North Carolina Rural Economic Development Center Exposed Part II: Government Waste Flushed Down Rural Center

The first article of the Civitas Institute’s two-part series on the North Carolina Rural Economic Development Center highlighted its corrupt tactics and the $200,000-plus per year salary of President Billy Ray Hall. To go over all the instances of favoritism over the center’s past 26 years would be overwhelming. The following examples are from the last year alone, when the Rural Center was involved in over 800 projects.

Cronyism

The worst part about the Rural Center is the cronyism. In 2012 alone, seven members of the Rural Center’s 50 person Board of Directors either directly or indirectly received funding for projects for their own departments, businesses, colleagues, or organizations. These individuals are (with size of Rural Center grant):

  • Steven Troxler (NC Agriculture Commissioner) – $95,000
  • Keith Crisco (Commerce Secretary under Gov. Perdue, grant issued to staff) – $17,000
  • Scott Hamilton (CEO, AdvantageWest Economic Development Group) – three grants totaling $437,000
  • Andrea Harris (President, NC Institute of Minority Economic Development) – $75,000
  • Lenora Jarvis-Mackey (CEO, River City Community Development Corp.) – two grants totaling $115,000
  • Howard Jones (CEO, Opportunities Industrialization Center of Wilson) – two grants totaling $435,000
  • Mikki Sager (VP, Conservation Fund) — $25,000

Total funding listed above: $1.2 million

The two most disturbing grants listed above are the ones to Agriculture Commissioner Steven Troxler and to a staff person of former Commerce Secretary Keith Crisco. Troxler is an elected official and has been Agriculture Commissioner for the past eight years. In addition to the Rural Center, he is on the board of the Foundation for Soil and Water Conservation and the Biotechnology Center, other wasteful non-profits.

Crisco was appointed Commerce Secretary in 2009. Strangely enough, the Governor’s Office, responsible for appointing Crisco, received $20,000 from the Rural Center to explore sources of renewable energy.

Astoundingly, it is not illegal for a government official to coax the government into giving tax dollars to a private firm, then sit on its Board of Directors and receive money from it. North Carolinians should be outraged. Can you say, “conflict of interest?”

Dollars Down the Drain

Tax dollars aren’t the only kind of waste flowing through the Rural Center. Of the over 800 projects the Rural Center helped to fund last year, more than 35 percent were water and sewer projects. But the Rural Center’s grants account for only a small portion of total funding for water and sewer projects. For instance, a pending grant to the Tuckaseigee Water and Sewer Authority in Jackson County accounts for only 6 percent of total funding for the $14 million project. The rest comes from federal or local government.

Indeed, according to a 2008 report by the North Carolina General Assembly’s Program Evaluation Division there are 12 different entities active in statewide funding efforts for water and sewer infrastructure – in addition to local government’s efforts. These include federal programs, various state agencies, and other non-profit organizations. Such redundancy in water and sewer funding sources led the report to conclude that “water and wastewater funding is provided in a complex and fragmented manner” in North Carolina. Among the report’s recommendations were that North Carolina should rely “less on grants when determining state appropriations for water and wastewater infrastructure.” Translation: the state’s water and sewer needs may be better taken care of without the Rural Center further cluttering the process. Here are some of the entities and programs involved in any given Rural Center project: USDA, DENR, ARC, CWMTF, IDF, CDBG, STAG, COG, CDC. What does all this stand for? MDD — Money Down the Drain. That’s what happens when a horde of agencies gets involved in the sewer and water projects the Rural Center gets involved with.

As anyone who has ever remodeled a bathroom or fixed a toilet will know, the science of plumbing is certainly a tricky skill to master. But surely it should not take a web of bureaucracy along with federal, state, and local governments to extend a sewer line a few hundred yards to a new business.

If the tax dollars were kept in local communities to begin with, the Rural Center’s small grants would be obsolete. Keeping local dollars in the hands of local representatives is the best way to clean up the Rural Center’s waste of time and tax money.

Going Green

Besides sewer and water, Rural Center funding favors the so-called green agenda. These projects include biofuels, wind energy, solar power, and environmentalist education programs. If a green economy is necessary, then businesses will strive to meet consumers’ needs for environmentally-friendly products. But forcing people to fund programs they do not agree with, especially when they involve something as controversial as green energy, is reprehensible.

Looking Out for the Little Guy?

While the center proclaims itself to be the ally of small businesses, its grants often favor large corporations who compete with local farmers and small retail shops. Major companies who benefited from Rural Center grants last year include Wal-Mart, Hampton Inn & Suites, Subway, Ace Hardware, Ford, Caterpillar, Sears, and Wendy’s. So much for looking out for the little guy!

In addition, funding to local cities and counties accounted for 75 percent of all Rural Center grantees last year. In essence, the state diverts money away from local communities and siphons it through the Rural Center to give a small portion of it back to local communities. Meanwhile, the runoff of salaries to state and Rural Center employees floods bureaucrats’ bank accounts while drying up rural communities.

Conclusion

The Rural Center is a prime example of unnecessary government cronyism at its worst. It has empowered a group of unelected, unaccountable bureaucrats with hundreds of millions of taxpayer dollars. Much of their activity is either redundant, wasteful or appears to benefit its own board members.

Its high time state lawmakers consider sparing taxpayers from having to continue funding this highly questionable organization.

This article was posted in Corruption & Ethics by Rhett Forman on June 18, 2013 at 3:32 PM.

© 2011 The Civitas Institute. Visit us on the web at www.nccivitas.org.
This article can be found at http://www.nccivitas.org/2013/rural-center-exposed-ii-govt-waste-flushed/

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