Politics & Government

Democratic rivals in House race blast former TransPark chief after audit

Story was updated Friday, April 26 to add a new statement from the state auditor.

The former executive director of an Eastern North Carolina business park failed to provide oversight of its financial statements, increasing the risk of fraud, according to a state audit released this week.

Allen Thomas served as executive director of the North Carolina Global TransPark in Kinston from June 2017 to March 2019, when he resigned to run for the Democratic nomination in the 3rd Congressional District special election. Thomas is not named in the 70-page report by the Office of the State Auditor, but his position is called out.

“The Executive Director and Controller (management) did not implement a proper system of internal control to ensure the financial statements were accurate and complete,” State Auditor Beth Wood writes, adding that executive director did not provide all documents on time nor alert the auditors of his decision to leave the TransPark.

The audit covers the fiscal year from July 1, 2017, to June 30, 2018. It found a $454,407 entry in the accounting system “to balance the financial statements because of accounting errors.” There was no accompanying documentation and “management was unable to provide a basis for the entry or to assist auditors in determining the necessary corrections.” Operating expenses were overstated by more than $1.2 million.

Thomas, a former three-term mayor of Greenville, said he knew the TransPark was a “dysfunctional entity” before he took the position at the request of Gov. Roy Cooper.

“I knew that was a challenging endeavor,” Thomas told The News & Observer. “It’s something I thought was important for North Carolina, and we had great progress.”

In a statement, Thomas said the TransPark had been an “after-thought of previous administrations” and touted his work in rehabilitating the park.

“This was a challenged asset that needed change and I appreciate the audit findings which support the changes we made,” Thomas said.

Wood issued a statement on April 26 to address the timing of the report and its conclusions. She said the report would have been published in December, months before the vacancy in the 3rd district, “had we been allowed to complete the audit as intended.” She said “auditors found financial statements full of errors as well as numerous communications with the Global TransPark that went unanswered.”

She also said the audit “does not say that there is any money missing at the GlobalTranspark. The use of this report to send that message is misleading. It also does not implicate the former executive director in any legal wrongdoing.”

Wood said the duty of state auditors is “to identify areas of risk to taxpayer dollars,” and that they felt strongly that “the lack of transparency and available financial records creates that risk.”

The TransPark — funded in part by tax dollars — has an airport and connected infrastructure, including rail and highway, designed to “support the manufacturing and logistics needs of the aviation, aerospace, defense, emergency response and advanced materials industries,” according to its website. The 2,500-acre site, for example, hosted emergency personnel during Hurricane Florence recovery and relief efforts. Several other businesses are located on the site, including a few aviation-related companies.

A plane takes off from the Global TransPark cargo airport in Kinston, N.C. BOB JORDAN AP

Thomas said the TransPark increased investments by $72 million during his time as executive director. He said he left only when Rep. Walter Jones’ death created a vacancy in the 3rd district, which covers parts or all of 17 counties in Eastern North Carolina.

Thomas is one of six Democrats vying for the nomination to replace Jones, who was first elected in 1994 and has held the seat since. The primary is April 30. Early voting ends April 26. The district is considered a safe Republican seat.

Other Democrats in the race have called out Thomas for the audit’s findings, saying that his response has been inadequate.

“The new, disturbing audit ... raises serious questions about his mismanagement of nearly half a million dollars of taxpayer funds,” said Travis Brimm, campaign manager for Richard Bew, a retired Marine in the race. “Mr. Thomas’ statement thus far leaves more questions than answers, and doesn’t even begin to address the fact that so much taxpayer funding went unaccounted for in the first year of his tenure, when no fraud was found the fiscal year prior.”

Democratic candidate Dana Outlaw, the mayor of New Bern, said the report raised “troubling questions.”

“The people of Eastern NC deserve a leader they can trust with their tax dollars, and that certainly doesn’t seem to be Mr. Thomas,” Outlaw wrote on Twitter.

In addition to Thomas, Bew and Outlaw, three other Democrats are running for the nomination: retired Marine Ike Johnson, 2016 Democratic nominee Ernest T. Reeves and Gregory Humphrey.

Thomas, who was born in New Bern, comes from a political family with deep ties to Eastern North Carolina. His brother, Scott, is the district attorney in Craven County, a part of the 3rd district, having run unopposed in 2018.

Thomas loaned his campaign $200,000, giving him a money edge in the primary campaign. Thomas raised $255,390 as of the FEC’s April 10 filing deadline. Bew raised $124,513 with no loans to his campaign. Outlaw raised $18,353, and Johnson raised $16,229. Reeves and Humphrey did not file reports. Candidates who raise less than $5,000 are not required to file.

Thomas said he has endorsements from Rep. G.K. Butterfield of Wilson and former Gov. Jim Hunt. Bew has been endorsed by, among others, Massachusetts Democratic Rep. Seth Moulton and VoteVets PAC.

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Brian Murphy covers North Carolina’s congressional delegation and state issues from Washington, D.C., for The News & Observer, The Charlotte Observer and The Herald-Sun. He grew up in Cary and graduated from UNC-Chapel Hill. He previously worked for news organizations in Georgia, Idaho and Virginia. Reach him at 202.383.6089 or bmurphy@mcclatchydc.com.