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NC Finishes Privatizing Part Of Commerce Department


The private board that's taking over job recruitment for the North Carolina Commerce Department meets Thursday. The state legislature recently finalized the basic rules for the board, and Governor Pat McCrory signed them into law this week.

McCrory has been pushing to privatize the state's job recruitment efforts since he got into office more than a year ago.

State Secretary of Commerce Sharon Decker said the change will allow the state to be much more aggressive in how it goes after businesses.

“The landscape is much more competitive, and I just began to understand that we can simply not move quickly enough or proactively enough to stay ahead of our competition,” she said.

Decker said the private side of the public-private partnership will have less red tape to deal with when it comes to traveling, entertaining clients and marketing to businesses.  

She said it'll also be relatively small and nimble.

“Of the nearly 2,000 Commerce employees in all the divisions that we have, this really will only be around 70 employees,” she said. “It's only the sales and marketing functions of the state.”

Those employees will be under the State Ethics Act. That's because the General Assembly ultimately went with the House version of the rules, which included stricter ethics requirements than the Senate version.

Greg LeRoy calls it the lesser of two evils. He's the executive director of a left-leaning Washington think tank called Good Jobs First.

“The House version certainly suggests that some people were taking lessons from other states that have had so many ethics and conflict problems with privatized state economic development agencies,” he said.

LeRoy studied eight or so states that have privatized job recruitment and found examples of conflicts of interests with incentives deals and dubious job creation numbers.

He said North Carolina's rules don't go far enough, for example, in preventing conflicts of interests for people serving on the private board.

“Will those private sector members be big political donors?” he asked. “Will they be companies seeking deals from the state in the future? Those are all problems we see in other states.”

But Commerce Secretary Decker is confident North Carolina's conflict of interest policies do go far enough.

“The board members as well as employees making over $60,000 have to disclose a state economic form that basically shares their personal financial information, so you know what they have holding in and what companies they're part of,” she said.

And Decker pointed out that the private board won't pull the trigger on incentives. It'll make recommendations to the Commerce Department, and state leaders will still have the final say.

The private board will start making offers to employees and picking out office space over the next few weeks.