If you want to save our County Commissioners from themselves maybe you should consider voting for Pat McCrory | Eastern North Carolina Now

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

The Commissioners have no accountability system for their corporate welfare, and refused last week to establish one.

    Julie Rose, with WFAR, the NPR station in Charlotte, is reporting:

    Gubernatorial candidates Pat McCrory and Walter Dalton addressed the role of economic incentives in attracting new jobs to North Carolina during their first debate Wednesday night. Democratic Lieutenant Governor Dalton says he doesn't like giving tax breaks and cash to lure businesses, but we have to offer incentives since other states do.

    "We have to have an incentive package," says Dalton. "The key is to make sure our incentives are competitive with other states and the best incentive in North Carolina is our workforce, our people and the strength of our community college system that does great workforce training."

    Republican former Charlotte Mayor McCrory agrees the state needs to offer economic incentives, but opposes the recent trend of offering cash to companies upfront, as was done to bring Chiquita to Charlotte.

    "When we offer upfront cash to new businesses to come at the same time we're taxing existing businesses to help pay for those incentives, we're sending a mixed signal to existing businesses that have already invested in North Carolina," says McCrory. "That's not a sustainable economic development policy."

    McCrory says lowering corporate taxes is a better approach to competing with neighboring states like Georgia, South Carolina and Virginia that have beat out North Carolina for some large new business opportunities.

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    Commentary

    Clearly this debate between the two major gubernatorial candidates has significant implications for Beaufort County. The county is currently wrangling with what strategy it will use in the future to promote economic development. The strategy used for the past decade has relied almost exclusively on subsidizing select businesses with incentive grants. Corporate welfare we have called it. Now it appears that if Pat McCrory wins the governorship that those days will be gone. So what is the county to do then?

    What the future strategy remains to be seen, one thing is clear. If incentives are done away with there will be less possibility for "insider conflicts of interests."

    One of the issues related to incentives is that of a potential for a conflict of interest to exist between the recipients of incentives and those involved in giving the grants. Closely associated therewith is the issue of who know about the deals before they became public? The issue was raised in the October 1, 2012 County Commissioners' meeting. Let's take Jay McRoy as an example. McRoy sits on the EDC board and thus is privy to inside information. McRoy himself is reported to have business dealings with clients of his that benefit from these incentives, either directly or indirectly. We don't know if those reports are true or not. But what we do know is that when we attempted to investigate the tips we found that Mr. McRoy has never filed an ethics disclosure statement of any kind that discloses his business connections. So it is impossible to determine if any of the recipients of economic development activity were his clients or connected to his clients. The Beaufort Observer has and is investigating such connections but has learned that they are hidden--covered-up. For example, Mr. McRoy has never filed an Ethics Disclosure statement revealing who his clients are with whom he is associated through his CPA work. Then the EDC has never required the grant recipients to file disclosure statements nor has it required its members to file such statements, as is required by state law.

    Let's make that simple for Mr. McRoy. What we have is a county commissioner who is a CPA and does work for a number of local businesses. He does not disclose who those clients are. The people who sit on the EDC and Committee of 100 board that approved these incentives (which includes Commissioners McRoy and Al Klemm) have never filed ethics disclosure statements. The people who get the money have never filed disclosure statements, even though they are required by state law. So who's to know whether there is an actual versus perceived conflict of interest or if everything is legitimate?

    Don't miss the significance of what we just reported. The important fact is that there are NO ethics disclosures and not once has anyone recused themselves from any of the "give away" deals. Now consider that. What do you think the actual possibility that no conflicts of interest have ever been involved? If you believe none, contact us. We have a bridge you'll just love the deal we can make you.

    Mr. Klemm is a former employee of National Spinning, one of the companies getting incentive grants. Yet he has never filed a disclosure statement indicating whether he still has a vested interest in National Spinning. Obviously he has a "special" relationship with National Spinning as a former employee. But we do not know if he collects a pension from the company, owns stock in it or some other way benefits from National Spinning.

    And Mr. McRoy also knows about the Coeur incentive grant. A sitting legislator, Arthur Williams, owned the real estate that he sold to the Committee of 100 which paid for the property with money from incentive grants. Yet as a County Commissioner, Mr. McRoy failed to contest that action. Did he know about it, or did he not? What did he know and when did he know it? The answer under this Good Ole Boy system is that we don't know because nothing is ever disclosed.

    Then there was the sewer line project that benefitted a company of a sitting "insider" on the Committee of 100. Mr. McRoy knew about that deal also, as did Mr. Klemm. Yet neither McRoy nor Klemm insisted on full disclosure.

    The point we are making is not to say that either Mr. McRoy or Mr. Klemm have violated any laws or ethics standards. We can't say that any more than they can say, based on disclosure statements, that they have not. And that's the point. The connections and relationships are hidden.

    The issue here is not "examples" of insiders who have been involved in engineering these incentives. The issue is disclosure. Full, fair and honest disclosure. And under Mr. McRoy and Mr. Klemm's tenure representing the county on the EDC the file shows that not one disclosure has ever been filed, as required by law.

    At the October 1 meeting Mr. McRoy also challenged Mr. Richardson to name an example of a contract that the Commissioners had not approved. But he knows that the Board of Commissioners has approved numerous incentive deals without ever approving the contracts. In fact they routinely approve deals without seeing the actual contract before they approve the deal. Granted, the board has approved the idea of the grants, but they have not approved the actual contracts in a number of cases. If Mr. McRoy wants examples he need only do what we did: Ask the County Manager to see a copy. We were told when we asked to see the contracts that they did not exist in the Manager's Office but rather in the EDC Director's Office. So we asked to see them. Months later we had to threaten to file suit to see them. When copies were furnished us they had no signatures on them.

    For example, Mr. McRoy, the Coeur contract does not show that it was ever approved by the Board of Commissioners. Not the "idea" of applying for the grant, but rather the contract itself.

    So we would ask Mr. McRoy: Can you tells us you actually saw ANY contracts before you voted to approve the deal. If so tell us which contracts these were. Tell us how you vetted the players involved if there are no ethics disclosure statements.

    In fact, the way the county has operated on these incentive deals is that the Board of Commissioners would meet in secret with the EDC Director who would lay out the "deal" verbally. But there are precious few records in the Board minutes of the actual contract being presented to the Board for action. In fact, again, when we ask to see the contracts we were told they did not exist in the Manager's Office.

    Finally, we will give Mr. McRoy the benefit of the doubt. We will trust he is correct, but we want to verify it. Mr. McRoy, show us the minutes in which ANY contract that was actually approved by the Board of Commissioners with the contract in hand before the deal was approved. And if they existed when we asked to see them why were they not furnished to us then? We would love to see all of these contracts and the matching minutes to determine who voted which way and especially who recused themselves from voting due to a potential conflict of interest and how the recipients were vetted.

    Perhaps Mr. McCrory will save Mr. McRoy from himself, along with the other commissioners who have failed to establish a solid accountability system for the EDC. Let us hope.