MEMO: Incoming Charlotte councilmember could face criminal questions depending on ownership stake

CHARLOTTE, N.C. (WBTV) - A memo from Charlotte’s city attorney raises the possible of criminal charges for incoming Charlotte councilmember James “Smuggie” Mitchell depending on whether or not he still has an ownership stake in a local construction company.

The memo from City Attorney Patrick Baker said there is a criminal statute “that makes it illegal for a city to conduct business with a company of which a member of that city’s governing board owns more than 10% or that company.”

However the criminal implications are for the councilmember and not the city, according to Baker.

“The criminal penalty attaches to the applicable council member rather than to the city,” Baker wrote.

Mitchell is scheduled to be sworn-in

But there are contradicting statements about whether Mitchell actually has the ownership stake.

Mitchell resigned from his job as Charlotte city at-large councilman on Jan. 11, 2021 and moved into his role as president at RJ Leeper Construction firm. In July of the same year, Mitchell announced he was moving on from his role as president of RJ Leeper after only six months.

When he filed to run for council again, Mitchell told WBTV he still had ownership stake in the company.

But the memo from Baker sent to current councilmembers said representatives of Leeper had a different story.

“In February of this year, company representatives (and their attorneys) requested a meeting with me where I was provided a notebook of documents that purport to show that the company executed the necessary legal steps to divest the incoming councilmember of the entirety of his ownership interest in the company,” Baker wrote.

Baker wrote that he hasn’t seen a situation like this in the 26 years he’s practiced municipal law and the statute isn’t tailored for this exact situation.

“Because this is a criminal statute, to prove a violation of this statute would require the establishment of proof beyond a reasonable doubt that the incoming councilmember does in fact own more than 10% of the company. The City would not be a party to such an action. Should a criminal complaint be filed against the incoming councilmember, it would be for the courts to decide the ownership issue rather than the City Council or City Attorney,” Baker wrote.

WBTV reached out to James Mitchell for a response. As of publication he has not emailed a statement regarding the city attorney’s memo.

WBTV had been investigating potential of conflicts of interest faced by Mitchell for two years.

WBTV’s investigation found that Mitchell went to Detroit in November 2018 on a taxpayer-funded trip that cost $1,421.26, records show.

On his reimbursement form, Mitchell listed the purpose of the trip as “return for site of Detroit Sports Facility.” The Detroit Lions hosted the Carolina Panthers that weekend in a regular season game.

Emails obtained through a records request show that Mitchell was communicating with Carolina Panthers President Tom Glick about visiting Detroit to tour some of its sports facilities.

Mitchell forwarded the email to high level employees at the company Barton Malow.

A press release from Barton Mallow shows Mitchell was hired at the construction firm in 2014. At the time, of the trip he worked for construction firm JE Dunn.

In August, the NCGOP filed an ethics complaint against Mitchell based on WBTV’s investigations.

The complaint filed by the NCGOP states “Mitchell’s current employer (JE Dunn) has several references to strong business partnerships with Barton Mallow, including joint ventures in jobsite accident technology and data sharing agreements.”

In January 2020, WBTV discovered Mitchell had not submitted required ethics documents, called a statement of economic interest. He only filed his most recent form after WBTV reported that he faced no sanctions for failing to file the documents.