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 Turning Over a New (Golden) Leaf
by Tom Campbell
November 5, 2009
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 impacted by the decline of the golden leaf. 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 selected from the House Speaker and one-third from 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 Governor Easley announced he wanted Dan Gerlach to become president. Pure hardball politics prevailed over an independent selection.
According to their website, the Golden Leaf Foundation has received almost 800 million dollars since inception and has made 825 grants totaling almost 400 million dollars. 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 dollar grant), failed to properly investigate grant recipients and failed to provide proper oversight for grants that were given, failed to insure 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 receives most of its funding from the state, and it is not subject to the State Ethics Act, an invitation to abuse. This isn’t a stellar report by any standards.
Residents are justified to ask what we have received for the 800 million dollars this organization has received to date. 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 dollars. It is imperative that we get maximum benefit from the remaining 1.5 billion dollars projected to be received in this fund between now and 2025. |
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