News: CJ Exclusives

Commerce ‘Sustainability’ Official Still On Job

In rambling memo to Commerce employees, McKoy promises to answer all questions

Nearly two weeks after N.C. Secretary of Commerce Keith Crisco asked Assistant Secretary Henry C. McKoy to resign over issues involving the attempted diversion of $2 million in government funds to a nonprofit organization he had controlled, McKoy is still on the job.

McKoy indirectly addressed the controversy — reported April 5 and April 12 in Carolina Journal Online and April 6 in The News & Observer — by way of a meandering, 4,000-word memo (PDF download) sent to Commerce employees Tuesday. Not only did McKoy give no indication that he planned to leave; he did not acknowledge that Crisco asked for his resignation. Moreover, McKoy insisted that he and Crisco would answer questions from Commerce employees during a conference call with staff sometime next week. “I have nothing to hide,” McKoy said in the memo, “so I am happy to answer anything from anybody.”

To date, however, McKoy has not responded to numerous phone messages and emails left by Carolina Journal. And Commerce spokesman Tim Crowley has provided incomplete and sometimes unresponsive answers to questions from CJ about McKoy’s employment status and the program McKoy and Crisco were attempting to manage through Commerce using the North Carolina Sustainability Center as a conduit. McKoy’s only contact with media since the initial CJ Online story was published has been a phone conversation with N&O reporter John B. Frank.

In the memo, McKoy claimed the CJ Online stories were untrue, but did not refute the details in them, and confirmed several — as when he acknowledged “failing to list the non-profit on my SEI [statement of economic interest] form” filed with the state when he served on the state Economic Development Board and after he began working at Commerce. It is a Class 1 misdemeanor “to knowingly conceal or fail to disclose required information” on the form. McKoy was serving on the NCSC board as chairman during 2010 and at least through July 8, 2011 — nearly a year after he began his current position with Commerce.

McKoy also denied that he, or any family member, would gain any financial benefit from the diversion of federal Community Development Block Grant funding to the sustainability center, though the CJ Online stories did not make that assertion.

The memo is interspersed with anecdotes that have no connection to the sustainability center project, which he described only in general terms as “great.” He said it “was to be the first time in the history of the state that every community, down to the smallest one, could have access to some level of funding for capacity building regularly that would make them more competitive in the short and long-run,” but did not explain what that meant.

Rather than use the space to detail the project, he discussed, among other things, a robbery at his home, the sermon at his church last Sunday, his workout routine, and his shower habits:

“Every single Sunday — rain, sleet, snow, or hail — unless it is just impossible to do so because I am away, I start out the morning doing two things. I wake up early Sunday morning and I do a 10-mile run — sometimes more depending on how early I awake. I then return home, shower and get dressed, sometimes eat breakfast, and then I drive my family and I to church.” He then “can conquer the world and anything that comes at me,” because he has “spiritual fitness” and “physical fitness.”

McKoy completed the memo describing the planned conference call with Crisco, where they — perhaps along with Deputy Commerce Secretary Dale Carroll — will answer all questions.

The sustainability project

CJ Online’s initial report described how McKoy launched a plan in November to direct more than $2 million in federal funds to the sustainability center, a small Raleigh-based nonprofit organization that he chaired last year. The money would be a windfall for an organization that appears largely to have been dormant for the past two years.

Under McKoy’s plan, Buncombe, Edgecombe, Orange, and Yadkin counties would receive funds for a “Community Capacity Building Program.” Each county would receive $600,000 and could retain 10 percent for handling the grant. Each county then would be required to turn over the remaining $540,000 to NCSC for planning and research activities.

McKoy sought Crisco’s approval for the plan in January, but Crisco never went along. In a Wednesday email Crowley said, “the proposal was never approved and no money was disbursed.” Exactly why Crisco turned down the project is not clear. CJ has made numerous requests to Commerce for all the public records related to McKoy’s project; so far, Commerce has turned over McKoy’s cell phone records but no other records.

McKoy failed to note his affiliation with the NCSC on statements of economic interest covering the years 2010 and 2011.

McKoy told the N&O that Crisco asked him to resign after the first CJ Online story was published, but McKoy said he declined. The N&O also reported that Crisco and other top officials of Gov. Bev Perdue’s administration were involved with the nonprofit.

CJ asked Crowley Wednesday to explain Crisco’s position on McKoy’s job status, what legislative authority Commerce has claimed to establish a nonprofit to distribute federal funds under this plan, and whether Crowley, Crisco, or anyone else at Commerce approved McKoy’s memo before it went out. Crowley has not responded to those questions.

Don Carrington is executive editor of Carolina Journal.