MAYOR FOXX’S PLANS FOR CHARLOTTE
The Charlotte Observer quotes Foxx from a press briefing when he returned from the 10-day trip to China with business investors and others, saying “One of the ways we can grow the economy is to attract foreign investment…We think there are exponential opportunities (with China)." They also said Foxx believes his trip will “pay off for more jobs in Charlotte.”
WSOC reported November 21st the Mayor gave similar projections who said he was “confident about the jobs that will come from his trip.”
He met with four Chinese companies, one of which is Jetion Solar. Jetion Solar USA held its grand opening in Charlotte in July. Officials told Eyewitness News that they hope their assembly plant will be running by the end of 2011.
Foxx said he encouraged Jetion to expand its operations in Charlotte and encouraged the others to invest.
As for whether incentives would be involved, he said that bringing a company to a region is "a narrative process" that involves the state, county and city.
"We certainly didn't make any commitments on those issues," he said, "but we certainly want to see the investment happen."
In Foxx Speak, that means Charlotte taxpayers will likely be signed up to pay out millions of dollars in incentives to these companies if they will build or expand any operation in Charlotte. But the Mayor’s hopes for economic improvement in exchange may be extremely misplaced (read below).
WSOC also says “Foxx said he used the trip to brand Charlotte as an energy hub and talked about the city's commitment to reducing its carbon emissions.”
He said one Chinese company offered to donate solar technology to retrofit buildings in uptown and that another offered similar technology to reduce energy costs at Charlotte-Mecklenburg schools.
"Of course, I don't speak for the school system in terms of accepting those things -- but we can certainly extend the offer," he said.
During his recent campaign for re-election, Foxx ran ads with contrary assertions about his influence and impact on CMS.
Bob Morgan, president of the Charlotte Chamber of Commerce, said its economic developer for China, Eileen Cai, will be following up with the companies.
Their story also states:
Foxx's trip was paid for by the Charlotte International Cabinet, which has a budget for the mayor's international travel and receives some city funding.
But how much funding?
And why is the mayor soliciting only particular businesses to sponsor his trip? The donations are made to a 501 ( c ) 3 organization with a mission statement on tax applications and forms that says it is categorized as an organization for “philanthropy, volunteerism, and grant-making (T11)” with a mission statement “to serve as a bridge between Charlotte and the International Community.” On December 17, 2008, the Charlotte Sister Cities merged with Mayor’s International Cabinet to form a new entity, the Charlotte International Cabinet and “combined exempt purposes.” The stated purpose of the Mayor’s International Cabinet purpose was for an “ANNUAL AWARD CEREMONY TO HONOR PHILANTHROPIC GIVING AND CONTRIBUTIONS OF THE REGION’S FOREIGN-OWNED COMPANIES.”
It seems MICA had a pretty big cash drain before combining operations. The Awards dinner continues, though. Refer to the donor request letters, promising seats at the tables and advertising for MICA as well as these other business opportunities. The Mayor’s International Cabinet Awards seem to have a very high cost. Costs for the Award evening were $90,451 in 2008 alone.
Yet it appears businesses are paying for special access to not only the Mayor and his delegation, but also the 15 members of the NC General Assembly delegation that traveled at the same time.
And it appears they are getting a tax write-off to do it. Now, as the Mayor won’t comment on incentives that he will likely offer to companies, that doesn’t add up to good practices.
If the Chamber wanted to sponsor businesses to have a business & trade trip to China, they should have done it openly and with all payments accounted for. Despite being an organization that receives public funding, making public records access undeniable, they denied giving information to at least one person asking. It took two rounds of questions to get the names of the Mayor’s delegations, and still only a partial list was given. One reader forwarded emails trying to ask these questions of the City regarding the Mayor’s trip to China:
· Are the companies chosen based on donations they make toward expenses? If not, would you tell me at least in general terms how the companies are chosen? I'm not clear if companies are being solicited to come to Charlotte to set up business or if companies from Charlotte are trying to gain business in China: would you please tell me that?
· If the CIC is a 501 (c) 3 non-profit, and companies may make tax-deductible donations to sponsor travel for business promotions, are they also paying for their own travel this way? Are they paying for Chamber members to go that way as well? Are they paying for anyone else to go that way? Are any reception expenses being covered that way? Are any of the other delegation (the 10 members of the North Carolina General Assembly and other policy leaders in a separate delegation) expenses intermixed, and was Mayor Foxx in charge of setting up the entire trip?
· May I see the "sponsorship packages" mentioned, as they were presented to sponsors? (*This information was obtained from another source and is shown below)
· You mention that 2 staffers and 1 CIC Board Member will have their expenses supported in the amount of $28,000. Will that cover their full expenses? Can you please tell me who is paying for the rest of the travel and expenses for all the rest of those mentioned, and how much they are paying, including for the Mayor? Will his wife or any other non-delegation members (anyone you have not listed) be traveling with the delegation and have any expenses covered with donations, sponsorships, or any type of public or private money?
The only answer that returned to this public records request came from a CIC representative on behalf of the City: “2 City staffers, 3 Charlotte International Cabinet Board members, 1 employee of the Charlotte Chamber of Commerce, 1 member of the Charlotte Chamber, 1 representative of the Carolinas Asian Chamber of Commerce, and 2 executives from Duke Energy.” (Note: this accounts for 10 people, and does not count Mayor Foxx). The Charlotte International Cabinet has raised $28,000 to support the travel expenses for 2 City staffers and 1 CIC Board member, as well as the Mayor’s Business Networking Reception in Shanghai.
A repeat inquiry squeezed out these names from the CIC, which stated that these nine people traveled to China. Citynewswatch added the professional association information: Anthony Foxx (Mayor of Charlotte), Eileen Cai (Charlotte Chamber), John Zhang (Vice President and Chief Technology Officer - Celgard LLC), Rory McNicholas (CIC Executive Board and International Teacher Exchange Services), Charles Lansden (CIC Board Vice Chair and partner in the real estate department at Katten Muchin Rosenman LLP), Ron Zurinskas (CIC Board and Bank of America), Rob Phocas (City of Charlotte Energy & Sustainability Manager), Tracy Montross (‘Special Assistant to the Mayor’ of Charlotte), and Heather Quinley (Director of EH&S National Stewardship Strategy of Duke Energy). That leaves at least a couple of mystery guests, and possibly more who were co-travelers that may or may not have also received “sponsored” travel.
Twenty-eight thousand dollars ($28,000) seems like a low number to cover cost for a minimum of 10 round trip tickets to China (wonder if they were First Class or Coach?), all lodging expenses for 10 days/10 or more people, and a big catered reception for numerous guests.
Note also that they didn’t say this included payment for the Mayor’s trip expense, although some news reports say it was covered under a Mayor’s travel budget of $5,000/year and others say the Charlotte International Cabinet funded his trip. They also wouldn’t answer whether the Mayor’s wife traveled with him and if so, who paid for her trip. There is potentially a long list of traveling companions unaccounted for.
“Charlottehappening.com” said that Benjamin DeSollar (Chairman & CEO of Sumter Packaging Corporation) also went on the trip. The article also says these companies were corporate donors:
Globeexpress services, Springs Creative, Sumter packaging, Shaw, CDM Engineering, Celgard and Dixon Hughes Goodman. Duke Energy also may be a sponsor, given that Quinley went on the trip, and that and unregulated division named Duke Energy Generation Services signed an agreement with the Chinese company ENN Group in May, complete with signing ceremony by Hillary Clinton.
There was also no answer on how invitees were chosen, but citynewswatch obtained an email that was sent from the Mayor’s Office to multiple potential donors soliciting funds. One solicitation sent to Siemans local leader Mark Pringle is shown here:
From: Montross, Tracy E
Sent: Thursday, August 25, 2011 1:06 PM
To: 'mark.pringle@siemens.com'
Cc: Foxx, Anthony R; Gordon, Alexis D.
Subject: China Delegation Sponsorship
Sent: Thursday, August 25, 2011 1:06 PM
To: 'mark.pringle@siemens.com'
Cc: Foxx, Anthony R; Gordon, Alexis D.
Subject: China Delegation Sponsorship
Good afternoon, Mark:
As follow up to your conversation with Mayor Foxx, I am forwarding a few items related to the Mayor’s trip to China in November. The attached press release provides background on the objectives of the Mayor’s trip and notes that the Mayor’s travel is paid for by the Charlotte International Cabinet (CIC), while the rest of the delegation will be sponsored by the Charlotte business community. Currently, we have two City staffers and one CIC Board member that need their travel underwritten. If Siemens becomes an Exchange Sponsor ($15,000), we would welcome a member from your company to join the Delegation on this trip to China.
Please note the “Business Networking Reception” in Shanghai is hosted by the Charlotte International Cabinet, but open to sponsorships. This reception will be held for 50+ people, including the Mayor, Charlotte delegation, and 15 members of the NC General Assembly (visiting China with the UNC Center for International Understanding) for food, drinks, and conversation related to Charlotte exports and investment. We would welcome your business associates or colleagues in China to join the Mayor’s delegation for this event. The invitation to Shanghai businesses would also include a Siemens logo, if you support the Mayor’s Delegation as a sponsor.
We hope Siemens will consider sponsoring the Mayor’s delegation to China via one of the sponsorship levels listed below. Please don’t hesitate to email or call me with questions. Many thanks for your consideration!
Sponsorship Levels
1) Exchange Sponsor ($15,000)
a. Benefits Include
i. Travel for one delegate from Sponsoring organization
ii. Premier sponsor of Mayor’s Business Reception in Shanghai on November 17, 2011. Company logo on invitation.
iii. 4 invitations for in-country staff or associates of Sponsoring organization to attend Mayor’s Business Reception in Shanghai
iv. Program Sponsor for Charlotte International Cabinet activities for FY2012
1. Sponsored Table at Mayor’s International Community Awards (MICA) event in May 2012
2. 4 VIP tickets for MICA
3. ½ page ad in MICA program
4. Listing as Charlotte International Cabinet Sponsor for FY2012, which includes website and print recognition at CIC sponsored events
5. Invitation to all CIC-hosted receptions for international delegations for FY2012
2) Premier Delegation Sponsor ($10,000)
a. Benefits Include
i. Support for one delegate from City staff or Charlotte International Cabinet
ii. Premier sponsor of Mayor’s Business Reception in Shanghai on November 17, 2011. Company logo on invitation.
iii. 2 invitations to Mayor’s Business Reception in Shanghai on November 17, 2011.
iv. Cabinet Sponsor for Charlotte International Cabinet activities for FY2012
1. Sponsor Table at Mayor’s International Community Awards (MICA) event in May 2012
2. ¼ page ad in MICA program
3. Listing as Charlotte International Cabinet Sponsor for FY2012, which includes website and print recognition at CIC sponsored events
4. Invitation to all CIC-hosted receptions for international delegations for FY2012
3) Delegation Sponsor ($5,000)
a. Benefits Include
i. Envoy Sponsor for Charlotte International Cabinet activities for FY2012
1. Sponsored Table at Mayor’s International Community Awards (MICA) in May 2012
2. Listing as Charlotte International Cabinet Sponsor for FY2012, which includes website and print recognition at CIC sponsored events
3. Invitation to all CIC hosted receptions for international delegations for FY2012
All the Best,
Tracy Montross
Special Assistant to the Mayor
City of Charlotte
600 East Fourth Street, 15th Floor
Charlotte, NC 28202
704-336-4332 Tel
704-336-3097 Fax
Another letter went out from Mayor Foxx’s office to City Council Members, County Commission Chairwoman Roberts and City Manager Walton, offering to get underwriting to sponsor them attending the China trip.
Put another way, you can spend your way in to exclusive business relationships with the government of Charlotte—and potentially “incentives” for your business. How were recipients of this opportunity chosen? Would you expect the mayor to represent you equally if you weren’t offered the opportunity or couldn’t afford a $15,000 “sponsorship”?
Derick Close at Springs Creative received a nearly identical proposal. Close is also the current Board Chair of the very controversial CRVA (Charlotte Regional Visitors Association), plagued by scandal over poor spending resulting in tremendous financial and other perks for CRVA Board Members and their associates.
IS THIS THE TAX-DEDUCTIBLE MISSION OF THE CIC?
According to the City’s website, they define “CIC Exchanges” this way:
Over the years the Charlotte International Cabinet Office has established visits and exchanges with various cities around the world, including our 8 sister cities. We work with City officials, The Charlotte Regional Visitors Authority, and The Honorary Consular Corps to promote the City abroad and highlight our international partners. Our goal is to establish an exchange for every visit we have with a purpose to promote citizenship and diplomacy. These exchange programs are typically focused on academics, business, civics, music and art, service, or sports and we make sure that each exchange has a significant educational or cultural component. Most programs offer home hosting to enrich the overall experience. All Charlotte residents are strongly encouraged to participate and more information about the various programs can be made available by contacting our office. Below is information about recent and ongoing exchanges we sponsor.
This list doesn’t include trade missions. And even though there’s a mild mention of business in this paragraph, a full examination of the “EXCHANGES” on the site demonstrate they do not fall outside personal, direct exchanges for cultural purposes.
ACCESS TO “INCENTIVE” MONEY
But WBTV’s story quoted Mayor Foxx upon his return, “We picked China as the first of these trade missions." They also said Foxx “expect(s) to see a quick partnership between one Chinese company wanting to bring its products to our city.”
The mayor said, "We are now exploring an offer made by the chair of Ying Li solar to partner with us to deliver solar panels at no cost to city schools and government buildings here."
On the other side of the coin, the Mayor is hoping to export the talents and technologies of local companies like Duke Energy and Charlotte-based Celgard to the Far East.
Mayor said don't rule out the possibility of tax incentives to attract Chinese investment. "The state gets involved. The county gets involved and the city gets involved."
Another WBTV story says:
Foxx talked about his efforts to try to get high-tech Chinese energy companies to bring jobs to Charlotte. He also hopes they'll buy technology-related things from Charlotte companies.
And
Many in the U.S. and throughout the world have been critical of China over human rights issues. Foxx says he met with folks with similar concerns before the trip, but still thinks the trip is worthwhile. "You almost can't pick a country where there's not some international relations challenge. That's generally understood, and I'll have more to say when I get home."
When he does have more to say, citynewswatch hopes the Mayor will also answer questions about exactly who funded the trip, exactly who had the expensive ear of this delegation and the other delegation comprised of NC Assembly and other business and policy leaders. Extensive searching has not yielded names of this delegation, either.
INVESTMENT BY CHARLOTTE ON THE WAY?
With taxpayer money supporting this organization directly and special access solicited to particular businesses, the public deserves to know exactly what took place financially as well. We also deserve to know what deals have been discussed to give money to businesses. Considering Mayor Foxx’s cagey comments about likely incentives he wants to offer certain businesses for coming to Charlotte or expanding in Charlotte, the call for openness is even stronger. If he’s planning to give away our money in exchange for promoting business, it’s appropriate to know what businesses had access. It’s also appropriate to know if those businesses are sound, or if they are in trouble and there will be another huge outlay of tax money given to a business with access to politicians rather than businesses which will benefit Charlotte with long-term success and good jobs for citizens.
JETION SOLAR CO. DELISTED FROM LONDON STOCK MARKET
Jetion’s status and future (one of the companies Foxx did mention) are uncertain at this time, according to a recent Telegraph article, “Chinese Aim-listed solar company is planning to delist from the London market before accepting a £60m takeover offer led by the chief executive's mother… in an unregulated deal”… in which most of those agreeing to the deal “are connected with the controlling Yang family behind Jetion.” A statement released explained they chose to delist from Aim because had “difficulty raising funds on Aim” and a “lack of liquidity.” Maybe a boost of US/Charlotte government money will help them, but will it help us?
SOLAR COMPANIES IN THE US
Even if Jetion improves as a company, low-paying jobs are predicted in US for all solar companies, The New York Times reported Nov. 22nd, “China Bends to U.S. Complaint on Solar Panels but PlansRetaliation,” and says
Chinese solar panel makers plan to shift some of their production to South Korea, Taiwan and the United States in hopes of defusing a trade case pending against them in Washington, according to industry executives.
But at the same time, the Chinese industry is considering retaliating by filing a trade case of its own with China’s Commerce Ministry.
The most likely target would be American exports to China of polysilicon — a prime ingredient in solar panels — Chinese industry executives and officials said on Monday. American manufacturers exported about $873 million of polysilicon to China last year, nearly as much in dollar terms as the value of the solar panels that China shipped to the United States.
The Commerce Department said it was considering punitive tariffs of 50 to 250 percent on Chinese solar panels, based on preliminary evidence that China was “dumping” solar panels in the United States below the cost of making and marketing them.
But because final assembly of solar panels is relatively low-tech manual labor, any Chinese expansion into Oregon (discussed in the article) would be unlikely to add many valuable American jobs.
Companies based in China supplied more than 40 percent of the American market for installed panels in the third quarter of this year.
The manufacture of polysilicon requires enormous amounts of energy — so much electricity that it typically takes the first year of operation of the panel to generate as much power as was required to make the polysilicon in it. The process requires superheating large volumes of material in electric-arc furnaces, including the melting of quartzite rock at more than 3,600 degrees Fahrenheit.
American solar panel makers, though, have had trouble competing with the Chinese, whose export industry has helped push wholesale solar panel prices down sharply — to $1 to $1.20 a watt of capacity today, from $1.80 in January and $3.30 in 2008.
Meanwhile, formerly brisk demand for solar panels in Europe has slowed, as financially pressed governments have reduced subsidies. And so far, the Chinese domestic market for solar power remains tiny. As a result many Chinese manufacturers have a capacity glut, to which they have responded by shipping more panels to the United States, driving prices down.
The United States energy secretary, Steven Chu, noted in Congressional testimony last week that solar panel prices had fallen 70 percent in the last two and a half years.
There are four main steps in making a solar panel, also known as a solar module. Using molten polysilicon to grow crystals or cast blocks of polycrystalline silicon is the first step. The second step is cutting and polishing the material into thin, smooth wafers.
The third step involves chemically treating the wafer and adding electrical contacts to turn it into a solar cell. The last step involves connecting 60 or 72 solar cells together, covering them with glass, enclosing them in an aluminum frame and adding an electrical junction box.
The United States trade case was filed against solar panels for which either of the final two steps — turning the wafer into a cell or assembling cells into a panel — was done in China.
Mr. Yuan said that Chinese manufacturers wanted to keep wafer production in China, but were making plans to ship wafers to Taiwan or South Korea for conversion into solar cells, as one way to potentially avoid any new tariffs the United States Commerce Department might decide to impose. That step is the costliest, most high-tech and most highly automated task in producing solar panels, representing about a third of the total cost.
Mr. Yuan of Grape Solar said cells made in Taiwan or South Korea from Chinese wafers would be shipped to the United States for final assembly — a step that typically accounts for a little less than a fifth of the total cost of making a solar panel.
An October article also in the NY Times by Keith Bradsher says “Unlike many other types of manufacturers, solar panel makers have fewer concerns about missing out on the Chinese market. That is because China exports 95 percent of its solar panel production, as the Chinese government and state-owned utilities have been reluctant to accept the extra cost of solar panels in generating electricity… Virtually all of the Chinese sales have been to the United States and Europe, where the Chinese panels usually qualify for generous government subsidies to consumers who choose clean energy.
From Mayor Foxx’s comments, it appears Charlotte may soon be among those generous benefactors who will prop up what may be money-eating businesses with little return.
The American solar panel industry’s case lists nearly $41 billion in loans and lines of credit to Chinese companies from state-controlled Chinese banks.
Trade cases sometimes result in foreign companies moving production to the United States. One of the biggest Chinese solar panel makers, Suntech, has already begun shipping solar cells to Goodyear, Ariz., for final assembly, to qualify for “Buy American” programs; 60 or 72 solar cells are typically bolted together to make one solar panel.
But rival Chinese makers say that final assembly of solar cells into solar panels represents only about one-tenth of the wholesale price of a solar module. Wednesday’s trade case covers imports from China not just of fully assembled solar panels ready for installation, but also of solar cells.
That’s because the assembly of the cells is mostly low-tech, low-paying jobs, even for the companies that continue to be in business.
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