An opinion from the U.S. Court of Appeals upheld the state's program to encourage road building by companies owned by African Americans and Native Americans, but the court struck down provisions that applied the program to other minorities and women.
The opinion from the U.S. Fourth Circuit Court of Appeals arose from a lawsuit by H.B. Rowe Co., a contractor that lost a 2002 bid for roadwork in Iredell County.
The company submitted the lowest bid, but it didn't get the contract because the N.C. Department of Transportation determined that Rowe didn't do enough to try to get minority subcontractors to participate.
Rowe sued, claiming the state's program, which is currently written to "encourage and promote" the inclusion of minority and disadvantaged businesses, is unconstitutional.
A judge disagreed. The appeals court found that through repeated studies, the state has shown that businesses owned by African Americans and Native Americans are unfairly left out of road building projects. The state's law allows contractors a lot of leeway to prove they tried to get those businesses to take subcontracts.
By 2003, Rowe was one of 13 contractors out of 878 that failed to win a bid because of the minority requirement. But for other minority groups, the state's figures do not prove a disadvantage, possibly because there aren't enough construction companies owned by Asian-Americans or Latinos, the court found. And the state's study shows that businesses owned by women are actually overrepresented in subcontract awards.
The money flowsto the incumbents
Incumbent members of the U.S. House are "crushing" their opponents in fundraising, according to a report by Democracy North Carolina.
The report looked at fundraising in the 13 races for the state's seats in the U.S. House and found that incumbents have a 5-to-1 advantage in the money race.
"The source of the big advantage, for both Democrats and Republicans, is theirheavy reliance on donations from PACs - which so far supply more than half of the incumbents' campaign funds but only 4 percent of the challengers' money," wrote Bob Hall, director of the group, which seeks to limit the influence of big money on elections.
The report also found that on June 30, incumbents had 16 times as much cash in the bank as their opponents, giving them an advantage of $7 million to $430,000.
N.C. cites nonprofit for misuse of funds
State auditors have cited a Marion nonprofit for misusing $61,000 in grant funds,lying to get its grant and holding on to laptop computers that it should return.
State Auditor Beth Wood's office turned over to law-enforcement officials its findings against Reggie Killough's Christ Team, a nonprofit that ran God's Country Free Clinics in Marion.
The nonprofit received a $75,000 grant in 2008 from the Office of Rural Health and Community Care, which is part of the N.C. Department of Health and Human Services. The grant was meant to help the nonprofit provide medical services to the poor.
Instead, the audit found,only $13,000 of the grant was used for those purposes. The "Christ Team" used $28,000 to pay federal taxes unrelated to the clinic. An additional $10,000 paid employees of the nonprofit's thrift store in Marion and affiliated organizations in Florida. And finally, executive director Shirley Killough spent $8,800 of grant funds by cashing checks made payable to "cash," or through ATM withdrawals.
In a written response, the Christ Team said the conclusions were inaccurate.
"To say $61,886 was misused is to totally ignore the establishment and success of the free clinic in McDowell County," the nonprofit wrote. "There is no mention in the Investigative Report of salaries that were paid, training of volunteers, establishment of communication systems, printing of brochures and the medical treatment and prescription assistance provided to the approximately 400 patients that were served under the grant."
The nonprofit said it was returning $16,747 in unspent grant funds.
Auditors noted that to get the grant in the first place, the nonprofit gave misleading statements about its tax situation. State law says a grant can't be given to an organization that owes taxes. When it got the money, the Christ Team owed federal payroll taxes, auditors said.
Officials say that the nonprofit has laptop computers bought with grant money and that those should be returned.
The audit was conducted at the request of the state rural health office. The report recommends that the state try to recover the full grant amount.
By staff writer Benjamin Niolet
