Contract with McCrory donor won’t be renewed as NC weighs privatization

Pat McCrory (file)

RALEIGH, N.C. (WNCN) – Some controversial prison maintenance contracts will expire and not be renewed at the end of the year, according to North Carolina officials.

The contracts are with a Charlotte company whose chairman is a campaign donor for Gov. Pat McCrory.

“These contracts expire at the end of the year and they will not be renewed,” State Budget Director Lee Roberts said Wednesday.

The maintenance will be done by the Department of Public Safety, officials said.
But many are still asking questions about the circumstances surrounding how state leaders extended the contracts with The Keith Corporation of Charlotte back in 2014. Gov. Pat McCrory pushed for a meeting with Graeme Keith, the company chairman, and key state officials. The meeting was held in Charlotte in the fall of 2014.

Documents obtained by WNCN show that at the meeting, Keith said he wanted to get some benefit from his giving to candidates.

A memo from the meeting said, “Mr. Keith began his remarks by stating that he had been working on private prison maintenance for 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.”

That contract was part of a long discussion with a key General Assembly oversight committee on Wednesday.

Documents obtained by WNCN showed that Department of Public Safety Secretary Frank Perry had concerns in 2014 about the contract with The Keith Corporation.

On Wednesday, Perry addressed what happened at that meeting and said what Keith said “was inappropriate.”

“It was uncomfortable to hear it,” Perry said. “But there has been no quid pro quo – therefore, no crime.”

Perry said he deferred to Roberts.

Roberts spoke about how he was asked by McCrory to weigh in on the matter about whether the state should extend private maintenance contracts on three prisons last year with The Keith Corporation.

On Wednesday, Roberts said, “I think it’s clear that cost savings are available. At the same time, it was very clear through this whole episode that DPS was unalterably opposed to these contracts.”

“I think it’s clear that cost savings are available,” Roberts said.

The DPS’ Perry has a different opinion.

“When I first met Mr. Keith, he said he could save us a million per prison per year.  That’s $56 million,” Perry said. “Of course, I would listen.  Anybody would.  We didn’t see that.  We still don’t see it.”

And also there is still the question of private versus public maintenance for state prisons, and what makes sense for North Carolina.

“We need to look more deeply into the whole issue of private contracts,” said Sen. Dan Blue, the Senate minority leader.

Blue said Thursday that the state still hasn’t gotten to the bottom of how to address this issue moving forward.

He was one of the lawmakers at Wednesday’s governmental operations committee hearing.

Perry expressed security concerns about privatizing maintenance at state prisons. Those concerns were echoed by the State Employees Association of North Carolina, who represents correction workers.

“If I’m coming in from outside just for a few hours to work on something, if I leave a screwdriver behind, it might cost lives,” said Ardis Watkins, government relations director for SEANC.

The State Employees Association is voicing concerns about whether there will be a movement toward wholesale privatization in the future.

“We believe that would be awful for the taxpayers and really dangerous for the folks working in the prison system,” Watkins said.

In a previous statement, The Keith Corporation has said the concerns about privatization are driven by interests and not by facts.

“The campaign to eliminate privatization is driven by entrenched interests and not facts,” Graeme Keith said.


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