore faulted Hall for failing to investigate previous Democratic administrations.

“Unlike Rep. Hall, Sen. Berger and Speaker Moore take their oversight responsibilities seriously,” the statement said, “so if Rep. Hall or any other member would prefer to focus on playing politics, then they should recuse themselves.”

The prison contracts were subjects of recent stories in The News & Observer and The Charlotte Observer, which reported that McCrory arranged an October 2014 meeting with prison officials and Keith. Keith proposed that his company take over private maintenance contracts at all of North Carolina’s 57 state prisons.

A deputy prison commissioner’s memo recounting the meeting stated that, in the presence of McCrory and prison officials, Keith said he “had given a lot of money to candidates running for public office, and it was now time for him to get something in return.”

Keith and his son and business partner, donated $12,000 to McCrory’s campaigns from 2008 through 2012. Keith Sr. also gave to Democrats when they were in power.

After the meeting, McCrory asked state budget director Lee Roberts to look into whether private maintenance was a better deal for the state. He and McCrory’s chief of staff, Thomas Stith, eventually decided to extend Keith’s existing contracts at three prisons over the protests of high-level prison officials.

McCrory does not dispute that Keith made the remarks. He said he did not hear Keith because he was involved in a side conversation at the time.

Keith has called the memo about the October 2014 meeting a “misrepresentation” and said he always acts with the highest ethical standards.

Limits for contractors?

The General Assembly has tried but failed to prevent the conflicts that arise when big political contributors win state contracts.

It would be simple fix for the legislature, according to a veteran lobbyist for good government.

“Either you can be a big contributor or a state contractor,” said Jane Pinsky of the N.C. Coalition for Lobbying and Government Reform. “You can’t be both.”

In 2011, the House passed a bill that would limit big state contractors to $500 in political contributions per candidate. The margin was 114-2. In 2010, the Senate and House each passed ethics legislation with similar measures, but the differing bills were never reconciled and the measure died in the Senate Rules Committee.