Cooper may quietly have lost influence over NC business recruiter
Posted December 20, 2016
Updated December 21, 2016
Raleigh, N.C. — Gov.-elect Roy Cooper will find it harder to put his stamp on the state's economic development efforts after a nonprofit corporation that serves as North Carolina's lead corporate recruiter changed its bylaws on Friday.
The move by the Economic Development Partnership of North Carolina appears to echo a move last week by the Republican-controlled General Assembly to curtail how much Cooper, a Democrat, could remake state government once he takes office.
The sitting governor appoints nine of 17 members to the Economic Development Partnership's board. The remaining seats are appointed by the House speaker and Senate president pro tem.
Until last week, Cooper would have been able to remove any of the members appointed by outgoing Republican Gov. Pat McCrory "at any time with or without cause," according to bylaws drafted in 2014. Under the bylaws approved last week, Cooper will be able to remove members only for "misfeasance, malfeasance, and nonfeasance." Other than that, Cooper will have to keep board members appointed by McCrory until their terms expire or they resign.
Bob Sar, a lawyer for the board, said the bylaws change merely "harmonizes the EDPNC board of directors with all the other state boards and commissions. ... To me, it adopts the status quo." Other state boards and commissions, he said, allow their members to serve out their full terms after a change in the Executive Mansion or at the legislature.
However, the partnership is not a state board; it is an independent nonprofit that works under contract for the state. Although its members are appointed by state officials, neither the partnership's board nor its staff are state employees, and the group was specifically designed to avoid some of the constraints placed on state agencies.
The board passed its bylaws change the same day lawmakers wrapped up a special session that stripped Cooper of many of the appointment powers enjoyed by McCrory. Cooper objected to those legislative changes as "ominous," but Ken Eudy, a top adviser to the incoming governor, was more circumspect regarding the EDP's changes.
"We have legal counsel reviewing them," Eudy said.
Before McCrory took office, the state's economic recruiting efforts were run entirely through the North Carolina Department of Commerce. But McCrory said the government recruiting arm was too bureaucratic and slow to react to new opportunities. So, in 2013 and 2014, McCrory and lawmakers developed a new framework under which a nonprofit corporation would be the lead recruiter for the state, while the Commerce Department would still handle incentive grants and a handful of other jobs.
The nonprofit is also designed to raise money from companies with an interest in economic development to augment stipends from the state, and it is exempt from many of the public records rules that apply to regular state agencies.
During the fall campaign, Cooper said he wasn't inclined to scrap the partnership entirely, but he said he would want to make changes so that it worked better. Making those changes may prove difficult if he's not able to work with the nonprofit's board.
Of the governor's current appointees, two of their terms expire in 2017, four expire in 2018 and three expire in 2020. One of those with two years left on their terms is John Lassiter, a longtime friend and supporter of McCrory, while Mark Bellissimo, managing partner of Tryon Equestrian Partnership and a McCrory donor who a hosted a fundraiser for him, has four years left on his term.
It's unclear if Cooper would necessarily want to clean house entirely. Some members appear to be less tied politically to McCrory and represent technology economy companies such as Red Hat and Lenovo.
Sar said the board's new structure is designed to ensure continuity and consistent leadership.
"You will never be in a position where the entirety of the board or a majority of the board would be removed overnight," Sar said.
While the board appears to be insulated from the influence of the new governor, Cooper could exert influence to get rid of members with whom he differs. For example, the partnership's contract with the state expires after five years, and the sitting governor has the option to cancel it "with or without cause at any time and in its sole discretion."