In a move described to lawmakers as “streamlining,” the House budget for commerce would eliminate the position of assistant secretary of commerce for community services. That job now is held by Henry C. McKoy, who is embroiled in a controversy over an attempted diversion of federal funds to a nonprofit he controlled.
The budget (552 kb download) was presented this morning to members of the House Subcommittee on Natural and Economic Resources.
Carolina Journal Online initially reported April 5 on a plan McKoy launched in November that would have directed more than $2 million in federal funds to the North Carolina Sustainability Center, a small Raleigh-based nonprofit organization that he chaired last year. The organization, whose only address is a postal box in a Raleigh UPS Store, appeared largely to have been dormant for the past two years.
McKoy failed to disclose his association with the center on statements of economic interest he filed when serving on the state Economic Development Board, and in 2010, when he took his current job at Commerce. Failure to disclose such affiliations is a misdemeanor.
After CJ Online’s initial story appeared, the News & Observer followed the next day with a story in which McKoy said that he had been asked to resign by Commerce Secretary Keith Crisco and refused.
Commerce spokesman Tim Crowley has told Carolina Journal that McKoy’s project was not funded and has refused to allow interviews with McKoy, Crisco, or other Commerce officials on the matter.
Last year’s long session of the General Assembly approved $33.3 million in spending for the Department of Commerce (under the control of this subcommittee) for the 2012-13 fiscal year. The House chose to boost the budget by $16.2 million overall — but axed McKoy’s job and its $129,228 salary.
Rep. Angela Bryant, D-Nash, asked why the position was targeted for elimination. Committee staff said the Department of Commerce has more assistant secretaries than any other executive branch department, and that eliminating the position would allow services to be delivered more efficiently.
The budget line (item 53, PDF) states that “[e]mployees in this division will now report to the Assistant Secretary for Energy, which will be retitled to be the Assistant Secretary for Energy and Community Assistance.” McKoy currently supervises approximately 90 employees.
The budget measure passed the subcommittee and will head to the House floor.
Rick Henderson is managing editor of Carolina Journal.
Editor’s note: This story was edited after publication to indicate that the budget adjustment was for commerce rather than agriculture and consumer services, as originally reported.