Two Indicted in Manteo Dredging Case

Fry, a town commissioner for 14 years before conceding to his opponent during an effort to break their deadlocked race in November’s municipal election, also was released on an unsecured bond of $50,000, Grube said.

According to the indictments, Fry was charged with one felony count of bribery of officials, and Tugwell was charged with one felony count of offering bribes.

The cases are being handled by the North Carolina Conference of District Attorneys in Raleigh because of concerns by District Attorney for the First Prosecutorial District Andrew Womble’s office about potential conflicts of interest. The district attorney handling the case, Chuck Spahos, was unavailable for comment for this report.

In a brief telephone interview with the Voice, Fry said he had to restrain from making a statement about the situation. “I wish I could,” he said.

Manteo Mayor Bobby Owens, who was not serving as mayor during the dredging project, is related to Fry through marriage. His late wife Sarah was Fry’s aunt.

Fry’s attorney Andy Gay, with the Zebulon law firm Gay, Jackson & McNally, told the Voice the case is in the early stages, but from what he has seen of the government’s case, it appears “nobody did anything wrong.”

“It’s a very, very unusual application of the statute,” Gay said on Friday. “It’s a bit surprising. But there’s probably a lot of politics behind this.”  He said he has not yet heard from the district attorney on scheduling a court date for his client’s first appearance in Dare County Superior Court.

Tugwell did not respond to a telephone message left on Friday seeking comment. According to Fry, Elizabeth City attorney Keith Teague is representing Tugwell. Teague could not be reached for comment.

Verbal agreement

The two men’s legal difficulties were spurred by a verbal agreement negotiated between Tugwell and a private property owner. The arrangement related to payment to the owner to store dredge material on his land that was removed during the town’s Doughs Creek Canal dredging project in 2017-2018.

At the time, Tugwell, owner of contracting company Tugwell Transport, was acting as the local agent for the Klimkiewicz family, which owned land along Doughs Creek. Eventually, an unwritten agreement was reached with the Klimkiewicz family that would allow the town to temporarily deposit dredge spoil on their land. At the conclusion of the project, the dredge material was trucked to the town public works property off Bowsertown Road and the private property was cleaned up.

According to a report issued in December by the North Carolina Office of the State Auditor, Tugwell — who at that point was not representing the town in any official capacity— submitted three separate invoices to the town: two for $12,500, and one for $25,000.

Despite the lack of a contract or any documentation, the report said, town Finance Officer Shannon Twiddy paid the invoices with town funds. Although Tugwell was not a town official when he made the dredge spoil deal, he had been appointed in Feb. 2018 to serve on the Manteo Planning and Zoning Board. He submitted his resignation on Nov. 20, 2019.

On Oct. 18, 2017, the Manteo Board of Commissioners approved a budget appropriation of $50,000 for a 120-day lease of the Klimkiewicz property. Fry, who was then a member of the board of commissioners, voted to approve the measure without revealing that he would benefit, according to the report.

“No Town employees or officials knew that the Commissioner would receive a payment related to the dredging project,” the report said.

After compensating the property owner $25,000 for the lease, the report said, Tugwell deposited $25,000 in his corporate account. He then wrote a check to Fry for $12,500 and later told investigators that it was a “gift.”

Tugwell told the auditor’s office investigators that the compensation was above board.

“Let me be clear,” he said, according to the report. “That money was all given to me, and I am allowed to spend my money in any way I see fit and for whatever reason I see fit.”

But according to the indictment, the payment that Fry accepted from Tugwell was made “with the understanding that he was to be influenced thereby and would perform an official act …” that led the town to appropriate $50,000 for the lease.

‘Corrupt intent’

The indictment called Tugwell’s transaction “a corrupt intent” to offer money to Fry as a “bribe,” with the understanding that Fry, in his capacity as commissioner, would vote to approve the $50,000 appropriation.

Meanwhile, a parallel controversy related to the dredging project is continuing to swirl. Some months after the dredged sand was deposited on the town property, more than 70 dump trucks were seen removing the sand from the town land. The Dough’s Creek dredging project, contracted for $648,901 to Carolina Marine Structures in Powells Point, began on Nov. 27, 2017.

To this day, the town has not determined — at least for the record— where the material went or whether it was sold or stolen. When it was taken, then Town Manager Kermit Skinner valued the material at about $15,000, and said that under the terms of the contract, it belonged to the town.

When contacted Friday afternoon, current Manteo Town Manager James Ayers said he was unaware of the Tugwell and Fry indictments and added that he has not been in communication with the district attorney’s office.

But Ayers said that the town is following the state auditor’s recommendation to investigate Finance Officer Twiddy’s actions in signing off on the invoices to determine whether there should be corrective and/or disciplinary action. The town is also considering conducting a five-year audit of the town finances, he said.

As to the disappearing sand, Ayers said the town has had discussions with the dredging contractor and is continuing to pursue the matter.  “We’re considering all legal alternatives to resolving this issue,” he said.