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Councilman James Mitchell refuses to answer whether he is breaking state law

It's illegal for a city council member to have more than a 10% stake in a company the city does business with. Mitchell's stake with RJ Leeper is unclear.

CHARLOTTE, N.C. — Questions are left unanswered on whether returning city council member James "Smuggie" Mitchell is breaking state law as he enters the 2022 term.

Mitchell served on Charlotte City Council for 20 years. His tenure came to a halt when he resigned in January 2021 following concerns over his new role as president of RJ Leeper Construction.

"I have determined, this is the best -- in the interest of me, the company and the city, that I step aside from my position today," Mitchell said at the council meeting that day.

RJ Leeper works with the city on many major projects including the Charlotte Airport expansion, Charlotte Convention Center renovations, and work on CMS schools.

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Mitchell has since stepped down as president of RJ Leeper but told WCNC Charlotte he kept his 25% stake in the company.

State law prohibits city council members from owning more than 10% of a company that the city does business with due to conflict of interest.

In May 2022, during his campaign for the July municipal election, Mitchell told WCNC Charlotte's Ben Thompson, “I’ll make sure I comply with the state law and sell shares of my stock, 25%, so I can get below the 10% threshold that’s required by the state of North Carolina.”

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Mitchell won the election and now holds one of the four at-large council seats. However, there is confusion over whether he still has a stake in the construction company and if he's violating state law.

RJ Leeper COO Lorie Spratley told WCNC Charlotte that Mitchell lost his stake in the company in March 2022.

“Mr. Mitchell’s 25% interest was foreclosed upon under North Carolina law after he defaulted on his obligation to repay a $375,000 loan plus accrued interest,” Spratley wrote in a statement.

When reporters pressed Mitchell for clarity on the situation Tuesday night after he was sworn into council, he refused to answer.

"That is a business matter, and we’re gonna keep it as a business matter,” Mitchell said.

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In a memo sent to council members on Aug. 30, City Attorney Patrick Baker also seemed to be confused on whether Mitchell has a stake in the construction company or not:

"Neither party has made a request of me to somehow intervene or take some action in this matter.  I also do not believe the Council has a legal duty or obligation to take it upon itself to attempt to decide the ownership issue. I am not aware of any legal authority that would prevent the incoming council member from being sworn in at next week’s ceremony.  It is up to the council member to determine whether taking the oath could potentially subject him the criminal penalty of GS 14-234. Again, the City would not be a party to any such action."

Baker said that if Mitchell is breaking the law, that would fall on him and not the city.

Contact Julia Kauffman at jkauffman@wcnc.com and follow her on FacebookTwitter and Instagram  

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