RALEIGH – Roy Cooper is about to make some news.

Currently serving his second term as North Carolina’s attorney general, Cooper is a former member of the NC House and Senate and a possible contender for the Democratic gubernatorial nomination in 2008. It’s not as though he hasn’t made news before, plenty of times. But I get the sense that the current occasion may prove pivotal.

As Carolina Journal readers know well, it came to light several months ago that Senate leader Marc Basnight, House Speaker Jim Black, and former Co-Speaker Richard Morgan had dipped into some $25 million in “discretionary funds” tucked away in the state budget. They used the money to fund pork-barrel projects across the state, typically in key legislative districts or timed to aid their political allies during election time.

Last week, State Auditor Les Merritt released a long-awaited report detailing the use of some of the slush funds (for reasons not entirely clear to me, his audit examined only $14 million of the $25 million). It provides helpful details on several of the most controversial items, such as Black’s use of state funds to create a position at the Department of Cultural Resources for former Rep. Michael Decker, who had switched parties in 2003 to help engineer the Black-Morgan coalition and was later defeated when he tried to return to the Republican fold.

But what Merritt’s report does not do is attempt to offer a definitive conclusion as to the legality of the discretionary-fund arrangement and any recommendation for subsequent legal action. The report does note a state law that forbids projects previously rejected by the General Assembly from receiving state funds through the back door. It further lists 11 projects that received discretionary funds after being excluded from the budget by legislative action. The implication, certainly, is that there may have been repeated violations of the law here, but again the state auditor’s report doesn’t offer an official legal judgment.

Instead, it leaves the matter up to Cooper’s office. The attorney general is presumably considering not just statutory violations but also the extent to which the discretionary-fund arrangement violated the constitutional separation of powers, which prohibits the executive branch of state government from acting as the legislature and vice versa.

So is there any hint of what Cooper might do, and when? Speaking on behalf of the attorney general, Noelle Talley seemed to indicate in media interviews that we might not have that long to wait. “Our lawyers have worked with the auditor’s staff from the beginning of this process to review the relevant statutes and case law,” Talley said. “We’ll issue a legal opinion as soon as we review the auditor’s findings.”

One lawmaker deeply involved in the mess, Rep. Morgan, chose not to wait for Cooper. Now speaker pro tem, Morgan “attempted to put a positive spin” on Merritt’s report, according to his hometown newspaper, by arguing that the report contained no legal findings because there was no illegality in the use of slush funds. “The operative words in his report are ‘no findings,’” Morgan said Friday. “It really wasn’t a great surprise to me that the words ‘no findings’ appear on the report.”

I don’t know what the attorney general is going to say about all this. I do know that he will have an attentive audience among lawmakers, the media, activists, and the political class.

Hood is president of the John Locke Foundation.