CHARLOTTE, N.C. — A dredging company launched with $15 million in state money must cease its work in the Oregon and Hatteras inlets after digging deeper and wider than permits allowed hundreds of times, the U.S. Army Corps of Engineers said Wednesday.

EJE Dredging Service is led by an influential North Carolina Republican who is under scrutiny by a federal grand jury.

The Corps suspended permits that it had issued to Dare County to dredge channels in the two inlets after finding that 98% of EJE Dredging Service’s loads of dredged materials over a nine-month period were removed either partially or completely outside designated channels.

Data pulled from sensors on EJE’s shallow-draft hopper dredge showed it had dredged as far as 445 feet beyond a 100-foot wide channel in the Oregon Inlet.

“I have been with the Corps for 22 years and I have never seen anything like this,” said Tommy Fennel, the regulatory chief for the Wilmington district, which covers North Carolina.

The Corps expects to meet with Dare County within the next two weeks to go over the noncompliance and make sure they have a plan that is enforceable, said Col. Brad Morgan, the Corps district commander. If that doesn’t happen, the Corps could revoke the permits.

“We want to continue to work with Dare County,” Morgan said. “Their ability to conduct dredging in support of Dare County and in support of these channels is a huge asset and a huge resource for the state. We just need to get them coloring within the lines and within the box that we have authorized for those channels.”

Dare County Manager Bobby Outten said he couldn’t comment until he’s seen the Corps’ information.

EJE Dredging was formed by Judson Whitehurst, a Greenville business owner, three months after state lawmakers provided the $15 million to Dare County for dredging. The following year, company documents showed Jordan Hennessy, a former legislative aide who helped convince lawmakers to provide funding for the dredging, working on behalf of EJE Dredging. He’s been the CEO for at least two years.

Hennessy has been named in two subpoenas linked to a federal criminal investigation for his work on another project funded by state lawmakers in 2020. Subpoenas issued over the past three months show a grand jury seeks information about Hennessy and one of his businesses as it investigates a domestic violence prevention program funded with $3.5 million also appropriated by state lawmakers.

How the dredging started

Dare County is a hub for commercial and recreational boating, and has struggled for decades to keep navigational channels open. The Corps operates dredges, but its resources are stretched thin. The federal government, meanwhile, has prohibited jetties that would limit the shifting sands.

The $15 million from state lawmakers in 2018 appeared to provide a solution. Then-state Sen. Bill Cook, a Beaufort County Republican, persuaded lawmakers to include the money in the budget that year.

Hennessy and Marion Warren, a former director of the state Administrative Office of the Courts, co-wrote the legislation that provided the money. The federal subpoenas also seek information about Warren. Hennessy could not be immediately reached on Wednesday.

The money went to Dare County to offer to a company as a forgivable loan it could use to purchase a dredge to work the inlets. The company would pay back the loan by charging a reduced rate. The loan would be forgiven after the rate reductions totaled $15 million.

The county’s Oregon Inlet Task Force selected EJE over a company in Massachusetts that has been in the dredging business for roughly 50 years. EJE used the $15 million to buy a new short hopper dredge, which they named the Miss Katie.

Its proposal to Dare County listed an experienced captain from a Corps dredge as the operations manager. Fennel said Wednesday that individual no longer works for the company.

The Corps regulates navigational channels that are authorized by Congress and are set at certain depths and widths to minimize the environmental impacts on marine life. That process involves extensive environmental reviews and approvals from state and federal agencies. The Corps then issues dredging permits and makes sure operators are in compliance.

The Corps worked closely with Dare County and EJE in the design plans for the Miss Katie, which is similar to the Corps’ Murden dredge, Morgan said.

“We’ve been working with Dare County for a long time,” he said. “There’s a huge need, there’s lots of channels out there.”

Problems emerge quickly

EJE began dredging the Oregon and Hatteras Inlets in late 2022. Within months, the Corps began finding problems, the Corps said. The Corps found EJE had dug parts of the channel too deep in the inlet in March and July of 2023, correspondence the Corps released to The N&O shows.

Dare County Manager Bobby Outten told The N&O in June that the channel was already deeper in those areas before EJE dredged. The Corps was continuing to monitor EJE’s dredging, it said in his response.

Morgan and his staff met with the county in September 2023 to try to resolve the dredging issues, he said. The county, with Hennessy present, came up with a plan to limit future violations, but that hasn’t happened, Morgan said.

“We’re to a point where that plan has not produced any change,” he said.

When the Corps conducts dredging or contracts with dredge operators, they perform surveys of the navigational channel before and after the dredging to make sure the work stays within the channel’s parameters, Morgan said.

Contractors typically comply because the Corps won’t pay them for loads dug outside of the channel.

“If there’s any overage and overrun it’s basically not paid for,” Morgan said.

But EJE has not been doing such surveys, Morgan said, even though the company has a survey vessel for that purpose.

The Corps built its case of repeated noncompliance by reviewing the sensor data that is gathered by the Corps’ National Dredging Quality Management Program. Dredge sensors are inspected by the program annually. The Corps found Miss Katie’s sensors operational in November.

While EJE’s dredging often strayed beyond the navigational channels, it showed no problem identifying where to dump its loads, Morgan said. All went to the designated area in the permits.

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