As grand jury cracks the NC legislature’s secrecy, its spending faces scrutiny Read more at: https://www.newsobserver.com/opinion/article291565840.html#storylink=cpy

Published August 29, 2024

The following editorial appeared in The News and Observer, August 28, 2024

Republican state lawmakers have grown so confident about the durability of their gerrymandered legislative majority that they have increasingly shut the public out.

Budgets are prepared behind closed doors. Public hearings are limited in occurrence, in attendance and in duration. Policy changes are buried deep in the budget. Finally, in a crowning touch, the legislature’s Republican majority last year exempted state lawmakers’ communications and documents from the state’s public records law.

Insularity and secrecy invite inside dealing and the abuse of public funds. There is a strong likelihood that what’s been done in the deepening legislative shadows would not look good if brought to light.

Now that’s happening.

The News & Observer investigative series, Power & Secrecy, has focused on questionable spending through grants that the legislature approved with little or no transparency.

Meanwhile, a federal grand jury in Raleigh is investigating funding for a nonprofit set up to electronically monitor people charged with domestic violence. The nonprofit, Caitlyn’s Courage, was awarded $3.5 million in COVID-19 relief funds by the legislature in 2020. The Greenville-based nonprofit is one of dozens of organizations that have received millions of dollars in state funding through direct grants.

On June 26, the U.S. Attorney’s Office in the Eastern District of North Carolina issued a subpoena to the N.C. Department of Public Safety seeking records related to Caitlyn’s Courage and 15 other individuals or businesses that are identified as relevant parties.

Among those named in the subpoena were James Jordan Hennessy and Marion R. Warren. Hennessy, is a former legislative aide, and Warren, a former district judge. According to a 2021 News & Observer report, Hennessy and Warren provided the wording for the legislation that resulted in the allocation to Caitlyn’s Courage.

The subpoena also seeks information regarding Monotec LLC, in which Hennessy has an interest, and Juristrat LLC, a self-described “consulting and investing” business. The subpoena also seeks documents related to Department of Public Safety payments to Tarheel Monitoring, a contractor hired by Caitlyn’s Courage.

On Aug. 5, the federal grand jury issued another subpoena. This one focuses on Warren’s work at UNC-Wilmington, where he is paid $213,000 annually as an assistant to the chancellor. His primary role is to lobby the legislature on behalf of the university.

Investigators are apparently looking at whether Warren disclosed to the university that he was also doing work for Juristrat. University policy requires the disclosure of outside employment.

The News & Observer reported that Warren’s disclosure form did not include his work for Juristrat, or $110,000 in consulting fees he had received while at UNCW from another questionable beneficiary of the legislature’s grants – the U.S. Performance Center in Charlotte.

The News & Observer and The Assembly have reported that the U.S. Performance Center, a private company, received $25 million from the state budget three years ago to promote its mission to train athletes and bring Olympic sporting events to North Carolina. Legislators later provided another $30 million to the North Carolina Sports Legacy Foundation, a nonprofit tied to one of the the founders of the U.S. Performance Center.

The money was intended for capital expenses, but expense reports show tens of thousands of dollars went toward meals, car loans, late taxes and hotels – including $1,300 to a Ritz Carlton. Meanwhile, the U.S. Performance Center has paid Juristrat and Warren a total of more than $400,000 in consulting fees.

The federal subpoenas could crack the shell of secrecy around how state lawmakers have doled out state tax dollars, plus billions of dollars in federal COVID relief funds. Since 2021, records show state lawmakers have used the state budget to give local governments, nonprofits and for-profit companies almost $8 billion in grants.

The federal grand jury and U.S. Attorney Michael Easley Jr. should follow these first traces of questionable state spending. They may lead to a far broader pattern of inside deals that benefited the well-connected at taxpayers’ expense.