Folwell: City of Rocky Mount needs a good hard look



We sure know how to keep federal investigators busy here in North Carolina.  Robin Hayes, David Lewis, and now The City of Rocky Mount:


State Treasurer Dale R. Folwell, CPA, said federal criminal charges against the developer of Rocky Mount’s multimillion-dollar downtown development project cast a troubling shadow on the venture.


“In light of the serious nature of the indictment, a prompt and thorough investigation is warranted before any taxpayer money is approved to pay for this project. As keeper of the public purse and chair of the Local Government Commission (LGC), which approves the issuance of public debt, I have an obligation to inquire about potential waste, fraud or abuse,” Treasurer Folwell said, while noting there must be a presumption of innocence until proven guilty.


“I would be highly disappointed if the elected officials in that community or this state would not be in favor of looking more deeply into the finances of the city of Rocky Mount and this project specifically,” Treasurer Folwell said.


David Hunt, the Tennessee developer chosen to lead the development project, was one of four people indicted by a federal grand jury in Mississippi in an alleged illegal bid-rigging scheme at the Mississippi Department of Education. The charges are not connected to the Rocky Mount project, which includes a downtown hotel, parking garage, retail spaces and housing.


In August 2019, the Rocky Mount City Council passed a resolution authorizing the submission of the financing application to the LGC. The Rocky Mount city manager has since placed a hold on the project and announced the rescission of the application. The mayor has urged the City Council to investigate the situation.


“The Rocky Mount City Council, not the city manager, needs to pass a resolution withdrawing the application,” said Treasurer Folwell. “That’s the best way to properly halt the LGC’s process.”


Treasurer Folwell said the criminal allegations are distressing for the commission, which was reviewing application materials for nearly $18.4 million in financing for the parking garage portion of the project.


“In light of this troubling situation, it would be natural for the LGC to question whether the city followed appropriate procedures in previous financing decisions, such as bond financing of up to $44.5 million that the LGC approved at the city’s request in 2016 to build the downtown Rocky Mount Event Center,” Treasurer Folwell said. That work was done by a different developer, not by Hunt.


The Hunt indictment follows a scathing report released in May by State Auditor Beth Wood, a member of the LGC. A state audit revealed that city officials gave preferential treatment to a council member to prevent utility disconnection and avoid nearly $50,000 in payments; the city suffered $60,000 in uncollected loans and improperly awarded funds; and the city manager incurred unallowable travel expenses.[…]


7 thoughts on “Folwell: City of Rocky Mount needs a good hard look

  1. Rocky Mount citizens welcome this investigation. Reverse discrimination is alive and well in Rocky Mount. Andre Knight, the councilman who didn’t pay his utility bills for 20 years, also bought land and properties around the event center prior to it being announced. If one visits the event centered you will notice a white church in the middle of the parking lot which is owned by Knight. It is Knights’ hope the hotel and parking deck will go through so he can sell his land to the city for a huge profit. Amazing this has been allowed to continue for 20 years. Knight is just one of many city council members and city officials that are entangled in this corruption. The District Attorney will not even issue a statement about it and has declined to investigate it.N.C. Rep. James Gaillard has never mentioned it and will not get involved. Governor Roy Cooper who is from this area refuses to investigate it or even acknowledge it. Such a shame that if your black and a Democrat your cronies will simply look the other way.
    Furthermore, Rocky Mount City Manager Rochelle, who was fired by a city in Georgia for corruption, paid 281,000 to remove a civil war monument that at best was a 50,000 job. She only accepted 2 bids who were from the same person. One could write an entire encyclopedia about the corruption in the city of Rocky Mount. This is just the tip of the iceberg. Thank you for reporting on this!


  3. Aren’t the retired Barnum & Bailey train cars in woods somewhere over there as well, known by Cooper and alleged to be pd for by tax $$$??

    Re: Rocky Mt. Heard the current mayor interviewed. The ‘corruption’ will make you insane. And not short-term, this is a long-term issue and as noted above, KNOWN issues. WHY? Could it be they are all Dems????

  4. Until these issues are investigated by an impartial party, Rocky Mount and its citizens will live in its shadows. Primarily, it is the responsibility of the voters in Rocky Mount to take action with their vote.

  5. Good work by Folwell and the LGC. Corruption is rampant in NC.
    Someone should look into the suspicious actions of Norwood, Union County and engineering firms
    over the interbasin transfer of water from the Yadkin to the Rocky River Basin. The water will be needed for a
    new waste water treatment plant to serve Eastern Mecklenburg County and developers. Cabarrus and Kannapolis
    may get some of the water. Big bucks involved.

  6. Once again, Dale Folwell comes to the rescue of the citizens of N.C. As have mentioned he is one of the few non politicians that are heroes to so many of us!!!
    Ron Margiotta

  7. Lint Head in Kannapolis is right when he says “Corruption is rampant in NC . . . Big bucks involved.” I’d love to compare notes.

    Years ago I was engaged by the Town of Marshville to help them determine the extent to which Union County Public Works had overcharged the Town by failing to follow both the County’s contract with the Town and the federal rules the County Commissioners agreed to follow in order to obtain major federal grants. Before I was hired, the law firm of Hunton and Williams had already told the Town they had “concrete evidence to support the conclusion . . . the Town of Marshville has been overcharged” but that didn’t stop Public Works from fighting for months to avoid accepting any responsibility for overcharges or making any refund.

    I was able to prove a pattern of overcharges that led me to believe Public Works intended to subsidize development outside of the Town of Marshville by illegally overcharging the Town. In essence, the County forced the Town to overcharge its businesses and residents to subsidize other customers. The County made a profit by overcharging the Town even though they promised the federal government they would operate a user-pay system that only charged the Town the actual cost of providing services to the Town.

    As reported by The Charlotte Observer (October 19, 1993), Union County’s attorney subsequently “told commissioners the state could impose civil or criminal penalties on the county for improper management of its sewer system” and the County Commission Chairman noted that the potential criminal penalties “could be in the millions of dollars.”

    At that point, the County finally admitted they had overcharged the Town, agreed to a settlement in excess of $400,000 and even signed a new contract agreeing to adjust rates more frequently than federal law required. Sadly, the County immediately resumed overcharging the Town and has now admitted in writing that they again ignored both their contract with the Town and the federal rules they agreed to follow for over a decade.

    The last time the County was caught violating federal statutes, most Commissioners recognized the severity of the potential penalties and quickly reached a settlement with the Town. This time, instead of attempting to negotiate a settlement with the Town, the County has sued the Town in the state courts and tried to completely ignore the federal statutes.

    It would appear that someone told the Commissioners that if they could force the Town to accept a new contract they could ignore the federal rules they agreed to follow. I did not know it was possible for a Town or a County to contract with each other to ignore federal rules designed to protect the public from unscrupulous officials operating the government for the benefit of private interests.

    Because I believe the evidence makes it clear that Union County has operated its Public Works Department in a way that subsidizes some private interests at the expense of the public, I have been fascinated by its attempt(s) to reroute water without public scrutiny.

    I even wrote about an earlier variation of the current interbasin transfer plan all the way back in 2012. In 2010 an attempt was made to sneak a bill through the legislature to make it easier to get approval of interbasin transfers, as described in the July 10, 2012 Daily Haymaker:

    “On April 21, 2010, Gibson lied to the Committee on Water Resources and Infrastructure to advance a bill, H802, deceptively designed to drastically change the interbasin transfer rules to reduce public notice requirements.

    “In order to explain this one, I’m going to have to admit that Representative Gibson was of tremendous assistance to me when he served in the legislature. I couldn’t possibly review all of the bills filed, but Gibson was my spotter. When he was interested in a bill, I became interested, because there was usually more to it than was immediately apparent.

    “In the case of H802, it seemed a simple study committee bill to define river basins. But Gibson was the sponsor so I read it and re-read it until I understood the trick. The new definition meant that most of the rivers in the state, all of the rivers that were tributaries of larger rivers, were no longer defined as rivers and transfers between any of the rivers in a major river basin were no longer covered by the IBT rules that required public disclosure and input on transfers between them.

    “Rather than being a boring, minor housekeeping bill, H802 was actually a big money bill. While it had huge possibilities statewide, a simple example should make the point.

    “At that time, Concord was engaged in a major fight over water withdrawal rights from the Catawba River and they were losing. Quite logically, they looked to the other side of the County to the Yadkin/PeeDee River and saw a huge resource with few competing interests to fight them for the water and an easy way to return water withdrawn from the PeeDee by flushing it down the low-flow Rocky River. But the Rocky River is also the northern boundary of Union County and Anson County and a lot of people who own land along the river could be expected to fight such a transfer tooth and nail if they knew about it before it was a done deal. The old IBT rules would require disclosure and hearings. H802 would eliminate that requirement.

    “Unfortunately for Gibson, his bill had a companion bill in the Senate, S833, and he had neglected to inform the Primary Sponsor of that bill of what the bill actually did. Gibson’s bill made it out of the House Committee with a favorable report April 21, but on April 22 the Senate version passed and was sent to the House making it the bill that should go forward since it passed first. But on April 27 the bill was recalled by the Senate and held. In other words, it was killed. And Gibson deserves full credit, because had he not sponsored H802, I never would have caught the trick.”

    (If you want to see the full article which covers a number of instances of questionable behavior in Raleigh, just do a search in The Daily Haymaker for interbasin transfers.)

    That was a decade ago, and supposedly the new version of the interbasin transfer received all of the appropriate approvals. But I still don’t know who is liable if the water added to the Rocky River causes levels of flooding not seen in the past on that river. I still don’t know why the people of Union County should be taking on enormous debt to provide water to other counties if, as Lint Head suggests, the intent of the Yadkin transfer is to provide water for other counties. And I still don’t know if the public has a clue of the ultimate cost of the proposed water transfer once the related infrastructure costs – wastewater treatment, roads, schools, etc. are added in on top of the enormous cost of the planned new water infrastructure.

Comments are closed.