"I want to see policies that encourage every American to vote, not make it more difficult to vote," said Powell, a Republican, at the NC CEO Forum in Raleigh.
"It immediately turns off a voting block the Republican Party needs," Powell continued. "These kinds of actions do not build on the base. It just turns people away."
The retired general served as the keynote speaker at the event and made his remarks moments after North Carolina Gov. Pat McCrory left the stage. McCrory's office said the governor left the event before Powell's comments.
The comments represent the most high-profile criticism of the Republican-crafted law that requires voters to show photo identification at the polls, cuts early voting days and makes it harder for students to vote.
In one comment, he seemed to rebuke McCrory for suggesting that voter fraud likely exists but is hard to detect. The governor had compared it to insider trading.
"You can say what you like, but there is no voter fraud," Powell said. "How can it be widespread and undetected?"
Powell, who served under President George W. Bush, also said the new law sends the wrong message to minority voters. "What it really says to the minority voters is ... 'We really are sort-of punishing you,'" he said.
McCrory delivered the event's opening remarks and preceded Powell, but didn't address the election law directly.
Instead, he focused on the role of community colleges in education and job training.
"Education is our greatest challenge. There's a disconnect between what we're teaching and what employers need. What I'm trying to do is bring commerce and education together."
After Powell's speech, McCrory's office issued a statement thanking Powell for complimenting some of the initiatives the governor has focused on since taking office in January.
"The Governor appreciates the warm compliments Secretary Powell made today regarding many of the Governor's initiatives and on voter ID we respectfully disagree," the statement said.
During his speech, Powell also blamed the political impasse in Washington on the Internet, cable TV and extremist advocacy groups.
And he defended the liberal arts as a discipline that gives people as sense of their place in the world -- another line that hits at McCrory, who said earlier this year in a radio interview that the state should focus on careers for graduates and away from academic pursuits "that have no chance of getting people jobs."
McCrory later said his comments were misconstrued and that he supports a liberal arts education.
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