A farmers’ grain cooperative heavily subsidized by Golden LEAF has transferred its interest in building an ethanol plant in Beaufort County to a newly formed group of private investors, whose experience in alternative fuels is unclear.
Sam Lee, chief executive officer of the North Carolina Grain Growers’ Cooperative, told Carolina Journal that the co-op recently signed over its interest in the ethanol plant to a group of private investors. CJ later learned that the investment group was Ricky Wright and Associates in Wake Forest.
“With the new group coming in, they have the technology and the funding and they will conduct the feasibility study,” Lee said. “It will not involve the co-op or any funding from the co-op.”
Wright’s primary business is The Electric Motor Shop in Wake Forest. North Carolina’s Northeast Partnership, a state-funded economic development nonprofit, is also involved in development of the plant.
The grain growers’ co-op, which promotes the production of alternative fuels, has received five grants for a total of $1,114,250 from Golden LEAF. Golden LEAF, a nonprofit organization created by the General Assembly, is responsible for distributing half of the state’s revenues from the 1998 tobacco settlement. The foundation’s main function has been to provide funding for economic development projects around the state.
The co-op was formed in September 1999, one month before Golden LEAF was chartered. Charles Davenport, founding vice chairman of the co-op, still sits on its board of directors. His brother Lawrence is chairman of Golden LEAF. The two brothers are also partners in J. P. Davenport and Son, a Greenville-based agribusiness and farming company.
On Aug. 14, 2002 Golden LEAF officials said the nonprofit was investing $10 million in a bio-diesel plant that would be operated by the co-op. In January, co-op officials said the group also was planning to build an ethanol plant in Beaufort County, according to an edition of the online soybean industry trade publication Soyatech.com
A document obtained by CJ dated Oct. 25 detailed the transfer of the co-op’s position in the ethanol plant to Ricky Wright & Associates. The agreement provided for a continuing relationship between the co-op and Wright’s group.
“Ricky Wright & Associates will use its best efforts to partner with the North Carolina Grain Growers Cooperative, North Carolina’s Northeast Partnership and other parties to facilitate the development of bio-fuels production facilities in North Carolina’s Northeast Region. The North Carolina Grain Growers Cooperative will cooperate and participate with Ricky Wright & Associates in the development of bio-fuels production facilities,” the document said.
The document also said the “North Carolina Grain Growers’ Cooperative hereby releases its position to Ricky Wright & Associates in the development of a bio-fuel production facility in North Carolina’s Northeast Region.”
Northeast Partnership President Rick Watson said the document’s wording was not intended to allow the co-op to transfer its $10 million to Ricky Wright & Associates.
Wright said his group will develop a feasibility study and a business plan for the ethanol plant in six months and then would seek financing for the project. He said his group does not want money from the co-op, from Golden LEAF, or from any federal government source. He also said his group has no interest in a bio-diesel project.
Wright is also a political fund-raiser, mostly for Democrats. He, his wife, daughter, and son-in-law contributed a total of at least $15,000 for Dennis Wicker and Mike Easley in the 2000 Democratic gubernatorial primary and general election.
Lee told CJ that the co-op is still involved in a soybean processing operation and the related bio-diesel fuel production facility, which is expected to cost $45 million. Bio-diesel production involves a refining process that turns vegetable oil into diesel fuel.
But little progress has been made since August 2002, when the $10 million investment from Golden LEAF was announced. As of early January, the bio-diesel project did not have an organizational structure, any additional funds beyond the $10 million, or a business plan.
Don Carrington is associate publisher of Carolina Journal.