They said they sued the tobacco companies for us, the people of North Carolina, but they lied. Lawyers for our state, including our current governor, told the courts they would use billions from cigarette manufacturers to pay escalating medical costs caused by smoking. Again, they lied. They said the funds from the settlement would go to retrain and re-employ tobacco workers. Now they’re using those workers as pawns to justify massive corporate giveaways.
Bureaucrats and employees who weren’t elected by the people of North Carolina have been doling out the interest on $2.3 billion from North Carolina’s share of the national tobacco settlement to private companies as a sort of payoff to get them to move to the state or keep them happy while they’re here. These people work for the Golden LEAF Foundation, an organization created by the state legislature to spend the interest on the $4.6 billion the tobacco industry agreed to pay the state over 25 years. The nonprofit foundation is supposed to spend the money in “tobacco dependent” communities.
Golden LEAF initially stuck to its mission, doling out grants for worker assistance and training for former tobacco workers after it opened its doors in 1999. Since then, it has become clear that the foundation is quickly losing sight of its intended vision. So loose were the guidelines set by the state legislature on how the money would be spent that some of it has even ended up back in the hands of tobacco manufacturers.
About $400,000 of it was given to a private company called Universal Leaf to help build — get this — a tobacco processing plant near Rocky Mount. The theory behind that, Golden LEAF President Valeria L. Lee explained to the Durham Herald-Sun, was that tobacco product manufacturing is still a legitimate industry that offers jobs and important economic investment to the state. Universal supposedly planned to leave the state, but changed its mind because of the grant.
Golden LEAF spokespeople say a $200,000 grant to help run a 200-acre horse park and foundation in Hoke County will help the county develop economically, although it’s doubtful that displaced tobacco workers will be able to afford to ride at the equine playground.
Then there was the $2 million that went to Flextronics to entice the California-based company to put its East Coast headquarters in Franklin County. In this case, the company will receive payments as jobs are created or “retained.” Retaining those jobs shouldn’t be too hard for Flextronics to do, because it already has two manufacturing sites in Wake and Johnston Counties that employ 2,900 workers. The only problem with this is that the company is being paid to move its operations in Wake and Johnston out of those counties and into Franklin, where its headquarters would also be located. When the move happens, workers will be given a choice of moving or losing their jobs.
But that’s not all. There’s no limit on how much money any one company can suck out of the fund. To sweeten the deal, Flextronics stands to receive an additional $500,000 dollars, which has already been earmarked, for simply remaining in North Carolina.
But Flextronics isn’t the only company to gorge itself on state tobacco money while taxpayers are left with the bill for the state’s escalating Medicaid and healthcare costs, one of the fastest growing areas in the state budget, which legislators recently raised taxes to fund. Lowe’s got $150,000 from Golden LEAF to locate a distribution warehouse in Northampton County; $83,000 went to BSH Home Appliance Corp. to keep them in New Bern; $75,000 was spent to bribe Alamac Knitting Corp. into staying in Robeson County; and $75,000 went into the pockets of the producers of the movie Cold Mountain to entice them to film the movie in North Carolina.
For companies like these, it’s the greatest racket ever. They only have to threaten to leave — they don’t actually have to pack anything — to get a share of the money. And get this. Cashing their checks from Golden LEAF doesn’t actually bind them to their promises to stay in a particular county, or in this state for that matter. They merely have to sign a letter of intent to stay to receive the money. And that’s not all they get. Golden LEAF will also pay for worker training for the companies — ostensibly the costs of retraining the displaced tobacco workers who may or may not actually work at these places.
Meanwhile, as the editorial board of a local paper recently pointed out in an editorial advocating more taxes on cigarettes, our state’s drugstores are threatening to cut off service to Medicaid patients if the state reduces the amounts paid to pharmacies that fill Medicaid prescriptions. And all this while legislators put their fists out for more of our money to solve the second, alleged billion-dollar state budget shortfall this year.
Does anyone see anything wrong with this picture? *
This article appears in Apr 17-23, 2002.
