NC Commerce Department shake-up too much, too soon

January 9, 2014 

Even some legislators who backed the idea of forming a public-private nonprofit to lead North Carolina’s economic development efforts aren’t sure the McCrory administration should be moving so quickly to redraw the game plan.

Lawmakers approved the formation of the Economic Development Partnership of North Carolina, but the administration now has hired a private business executive, Richard Lindenmuth, to head it, signaling the intention to move ahead with huge changes in the Commerce Department.

First off, Lindenmuth announced his intention not to resign from the business consulting firm he co-founded, Verto Partners, which specializes in crisis management and corporate restructuring. That is not acceptable. This is a new, complex job, and despite Lindenmuth’s assurances that he’ll be on top of it and not involved in the day-to-day operations of his company, there must not be any chance for a distraction or a conflict. Taxpayers need to have those who work for them accountable only to them.

But beyond that, the plans for rearranging things in the development arm of the Commerce Department headed by Sharon Decker are daunting and risky in a state that is regarded as “business friendly” in national surveys. The economic downturn hurt all states just as it hindered plans for many businesses.

The economic upturn of late should help. That’s one reason the changes eyed by Decker and Lindenmuth seem rushed. Lindenmuth is said to be ready to oversee moving business development and marketing – along with the Division of Tourism, Film and Sports Development – to the partnership. That’s putting a lot of successful, established parts of state government under an untested public-private arrangement that has never really been adequately explained.

The state’s Division of Tourism, Film and Sports Development, for example, has run fairly smoothly, with some exceptions, through administrations both Democratic and Republican. Moving it rings more of giving the partnership additional responsibilities to justify its existence than it does of necessity.

And though Gov. Pat McCrory talked about economic development in his campaigns, his experience in that area is not deep. Decker and Lindenmuth might have lots of private business experience, but there is a world of difference in the executive suite and the public service arena, most notably the fact that public officials in North Carolina report to the people, not to boards of directors.

McCrory’s breathless enthusiasm for running government like a business is something he picked up as mayor of Charlotte, where the business community didn’t hesitate to offer him marching orders. Government needs to be efficient, to be sure, but it isn’t a business. Its main function is delivering services, not turning a profit.

And by virtue of government’s size and the nature of its mission, leaders can’t maneuver it with the same speed – and sometimes without much accountability – in the way a powerful CEO can manipulate a private company. That’s why critics of this reorganization fear potential conflicts of interest and other problems when the time comes to make development deals.

It would appear, from the rush applied to this economic development partnership, that neither McCrory nor Decker is interested in listening to questions about the potential downside of this kind of privatization. But let’s hope lawmakers demand more accountability in at least one way: The administration needs to explain to them, and to the people, exactly how this reorganization is going to “fix” something that doesn’t appear to be broken at all.

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