Former New Hanover Republican Party chair files ethics complaint against Michael Lee over development issues

A formal ethics complaint filed with the North Carolina State Ethics Commission on Monday, October 29, by former New Hanover County Republican Party Chairman William Shell against State Senator Michael Lee. The complaint alleges that Lee's position as a state senator has allowed him to profit through his private legal practice, representing developers in front of local boards that "cannot to cross a local senator." The complaint cites several different developments represented by Lee. (Port City Daily photo / Courtesy William Shell)
A formal ethics complaint filed with the North Carolina State Ethics Commission on Monday, October 29, by former New Hanover County Republican Party Chairman William Shell against State Senator Michael Lee. The complaint alleges that Lee’s position as a state senator has allowed him to profit through his private legal practice, representing developers in front of local boards that “cannot afford to cross a local senator.” The complaint cites numerous developments represented by Lee. (Port City Daily photo / Courtesy William Shell)

NEW HANOVER COUNTY — A formal ethics complaint was filed against State Senator Michael Lee, alleging the use of “public office for private gain” in relation to Lee’s legal representation of a number of Wilmington-area developments. The complaint was filed just one week before Election Day, where Lee will face two challengers at the polls, Libertarian Ethan Bickley and Democrat Harper Peterson.

The complaint was filed by William R. Shell and Terry Reilly, both of whom spoke during public hearings for The Avenue development on Military Cutoff Road. Sent to the North Carolina State Ethics Commission, the complaint alleges, in short, that Lee uses his position as a state senator to implicitly pressure New Hanover County and Wilmington boards when he appears before them in his private role an attorney for developers. (You can read the complaint in its entirety at the end of this article.)

“There is nothing illegal about lawyers who are members of the General Assembly representing private clients,” the complaint reads. “However, the problem here is that Lee is representing those clients before local governmental boards and commissions which are dependent upon the North Carolina General Assembly for things they wish to have done and funding and frankly, for even their existence … the members of the governing boards of counties and cities cannot afford to cross a local senator.”


The complaint lists a number of recent examples of Lee’s appearances on behalf of developers, including The Avenue, the Wrightsville Avenue Galleria project, the Landing on Lewis Creek, the creation of Wilmington’s conservation districts that lead to a lawsuit, and other projects.

Lee called the complaint a “stunt.”

“This is just a last-minute desperate attempt to distract voters from Harper Peterson’s horrible record as mayor that had him voted out after just two years and what we are now seeing about his record with the court system and taxes. This stunt is in keeping with the false ads he is running on TV — just ridiculous,” Lee said.

The complaint

Bill Shell, former Chairman of the New Hanover County Republican party, speaks at a small press conference to call attention to Senator Michael Lee's private conduct representing developers before local boards. (Port City Daily photo/Johanna Ferebee)
Bill Shell, former Chairman of the New Hanover County Republican party, speaks at a small press conference to call attention to Senator Michael Lee’s private conduct representing developers before local boards. (Port City Daily photo/Johanna Ferebee)

The primary author of the complaint is William Shell, the former chairman of the New Hanover County Republican Party in the 1980s. Shell voted Republican until 2016; he is currently unaffiliated, but voted in the semi-closed 2018 Democrat primary, according to state voting records (semi-closed meaning unaffiliated voters can vote in either primary).

“I took the chair job when we built the Republican party in New Hanover County,” Shell said, adding that he had more recently become “disappointed” with the party, and particular Lee’s involvement with The Avenue project.

According to Patrick Gannon, spokesperson for the Ethics Commission, the complaint could not be confirmed or denied under state statute G.S. § 163A-156(p). However, Shell confirmed that he filed the complaint on Monday, and was notified by the Ethics Commission that is was received.

Why now?

In 2016, Michael Lee applied on to the Wilmington Planning Commission to change the city's land use codes; 6329 Head Road was used as an "example." (Port City Daily photo | City of Wilmington)
In 2016, Michael Lee applied on to the Wilmington Planning Commission to change the city’s land use codes; 6329 Head Road was used as an “example.” (Port City Daily photo | City of Wilmington)

Asked about the timing – just a week before election day – Shell acknowledged it was a fair question. Shell has had a recent illness in the family, and Hurricane Florence caused a major disruption, but part of the issue had to do with new information that came to Shell’s attention, he said.

“I knew that question would be coming, it’s a fair question to ask,” Shell said. “A big part of it is I just didn’t know — the thing is, people have to dig for this information. I found a little bit of it in [Port City Daily], a little bit in Lumina [News], a little bit here and there, I really had to piece it all together from many sources.”

Shell said that while his concerns over Lee date back some time, but he’d seen more examples of what he called “influence peddling” in recent months.

“I’ve had concerns about Michael Lee for a long time and, I do wish we had done this earlier, but one that got me to say, ‘enough is enough,’ was the Head Road article,” Shell said.

Shell referred to a Port City Daily article, included in the complaint, which was published just before Hurricane Florence struck the region. The article details the fight between the neighbors of a Wilmington property owner and the city’s planning commission over a decision that would allow a parcel of land to be subdivided.

The land was initially purchased by Thomas Fetzer, former mayor of Raleigh and chair of the North Carolina Republican party from 2009 to 2011, for $1.35 million. Fetzer wanted to subdivide and resell the land, but neighbors objected — in part because the subdivision deal would create a road through their property.

Fetzer hired Lee, who ultimately convinced the city to create an entirely new zoning designation. Once the road appeared clear for subdivision, Fetzer sold the property for an approximate $650,000 profit.

However, neighbors continued to protest and appealed to the city. Lee appeared before the planning commission to defend the rezoning, using the hearing’s quasi-judicial status to dismiss testimony against the move. A lawsuit against the city resulted, and recently settled.

A campaign move?

Asked if this was a campaign move or “stunt,” Shell said absolutely not.

Shell said he had no conversations about the complaint with Harper Peterson or Ethan Bickley, the Democrat and Libertarian challengers in the current District 9 State Senate race. Shell said he was unfamiliar with Bickley’s campaign and that, while he knew Peterson, his ethics complaint was not related to Peterson’s campaign.

“I’ve had no conversations with Harper [Peterson] about this. I would have done this regardless of who was running,” Shell said. “I just think people should know what’s going on and then make up their own minds.”

(Editor’s note: Bickley ended his campaign and endorsed Lee on Wednesday.)

‘Hard call’

Reilly, a Landfall resident, first became concerned about Lee’s private practice during the public hearings for The Avenue. Reilly followed the story closely, and during the city’s final public hearing for the development, appeared with his own presentation to oppose it.

Still, despite his objections to The Avenue project, Reilly said it was a “hard call” to put his name on the complaint.

“Well, I wanted to be fair. I wanted to respect that he is an attorney, he has a family, he’s trying to make a living. But I think he stepped over the line by choosing to take this client [The Avenue] instead of being concerned with the public,” Reilly said.

“He doesn’t have to take every client that comes down the pike — especially in this case where the safety concerns of that much additional traffic were pretty clearly documented,” Reilly said.

Signing the complaint also had personal repercussions, Reilly said. After the Wilmington Star-News received a copy of the complaint, Reilly – who is a freelance writer for the paper – said he got a call saying his services would no longer be needed.

“They said, ‘you can’t be political,’ and I knew that might happen, but I think I still had to say something,” Reilly said.

Reilly also acknowledged the timing of the complaint; he said he does hope it has an effect on the election but denied any connection to the campaigns of Lee’s challengers.

“I’m a fan of Harper [Peterson], and I’d like to see him win. But I haven’t spoken to him, I haven’t been contacted or asked to do this by him or his campaign, no,” Reilly said.

Complaint Form Against State Senator Michael Lee – State Ethics Commission – Port City Daily by Ben Schachtman on Scribd


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