City attorney: Incoming councilman can be sworn in, may face criminal penalties

CHARLOTTE — Charlotte City Attorney Patrick Baker told the Charlotte City Council that incoming Councilman James Smuggie Mitchell will be able to be sworn in but may be subjected to criminal penalties if he owns as much of a construction company that he claims he does.

The memo, which was also obtained by the Charlotte Ledger, comes after a dispute between Mitchell and the construction company RJ Leeper. State law bans cities from doing business with a company if an elected official owns 10% or more of it. Mitchell claims he owns 25% of RJ Leeper.

But the city of Charlotte finds itself in an “unprecedented” situation. As Channel 9 has been reporting, RJ Leeper claims Mitchell no longer owns a stake in the company.

According to Baker, the statute at issue is GS 14-234. According to Baker, the criminal penalty is attached to the applicable council member rather than the city, but it does not contemplate a situation when the ownership interest is in dispute.

“I am not aware of any legal authority that would prevent the incoming council member from being sworn in at next week’s ceremony,” Baker said. “It is up to the council member to determine whether taking the oath could potentially subject him the criminal penalty of GS 14-234. The city would not be a party to such an action.

“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 council member does in fact own more than 10% of the company,” Baker wrote. “The city would not be a party to such an action. Should a criminal complaint be filed against the incoming council member, it would be for the courts to decide the ownership issue rather than the City Council or City Attorney.”

Baker wrote to councilmembers that the situation is unprecedented in his 26 years of experience with municipal law and there is no particular statutory guidance other than what he provided them. Baker said in 2021 the ownership issue with Mitchell was clear and undisputed. That’s when Mitchell resigned to become president of RJ Leeper. He then left that position six months later.

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Mitchell tells Channel 9 he is not worried about any criminal issues related to his presence on the Charlotte City Council. He has read Baker’s memo and says it is mainly clarifying whether he could be sworn in. He called himself “Charlotte’s biggest cheerleader” and said he is “ready to rock” on Tuesday.

He said he is still discussing legal action against RJ Leeper.

Baker said any lawsuit filed by or against either party seeking a civil judicial determination to the ownership issue would not involve the city of Charlotte. Baker says neither party has requested him to intervene. He also told the council that he does not believe the city has a legal duty or obligation to attempt to decide the ownership issue. Mitchell and all the elected Charlotte City Councilmembers will be sworn-in Tuesday.

Statement from Mitchell:

“I am excited to be sworn in next Tuesday, and look forward to continuing the great work and advocacy on behalf of the constituents of Charlotte. While I’m disappointed that the City Attorney has opined on the circumstances of my pending litigation matter with the investment group, Bright Hope Capital as to my ownership state in RJ Leeper. I remain focused on upholding my oath to those that elected me and will allow my legal team to handle the matter in the proper forum, as I want nothing more than for this to be behind me. As of today, there has not been a judicial determination as to my ownership and I look forward to having a judge render a decision in the near future. City Attorney Patrick Baker will be issuing a clarification on this matter tomorrow. Should you have any questions please contact City Attorney Patrick Baker directly.