Seedy Dealings at the Raleigh Business and Technology Center

Financial mismanagement and waste are nothing new in government. But it seems that these days, you can’t turn your head without seeing something amiss.  In June, Civitas published a report detailing corruption at the Rural Economic Development Center. Following that was the release of a state audit, which forced the resignation of the Rural Center’s CEO, Billy Ray Hall. Hall’s successor, Valeria Lee – who tried to defend Hall’s $242,000 severance payment – also stepped down after the General Assembly cut off funding to the organization.

City of Raleigh officials appear determined not to let the state government get all the headlines. This month, a city audit uncovered cronyism and possible fraud at the Raleigh Business and Technology Center (RBTC), a nonprofit “business incubator” funded almost entirely by the public.

The Civitas Institute has obtained the full audit conducted by the City. Here are some interesting facts not previously reported by the media:

• Lawrence Wray, a retired Assistant City Manager, is the secretary of the board (now acting president) at RBTC. Wray claimed to be the whistleblower at RBTC, but the city’s audit appears to show that he might have been actively complicit in wrongdoing at the organization. Wray has retained state senator Dan Blue as his attorney, and is actively fighting the city’s efforts to cut ties with the RBTC.
• Despite the fact that the RBTC has occupied a city-owned building since 2000, a lease agreement drafted by the city was never signed and therefore never officially completed. This, according to the City audit, may lead the City of Raleigh afoul of federal compliance regulations, since the City used federal funds to purchase the facility.
• Bob Robinson, the CEO of the RBTC, resigned when he read the City audit. Robinson repeatedly and actively stonewalled auditors. He ignored multiple emails requesting documentation, avoided meetings, and left meetings in progress. From the city audit:

We scheduled to continue on 4/26. Bob [Robinson] sat down for a minute [and] stated he needed to obtain the invoices I requested and left the meeting. He did not return to the room nor did he state anything else to me that day.

The story of the RBTC is not just about one institution. It is about a pervasive culture of graft and corruption that has entered government in the guise of “economic development”: utter those magic words, and the public coffers spring open. But more often than not, schemes to “develop communities” and “spur growth” are ineffective at best and downright criminal at worst. Using the example of the Raleigh Business and Technology Center, we intend to shine a light on this phenomenon.

Stay tuned to Civitas for more.

 

Note: Part I of the two-part article on the RBTC audit has been published. Read it here.