This story is part of a reporting partnership with The Outer Banks Voice.
Jordan Hennessy, a member of the state Coastal Resources Commission, has threatened to sue a candidate for Dare County commissioner for defamation, The Outer Banks Voice reported.
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The threat against candidate Katie Morgan came two weeks after the Dare County Board of Commissioners terminated its housing partnership with Coastal Affordable Housing, a company in which Hennessy is principal, and voted to return to the state $35 million in funding for affordable housing. Craig Schauer, an attorney for Hennessy accused Morgan in an April 23 letter of “false and defamatory statements” and threatened litigation if the matter is not resolved “immediately and satisfactorily.”
Morgan is running as the Democratic challenger to incumbent Republican Commissioner and Board Chair Bob Woodard and has been critical of the county’s partnership with Hennessy’s firm.
Schauer cited four statements Morgan had made about Hennessy and his company as “false and defamatory.” He also blamed Morgan for the county’s April 9 cancellation of the housing partnership, writing that, “Due to your public mischaracterizations of Coastal Affordable Housing and Mr. Hennessy, the Dare County Board of Commissioners have terminated negotiations with Coastal Affordable Housing and returned the $35 million loan from the State.”
That letter specified two “remedies” to resolve the situation. One called for Morgan to post a public retraction of the “false accusations” concerning Hennessy and Coastal Affordable Housing and another required her to donate $5,000 to the Community Care Clinic of Dare “as a gesture of your support for the local community.”
If these steps weren’t agreed to, the letter stated, “Mr. Hennessy and Coastal Affordable Housing will file suit against you.”
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In an email to the Voice, Morgan stated that “This letter has caused me immense anxiety along with undue emotional and financial stress for me and my family … As I am currently running an active campaign, my intention has always been to highlight what I believe are poor decisions and partnerships made by our local officials. The fact that I am being singled out as the sole party responsible for all Dare County Commissioners to vote unanimously to send the money back is laughable.”
Neither Hennessy nor Schauer responded to the Outer Banks Voice’s requests for comment.
Hennessy, a former aide to State Sen. Bill Cook, is prominently involved in a number of local issues. Aside from his roles with the Coastal Resources Commission and Coastal Affordable Housing, he is a top officer at EJE Dredging, which owns and operates the Miss Katie Dredge.
That April 23 letter triggered a series of exchanges between Schauer and Morgan Attorney L. Phillip Hornthal, III. On April 30, Hornthal wrote that Morgan “steadfastly denies that she has made any defamatory comments, and that most of the comments you reference are directed at Dare County and not Mr. Hennessy … She believes your clients are attempting to chill her free speech and prevent her from asking tough questions about the business of Dare County …”
Hornthal said that Morgan is “willing to consider correcting her statement that your clients have ‘billed’ Dare County $5,000,000 to date,” since the pre-development contract between Dare County and Coastal Affordable Housing indicated that the firm would be eligible for up to $5 million in expenses, but had only invoiced the county for about $664,000 to date.
On May 2, Schauer responded by stating that to resolve the matter, Morgan had to issue a correction and apology, along with a video of her doing so, using language Schauer included in that letter. The statement and video, he said, “must be posted on Ms. Morgan’s Facebook account (both her campaign and personal page) and Instagram account, as well as any other social media accounts on which she made the defamatory statements.”
That produced a May 6 letter from Hornthal in which he outlined a response that Morgan would be willing to make, stating that it would be “a social media post correcting her earlier post concerning the $5 million payment by Dare County…in the form of a written post,” but not in a video format. It would include a statement that she is not aware of any “unlawful” actions by Hennessy or CAH.
Hornthal added that “if a lawsuit is filed, we believe that the claims will be summarily dismissed and your client ordered to pay Ms. Morgan’s attorney’s fees.”
In her email to the Voice, Morgan said that she has heard nothing further from Schauer or Hennessy since then, adding that “I am totally willing to do the post outlined by my lawyer. I have intentionally been waiting to see what their lawyer said before I do it … I’ve never been in this type of situation before and it is paralyzing.”
