Warren Smith responds to Al Klemm on economic development | Eastern North Carolina Now

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

    Beaufort County Commissioner Al Klemm touts himself as Beaufort County's economic development commissioner. He recent wrote a letter to the County Compass which we printed in the December 13 edition as a Guest Commentary. Click here to read that.

    In response, Warren Smith wrote the following:

To the Editor, (December 14, 2012)

    Your paper published a letter from Beaufort County Commissioner Al Klemm, which appeared during the week of December 13, 2012 and made specific reference to me and my request that Mr. Klemm resign from the Economic Development Commission (EDC) due to that organization's abysmal list of failures under his leadership.

    I would like to speak to Mr. Klemm's doubts on my experience in public sector economic development. I have no such experience; rather I spent forty years as an entrepreneur and private investor. While doing so I developed a small business, created jobs, served a customer base and paid my taxes. For the entire time I reinvested my profits in productive enterprises and paid for my own losses when they came my way. I have never pandered to special interests by spending taxpayer money on favored friends and I have never found it necessary to flatter politicians in exchange for taxpayer assistance.

    In regard to my opinion on continuing the economic development program in Beaufort County, although I do see it as a means of generating grants capable of recapturing the state and federal taxes, which are drawn away from our community every year, I believe that economic development needs to be conducted in an logical and transparent fashion. Under the leadership of Mr. Klemm and his associates the entire process has been secretive, inadequately researched, lacking in any documentation and of benefit to far too few.

    Concerning Mr. Klemm's recital of the specious and bloated list of successes attributable to the EDC, I am curious as to why the EDC regularly filed inconsistent and self contradictory claims regarding the jobs created, but failed to ever submit a report that was supported by specific, verifiable documentation from the NC Employment Security Commission for those jobs. While grabbing credit where little credit is due, Mr. Klemm failed to mention that the Spinrite grant was actually a grant that reduced total employment. Neither did Commissioner Klemm mention that the Carver grants, totaling over $3.0 million, resulted in claw back penalties of $500,000 paid by local taxpayers while creating only 15 jobs in five years. Over and over again the EDC's list of recipients begs the question of why were so very few so very blessed?

    The unnecessary waste of $6.5 million squandered on ill conceived industrial parks and the $1.5 million in salary paid to an economic developer who for 10 years would not even move his residence to Beaufort County along with the catastrophe represented by the $1.5 million lost on the Quick Start II building are still entirely unappreciated by Mr. Klemm. The great tragedy, according to Mr. Klemm, is not that he encouraged taxpayers to pour over $10 million down a rat hole at the EDC, but rather that voters do not appreciate him and would like to see him defeated in the 2014 election.

    At the May 2012 meeting of Beaufort County's board of commissioners there was unanimous agreement that the EDC had become an embarrassment and was in need of a complete "do over", yet as of today the same discredited leadership is in control of the same error prone organization. I personally do not care about Al's bruised ego or his dreams of becoming a perpetually reelected commissioner for life. He has proved to be a miserable failure at pretending to be a wealth creator and needs to step down as part of the promised clean up at the EDC.

    Regards,

    Warren Smith
     Beaufort County, NC


    Commentary

    We think Mr. Smith has, once again, hit the nail on the head. The issue is not whether Beaufort County needs economic development or not but rather whether the taxpayers have gotten their money's worth from the past economic development program Mr. Klemm has played a key role in. Clearly we have not.

    We say that based purely on what Mr. Klemm says. He has no evidence that the economic activity he touts as having happened was the result of the county's economic development program. We would contend that he can honestly take credit only for what happened that would not have happened had it not been for the expenditure of over ten million dollars of taxpayer money.

    Al is like the rooster who credits himself with the sunrise.

    If Mr. Klemm is going to use the disingenuous thinking that anything good that happened in Beaufort County then he must also account for why the bad should not be blamed on his economic development strategies. We won't play his game by arguing that the county's economic development program is the reason for the high unemployment and lost businesses because that is not honest. But it is equally dishonest for him to claim credit where no credit is due.

    We challenge Mr. Klemm to produce documentation that the things he brags about would not have happened regardless of the county's economic development expenditures. In fact, the law that requires the EDC to make an annual report of its activities is predicated on that concept. No such documentation has ever been provided the taxpayers of Beaufort County by the EDC. And what has been reported has been soundly debunked as bogus. Valid accounting is long overdue and Mr. Klemm bears the responsibility that such accountability takes place going forward. We offer him our facilities to publish such documentation, as opposed to the unsubstantiated claims as he made in the article linked above.

    And while we are on the subject, we think Mr. Klemm has a compelling duty to explain to the taxpayers why the ten million dollars he presided over would not have been better spent on other strategies to encourage economic development and growth. Just consider, for example, what might have happened had the county supported small business with that ten million dollars, such as a revolving loan guarantee program to help any business--not just Mr. Klemm's chosen buddies such as his previous employer--grow and develop. Or what if that money had been spent on workforce development? The opportunity costs of Beaufort's economic development strategy we suspect dwarfs the ten million in give-aways Mr. Klemm has presided over.

    We suspect Mr. Klemm and his cronies will immediately react to that challenge by seeking to buttress his attempt to take credit for any economic growth and development within site. But that's really not the most important thing. The real question is what the multitude of businesses and consumers in Beaufort County could have done with that ten million dollars if Mr. Klemm and his Gang of Five had not sucked it out of the private economy converted it to government largesse. Clearly the county did not make much productive use of what it confiscated from the taxpayers. But we bet many small businesses in the county could have and would have put it to good use. The really sad thing about Mr. Klemm's thinking is that he has never, to our knowledge, expressed any awareness that before government can give money to one business or organization, it must first take it way from others. The opportunity costs of Beaufort County economic development program are indeed staggering and Mr. Klemm should account for them.

    It is encouraging that Mr. Klemm is willing to participate in a debate about economic development. That is long overdue. Too much has been done behind closed doors. We will look forward to hearing from Mr. Klemm in his substantiating what he wrote in the Compass.

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