North Carolina’s newly privatized economic development group may create a business advisory board with seats designated as rewards for private funders, board members said during a meeting Friday.
The Economic Development Partnership of North Carolina gets most of its funding from state taxpayers, but members of an advisory board could draw its membership from its private funders, said Jim Whitehurst, the CEO of Red Hat and a member of the public-private partnership.
At Friday’s meeting, Whitehurst said the structure of the business advisory board wasn’t finalized, but he envisioned 20 members from a variety of industries and areas of the state. He said the advisory board would be designed in conjunction with the group’s fundraising plan.
Several seats on the advisory council may go to those who donate to the private arm of the partnership, Whitehurst said, in response to a reporter’s questions after the open portion of Friday’s meeting.
“There may be a few seats for people that are large contributors,” Whitehurst said.
The Economic Development Partnership of North Carolina opened last October, when the state’s business recruitment, tourism and marketing functions were moved out of the state Commerce Department to the newly formed private non-profit.
Lawmakers, when they authorized the move, held the group subject to open meeting and public records laws, and members of the partnership’s board also must adhere to the state ethics law.
The general public is the biggest backer of the partnership, with more than $16 million in public dollars funding the venture.
The partnership has been a key focus of Gov. Pat McCrory’s jobs platform, and he has said the privatized structure will allow the state to pursue jobs leads without being encumbered by state government regulations. Final decisions about tax or other incentives will rest with the state Commerce Secretary.
But skeptics of the move to a public-private partnership have said moving the public dollars into a separate entity may create barriers to accountability.
The privatized setup has had mixed results in other states, and some have seen pay-to-play scandals erupt.
When asked if carving out seats on an advisory board for major funders could give the appearance of a “pay-to-play” culture, Whitehurst said he didn’t think it would. The board would be advisory in nature and funders weren’t being given seats on the larger economic development partnership board that makes decisions, he said.
People “want to have a role in the organization they are funding,” Whitehurst said.
He said he hadn’t considered whether any seats on the advisory board should be offered to members of the general public.
The privatized group has raised $819,500 to date, according to figures provided at the economic development group’s board meeting Friday. It will need to raise a total of $1 million by October to meet targets set by lawmakers , including $250,000 in private funds it needed to start.
That includes an additional $400,000 that have come in since last fall from private funders, with money coming in from companies like MetLife, Bank of American and Wells Fargo.
MetLife, which is in line to receive up to $87.3 million in state incentives for bringing 2,600 positions to Charlotte and Cary, gave $100,000 to the economic development partnership.
The group is also considering in-kind contributes, like a $42,000 worth of computers and technology work provided by Lenovo, to meet their fundraising requirements, according to a summary sheet of donations handed out at the partnership meeting Friday.
Christopher Chung, the new CEO of the economic development partnership, is expected to be at the state legislature Wednesday at the House Commerce Committee.