COCAINE TIED TO COURT OFFICIAL'S EXIT

The state's chief justice says trace amounts found in John Kennedy's office

Kennedy denies using cocaine in his office or elsewhere.

John Kennedy, who resigned abruptly last month as the top administrator of
North Carolina's courts, stepped down after the state's chief justice
confronted him about whether he used cocaine at work. Chief Justice Beverly
Lake Jr. said Tuesday that he demanded Kennedy's resignation July 23, a day
after Wake County Sheriff Donnie Harrison's search of Kennedy's office with
a drug-detecting dog found what appeared to be cocaine inside his desk.

"My information is that they found trace amounts of cocaine," Lake said in
an interview at his office Tuesday.

Lake said Kennedy did not dispute the finding when confronted and agreed to
resign the next day as director of the Administrative Office of the Courts.

Kennedy, a former Wake County clerk of court, has not been charged with a
crime. Harrison and Wake District Attorney Colon Willoughby said they do not
have enough evidence to launch a criminal investigation.

In interviews this week, Kennedy denied using cocaine at work or anywhere
else.

Asked Monday whether he used cocaine at his office, Kennedy said: "I would
say no. I think that's an outrageous statement."

When asked whether he had ever used cocaine, he said, "No."

Kennedy earned $107,527 a year running an agency with more than 400
employees and a budget of more than $360 million. The agency provides the
state courts in all 100 counties with personnel, funding, legal research and
purchasing.

The agency's director reports to the chief justice of the state Supreme
Court, who heads North Carolina's judicial branch.

Lake said two agency employees last month reported to him that they saw
Kennedy hide things on his desk when they walked into his office on four
occasions.

Asked Tuesday whether he knew of any reason that a drug dog would be
summoned to his office, Kennedy said: "They may have thought they saw
something that was one thing when it was something else.

"The law enforcement people, as I understand it, went and searched that room
and found nothing. They did not find anything in that room. That's what I
was told."

But several hours later, Lake released a memorandum outlining his inquiry
into Kennedy's alleged drug use in his second-floor corner office at the
state Justice Building, across from the Capitol in downtown Raleigh.

Lake's memo said the search of Kennedy's office corroborated "information
about possible cocaine use" by Kennedy.

Before Tuesday, Lake and Kennedy had said Kennedy resigned for personal
reasons, including his desire to pursue other interests and to play trombone
in a jazz band.

Lake said he never intended to cover up Kennedy's conduct. He said he
initially thought state law prevented him from disclosing the circumstances
of Kennedy's departure.

But after The News & Observer inquired in recent days about the purported
discovery of cocaine in Kennedy's office, Lake and AOC general counsel Tom
Andrews decided that state law allowed Lake to disclose the facts to protect
the integrity and the public reputation of the courts.

"Pursuant to that statute, I have in my discretion determined that my
disclosure of this information is essential to maintaining the integrity of
the AOC and of our court system," Lake's memo said.

Kennedy's wife said at their home later Tuesday evening that he was
unavailable to comment on the memo, which is public record.

Lake said he had offered his help to Kennedy, and he thanked him for his
service.

"John Kennedy was a very good director," Lake said. "He made a number of
very significant improvements during his tenure at AOC that advanced the
courts."

But Lake's concern was mixed with disappointment in the man to whom he had
entrusted the operation of the state courts.

"It was very troubling that anybody would do something like that -- in the
Justice Building," he said. "People in very responsible positions under
extreme stress give in from time to time."

Just two months ago, the state Supreme Court, which works one floor above
the AOC director, ruled that cocaine possession is a felony under state law.

No investigation

Harrison said he searched Kennedy's office with a drug dog -- a golden
Labrador retriever named Tusca -- and two deputies on Thursday, July 22, at
Lake's request, relayed through Dick Ellis, an aide to the chief justice.

Harrison said he found something suspicious in Kennedy's office, but not
enough to charge Kennedy with a crime or to launch a criminal investigation.

Harrison would not say what he found, including whether it was residue of
some kind.

Lake said he met with Willoughby on Friday, July 23, after confronting
Kennedy. He said he told Willoughby the facts and asked him to handle the
case just as he would any other, which Willoughby promised to do.

Willoughby said in an interview that he reviewed the evidence -- Kennedy's
furtive activity and the reaction of the dog -- and concluded that it was
not sufficient to begin a criminal investigation. He said he was not told
about traces of cocaine in the desk.

"Based on the information I was given, there was no evidence seized and no
competent evidence that there had been a violation of the law," Willoughby
said. "I don't think the information was sufficient to conduct any further
searches, and there was nothing left to investigate."

Donald Stephens, Wake's senior resident Superior Court judge, said
Willoughby consulted him July 23 about the possibility of investigating
Kennedy for possessing cocaine.

Willoughby would have needed a judge's approval to search Kennedy's car or
home.

"In my opinion, there's a lot of information creating a suspicion of a drug
offense, but no competent admissible evidence that would support a criminal
accusation," Stephens said. "So I agreed with Colon that any further
investigation would lead nowhere. I think he made the right call. That is
the same standard that we would apply to anybody."

Willoughby, who worked closely with Kennedy for 16 years at the Wake County
Courthouse, said Kennedy did not get special treatment.

"We of all people -- the courts -- have to follow the rules," Willoughby
said. "How bad would it be if we apply a different set of rules to someone
because of who they are? I can't think of any thing more repugnant to our
system of justice. That means not being more harsh or more lenient, but
following the rules."

Kennedy's explanation

In interviews this week at his home on Raleigh's St. Mary's Street, Kennedy
said that for some time he had considered retiring, which he could do at age
50 in the court system. On Tuesday, he produced a Nov. 24, 2003, letter from
the state Treasurer's Office responding to Kennedy's request for information
about retirement.

Kennedy said that when Lake returned from a Hawaiian cruise in late July, he
and Lake met to talk about the AOC's budget. At some point in the
conversation, Kennedy said, the subject turned to retirement.

The job, Kennedy said, had grown impossibly stressful as he dealt with the
court system's budget, the General Assembly, the internal agency bureaucracy
and the state's judges.

He also said The News & Observer's articles last winter about the AOC
selling public information to private vendors had hurt his reputation.

Kennedy said the job aggravated long-standing health problems, which he
declined to describe. But he said the problems had grown worse in the past
year, prompting his asking the state treasurer about retirement.

Kennedy's July 24 resignation letter to Lake said in part, "The
circumstances have taken a toll, but I hope things [at AOC] are better now
than when I arrived."

The episode tarnishes the once-promising court career of Kennedy, who turns
50 on Sunday. He came to the job after more than 16 years as the elected
clerk of the Wake County courts.

A Raleigh native and Broughton High School graduate, Kennedy received a
history degree from the University of North Carolina at Chapel Hill in 1975,
and then his law degree from UNC-CH in 1980. After a brief private law
practice, Kennedy was made a county magistrate in 1982, when he was 28.

When Russell Nipper retired as Wake court clerk in 1985, Superior Court
Judge Pou Bailey appointed Kennedy to succeed Nipper. Kennedy won his first
election in 1986 and was re-elected in 1990, 1994 and 1998.

Kennedy went to the AOC in November 2001 as its deputy director and moved
into the top office in March 2002.