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Investigation into NC coal ash spill widens

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MICHAEL BIESECKER | February 19, 2014 03:57 PM EST | AP

RALEIGH, N.C. (AP) — Federal prosecutors widened their investigation triggered by a massive coal ash spill in North Carolina, demanding reams of documents and ordering nearly 20 state environmental agency employees to testify before a grand jury.

The subpoenas were made public by the N.C. Department of Environment and Natural Resources on Wednesday. They also ordered state officials to hand over any records pertaining to investments, cash or other items of value they might have received from Duke Energy or its employees.

Charlotte-based Duke also confirmed it was served with a new subpoena Wednesday, the second received by the nation's largest electricity provider. Company spokesman Tom Williams declined to discuss what prosecutors wanted.

On Feb. 2, a pipe running under a coal ash pond collapsed at Duke's Dan River Steam Station, spilling up to 82,000 tons of coal ash mixed with 27 million gallons of contaminated water. The spill coated the bottom of the Dan River, near the Virginia border, with toxic ash up to 70 miles downstream.

State environmental Sec. John Skvarla refused to answer Wednesday when asked at a media briefing if he had been served with a subpoena. His agency also declined to say whether it had received other subpoenas it had not yet made public.

Skvarla was appointed last year by Gov. Pat McCrory, a Republican who worked for Duke Energy for more than 28 years. Josh Ellis, McCrory's spokesman, confirmed the governor had not been subpoenaed.

The 20 subpoenas disclosed by the state environmental agency were issued on or since Feb. 11. They follow two Feb. 10 subpoenas, which were issued the day after a story by The Associated Press raised questions about a proposed deal between state officials and Duke that would have fined Duke $99,111 to settle violations over toxic groundwater contamination at two facilities.

The new subpoenas seek documents related to that settlement and the agency's regulation of Duke's coal ash dumps before the Feb. 2 spill.

Among those ordered to appear before the grand jury next month is Tom Reeder, the Division of Water Quality director who oversees the state's enforcement of environmental violations at Duke's 31 coal ash dumps in North Carolina.

When citizen groups tried to use the U.S. Clean Water Act to sue Duke in federal court last year, the state agency intervened three times to use its authority to issue violations over the pollution. The citizens groups 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.

After negotiating with the company's lawyers behind closed doors, the state proposed a settlement that would allow Duke to settle violations at facilities near Asheville and Charlotte for $99,111. That deal, which the state put on hold the day after the AP reported on it, included no requirement that Duke clean up its pollution.

Skvarla said he briefed McCrory before making the decision to intervene, but that he never discussed the terms of the deal with the governor. Environmental groups have suggested Skvarla shepherded a "sweetheart deal" with the governor's former employer to shield Duke from harsher penalties it might have faced had the citizens been allowed to sue in federal court.

Since his first unsuccessful 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 on TV ads, mailings and events to support him.

After his successful 2012 campaign and subsequent inauguration, McCrory disclosed on state ethics forms that his investment portfolio includes holdings of Duke stock valued in excess of $10,000. He is not legally obligated to reveal the specific amount and has refused to do so voluntarily.

The governor said last week he sees no conflict of interests between his role as elected official and remaining a shareholder in the company regulated by his appointees.


Associated Press reporter Emery P. Dalesio also contributed to this report.


Follow Associated Press writer Michael Biesecker at