Corruption, Carolina-style 2012: “The facts are not true.”

 

 

 

Wow.  I have to tuck that one away for the next time I get into hot water.  

THAT is the defense put up by a state government official accused of corruption in an investigative piece by The John Locke Foundation’s Carolina Journal:

Gov. Bev Perdue’s administration is conducting an internal review of a high-ranking state commerce official’s ties to a local nonprofit that went unreported on an ethics disclosure form, an inquiry that could reach even higher in the agency.

Henry McKoy Jr., the assistant secretary for community development, helped guide an initiative to direct about $2 million in federal grant money to counties for sustainability efforts coordinated through the Raleigh-based nonprofit North Carolina Sustainability Center.

McKoy, who was appointed by Perdue in August 2010, served as the nonprofit’s unpaid leader under its previous iteration, Sustainable North Carolina, signing documents as the board chairman as recently as July. But his affiliation doesn’t appear on his 2011 or 2012 state ethics disclosure forms.

The matter first came to light Wednesday in a report at Carolina Journal Online, a website affiliated with the conservative John Locke Foundation. The N.C. Department of Commerce said the substance of the report is being investigated. Spokesman Tim Crowley reiterated that the project was not yet approved, and no money was disbursed.

McKoy said that after the report came out, Commerce Secretary Keith Crisco asked him to resign, which he declined to do. The department later said he is still an employee.

But the inquiry is likely to get complicated, because internal agency records and interviews indicate many top Perdue administration officials were intimately involved in the project, including Crisco. The nonprofit center was essentially a creation of the Commerce Department, the first seed of a future private-public partnership aimed at promoting sustainable economic, social and environmental practices.

Crisco and McKoy served voluntarily on an interim board of directors for the Sustainability Center in July 2010, according to records and former state Sen. Gerry Hancock, an attorney and former board member.

Crisco also neglected to list his role on a 2011 ethics statement, records show. Crisco could not be reached for comment. State law makes it a Class 1 misdemeanor to “fail to disclose required information” and subjects the official to disciplinary action.

McKoy: Story ‘distorted’

In an interview Thursday, McKoy, 39, disputed the suggestion that he benefited financially from the arrangement, as he said the Carolina Journal Online report suggests. “The facts are not true,” he said. “I think the story is being distorted.”

He resigned from the interim board in August when new directors were named, as did Crisco and the other temporary members. “I have no economic interest. There’s no association that offers any financial gain,” he said.

Whether he – and possibly Crisco – violated the state’s ethics laws by not listing affiliations with nonprofits could depend on how the requirement is interpreted. McKoy said the organization was dormant for most of the past two years so he didn’t list it on his disclosure. The form asks for connections to “operating” nonprofits.

McKoy served as board chairman when Sustainable North Carolina effectively shut down at the end of 2009. As a member of a state economic development panel at the time, he properly listed his affiliation.

The nonprofit re-emerged the next year after the Commerce Department wanted to use its tax-exempt status to help launch a sustainability clearinghouse funded by private dollars and federal sustainability grants. By renaming and repurposing the organization, the state avoided the lengthy process of creating a new nonprofit entity, according to state records and interviews with previous board members. It officially reconstituted as the center in 2011 with a new board and new executive director.

Leslie Winner, the executive director of the Z. Smith Reynolds Foundation, which gave the Sustainability Center a $150,000 grant to cover its first two years, said the Commerce Department knew about McKoy’s involvement from the start. “There may have been an error on the financial disclosure report … but it wasn’t like he was hiding anything,” she said.