Did Arthur Williams benefit from grant funds while he served as a legislator? | Eastern North Carolina Now

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

    The race for N. C. House District 6 in Tuesday's Republican Primary took a major turn earlier this week when Mattie Lawson, who is running for the same seat, published an ad at www.beaufortobserver.net (see right sidebar) raising questions about a real estate transaction that her opponent, Arthur Williams, apparently made while he was serving in the Legislature from the old House 6 district.

    It appears that Williams was a partner in a company that owned land and a building occupied by a company that makes plastic medical implements, doing business as Coeur, Inc. Public records filed in the Beaufort County Register of Deeds office indicate that coincidental to the sale of the property, there were one or more state grants received at about the same time. Lawson's ad calls on Williams to disclose what actually went on. At this deadline, to our knowledge Williams has chosen to ignore the questions.

    The evidence, if true, is very troubling. It has the appearance of a conflict of interest if Williams benefitted personally from the deal that involved state or state-related funds.

    What the records show, de minimus is that Williams and a partner named Jack Lail bought the land in 2000 that Coeur was or would eventually be operating from. Reliable sources, who did not want to be named, said that Williams and his son were active in running the company until "sometime around 2004." The source also tells us that sometime in 2004 there were attempts to dissolve the partnership between Williams and Lail and that Lail was trying to buy Williams' interest in the land, building and/or business.

    On August 11, 2004 a deed was filed in the Register of Deeds office conveying the land and building from Williams and Lail to the Beaufort County Committee of 100. Apparently the Committee of 100 then borrowed money to pay Williams, and perhaps Lail, for their interest in the real estate.
Democratic Three Amigos in December, 2010: Beaufort County Commissioner Jerry langley, NC Governor Beverly Perdue, NC House Rep Arthur Williams: Above.     photo by Brandia Deatherage
    Coincidental to this real estate transaction, the N. C. Department of Commerce awarded the Committee of 100 a $200,000 grant for "job creation" by Coeur. The 12-31-11 EDC report listed a $400,000 One NC grant, of which $200,000 was local match from Beaufort County and the City of Washington. Media reports at the time, based on press releases from the Committee of 100, said that "other agencies," in addition to the One NC Fund would provide grants to the Committee of 100 to allow it to borrow $1.4 million from Wachovia. The current tax value of the property Lail and Williams sold to the Committee of 100 is $1,016,684. Apparently, that mortgage was paid off within a year. In the meantime, records indicate that Coeur was paying the Committee of 100 to lease the building from them. What is not known is whether the Committee of 100 was making any payments to either Lail or Willaims or their LLC.

    The Beaufort Observer has made a formal Public Records request to Economic Director Tom Thompson for access to the leases the Committee of 100 were/are involved in. Thompson has failed to respond to the request after a week, except to forward an email he sent to John Tate, III, a local attorney, asking him to "advise the board on what this means." Thompson himself has resigned his position as Beaufort County Director of Economic Development and media reports friendly to his cause have said that he and the Committee of 100 have agreed to a "consulting" deal between themselves.

    The Committee of 100 is a non-profit corporation and not a part of county government, but many of the same people are involved in both the Economic Development Commission, which is a county agency, and the Committee of 100. Some have accused the setup as being incestuous, with Thompson moving back and forth in his dual roles with the EDC and the Committee of 100 and a number of officers and directors doing likewise.

    Without seeing the leases, it is impossible to track the funds. It could all be legitimate. But that would depend on where the money came from and where it went to. We have been told by an expert in state ethics regulations that if the grants the Committee of 100 received from the state, and other state funded agencies, went to buy Mr. Williams out that this would most likely constitute an ethics violation, or even potentially criminal culpability, depending on the factual details.

    The expert also told us that it is likely that a major issue in assessing the deal would depend on whether it was an "arms length" transaction in relation to the Committee of 100 and its principals. "If the agents of the Committee of 100 were working to acquire state funding and at the same time knowledgeable of, and in fact facilitating, the purchase of Mr. Williams' property then..." the expert chose not to complete his sentence.

    But since the Committee of 100 has been refusing to make its records accessible and Mr. Williams has thus far failed to respond to Ms. Lawson's call for full disclosure, it is impossible to determine precisely whether any ethics regulations or laws have been broken.

    But it does look suspicious and it does have the appearance of a potential conflict of interest on Mr. Williams' part and potentially on the part of agents of the Committee of 100.

    If, while serving as a state Legislator, he benefitted personally from the sale of his part of the business or real estate to the Committee of 100 and the Committee of 100 used state grant funds to make the deal for the real estate that they then turned around and leased to the same company, then it would appear that Mr. Williams is culpable and perhaps individuals within the Committee of 100, depending on what they knew.

    Our expert tells us that if the actual role of the Committee of 100 was to hide the use of state funds to pay Mr. Williams for his interest in the property or business then there are serious questions to be answered.

    Ms. Lawson told us when she placed the ad that: "I am not charging anybody with anything. My campaign is simply disclosing what we know from public records. Those records do raise troubling questions and that is what I am asking Mr. Williams to do...provide the public with a full and fair disclosure of the transaction that apparently was related to public funds."

    And that would be our position. We are not saying, at this point, that any of the players in this deal did anything wrong. We don't' know because we have not had access to the records and an explanation from any of the parties involved. Mr. Thompson's response was: "no comment."

    In keeping with a longstanding policy here at the Observer, we have not solicited a comment to this story from Mr. Williams. That policy is to offer officials three opportunities to comment on stories we publish but if they fail to respond after three tries we no longer solicit their comments but leave it up to them to initiate such. We offer Mr. Williams our facilities to explain what happened.

    Update: After a copy of this story was furnished to Mr. Thompson, and after checking with his attorney, he notified the Observer that the request of access to the lease would be allowed. We are in the process of reviewing that and other records and will have further reports going forward.