RALEIGH, N.C. (AP) — North Carolina's top environmental official said Monday that he briefed Gov. Pat McCrory before intervening in lawsuits against Duke Energy, resulting in a negotiated settlement that fined the $50 billion corporation $99,000 to resolve violations over groundwater contamination leaching from two huge coal ash dumps.
Environmentalists criticized the modest fines as a sweetheart deal that included no requirement to force the nation's largest electricity provider to actually clean up its pollution.
The state has now put its proposed settlement on hold following the massive Feb. 2 spill from one of Duke's coal ash dumps into the Dan River, which turned the water cloudy and gray for miles.
State Department of Environment and Natural Resources Secretary John Skvarla told lawmakers at an oversight hearing that he spoke with the governor before his agency used its regulatory authority to intervene in lawsuits filed by a coalition of environmental groups under the federal Clean Water Act.
"When I went to brief Gov. McCrory about the initiation of those suits, he said two things," Skvarla recounted. "He said protect the environment, and do the right thing."
But Skvarla maintains he never told McCrory, a Republican who worked for Duke for 28 years, about the proposed terms of the settlement negotiated by his agency.
The citizens groups that originally tried to sue Duke opposed the state's deal, saying it shielded the company from far harsher penalties it might have faced in federal court had the state not intervened.
Federal prosecutors served Skvarla's agency and Duke with grand jury subpoenas demanding records as part of a federal investigation into the spill, which contaminated the river so badly public health officials advised against prolonged contact with the water or eating fish.
The state announced Monday that it will begin testing for contaminates in John H. Kerr Reservoir in Virginia, roughly 80 miles downstream from the spill site, after layers of gray ash were seen on the surface.
McCrory has maintained close ties to Duke since leaving the company to launch his first campaign for governor in 2008.
Campaign finance reports show Duke Energy, its political action committee, executives and their immediate families have donated at least $1.1 million to McCrory's campaign and affiliated groups that spent money on TV ads, mailings and events to support him.
After becoming governor on his second try in 2012, McCrory gained authority to make numerous decisions that could affect Duke's bottom line, including making appointments at the state commission that approves utility rates.
On a state ethics form last year, the governor indicated that his investment portfolio includes holdings of Duke stock valued in excess of $10,000, though he is under no legal obligation to disclose the specific amount and has refused to do so as recently as last week.
McCrory said Friday that he sees no conflict of interest in his role as elected official and corporate shareholder.
Follow Associated Press reporter Michael Biesecker at Twitter.com/mbieseck