Carolina Journal News Reports
RALEIGH — A deal arranged by North Carolina's Northeast Partnership president Rick Watson to work with country musician Randy Parton is not the first case in which Watson has tried to become involved with a company that his public agency is trying to help.
Watson, who leads many variations of the partnership, has in the past sought either a personal investment stake or other benefits from the businesses he has tried to help locate in northeastern North Carolina. He currently plans to work both for the partnership and Moonlight Bandit Productions, a company owned by Parton that is building an entertainment theater in Roanoke Rapids.
According to a report in The Daily Advance of Elizabeth City on Wednesday, Watson helped draft legislation that got $500,000 in state money for the promotion of Parton's theater project. The newspaper said Watson plans to work for both the Partnership and Parton for 18 months, until he becomes fully employed by Parton. The partnership enlisted a consultant, former state attorney general and U.S. Sen. Robert Morgan of Lillington, to determine whether Watson's dual employment posed a conflict of interest. Morgan concluded that it didn't.
The partnership is one of seven regional state economic development agencies that is funded by the state. State law prohibits public funding that benefits a government employee, or a private organization that the employee is involved with. The Daily Advance reported that Morgan found no problems related to Watson's dual employment because "no public funds will be expended or benefits provided to the private entity." It isn't clear whether Morgan was aware of the $500,000 allocation for the project when he wrote his opinion.
Watson has been alleged in the past to have sought personal benefit from companies that have received help — supposed to be provided for free — from the Northeast Partnership. In 2001 and 2002 Watson proposed that biotechnology company CropTech give ownership equity to the partnership in exchange for helping the now-defunct business get financial incentives. The partnership would put up little, if any, of its own money in exchange for a significant ownership stake. The company rejected the proposal.
Carolina Journal reported two years ago that Watson and others sought a personal stake in an ethanol plant in 2002 that a Raleigh businessman wanted to build in Martin County. And in a series of articles in The Daily Advance in May 2003, officials of DataCraft Solutions alleged that partnership representatives tried to get a 15 percent stake in their company in exchange for services from their side business. The DataCraft executives claimed they were told that Watson owned 50 percent of the side business and would "close deals" for DataCraft — which would have been an apparent violation of Watson’s contract with the partnership.
Earlier this year CJ reported that Watson was an investor in a fingerprint technology company that received funding from the state's Tobacco Trust Fund, according to sources with direct knowledge of the project. Watson worked on obtaining the funds for Privaris, Inc., despite his personal financial stake in the company, creating an apparent conflict of interest.
Watson has created several nonprofit organizations, which he says are private, that are related to the original Northeastern North Carolina Regional Economic Development Commission created by the state in 1994. The first spinoff became North Carolina's Northeast Partnership, which is how it is presently identified after at least two name changes.
In addition to the Commission and the Partnership, Watson created other affiliated organizations: North Carolina's Northeast Committee of 1000; North Carolina's Northeast Economic Development Foundation; and the North Carolina's Northeast Partnership for Financing — created last November.
Watson in 2003 also changed some key provisions to the Partnership's articles of incorporation. He greatly broadened the official "purposes" of the organization to include any activities outside of economic development. He also removed the Department of Commerce as the recipient of all the Partnership's assets should it be dissolved, leaving the decision with the board of directors.
Watson also amended the articles to allow directors and officers of the Partnership to receive "reasonable compensation for services rendered…" and "reasonable expenses incurred in furtherance of the [Partnership's] business…." The changes also protected current and former directors, officers, employees and agents of the Partnership from financial expenses incurred from "actual or threatened litigation."
The broadening of the activities of the Partnership, coupled with the allowance for payments to employees, could mean that Watson, other employees, or contractors could be paid for almost anything they decide to do.
Watson in the past has cited the private nature of the organizations related to the original Northeastern Commission as reasons for not complying with public records requests.
Paul Chesser is associate editor of Carolina Journal. Contact him at email@example.com.