The General Assembly in the waning days of the short session last week passed legislation that purports to hold the state’s seven regional economic development agencies more accountable.
But the bill, sponsored by Sen. David Weinstein, D-Lumberton, replaced a bill that he introduced in May that would have ended the practice of the agencies contracting with outside nonprofit organizations to “carry out their powers and duties.”
The legislation that was approved by legislators awaits Gov. Mike Easley’s signature, but includes no such provision. Current law allows the agencies to use outside nonprofits, which the N.C. Northeastern Economic Development Commission exploited by creating the N.C. Northeast Partnership to carry out its duties during the past 12 years.
Had Weinstein’s initial legislation passed, it would have banished the practice of contracting with outside organizations to do the agencies’ work. He did not return a phone message seeking comment by publication time.
Northeast Partnership officials, including former President Rick Watson and Vice President Vann Rogerson, had claimed the partnership was a private organization and therefore not subject to the state’s public records laws. The partnership received nearly all of the commission’s annual appropriations from the state, and then shielded details about its activities from the public.
In April, State Auditor Les Merritt released a report on the activities of the partnership and commission, alleging that both organizations’ directors “relinquished too much authority” and insufficiently exercised “their fiduciary responsibilities.”
The audit found that Watson had a conflict of interest in working for the two economic development agencies while planning future employment with one of his clients, the Randy Parton Theater and Carolina Crossroads Entertainment District Project.
Auditors also found “significant” bonuses were paid to Watson and other employees, including some who work in the partnership’s offices for the state Department of Commerce. The report said no predetermined, documented criteria served as a basis for the payments, which totaled $572,000 over a three-year period.
Weinstein’s initial bill would have required all the regional commissions to be subject to the state’s Public Records Law and Open Meetings Law as a condition for receiving state funds. Also, each agency would have been required to create and implement a written conflict-of-interest and ethics policy, to be approved by the N.C. Board of Ethics. Compensation and leave policies for agency employees would also have to be aligned with similar laws that address all state employees.
The legislation that did pass requires all seven regional economic development agencies to report their activities and accomplishments, and to provide an itemized list of expenditures of state funds, as a condition for receiving its annual appropriations. It also requires the establishment of uniform standards for all the agencies related to accounting procedures, personnel practices, and purchasing and contracts procedures. Board members of all the commissions would be required to receive training on their duties and responsibilities, and ethical behavior.
Paul Chesser ([email protected]) is associate editor of Carolina Journal.