Gerlach: Allegations about Golden LEAF mission incorrect
Monday, April 04, 2011
Posted by: Cindy Verity
Former N.C. Supreme Court Justice Robert Orr's recent Op-Ed column contained several serious but incorrect allegations about the Golden LEAF Foundation. I write to correct the record.
First, he believes that grants made by Golden LEAF to government agencies to help businesses expand or locate in North Carolina are outside Golden LEAF's purview. In fact, Golden LEAF's articles of incorporation expressly state that we can provide grants to provide assistance to such projects. Both projects that Orr cites are in tobacco-dependent areas, for farming (Kinston) and cigarette manufacturing (Winston-Salem). We were set up to help transform North Carolina's economy, and by helping aerospace and advanced manufacturing companies expand in North Carolina, we are doing so. Our support for biotechnology and health care in Pitt County has helped the transformation of this region as well.
Second, Orr argues that some of our grants violate the IRS requirements of tax-exempt foundations. But the fact is that the IRS permits grants that might benefit an individual or private company where the grant achieves a greater, overarching public benefit. This is the case with the Spirit AeroSystems project, whereby the private company must invest a minimum of $100 million of its own money in a building owned by a state authority, even though it is only a tenant, and has to meet annual job creation targets or face clawback repayments if it materially fails to meet those targets.
Moreover, the company plans to invest hundreds of millions more in equipment on the site. North Carolina courts have upheld the constitutionality of this type of assistance repeatedly and consistently.
Third, Orr wonders if the foundation itself is unconstitutional. The fact is that the N.C. General Assembly approved the court's order that directed the attorney general to form the Golden LEAF Foundation. All three branches of government, including the judicial branch, were therefore involved in its creation. Our board of directors is appointed by the governor and the leaders of the N.C. House and N.C. Senate, and we must report annually to the Legislature on our work.
The foundation is totally committed to the mission of economic impact assistance in tobacco-dependent, rural and economically distressed counties. Aiding in the creation of more private-sector jobs is one way to do that. We are proud of our record in the Greenville region and will continue to do more.
Finally, we are dedicated to transparency, accountability, and public input. Information on all of our grants can be found on our website. Our board and committee meetings are open to the public. Records about our grants are provided upon request — and have been provided — to those with interest.
Dan Gerlach is president of the Golden LEAF Foundation.