District Attorney: 'No basis' to prosecute James Mitchell over alleged company ownership
Mecklenburg County District Attorney Spencer Merriweather said Thursday he does not believe that Charlotte City Council member James Mitchell still has an ownership stake in R.J. Leeper Construction, a firm that does business with the city. He said there is “no basis for prosecuting him under state law.”
Merriweather made that decision after reviewing a report from the State Bureau of Investigation, which interviewed Mitchell and Leeper executives late last year.
Merriweather’s letter apparently closes a bizarre chapter for Mitchell and the city council.
- In January 2021, Mitchell, who was on City Council, was hired to be chief executive of R.J. Leeper, which has contracts worth tens of millions of dollars with the city. Projects include the terminal expansion at Charlotte Douglas Airport and a recent renovation of the Charlotte Convention Center.
- But Mitchell and Leeper didn’t realize that an elected official can’t serve if they own more than 10 percent of a company that does business with the city. Mitchell then resigned from city council.
- In July 2021, however, Merriweather says Mitchell was fired. He then announced he would run again for City Council.
During the campaign, Mitchell said numerous times that he still owned 25% of Leeper. He said that the company could buy him out so it could continue to do business with the city if he were elected. Leeper – which is owned by Bright Hope Capital – refused to buy him out.
Executives there maintained that Mitchell lost his ownership share when he did not pay back a $375,000 loan.
When Mitchell was elected in July, Merriweather asked the SBI to determine who was correct.
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Did Mitchell still own 25% of the company? Or had he lost his ownership stake when he failed to repay the loan?
Mitchell told investigators that he believed he did still own the stake, and had not been properly compensated. In their report, investigators said Mitchell was "adamant" that he wouldn't voluntarily resign.
"If you are going to terminate me, then you have to own it. Why would I leave a company that I sacrificed and got off Council (for)? Why would I resign?” the report quotes Mitchell as saying.
Mitchell also told investigators that he believed he had until the end of 2024 to repay the loan, and that he believed he should not be personally responsible for paying it back.
"Mitchell cited another line from the promissory note that he understood to support his claim that he would never be personally responsible for paying back the loan," Merriweather wrote.
The report cited an exchange between Mitchell and investigators in which he asserted the company should not have been able to foreclose on his ownership stake.
- SBI Investigator: Are you disputing that (foreclosure on Mr. Mitchell’s member equity in BH Construction)?
- Mitchell: Oh yes.
- Counsel for Mitchell: At some point, we intend to, but, at this point and time, we are letting it stand as it is.
- SBI Investigator: Ok. As, it is being foreclosed on...to be revisited at a later date?
- Counsel for Mitchell: Potentially
But the district attorney didn't believe Mitchell's claims.
Merriweather wrote that “ultimately, the statements of BH Capital, asserting Mr. Mitchell is no longer in possession of an ownership stake in BH Construction/Leeper Construction, are extremely compelling.”
In response to the finding, Mitchell said he is relieved the investigation is over and that “it is a bright day.”
While Merriweather’s letter means Mitchell is not subject to prosecution, it also cast doubt on whether Mitchell is likely to recover any additional money from Leeper.
When asked whether he would go to court over his alleged ownership stake, Michell said he would determine that next week.
In his report, Merriweather wrote that it would be a "peculiar posture" for someone to pursue a civil claim that, if successful, would open them to criminal prosecution.