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Lawmakers consider ethics’ role in state’s economic development (with correction)

Note: The version of this post has changed from the original to reflect that lawmakers approved draft legislation that placed board staff and board members of a proposed  public-private partnership under state ethics rules. The initial version incorrectly stated that just staff was covered.

Lawmakers are leaning towards bringing staff and board of North Carolina’s public-private economic development group under state ethics rules.

Members of the Joint Legislative Economic Development and Global Engagement Oversight Committee discussed draft legislation yesterday that would bring staff and the board of the economic development partnership under state ethics rules, as well as state rules for travel and expenses.

Changes to that are more than possible with the state legislature not convening until May when it will consider, among many other things, what the new economic development group will look like.

(For background, click here to read a past Policy Watch article about the currently absent ethics rules.)

The public-private partnership proposed as a central piece of Republican Gov. Pat McCrory’s economic strategy would shift business recruiting and marketing responsibilities from the state commerce agency to a new quasi-public group. The public-private model for economic development has only been used in a handful of other states, with mixed results and issues in some places with conflicts of interest and transparency.

The partnership itself has been operating in a provisional mode, after legislation failed to pass last year that would have formally established the group.

As the Raleigh TV station WRAL reported yesterday, the suggestions to bring the partnership staff and board members under ethics rules as well as state guidelines for travel and expenses wasn’t warmly embraced by Commerce officials.

“The objective here is nimbleness, speed of movement, the ability to take action and to market the state effectively,” said Commerce Secretary Sharon Decker, according to WRAL. “I’m looking at all of the legislation with that lens. So, I’ve got concerns about legislation that might be preventive.”

 

You can read more about yesterday’s meeting here and here.

N.C. Policy Watch’s Chris Fitzsimon wrote today about why bringing the whole partnership, board and all, under ethics rule might be a good idea in his  weekly “Friday Follies” commentary.

Sen. Brent Jackson asked at a committee meeting this week if the new nonprofit would be subject to the State Ethics Act. The CEO of the private nonprofit, Richard Lindenmuth, said that issue was still under negotiation and that he didn’t think any of the people involved with the new organization “intend to be less that truly ethical.”

That’s reassuring. Lindenmuth himself is working under a personal services contract and therefore does not have to disclose his own financial interests under the ethics act—which is absurd. If he wants to be “truly ethical,” he should file the statement on his own before he starts putting together deals to give taxpayer money to private corporations.

The board should be covered too. If that causes too many problems, maybe that’s a sign that privatizing economic development isn’t such a good idea in the first place.

And for those wondering who is on the board now for the N.C. Economic Development Partnership now, here’s a list of interim members:

  • John Lassiter, chair, of Charlotte. Owns Carolina Legal Staffing and, until recently, headed the Renew North Carolina Foundation, an advocacy group that promotes McCrory’s policies.
  • Jim Whitehurst, vice-chair. C.E.O. of Raleigh-based Red Hat, open-source technology company in Raleigh.
  • Pat Corso, of Pinehurst. Director of Moore County Partners in Progress, former president of Pinehurst Resorts.
  • John Kane, of Raleigh. Developer and C.E.O. of Kane Realty Corporation.
  • Tom Looney, of Raleigh. Vice-president of computer company Lenovo’s North American operations

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