Are we in Beaufort County about to be treated to another example of crony capitalism? | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer.

    Or, are our "leaders" fixing to gamble with our money yet again in spite of the fact they've lost on most of their best of late.

    At the November Beaufort County Commissioners meeting the board went into closed session with Economic Developer Tom Thompson and National Spinning Jim Chesnutt. After about thirty minutes they came back out into public session and here's what the public was allowed to see:



    We asked what was going on and were told that it is a secret. We have reason to believe this was the same deal that was recently pitched to the City Council. From fitting the pieces together we feel relatively confident we can tell you what is going on. First, some background.

    Last spring, Kristy Bailey with the Carolina Journal reported on a story out of Lee County about a controversy over economic development incentives in that county. The short version is: A Canadian company proposed to locate a steel fabrication plant in Lee County. But a condition of doing so was that the County and State give them an "incentive grant." Typical proposal these days. But the wrinkle in that case was that the new company they were recruiting would be a competitor for existing local steel fabricators. You can read about the details by clicking here.

    Then a few months ago the Firestone tire plan in Wilson County threatened to pull up stakes and leave North Carolina. The Democrat controlled State Government rushed in and gave them tons of money to stay. All to "save the jobs" you know.

    Shortly thereafter, Goodyear decided if it was good enough for Firestone it was good enough for them. They went after their share of the pie.

    Not long after that a food service operation (Sysco) worked a deal to get a boatload of money from the state and Johnston County in spite of the fact that they were going to (are in fact now) compete against another food service (Pate Dawson) that has been an employers in the area for decades.

    We've all heard similar stories, from the Obama Administration bailing out GM and Chrysler to Solyndra and the likes. Crony capitalism it has come to be called. The fundamental idea is that under the guise of "creating or saving jobs" the government picks and chooses who will get subsidies and who will not. Invariably the ones picked (or their unions) are the ones that are politically well connected.

    When we hear these stories most people we know just shake their head and go on about their everyday business trying to pay the bills, including their tax bills. They seldom see this as a local issue.

    But it is a local issue. In fact it is one of the biggest local issues Beaufort County now faces.

    The Washington City Council and Beaufort County Commission play the exact same crony capitalism game.

    Not too long ago the two governing bodies agree to provide local matches for an incentive grant for the out-of-state company that bought out Hackney--the truck body builder. What most people did not know is that the money given to the new owners of Hackney was money taken from Beaufort County taxpayers and given to an out-of-state company that gave it a competitive advantage over another local company who does the same kind of work but does not take corporate welfare from the taxpayers. The Economic Developer brags about such as a success story.

    Then the Gang of Five on the Beaufort County Commission gave Rev. David Moore (read: Politically connected) nearly $300,000 for a health clinic he runs in direct competition with the then Beaufort County Hospital. While the hospital was going broke, the County Commissioners (Langley, Cayton, McRoy, Klemm and Booth) took customers away from the hospital and fed them to Agape Health Clinic.

    Then when Fountain Powerboats got into financial trouble and had to seek a buyer the EDC/Committee of 100/Economic Developer decided they knew better how to pick a buyer than did the market. They manipulated, just as they did on the buyer for the Hospital, a chosen outfit to take over and "save the jobs" at Fountain. That deal did not work out much better than did the snakeoil they sold us called "ethanol" with a bunch of crooks who ended up in jail over the way they did business. Now the sexy thing they're pushing is "wind energy." And on and on it goes.

    Now we hear the EDC/Committee of 100 is playing another game to "save jobs." The word on the street this time is that the City, County and Committee of 100 will all pitch in and give an incentive grant to a Canadian company that is said to be buying a local business and will leave the operation here for a couple of years in return for $270,000 in incentive grant. We're not sure of the details on this because the taxpayers are being kept in the dark on the details.

    The Economic Developer recently pitched the Washington City Council on the project and last week got a 'go ahead' from the County Commission for $90,000 in taxpayer money to kick into the deal. But it does seem like once the City agreed and they realized they could get the County money, the Committee of 100 suddenly withdrew its money from the deal. We'll just have to wait and see how that works out. But it appears that the only people with skin in this game are the taxpayers of the City and County, maybe the State. We suspect the local money is a match for an NC One grant.

    But here's the rub.

    Let's just assume that this deal they're calling "Project Treehouse" might save "up to 90 jobs" for a couple of years. Then what? Can we expect the operation to continue after the corporate welfare ends? What do you think the odds of that are? If the business cannot make a go in its market now, what's to say that it will be able to do so when the taxpayers' bailout runs its course? And we wonder if Mr. Chesnutt was asked: "If this new company can make a go of it, why can't you?" How is this going to be any different from the boatbuilders who have left empty buildings in our industrial park?

    Our EDC, County Commission and City Council are racking up a pretty impressive record of picking losers. And we have not even mentioned the $3 million industrial park outside Chocowinity that is cleverly disguised as a cotton field the last time we looked.

    So how many dogs that won't hunt must our County Commission and City Council buy before they decide they are not very good business people? At the same meeting they reappointed the same losers to the EDC. How much sense does that make?

    If these wannabe Kingmakers really wanted to save or create jobs why not run a contest on job creation? Just say to anybody who is already doing business in Beaufort County: "We'll give $270,000 to the company or group of companies who create the most jobs next year (provided if you cut them out within seven years you have to pay the money back) ." So why would they not do that?

    Go back to the "politically connected" part above and you will get a clue.

    What we have that we call "economic development" in Washington and Beaufort County is simply a corrupt system of crony capitalism...using the taxpayers' money to gamble on bailouts of companies that can't otherwise compete in the market. That is to say:...to pick and choose...losers.

    Bless us and save us.