Those in charge of an economic development partnership serving northeastern North Carolina had some curious ideas about their responsibilities for public money, according to the State Auditor's Office. Hundreds of thousands of dollars were spent on bonuses, consultants and generous pay for staff.
It's no surprise that State Auditor Les Merritt reckons there will be audits of six other regional partnerships. That's a prudent course, and Merritt's office is due credit for watchdogging the public purse and not being afraid to bite.
This audit is a thorough one, and what it reveals is a disgrace.
There seemed to be little accountability and some downright strange spending here, as described in a report by The News & Observer's Dan Kane. That's disturbing, given that the Northeast Partnership, part of the Northeastern North Carolina Regional Economic Development Commission, has collected more than $4 million from the taxpayers in the last three years. It's supposed to promote economic development in a 16-county area in that corner of the state.
Consider: the partnership's former president, Rick Watson, according to the audit was seeking to work for a private project aiming to put an entertainment complex near Roanoke Rapids, while he was still running the partnership. The audit said he had a conflict of interest. (He resigned from the partnership job last month.)
Watson received a total of $240,000 in bonuses during the last three years, including nearly $100,000 last year alone. During that period, over $500,000 had been given in bonuses to partnership employees. And the state Department of Commerce is looking into the fact that three department employees got $66,000 in bonuses, though they weren't supervised by the partnership.
And then there's Meredith Norris. Norris, former unpaid political director for House Speaker Jim Black, is a figure in investigations pertaining to the start of the state lottery, as is Black himself, and she was an active and successful lobbyist after leaving Black's staff. It turns out that Norris had a public relations contract with the partnership. Officials there say the contract amounted to $24,000, but they have no documentation as to what she did to earn the money. Black, by the way, helped get $500,000 in state money for that entertainment complex.
Kane also reported that the audit calls into question $890,000 in consultant contracts that were a little loosey-goosey in terms of oversight. The partnership's interim head, Vann Rogerson, said boards supervising the group are working on oversight issues. "My charge is to go forward," he said.
No so fast. Maybe the charge to lawmakers should be, hit the expenditure brakes until the problems exposed by the audit are fixed for certain. And while it may be that other partnerships have been more conservative with spending public money, they need a good look, too.
Marc Basnight, president pro tem of the state Senate and a northeasterner himself (he's a Dare County Democrat), says lawmakers will fix this. That's stating an obvious need, but it's also important that an independent investigation -- which should start immediately -- look into what role, if any, political connections may have played here. In addition, it may be that some of the money spent on bonuses should be returned, given that there's been an embarrassing pittance of accountability up to now.
The state, through these partnerships, is engaged in aggressive pursuit of new industry, and that task is one requiring a variety of skills in those who lead the organizations. But when state money is involved, the means as well as the ends are important. This audit demonstrates a woeful neglect of guardianship of the public's dollars and the mission they were supposed to help accomplish.