Commissioners discuss the EDC and its Director...again | Eastern North Carolina Now

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

Do we have yet another cover-up of corruption in Beaufort County?

    There was an interesting discussion at this month's Beaufort County Commissioners meeting on the continuing controversy over the Economic Development program in the county. The director has come under strong scrutiny in recent months about how effective the program has been. He has resigned, effective June 30, 2012. But reports are that he is spending little or no time in the EDC office. Repeated requests to him have gone unanswered. And recently the Commissioners asked when he was going to submit the Annual Report that is required by the State? It was due weeks ago and no one seems to be able to find out when it will be available.

    The Observer's researchers have recently discovered that anual "interim progress reports" that were required and due to Golden LEAF have been routinely late or not been filed and the most recent audit raises serious questions about the liabilities the Committee of 100 and/or EDC have outstanding for non-performing grants.

    For example, in June, 2009 the Beaufort County Committee of 100 was sent a letter from the State suspending their receipt of any more state funds because they failed to file the required reports in 2008. In the report, filed with Golden LEAF for the third quarter and fourth quarters of 2012, the documents for the Carver Machine Works Project were not included as required. Golden LEAF documents show a discrepancy between what the Committee of 100 reported as new jobs created and what the State said were actually created. Records appear to indicate that the Committee of 100 overstated PAS jobs by 71. There is a question about 91 jobs the Committee of 100 reported in February, 2012. Of course, without proper reporting it is impossible to know what liabilites the Committee of 100 has incurred for the County at this point. We'll have more on that later, but it is assumed that the "restructuring committee" Mr. Klemm reports on in the video will be assessing those issues in developing its recommendations to clean up the EDC mess.

    In light of the director's resignation a committee has been appointed to review the Economic Development Commission's by-laws. That is what precipitated the discussion at Monday's meeting.

    You can hear the discussion in the video below. We have also attached a clip from later in the meeting when the board came back to a discussion of the EDC annual report and a motion was made to withhold the Director's salary until the report is furnished. As you will see in the video, the motion passed on a 4-2 vote, with Chairman Jerry Langley absent at the time the vote was taken.

    Jay McRoy, who has been a staunch supporter of the Director, voted against the motion, along with Robert Cayton.

    We offered Mr. McRoy an opportunity to explain his vote and here is what he said: "He is an county employee, and is covered by the state of North Carolina's personnel policies. These policies were not being followed in this personnel matter. I did not want to be a part of any illegal activity."

    You will note in the video that Commissioner Ed Booth asked the County Attorney about the legality of the vote before it was taken and the attorney said he thought it would be acceptable if the board required the report before his check was released.

    It is also interesting to note that this same board, with Mr. McRoy present then, also discussed withholding pay checks of county employees when they too had not completed an "exit interview" upon resignation. Mr. McRoy did not challenge that as being illegal at the time.

    In a response to the Observer, County Manager Randell Woodruff told us, in response to a request that he supply us with a copy of the policy Mr. McRoy was referring to, said: "I don't know of any policies within the County personnel manual that apply to this particular situation as it is very unique. My hope is that Mr. Thompson will comply with the request and that no further action will be required." A check with a local government expert at the UNC School of Government confirmed that absent a county policy on the matter that there is no prohibition of the County suspending an employ who deliberately refused to perform their prescribed duties and that if such suspension or termination resulted in a reduction in pay that such would most likely be upheld as legal.

    Moreover, we learned that Mr. McRoy is wrong about the Director being subject to State Personnel Act. He is not. He is a county employee but the State Personnel Act does not cover local government employees, except in certain circumstances and apparently they do not apply to the Director, contrary to what Mr. McRoy claimed.

    In a brief interview with Commissioner Richardson he said: "I am interested in reviewing the annual Economic Development Report because the county is subject to "claw back" provisions in almost all of these grants. That means if the companies that got the grants do not generate the number of jobs they promised, the County could be held liable to have to give back some, or all of the money unless it could be recovered from the company.

    All the commissioners are aware of several grants that have not come close to providing the number of promised jobs and I want to know how much money we may have to pay back and when. Jay McRoy knows that when Mr. Thompson is gone the County will have to start digging to find out what our liabilities are and I can't understand why he would not want this information.

    The real problem in all this is that the commissioners on the EDC and the Committee of 100 have not kept the Board apprised of these liabilities and what the financial status of the Committee of 100 is in terms of meeting these liabilities. It is just like the hospital mess. We are being kept in the dark."

    Here's the discussion of the restructuring of the EDC and the issue of the missing Annual Report:



    Commentary

    As Yogi Berra said "its deja vu all over again." Jay McRoy sat on the Hospital board for years while it got in unsalvageable financial straits and kept saying, in effect: "everything is alright. We're on top of it." Now it would appear he's doing the same thing with the EDC and Committee of 100. It is beyond our comprehension why he would not be more concerned about getting the information that is needed to comply with the grant regulations than he would about any legal complaint Mr. Thompson might have about a half month's salary.

    And Mr. Klemm seems equally oblivious to the problems the taxpayers of the County could face from the EDC and the Committee of 100.

    But actually we don't think it is the Ostrich Syndrome operating here. We are prepared to charge both Mr. McRoy and Mr. Klemm with a deliberate cover-up. Of what, we do not know. But of a cover-up we are sure. We say that from first hand experience. Both have been parties to numerous illegal meetings and violations of the Public Records laws of this state. We have over a dozen instances documented. Both have also been involved in the violation of the state's ethics laws by the EDC and Committee of 100. The most recent violation of the law was notice sent to Mr. Klemm that we wanted to be notified of the By-laws Committee meetings, as is required by state law. He has failed to respond.

    We recall another instance of Mr. McRoy orchestrating an illegal series of meetings that turned into what is euphemistically called "Chickengate." That imbroglio, to cover Mr. McRoy's and Mr. Langley's liability, cost the taxpayers over six million dollars when they pushed through a deal to avoid the superintendent and/or school board members suing them for improper, and potentially illegal, use of their position for personal benefit. The real reason all that happened was because it was done under the table/behind closed doors. We have to believe the reason both Mr. McRoy and Mr. Klemm are not any more transparent with the EDC/Committee of 100 business than they have been is because they know something they don't want to be made public. Otherwise, why would they not want the records and why would they not insist the information be public? We have to believe there is a connection between Mr. Thompson's failure to file the proper accounting and his getting out of town. Did anyone see the Music Man and what he did to River City?

    We have reason to suspect that there has been an effort to hide the fact that some of the companies that have been given taxpayer money might be subject to claw back provisions. We'll have more on that later however. The question here is whether McRoy, Klemm and Langley are a party to this potential illegal cover-up. We've asked for the information and the lack of response has given us reason to suspect something nefarious has been going on.

    The real question is whether these commissioners have provided adequate oversight. Beginning to sound like a broken record is it not?

    We'll just see how successful they are in this cover-up. They should understand however that the Observer is not going to be as compliant in this cover-up as the other local media was with Chickengate, or the Hospital debacle.

    Stay tuned.