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Charlotte city councilman didn't break conflicts of interest law because he no longer has stake in construction company, Mecklenburg DA says

James "Smuggie" Mitchell Jr. was found to not be breaking state law over conflicts of interest for elected officials.

CHARLOTTE, N.C. — The Mecklenburg County District Attorney's Office will not be pursuing charges against Charlotte city councilman James "Smuggie" Mitchell Jr. after a state investigation into whether he broke laws regarding conflicts of interest.

The letter from District Attorney Spencer Merriweather III was sent to the North Carolina State Bureau of Investigation (SBI) after his office reviewed the agency's findings. Merriweather had asked the SBI to investigate to determine if Merriweather's possible status as a stakeholder in a construction firm that dealt with the Charlotte city government violated state law.

Concerns were raised about Mitchell's role as president of RJ Leeper Construction in 2021. He joined the firm that year and resigned from his seat on the city council amid scrutiny about potential future contracts. Before his resignation, he had offered to recuse himself on any votes involving the firm, but North Carolina state law outlined that wasn't enough to avoid a conflict of interest.

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However, Mitchell ran again for the council in 2022, this time for an at-large seat. He told WCNC Charlotte Flashpoint anchor Ben Thompson during his campaign he would reduce his stock shares to comply with state law regarding conflicts of interest. At the time, he owned 25% of RJ Leeper Construction and said he would sell enough stock to get under North Carolina's 10% threshold.

Mitchell was re-elected to the council but ended up leaving the firm. However, he told WCNC Charlotte in 2022 he still owned a 25% stake in the company. Even then, there was further confusion when RJ Leeper COO Lorie Spratley said he lost that stake when he defaulted on a $375,000 loan with interest. Mitchell refused to answer questions when pressed by WCNC Charlotte reporter Julia Kauffman, and even Charlotte City Attorney Patrick Baker was unsure if Mitchell was breaking state law.

Merriweather's letter revealed more details about Mitchell's time with RJ Leeper. Mitchell was named president of the firm in December 2020 and signed the promissory note for the loan with Bright Hope Capital, which is the holding firm of RJ Leeper Construction. The loan's conditions included Mitchell's stake in Bright Hope Construction, RJ Leeper's parent company, as collateral.

Mitchell would be terminated from RJ Leeper in July 2021, serving as president for just six months. Merriweather's letter revealed Bright Hope Capital tried to work with Mitchell's legal counsel to resolve the ownership interest, but reportedly didn't hear back for several months. Bright Hope Capital then called their promissory note in December 2021, giving Mitchell five days to repay the loan and accrued interest.

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Three months later in March 2022, Bright Hope Capital ultimately foreclosed on the collateral after reportedly getting no response from Mitchell's counsel. The reclamation of his 25% stake gave Bright Hope Capital 100% ownership in its own construction firm.

The following month, Mitchell's counsel did raise legal objections to the foreclosure, but no civil action has thus far been taken and his counsel has said they are "letting it sand as it is". Because Bright Hope Capital said Mitchell has no active stake in the construction company, Merriweather's office said this means he is not in violation of state law.

Mitchell provided this statement to WCNC Charlotte when reached for comment:

I’m glad this issue is behind me now, and I accept the DA’s finding regarding this issue. Now I can focus 110% percent of my time on providing public service for the citizens of our city.

Flashpoint is a weekly in-depth look at politics in Charlotte, North Carolina, South Carolina, and beyond with host Ben Thompson. Listen to the podcast weekly.
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