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Official's Scheme Involved Payments For Software Development
Publisher's note: The author of this fine report is Don Carrington, who is executive editor of the Carolina Journal, John Hood Publisher.
Commerce Department denies requests for interview
RALEIGH Documents obtained by Carolina Journal show that a plan recently scrapped by the North Carolina Department of Commerce included a provision to pay Cary-based software developer SAS $1.5 million in federal funds meant to assist low- and moderate-income families.
Assistant Secretary for Community Development Henry C. McKoy, who oversees the annual allocation of approximately $40 million in federal Community Development Block Grants, created the plan. Each dollar would have traveled through three other entities, including a nonprofit organization McKoy created, before reaching SAS, documents show.
According to the agreement, four counties selected by McKoy -- Orange, Yadkin, Buncombe, and Edgecombe -- each would have received $600,000. Each county would keep $60,000 for participating in the scheme and transfer the remaining $540,000 to the North Carolina Sustainability Center, a nonprofit that McKoy chaired last year.
Under the plan, the NCSC would retain $165,000 from each county -- $660,000 overall -- and provide some planning services for each county. The NCSC then would transfer the remaining $375,000 from each county, or a total of $1.5 million, to the North Carolina Association of Regional Councils of Government, also known as COGS.
Finally, COGS would transfer the entire $1.5 million to SAS. See a copy of the contract here (8.8 MB PDF).
SAS has been working on a software project called NCREPS -- North Carolina Regional Economic Prosperity Tool -- that would be used by local governments. The company says it has put $4 million into developing the software, but needs additional funds to finish the project. REPS, in fact, was developed for COGS, and SAS has an agreement with that organization, CJ has learned.
Sometime last year, McKoy learned of the project and asked to be involved. He also offered to help pay for it.
McKoy's plan to funnel money through the four counties to NCSC was outlined in a Jan. 6 memo (PDF download) that he sent to Crisco seeking approval. The money was to come from surplus federal Community Development Block Grant funds from the years 2002, 2004, and 2007.
The plan engineered by McKoy and NCSC President Katie Kross was being finalized as late as March 30, but it was scrapped after CJ Online's initial report, which appeared April 5. The SAS connection was not mentioned in the original set of documents CJ obtained for that initial report.
Commerce Secretary Keith Crisco asked McKoy to resign the day the initial CJ story appeared, according to the News & Observer, but McKoy refused and remains on the job.
Repeated requests to interview McKoy or others in his division about the plan were turned down by Tim Crowley, assistant secretary for communications and external affairs at Commerce.
In a May 21 email, Crowley said: "We are going to be unable to accommodate your request for an interview. I can say this. The economic well-being of our local communities is critical to North Carolina and we will continue to work with our many stakeholders on finding ways to help them with their efforts. As I have mentioned previously, the proposal related to the N.C. Sustainability Center was not approved, no contract was signed, and no money was ever disbursed."
House budget eliminates position
Even though McKoy remains on the payroll at Commerce, his position may not be active beyond June 30. The budget adjustment for the next fiscal year, approved May 24 by the House Subcommittee on Natural and Economic Resources, seeks to eliminate his assistant secretary's position and its $129,288 annual compensation (see item 53 in PDF). The budget plan would move the employees and staff in McKoy's division to the supervision of the assistant secretary for energy in commerce.
The budget is expected to be approved by the full House this week.
McKoy is a relative newcomer to public administration. Gov. Bev Perdue appointed him to the Commerce position in August 2010. He reports to Crisco, and oversees more than 70 employees and a budget of approximately $50 million.
Sustainability Center
NCSC started in 1998 as an organization named Saving Our State. It was renamed Sustainable North Carolina in 2004.
An April 2010 report in Philanthropy Journal stated that Sustainable North Carolina "is suspending operations as it re-evaluates its future." McKoy declined to comment for that story.
On Aug. 2, 2010, the same day Perdue announced McKoy's appointment to the Commerce position, McCoy filed a name change form with the N.C. Secretary of State's Office, renaming the organization the North Carolina Sustainability Center. McKoy signed the form with the title "Chair, Board of Directors."
The address of NCSC's current headquarters is a mailbox at a UPS Store in north Raleigh.
NCSC's latest Internal Revenue Service Form 990, Return of Organization Exempt From Income Tax, indicates the center was not very active (PDF download). It received $7,638 in grants and had $8,441 in expenses for the calendar year 2010. The form lists McKoy as the center's chairman. It was dated July 8, 2011, and signed by McKoy as chairman.
CJ Online reported April 12 that the Z. Smith Reynolds Foundation authorized a grant of $150,000 to NCSC on May 13, 2011. "Libby Smith [a senior adviser to McKoy at Commerce] was listed as the president and contact person. Henry McKoy was involved in the pre-grant discussions with the ZSR about the grant request," foundation Executive Director Leslie Winner told CJ.
The 2009 Form 990 shows $51,834 in revenue and $89,743 in expenses for that year. The form, prepared by Executive Director Cyndy Yu-Robinson, also lists McKoy as one of 11 board members.
The 2008 Form 990, prepared by President Katherine Ansardi, shows total revenue of $225,816 and expenses of $213,297, and also lists McKoy as one of 14 board members.
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Commerce Department denies requests for interview
RALEIGH Documents obtained by Carolina Journal show that a plan recently scrapped by the North Carolina Department of Commerce included a provision to pay Cary-based software developer SAS $1.5 million in federal funds meant to assist low- and moderate-income families.
Assistant Secretary for Community Development Henry C. McKoy, who oversees the annual allocation of approximately $40 million in federal Community Development Block Grants, created the plan. Each dollar would have traveled through three other entities, including a nonprofit organization McKoy created, before reaching SAS, documents show.
According to the agreement, four counties selected by McKoy -- Orange, Yadkin, Buncombe, and Edgecombe -- each would have received $600,000. Each county would keep $60,000 for participating in the scheme and transfer the remaining $540,000 to the North Carolina Sustainability Center, a nonprofit that McKoy chaired last year.
Under the plan, the NCSC would retain $165,000 from each county -- $660,000 overall -- and provide some planning services for each county. The NCSC then would transfer the remaining $375,000 from each county, or a total of $1.5 million, to the North Carolina Association of Regional Councils of Government, also known as COGS.
Finally, COGS would transfer the entire $1.5 million to SAS. See a copy of the contract here (8.8 MB PDF).
SAS has been working on a software project called NCREPS -- North Carolina Regional Economic Prosperity Tool -- that would be used by local governments. The company says it has put $4 million into developing the software, but needs additional funds to finish the project. REPS, in fact, was developed for COGS, and SAS has an agreement with that organization, CJ has learned.
Sometime last year, McKoy learned of the project and asked to be involved. He also offered to help pay for it.
McKoy's plan to funnel money through the four counties to NCSC was outlined in a Jan. 6 memo (PDF download) that he sent to Crisco seeking approval. The money was to come from surplus federal Community Development Block Grant funds from the years 2002, 2004, and 2007.
The plan engineered by McKoy and NCSC President Katie Kross was being finalized as late as March 30, but it was scrapped after CJ Online's initial report, which appeared April 5. The SAS connection was not mentioned in the original set of documents CJ obtained for that initial report.
Commerce Secretary Keith Crisco asked McKoy to resign the day the initial CJ story appeared, according to the News & Observer, but McKoy refused and remains on the job.
Repeated requests to interview McKoy or others in his division about the plan were turned down by Tim Crowley, assistant secretary for communications and external affairs at Commerce.
In a May 21 email, Crowley said: "We are going to be unable to accommodate your request for an interview. I can say this. The economic well-being of our local communities is critical to North Carolina and we will continue to work with our many stakeholders on finding ways to help them with their efforts. As I have mentioned previously, the proposal related to the N.C. Sustainability Center was not approved, no contract was signed, and no money was ever disbursed."
House budget eliminates position
Even though McKoy remains on the payroll at Commerce, his position may not be active beyond June 30. The budget adjustment for the next fiscal year, approved May 24 by the House Subcommittee on Natural and Economic Resources, seeks to eliminate his assistant secretary's position and its $129,288 annual compensation (see item 53 in PDF). The budget plan would move the employees and staff in McKoy's division to the supervision of the assistant secretary for energy in commerce.
The budget is expected to be approved by the full House this week.
McKoy is a relative newcomer to public administration. Gov. Bev Perdue appointed him to the Commerce position in August 2010. He reports to Crisco, and oversees more than 70 employees and a budget of approximately $50 million.
Sustainability Center
NCSC started in 1998 as an organization named Saving Our State. It was renamed Sustainable North Carolina in 2004.
An April 2010 report in Philanthropy Journal stated that Sustainable North Carolina "is suspending operations as it re-evaluates its future." McKoy declined to comment for that story.
On Aug. 2, 2010, the same day Perdue announced McKoy's appointment to the Commerce position, McCoy filed a name change form with the N.C. Secretary of State's Office, renaming the organization the North Carolina Sustainability Center. McKoy signed the form with the title "Chair, Board of Directors."
The address of NCSC's current headquarters is a mailbox at a UPS Store in north Raleigh.
NCSC's latest Internal Revenue Service Form 990, Return of Organization Exempt From Income Tax, indicates the center was not very active (PDF download). It received $7,638 in grants and had $8,441 in expenses for the calendar year 2010. The form lists McKoy as the center's chairman. It was dated July 8, 2011, and signed by McKoy as chairman.
CJ Online reported April 12 that the Z. Smith Reynolds Foundation authorized a grant of $150,000 to NCSC on May 13, 2011. "Libby Smith [a senior adviser to McKoy at Commerce] was listed as the president and contact person. Henry McKoy was involved in the pre-grant discussions with the ZSR about the grant request," foundation Executive Director Leslie Winner told CJ.
The 2009 Form 990 shows $51,834 in revenue and $89,743 in expenses for that year. The form, prepared by Executive Director Cyndy Yu-Robinson, also lists McKoy as one of 11 board members.
The 2008 Form 990, prepared by President Katherine Ansardi, shows total revenue of $225,816 and expenses of $213,297, and also lists McKoy as one of 14 board members.
| The budget...or an easy way to waste your money | John Locke Foundation Guest Editorial, Editorials, Op-Ed & Politics | House Budget Plan: The Rest of the Story |
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