More Stimulus Problems for Kay Hagan

Husband's company pocketed taxpayer dollars, hired son and future son-in-law to work on solar project

October 14, 2014

Senator Kay Hagan (D., N.C.) has come under fire in recent weeks over stimulus funding that directly benefitted businesses owned by her husband and son. The Carolina Journal reports new details that could cause further headaches for Hagan, whose lead in the polls has started to fade:

REIDSVILLE — JDC Manufacturing, a company co-owned by Democratic U.S. Sen. Kay Hagan’s husband Charles "Chip" Hagan, lowered the total cost of a 2010 stimulus-funded energy project but kept all of the savings, sending none back to taxpayers who had funded the stimulus grant.

The company’s original application stated the total project would cost $438,627, and said JDC would contribute "leveraged funds" amounting to $187,983, or 43 percent of the total. As the project reached completion, however, JDC revised the total budget downward by $114,519 and applied all the savings to its share, keeping all the taxpayer funding.

Also, JDC’s decision to hire Solardyne/Green State Power, a separate company co-owned by Chip Hagan and the Hagans’ son Tilden, to install a portion of the stimulus-funded energy project at the JDC building appears to violate a conflict-of-interest provision that was included as part of the original application for the stimulus grant.

That's a neat little trick to keep in mind. You know, the next time your wife is a senator and Congress has just passed an $800 billion stimulus package. According to financial disclosure forms, the Hagans' income from JDC Manufacturing jumped from almost nothing in 2008 to roughly $134,000 in 2013. Hagan praised the passage of the stimulus bill as a victory for "working families" over "special interests."

Carolina Journal notes that JDC included a copy of its conflict of interest policy as part of its stimulus application. It reads:

A conflict of interest occurs when an employee/board member has a direct or fiduciary interest in another relationship. Employees are to avoid any conflict of interest, even the appearance of a conflict of interest. The appearance of a conflict of interest can cause embarrassment to the company, jeopardizing the credibility of the company. Any conflict of interest, potential conflict of interest, or the appearance of a conflict of interest should be reported to your supervisor immediately.

JDC appears to have disregarded its own policy when it hired Green State Power (formerly known as Solardyne) to install solar panels as part of the taxpayer-funded project. The company, which formed at the same time as JDC was applying for taxpayer funding, was managed by the Hagans’ son, Tilden, and William Stewart, who became their son-in-law in 2011. Both were paid for their work on the JDC project, which was Solardyne’s first ever job as a company. Despite JDC’s pledge to hold an "open bid process" for the solar panel installation, there does not appear to be any record that one actually took place.