- Associated Press - Saturday, October 31, 2015

RALEIGH, N.C. (AP) - A friend and campaign donor of Gov. Pat McCrory got prison maintenance contracts for his company extended even though the head of North Carolina’s Public Safety Department said the contracts should not renewed, two newspapers reported Saturday.

The News & Observer of Raleigh and The Charlotte Observer reported (https://bit.ly/1SdTTls) that the state extended the contract of TKC Management Services after McCrory met in October 2014 with Department of Public Safety officials and TKC chairman Graeme Keith Sr.

Keith has given political donations over the years to both Democratic and Republican governors and legislative leaders.

TKC has provided maintenance for three prisons. Some of the McCrory’s top lieutenants worked out an extension agreement in late December, just before two of the contracts were supposed to expire at the end of 2014, according to interviews and text messages reviewed by the newspapers.

Public Safety Secretary Frank Perry opposed the extension, arguing the contracts weren’t saving taxpayers money and posed greater security risk, and that an extension first required telling a key General Assembly committee.

McCrory’s aides didn’t believe the legislative obligation was required in this case. State Budget Director Lee Roberts said an analysis performed by his office showed the state would save $1 million annually.

“What’s important is whether the decision was made on a good-faith basis for legitimate reasons or whether it was made for illegitimate or political reasons,” Roberts said in an interview with the newspapers. “We made it on what we thought were sound, objective, reasonable bases.”

The newspapers reported FBI agents have gathered documents and interviewed several state employees from Perry’s department and McCrory’s state budget office, citing the papers’ own interviews. Larry Gwaltney of Charlotte, a lawyer for The Keith Corp., the parent company of TKC Management, said Friday the company was cooperating fully with the FBI.

A memo written by deputy prisons commissioner Joe Prater about the Oct. 28, 2014 meeting in Charlotte recalled Keith saying he had been working on “private prison maintenance” for over ten 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.” The meeting was soon ended.

McCrory, a Republican, said in an interview with the newspapers that he didn’t hear Keith make a statement linking political donations to state contracts.

“Had I heard it, I would have walked out,” he said, adding that Perry “informed me that was said probably while I was in a side conversation. I did not hear it.”

The governor said he wanted an analysis by Roberts, who did not attend the Charlotte meeting, to settle whether private or public maintenance would be a better deal for the state. “We did this the right way,” he said. McCrory said he has not talked with the FBI but added: “We have nothing to hide.”

In a statement, Keith called the public safety agency memo a “misrepresentation” and “nothing more than an attempt to ascribe a nefarious purpose to what was simply a straightforward discussion” because the department opposed privatization.

A May 2014 report to the General Assembly from the state prison system determined private maintenance didn’t lead to significant savings and that there were concerns about potential problems such as smuggling contraband and inappropriate interactions with inmates.

“The security and risk was the tipping point,” Prater said in an interview.

When told by Roberts in late December of the planned extension, Perry replied in a text that decision was “not in our Governor’s interest or that of good governance.” Perry’s office is now attempting to take all over maintenance in January, the newspapers said.

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Information from: The News & Observer, https://www.newsobserver.com

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