Rep. lobbies for regulation of businesses

Before this year's elections, N.C. Rep. Paul Luebke promised that, if re-elected, he would reintroduce a bill that would prevent a conflict of interest between businesses and state departments.

On Nov. 2, Luebke regained his seat and got to work.

The bill states that if a business has a contract with the state that involves altering economic incentives, it should be prohibited for two years from working with another business seeking to use those incentives.

"If you are going to do the one, you can't do the other," said Luebke, who is from Durham County and serves as co-chairman of the House Finance Committee.

Luebke will introduce the bill soon after the N.C. General Assembly convenes in January. He proposed the bill during this year's short session, but it was left in the House Rules Committee until session ended.

He said he was prompted to write the bill after the Carolina Journal broke a story about a seminar hosted by the consulting firm Ernst & Young, which previously had a contract with the N.C. Department of Commerce.

The company studied North Carolina's competitors to see how the state could become of greater interest to corporations. Linda Weiner, the commerce department's assistant secretary of communications and external affairs, said one of the decisions that came out of that study and others was to begin to offer incentives to companies.

"This is just an example of one of the tools North Carolina was missing," she said. "North Carolina was losing jobs, and we weren't winning some of the big projects."

The seminar - held in Georgia - was designed to help corporations take advantage of existing incentives programs in different states.

"One of the handouts actually said that corporations should view state government as a cash cow - i.e., milk it for money," Luebke said. "The whole seminar was how to basically manipulate politicians so they are willing to make major payouts to your company."

He said holding such a seminar after having a contract with the state was a conflict of interest that could result in corporations taking unfair advantage of state incentives.

If a company were found to be in violation of Luebke's bill, it would forfeit its compensation from the state and the other business. It also would be barred from advising both parties for two years.

Luebke will propose his bill in the aftermath of what some say is the state's biggest economic gain in months. Legislators decided last week on a $242 million incentives bill to lure Dell USA to the state.

The company announced Tuesday that it will locate a plant in the Triad, bringing 1,500 manufacturing jobs to the area.

Luebke said his bill seeks to ensure that North Carolina's incentives are not exploited and that the state's best interests are protected.

"These companies don't care how much they deplete the treasuries of the state," he said, adding that his bill is not a sweeping reform but rather of symbolic value.

"It makes a statement about how state governments shouldn't be played with by out-of-state corporations," he said. "The people of North Carolina deserve better than this."

Contact the State & National Editor at stntdesk@unc.edu.