North Carolina Conflict of Interest Controversies
As odd as it sounds, North Carolina's ethics law allows high-level state appointees to serve on the boards of for-profit
corporations. Such officials are prohibited, however, from taking actions that might create a conflict of interest with their official duties. Sharon Decker, the state's secretary of commerce, is taking advantage of that law but is ignoring what many observers see as an obvious conflict.
Decker has been serving on the board of Family Dollar Stores, one of the country's largest chains of deep-discount retailers. That part-time post pays her more (nearly $150,000 last year) than her official salary ($136,000). Being a Family Dollar director these days is more challenging than usual. The company, responding to concerns about its financial performance, agreed a few months ago to be acquired by its rival Dollar Tree. But then the biggest dollar-store chain of all, Dollar General, made its own offer.
The situation remains unresolved, but it is likely that any change in ownership of Family Dollar will jeopardize jobs at the company's headquarters in Matthews, North Carolina. In other words, Decker, whose duties include promoting job creation, might very well be taking steps in her private position that reduces employment in the state.
Decker’s situation creates serious questions about the policy of allowing high-level economic development officials to sit on corporate boards. On one hand, those officials are responsible for protecting North Carolina jobs and for representing the state’s interest in negotiations with companies. On the other hand, as directors they are responsible for maximizing profits of corporations.
Decker is not the first high-level official whose close relationship with a private company has caused public concern. For 14 years when Gov. McCrory was Charlotte’s mayor, he was also a manager at Duke Energy. The recent coal ash spill caused by the company raised questions about whether the Governor was still advancing the interests of the company.
There is another troubling aspect of this story. The Economic Development Partnership of North Carolina, a newly created private arm of the Commerce Department, is about to start its operation. Its employees will follow the same ethics rules as legislators and executive branch officials, meaning that they could end up in similar positions to McCrory and Decker.
The next time they meet, North Carolina legislators might want to consider whether it's time to overhaul the state's conflict of interest rules.