Why Are We Still Paying Tim Newman? Will DNC Scrutiny Finally Bring CRVA Accountability?

UPDATE:

WFAE has done an interview with CRVA CEO Tom Murray on September 13th, 2012, discussing the outside firm hired to evaluate the economics of the DNC Convention.  With prior talk of public funding for a mammoth hotel downtown, the expected results we are paying for already seem suspect:

"Clearly there were people that felt they had to go too far to stay here (during the DNC)," says Murray.  "If we find that we'd love to do lots of more DNCs, than how would we be better at delivering a DNC-type convention? We might say we'd have more hotels closer to the center.   But we're not ready to say that yet."

Will he be "ready to say that" when the study he has commissioned to lend credibility is complete?  Is this just another consultant to prepare inflated numbers to justify more huge tax expenditures?  Call on City Council and Mayor Foxx to force the CRVA books open NOW.   The records belong to the public.  

See email addresses at the right of this column. 

Mr. Murray also didn't mention the prostitution and crack dealing alleged on the in-town hotels that press representatives highlighted at the National Review.  Chief Monroe and Mayor Foxx may want to focus on that first.

ORIGINAL POST:

PUBLIC RECORDS OF CRVA SPENDING

A recent set of requests to find out what money, why, and for how long the CRVA (Charlotte Regional Visitors Authority) will be paying Tim Newman went to City of Charlotte Attorney Hagemann, the CRVA Board, and the CRVA Board’s attorney (Cameron Furr), asking again for that public information.  No one yet seems to have legal concerns for refusing to answer.  Is it possible no larger media outlets have been asking?  Or have they been rebuffed as well and gotten tired of asking?

What about Mayor Foxx and City Council who have proclaimed their interest in a more transparent CRVA for many months?  Do they know already…

The CRVA has already been highlighted here in previous Citynewswatch posts and more recently in a series of Charlotte Observer stories about “overestimating” millions of dollars in profit impact the CRVA has claimed.  Check this article, which provides links to the whole series.  The Observer explained that 

The Charlotte Convention Center has cost taxpayers as much as $30 million annually for construction debt, operating losses and incentives worth of hundreds of thousands of dollars to win business. The promised payback from the investment hasn’t materialized.

and

In the past, the CRVA has inflated attendance by tens of thousands of people, which in turn led to claims of tens millions of dollars of economic impact. Much of that money likely never materialized.

In other instances, the CRVA added millions of dollars of visitor spending for no apparent reason, as was the case with the 2010 National Rifle Association Convention.  For that convention, the CRVA increased its estimate of spending by 600 percent.

Now we are paying an outside consulting company $25,000 to determine a better method and identify whether and how much was net by the DNC Convention.  So the full-force denial about Newman’s payments is really puzzling.  The Observer also quotes Mayor Foxx:

“We have pushed for change at the CRVA in a very public way,” Foxx said in a statement. “The new leadership team has had less than a year to get established, and I have confidence that we’ll see good results and better accountability from them. After the Convention, I will ask them to update us on their efforts to date.”

We’ll see if Mayor Foxx answers all the questions, including why former CEO Tim Newman, who left under a cloud of revelations about lavish and possibly reckless spending, is still receiving huge sums of money from tax-funded CRVA.  In the wake of conventioneers leaving town, we need to take accurate stock of the effects on life and economic impact at all levels. 

Despite promises that Charlotte’s taxpayers will not have a negative effect, it’s safe to say that the real impact on City and County staff, budget, and businesses has been great and must be counted on the balance sheet.  Mayor Foxx also swore Charlotte tax payers would not be on the hook for any leftover DNC bills, no matter what fundraising goals were met or missed.  With word out now (via Bloomberg news) they missed by $15 million, people are nervous about managing and reporting the finances.

LAWYERS AND BOARD MEMBERS WILL NOT SUBMIT RECORDS

The latest request letter concerning just Newman’s payment information reiterates some points made in earlier letters, and there has been no response since the CRVA received this:

The Resolution shown below, sent to you again, establishes the CRVA and shows:

"This First Amendment to Interlocal Agreement, made July_' 2009 by and between the CITY OF CHARLOTTE, a municipal corporation organized under the laws of the State of North Carolina (the "City"), and the CHARLOTTE REGIONAL VISITORS AUTHORITY, a unit of local government and political subdivision of the City of Charlotte (the "CRVA")."  **(SEE FULL RESOLUTION AT THE END OF THIS POST)

Mr. Hagemann's statement that "the CRVA is a legal entity separate and distinct from the City of Charlotte" is not quite correct and the "clear legal facts" are that the CRVA is a municipal corporation, making the records and terms I have asked for public.  Please release the records immediately.  Your continued efforts to hide this information are not acceptable and cause a great deal of increased concern regarding the spending of public money.

Robert Hagemann’s terse reply on August 28^th says he believes the CRVA is not an entity which is part of the City of Charlotte:

Although I previously provided you the following response, I am resending it for the benefit of the members of the CRVA board who you have copied:

I am going to repeat what I previously advised – the CRVA is a legal entity separate and distinct from the City of Charlotte and I am not its legal advisor.  Your repeated assertions to the contrary do not change these clear legal facts.  And I do not intend to debate the matter.

Robert E. Hagemann

CITY ATTORNEY

OFFICE OF THE CITY ATTORNEY

PH:704.336.2651

FAX: 704.632.8331

rhagemann@charlottenc.gov

www.charlottenc.gov

Mr. Hagemann does not assert the records are not public—only that he says he does not have them.  It seems obvious he could get them.  When consulted, is it his responsibility?

Also, Mr. Hagemann seems to be stating he will not involve himself in anything having to do with the CRVA, based on his argument.  But isn’t that part of his job responsibility to be chief legal adviser for matters pertaining to City business?  It would be good to hear Mayor Foxx’s position and the rest of City Council’s position on this.

BEFORE THE CITY ATTORNEY STATED THE CRVA IS SEPARATE FROM CHARLOTTE…

After asking for all the pay, settlement, retirement, or other salary or benefit information for some time, the CRVA responded with this:

On Thu, Jul 26, 2012 at 1:40 PM, Cameron Furr <cfurr@grierlaw.com> wrote

Mr. Newman began working for the CRVA on November 29, 2004 as the Chief Executive Officer.  He served in that position until December 14, 2011, when he became Chief Marketing Officer.  Mr. Newman resigned on February 24, 2012.  There was no "dismissal, suspension or demotion for disciplinary reasons taken by the municipality" and therefore there is no "written notice of the final decision of the municipality setting forth the specific acts or omissions that are the basis of the dismissal." 

As noted above, Mr. Newman was employed as CEO.  He became Chief Marketing Officer, a position which reported to the CEO.  He then resigned.  There was no promotion for which we can provide a date and general description of the reasons for the promotion.

"Current Salary,"  "For purposes of this subsection, the term 'salary' includes pay, benefits, incentives, bonuses, and deferred and all other forms of compensation paid by the employing entity."  We have provided you with amounts paid to Mr. Newman from March 16, 2012 through July 6, 2012 (see below).  If there is another period during which Mr. Newman was paid by the CRVA for which we could provide that information, we will gladly provide it.

As noted above, Mr. Newman resigned his position with the CRVA on February 24, 2012.  He is no longer an employee of the CRVA.

Pay Date          Pay                  Car Allowance   Total Payment

07/06/2012      $9,461.54                                 $  9,461.54

06/22/2012      $9,461.54         $694.58            $10,156.12

06/08/2012      $9,461.54                                 $  9,461.54

05/25/2012      $9,461.54         $694.58            $10,156.12

5/11/2012        $9,461.54                                 $9,461.54

4/27/2012        $9,461.54         $694.58            $10,156.12

4/13/2012        $9,461.54                                 $9,461.54

3/30/2012        $9,461.54         $694.58            $10,156.12

3/16/2012        $9,461.54                                 $9,461.54

Again, since the CRVA did not release the full information requested, so:

If you maintain there was no settlement for Mr. Newman, then is he still an employee?  Or would you define the amount of money he is being paid as some sort of other payment or benefit?  That must be defined.  Is he still an employee?  Is he a consultant?  Is this a gift?  Is this money being paid out of regular salary budget?  This is public information.

When will these payments stop?  Is he under contract so that they will stop, or do you plan to pay him indefinitely?  If you don't define these payments as part of a "settlement," do you define them as part of a "contract?"  If so, please provide that contract which would be public record. He is either salaried and a current employee, contracted (in which you must provide the contract), received some sort of settlement (or if you wish to title it differently, such as separation agreement) to leave, or is being paid as a gift of some sort.

Is Mr. Newman currently employed or contracted by the CRVA?  Is he performing any work for you?

Thanks for clearing this up and providing all the information required by law without further delay.

On Fri, Aug 17, responding to Cameron Furr’s email, another request was sent:

Dear Mr. Furr,

I assume you are "unable to understand anything in this email that is different from ... prior emails" because the law has not changed.  My request has not changed.  I did highlight your own statements back to me, hoping you that would help you understand, as you and members of your organization had indicated your difficulty understanding the law and struggle to find information.  However, I believe you have had ample time to discover the very issues you cited back to me and the basic information about contracts and settlements which are also included.  

All issues of pay, benefits, incentives, bonuses, and deferred and all other forms of compensation paid by the employing entity are salary and must be disclosed.  Also, any contracts must be disclosed as public documents.  Also, any settlements must be disclosed as public documents.  So, no matter what the source of the reason for the payment, you must disclose.  Please provide the information I have asked for.

Aug 21, 2012  Cameron Furr <cfurr@grierlaw.com> wrote:

I continue to attempt to understand what information or document you might be requesting that falls under a North Carolina statute which allows or requires disclosure.  While you have not asked for this specifically, following are the amounts paid to Mr. Newman since July 6th, the date of the last payment we reported to you.  These amounts are disclosed pursuant to Section 160A-168(b)(7) of the North Carolina General Statutes.  Other than the following, the CRVA does not have any other information which falls within your request, as we can understand it, and which is disclosable under the North Carolina General Statutes.  Thank you. 

Pay date                                Pay    

07/20/2012                         $9,461.54 plus car allowance $694.58                

08/03/2012                         $9,461.54

08/17/2012                         $9,461.54

Mr. Furr gives no rebuttal to what seems to be a misstated personnel exclusion—where there is no specific reason he feels the terms of payments and car allowances would be permitted to be held as confidential when the law clearly allows for release of that information. 

Mr. Furr even points out himself that “the public information of ‘salary’ defined includes pay, benefits, incentives, bonuses, and deferred and all other forms of compensation paid by the employing entity."  Also, see North Carolina § 132‑1.3. Settlements made by or on behalf of public agencies, public officials, or public employees; public records (a) Public records, as defined in G.S. 132‑1, shall include all settlement documents in any suit, administrative proceeding or arbitration…   But his email on August 24^th states:

I have tried to explain to you the personnel records exceptions to North Carolina public records laws and how that limits the disclosure of documents.  We have provided you with "salary" paid to Mr. Newman to date as required by law. 

This led to yet another clarification to attorney Furr:

The money you are paying to Mr. Newman falls into a category which you must disclose, including if it is salary, a benefit package, incentive package, bonus package, deferred compensation package, contract payment, settlement payment, or other type of compensation.  The TERMS of those agreements are PUBLIC INFORMATION, including how much the payments are and when they will stop (if ever).

So far, then, CRVA has confirmed at least $117,011 in some kind of payments and car allowances to former CEO Tim Newman.  If he has continued on schedule, that number would be $136,629.  That’s not bad money for ten or twelve weeks of not working somewhere.

Citynewswatch will update you when editorial staff receives word that the CRVA or City of Charlotte replies.  Or, ask them yourself:

cfurr@grierlaw.com

rhagemann@charlottenc.gov

http://crva.com/contactinfo/contact.aspx

REFERENCES

Here is a portion of Chapter 132, the Public Records Law Chapter of North Carolina General Statutes.  Read the entire chapter and other statutes at www.ncleg.net.  Also check out N.C. Sess. Laws c. 169 (HB 961)(the Act) enacted by the General Assembly July 10, 2010, which broadened and defined release of information concerning public employee records and information.

Chapter 132.

Public Records.

§ 132‑1. "Public records" defined.

(a) "Public record" or "public records" shall mean all documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data‑processing records, artifacts, or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions. Agency of North Carolina government or its subdivisions shall mean and include every public office, public officer or official (State or local, elected or appointed), institution, board, commission, bureau, council, department, authority or other unit of government of the State or of any county, unit, special district or other political subdivision of government.

(b) The public records and public information compiled by the agencies of North Carolina government or its subdivisions are the property of the people.

§ 132‑1.3. Settlements made by or on behalf of public agencies, public officials, or public employees; public records.

(a) Public records, as defined in G.S. 132‑1, shall include all settlement documents in any suit, administrative proceeding or arbitration instituted against any agency of North Carolina government or its subdivisions, as defined in G.S. 132‑1, in connection with or arising out of such agency's official actions, duties or responsibilities, except in an action for medical malpractice against a hospital facility. No agency of North Carolina government or its subdivisions, nor any counsel, insurance company or other representative acting on behalf of such agency, shall approve, accept or enter into any settlement of any such suit, arbitration or proceeding if the settlement provides that its terms and conditions shall be confidential, except in an action for medical malpractice against a hospital facility. No settlement document sealed under subsection (b) of this section shall be open for public inspection.

(b) No judge, administrative judge or administrative hearing officer of this State, nor any board or commission, nor any arbitrator appointed pursuant to the laws of North Carolina, shall order or permit the sealing of any settlement document in any proceeding described herein except on the basis of a written order concluding that (1) the presumption of openness is overcome by an overriding interest and (2) that such overriding interest cannot be protected by any measure short of sealing the settlement. Such order shall articulate the overriding interest and shall include findings of fact that are sufficiently specific to permit a reviewing court to determine whether the order was proper.

(c) Except for confidential communications as provided in G.S. 132‑1.1, the term "settlement documents," as used herein, shall include all documents which reflect, or which are made or utilized in connection with, the terms and conditions upon which any proceedings described in this section are compromised, settled, terminated or dismissed, including but not limited to correspondence, settlement agreements, consent orders, checks, and bank drafts. (1989, c. 326.)

The following resolution regarding the formation of the CRVA, which may be key, is even provided to the Board and attorneys:

 July 27, 2009

Resolution Book 42, Page 42

STATE OF NORTHCAROLINA

COUNTY OF MECKLENBURG

First Amendment to Interlocal Agreement

This First Amendment to Interlocal Agreement, made July_' 2009 by and between the CITY OF CHARLOTTE, a municipal corporation organized under the laws of the State of North Carolina (the "City"), and the CHARLOTTE REGIONAL VISITORS AUTHORITY, a unit of local government and political subdivision of the City of Charlotte (the "CRVA").

WITNESSETH:

WHEREAS, the parties hereto are authorized pursuant to Article 20 of Chapter 160A of the North Carolina General Statutes to enter into contracts or agreements with each other in order to provide for the joint exercise or the contractual exercise by one for the other of any power, function, public enterprise, right, privilege, or immunity of local government; and

WHEREAS, pursuant to, inter alia, G.S. 160A-489 the City is authorized to establish and support public auditoriums, coliseums, convention centers; and

WHEREAS, pursuant to Chapter 5, Article II of the City Charter (Session Law 200-26), the Authority is vested with the authority to control, manage, and operate City-owned auditoriums, coliseums, and convention centers; and

WHEREAS, on January 13, 2003 the City and the CRYA signed an Interlocal

Agreement to confer upon the CRVA the powers, functions, rights, privileges, and immunities of the City for purposes of the management and operation of City-owned auditoriums, coliseums, and convention centers in order to facilitate the more economical operation of the same and to

better serve the public; and WHEREAS, pursuant to Session Law 2005-68, the CRVA was vested with the additional authority to control, manage, and operate the NASCAR Hall of Fame Museum; and

WHEREAS, the City desires to confer upon the CRYA the powers, functions rights, privileges, and immunities of the City for purposes of the management and operation of the NASCAR Hall of Fame Museum in order to facilitate the more economical operation of the same and to better serve the public.

NOW, THEREFORE, in consideration of the premises and the fulfillment of the terms of this Agreement, the parties hereto agree that the Interlocal Agreement between the City and the CRVA dated January 13, 2003 is amended to read as follows:

I. In addition to the powers, functions, rights, privileges, and immunities directly provided to the CRYA by law, in fil1filling its responsibility to control, manage, and operate City-owned auditoriums, coliseums, convention centers and the NASCAR Hall of Fame Museum, the CRVA shall have in addition thereto, and not in substitution thereof, all of the powers, functions, rights, privileges, and immunities of the City.

July 27, 2009

Resolution Book 42, Page 43

2. The CRVA may exercise or act upon the powers, functions, rights, privileges, and immunities conferred on it pursuant to paragraph I of this Agreement either unilaterally or jointly with the City.

3. This Agreement shall continue in perpetuity unless and until it is terminated by operation of law, by mutual consent of the parties, or unilaterally by either party, with or without cause, upon six (6) months written notice to the other party. The parties may amend this Agreement by mutual consent.

4. If the parties jointly exercise or act upon the powers, functions, rights, privileges, and immunities conferred pursuant to paragraph I of this Agreement, the manner of appointing any personnel necessary to the execution of the undertaking and the method of financing the undertaking, including the apportionment of costs and revenues, shall be set forth in the Instrument that constitutes the joint exercise. If the CRVA unilaterally exercises or acts upon the powers, functions, rights, privileges, and immunities conferred upon it pursuant to paragraph I of this agreement, the CRYA shall be responsible for appointing any personnel necessary to the execution of the undertaking and for the financing of the undertaking.

5. Ownership and title of any coliseums, auditoriums, convention center, and the NASCAR Hall of Fame Museum real property that might be the subject of the CRYA's exercise or actions upon the powers, functions, rights, privileges, and immunities conferred upon it pursuant to paragraph I shall remain vested solely in the City, and under no circumstances shall the CRVA have the power or authority to unilaterally convey an ownership interest in such properties.

Executed as of the day and year first above stated by authority duly granted by the government boards of the parties hereto.

CITY OF CHARLOTTE

Curt Walton, City Manager

CHARLOTTE REGIONAL

VISITORS AUTHORITY

Tim Newman, Chief Executive Officer

July 27, 2009

Resolution Book 42, Page 44

CERTIFICATION

I, Stephanie C. Kelly, City Clerk of the City of Charlotte, North Carolina, DO HEREBY CERTIFY that the foregoing is a true and exact copy of Resolution adopted by the City Council of the city of Charlotte, North Carolina, in regular session convened on the 27th day July, 2009, the reference having been made in Minute Book 128, and recorded in full in Resolution Book 42, Pages (41-44).

WITNESS my hand and the corporate seal of the Ci~~~~1I'

     (CITY OF CHARLOTTE SEAL)

Mayor Foxx’s China Trade Trip: Spending up the Wrong Tree?

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 21^st 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.”  T Philanthropy, Voluntarism, and Grantmaking / T11 (Single Organization Support)

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

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. 22^nd, “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.