In supporting the Atlantic Coast Pipeline, a struggling nonprofit confronts a conflict of interest

In supporting the Atlantic Coast Pipeline, a struggling nonprofit confronts a conflict of interest

- in Environment, Top Story
The NC Center for Automotive Research encompasses 620 acres in Northampton County. (Photo: Lisa Sorg)

For the 18 months, Gary Brown has been traveling through northeastern North Carolina like an itinerant preacher, singing the praises of the Atlantic Coast Pipeline.

“Atlantic’s decision to place its operations center in Northampton County is impressive and certainly welcomed,” he told the Roanoke-Chowan Herald in March 2016. “The project is critically important in serving the energy needs of residents, business and industry in the state and region, present and future. We appreciate the opportunity to be a part of that, and the trust they have placed in us.”

At public hearings in Jackson and Rocky Mount, Brown urged state environmental officials to approve the ACP’s water quality certification application, claiming the project would create jobs.

One could argue that as the executive director of the Northampton County Economic Development Commission for the past 25 years, Brown was simply doing his job: trying to attract industry to an economically depressed part of the state.

But while promoting the controversial project, Brown failed to disclose an important conflict of interest: He is the board president of a nonprofit that made the short list of grant recipients of the Atlantic Coast Pipeline Foundation.

According to documents reviewed by Policy Watch, in 2016, Brown’s nonprofit, the North Carolina Center for Automotive Research, was being considered for a $5,000 grant for “site logistics, safety and program support.”

The center touts itself as a place for engineers to test vehicles, but is essentially a race track for cars and motorcycles. Yet the proposed grant amount put the center on financial par with three community- and education-oriented nonprofits: The Garysburg Volunteer Public Library, the Lake Gaston Community Center and the Gaston College Prep-KIPP, all of which were also under consideration to receive $5,000.

The foundation is funded by the pipeline’s owners: Dominion Energy, Duke Energy, Piedmont Natural Gas and Southern Company Gas. It has been awarding community investment grants to nonprofits and other groups along the pipeline route.

Such funding strategies are a common, albeit contentious practice for many industries. While the awardees financially benefit in the short-term, the corporate giving can also be viewed as a method of dampening opposition and buying support.

Brown said he became aware of the grant program after speaking with ACP representatives. “On the spot, I imagined there might be some opportunities” for nonprofits in Northampton County, he said. And when NCCAR had the opportunity to apply for an ACP grant, Brown said, “we jumped at the opportunity and submitted an application.”

His support for the ACP was unrelated to the possibility his nonprofit could benefit, Brown said. The Northampton County Board of Commissioners endorsed the project, “and the fact that I work for them,” plus “from a professional perspective, yes, I’m a supporter of the ACP project.”

An aerial photo of NCCAR, from a presentation given to the General Assembly in 2011.

The NC Center for Automobile Research, or NCCAR for short, encompasses 620 acres tucked behind a Lowe’s Distribution Center and a solar farm off NC Highway 46 near Garysburg. But one cannot simply drop in. The entrance is guarded by 10-foot metal gates, which open via key card. A large, modern brick and glass building looms behind the gate. A sign nearby says the area is under video surveillance.

On the day Policy Watch visited, there was no distant roar of race cars or motorbikes, only birdsong and the rustle of leaves.

In the early to mid-‘00s, NCCAR had an impressive sales pitch. A presentation to the legislature touted it as a  “high-tech tool box” that would serve as an incubator for the auto industry, free educational programs for area schools, driver skills assessment and a free training track for law enforcement.

The legislature, which at the time operated under a Democratic majority, bought in. According to documents from the General Assembly’s Fiscal Research Division, NCCAR (formerly known as the Advanced Vehicle Research Center) received almost $15 million in state appropriations between 2006 and 2010.

The money was included in the Commerce Department budget, which has historically funded select projects deemed central to the state’s interests, such as the High Point Market Authority and the Institute of Minority Economic Development.

Additional federal funding, plus grants from the Golden Leaf Foundation, the Tobacco Trust Fund Commission and the Rural Center were used to build the facility, which opened in 2010.

But NCCAR was never fully funded, as approved by the House and Senate leadership, Brown said. Originally it was to receive $30 million in equal installments over four years. However, in 2010, faced with a budget shortfall after the recession, the legislature did not fund NCCAR; nor has it since. This has hampered NCCAR’s ability to generate revenue, Brown said.

And tax returns show that since NCCAR has been weaned from government funds it has been land-rich and cash-poor. Since 2011, the center has reported a net loss every year, including depreciation on equipment, for a total of $3.8 million, according to federal tax returns.

Brown said the center’s client base has “steadily grown” over the years, but acknowledged NCCAR has operated at a “balance sheet loss.” Revenues have exceeded operational expenses, he said, but depreciation has put the center in the red.

In the lean years, the center eliminated some of its overhead. In 2011, NCCAR’s director and former Lotus Engineering executive, Simon Cobb, earned $160,000 annually, including benefits; that amount decreased to $145,000 the following year. (Meanwhile, the annual median household income in Northampton County was just over $25,000.) By 2013, Cobb was gone.

Now the only employee is Sam True. The NCCAR site describes True, a former Northampton County building code enforcement officer, as “a very experienced and broadly skilled professional with a background in electrical contracting and systems controls. He has a very wide range of interests and skills that include automotive and motorsport.”

True has been with NCCAR for seven years. He earns $51,000 a year.

Brown is not paid in his role as board president. Nor are any of the organization’s nine board members, two of whom are appointed by the Northampton County Board of Commissioners and two by the Northampton County Economic Development Commission.

While NCCAR has generated $5,550 for track usage and $450,000 in undefined “client services” it has also provided free access to the track to local schools and colleges for training and hosted an electric vehicle challenge.

County Manager Kimberly Turner said that didn’t know the direct economic benefit NCCAR generates for Northampton County.  The center does generate revenue for the county through property taxes — it paid $48,000 in 2015 — and money spent on gas, food and supplies purchased by its clients, she said.

In March 2016, while Brown was on the campaign trail for the ACP, the foundation announced the first round of grant recipients from the original shortlist of six. NCCAR wasn’t on it. The money went to the Northampton County Education Foundation ($10,000); Garysburg Volunteer Public Library ($5,000) and Creek Development, which provides meals, after-school and summer programs and support for “Band of Brothers,” a group that offers college tours and prep for at-risk high school boys ($7,500).

Neither Duke Energy nor Eckel & Vaughan, the public relations firm representing the ACP Foundation, responded to questions of how the recipients were selected.

NCCAR had to wait another year for its money, although it didn’t receive the full $5,000. Last March, the ACP announced it was giving NCCAR a $1,680 grant to replace the batteries on its two “global electric motorcars.” These GEMs, as they’re known, resemble golf carts, and are used to shuttle staff around the facility and for events.

The amount might seem puny, but considering most of the NCCAR’s grant funding has dried up, it’s a comparative windfall. In the latest publicly available tax returns for 2015, on the line for “grants” there is a number: zero.

Guidestar Report for North Carolina Center for Automotive Research Inc 09-13-20171118am by LisaSorg on Scribd