Revisiting Golden LEAF

Yesterday, the NC Auditor’s office released a new audit detailing some deficiencies in the operations of the Golden LEAF Foundation. Of note:

There is a risk that potential conflicts of interest or political influence play a role in Golden LEAF investment decisions.  For example, in 2002 Golden LEAF invested $30 million with an investment company owned by a well-known political campaign contributor.  In 2006, Golden LEAF approved a $10 million investment in which a board member voted on the investment after disclosing, at an earlier meeting, a conflict of interest regarding his brother’s position on a related board.

The problems with Golden LEAF should not be anything revolutionary to readers of the Civitas Institute as our own Brian Balfour made the case earlier this year to dissolve the organization.  Brian wrote then:

The political nature of Golden LEAF’s Board of Directors has corrupted the Foundation’s grant-making process. Rather than an objective analysis of which projects will best advance the “economic well being of North Carolinians,” grants have all too often been decided by political turf wars and power plays. A review of pet projects and questionable items funded by the Foundation, in fact, prompted the Capital Monitor to state, “many are concluding that Golden LEAF has been nothing more than a multi-million dollar slush fund.” ⁹

The need for Golden LEAF to exist is highly questionable.  It’s grant-making can be handled by existing government agencies and its revenues could better be used to pay for the Medicaid and State Health Plan costs for smokers (as the funds were originally intended to be).