news-record.com

By TOM CAMPBELL

When the Golden Leaf Foundation was formed to receive 50 percent of North Carolina’s portion of tobacco settlement funds, there were great hopes this organization would make a significant impact on a state hurt by the decline of tobacco. The foundation has never lived up to its promise and a recent audit by State Auditor Beth Wood indicates more than a few serious issues.

Golden Leaf’s problems were obvious from the beginning. One-third of the governing board is selected by the Senate president pro tem, one-third  by the House speaker and one-third by the governor. State law provides that members of the board represent the interests of tobacco production, tobacco manufacturing, tobacco employment, health and economic development. But instead it has become a political slush fund for politicians’ pet projects. Rather than serving people, the fund is more a servant to politicians.

A good example of the way this organization operates is found in the selection of the current president. When the founding president resigned (partially out of frustration), a search committee was tasked to select a new executive. A lengthy and impartial selection process narrowed the field to three impressive candidates, but the process was completely negated when then-Gov. Mike Easley announced he wanted Dan Gerlach to become president. Pure hardball politics prevailed over an independent selection.

According to its Web site, the Golden Leaf Foundation has received almost $800 million since inception and has made 825 grants totaling almost $400 million. The frequent criticism is that Golden Leaf has made lots of small grants, none of which has had any significant economic impact but are politically popular.

The audit asserts that the board failed to keep proper minutes of board meetings, made decisions in closed session, which were against the law (including a $15 million grant), failed to properly investigate grant recipients and failed to provide proper oversight for grants that were given, failed to ensure conflicts of interest were avoided and resisted efforts to open their records to examination by state auditors. In addition, the audit revealed that the foundation was exempted from state laws and policies regarding investments. Yet it receives most of its funding from the state, and it is not subject to the State Government Ethics Act, an invitation to abuse. This isn’t a stellar report by any standards.

Residents are justified to ask what this organization has done with the $800 million it has received. A strong case can be made that the benefits don’t justify the expenditures, that inadequate management controls and undue political influence might indicate we go back to the drawing board and come up with a new approach that does not have so many inherent problems. At a minimum, we need more accountability, better controls, less political influence and a new vision.

We don’t often get the chance to receive $2.5 billion. It is imperative that we get maximum benefit from the remaining $1.5 billion projected to be received in this fund between now and 2025.

Tom Campbell is creator/host of NC SPIN, a weekly discussion of state issues airing at 6:30 a.m. Sundays on WFMY (Channel 2). Contact him at www.ncspin.com.