Easley urged to help lure businesses; A state auditor's report urges the governor to more actively recruit new companies and says economic development

BYLINE: Jonathan B. Cox, Staff Writer

Gov. Mike Easley could be a better salesman for North Carolina, concluded a state auditor's report that reviewed efforts to attract new businesses to the state.

Though Easley has increased incentives used to win investment, he needs to work on the personal touch that can sway prospects, said the report, released Wednesday. In a survey of local economic development groups, 13 of the 30 respondents said that he fails to play a key and active role in recruiting.

The report -- which Easley's office disputed -- outs complaints long whispered in economic development circles about his role. In the game of business courtship, recruiters say a call or visit from the governor can soothe executive egos and influence their location decisions.

In the auditor's report, one respondent griped that Easley "routinely does not show up for important" events. Another said he should make recruiting "seem as if it is one of his greatest priorities." All survey responses were confidential.

Two earlier consulting studies done for the state recommended that Easley take a more visible role in recruiting and "the concerns of the economic development community should be recognized and addressed," State Auditor Leslie W. Merritt Jr. wrote in his report.

Merritt's office initiated the review as part of an ongoing evaluation of economic development in North Carolina. His staff interviewed legislators, members of Easley's office and Department of Commerce officials. They reviewed records and conducted the surveys.

The report found that North Carolina's objectives and vision for economic development are not clear. A plethora of groups and agencies -- the Commerce Department, local chambers of commerce, regional economic partnerships, a statewide board and others -- have different approaches and goals.

"Without a statewide marketing plan and better coordination of activities and more clearly defined roles ... there is confusion," the report said.

That also highlights why the governor's actions are important. He plays "a key role in determining the economic development landscape," the report said.

In a sharply worded rebuke of the report's conclusion, the Department of Commerce said that Easley focuses on action, not appearances. He works behind the scenes to develop and push incentives, education and other policies that make North Carolina conducive to business, the two-page response said.

"The suggestion that the governor ... should instead use his energy and resources to be a 'cheerleader' defies reason," the response said.

Easley's office was more blunt. "It was clear the auditor does not understand economic development," spokesman Seth Effron wrote in an e-mail message.

In national rankings, North Carolina often is named among the best places for business and has had a string of successes in winning expansions. In the past year, companies including drug maker Novartis, financial services company Fidelity Investments and Google have announced new operations in North Carolina.

But it has missed out on some big ones, too. Boeing in 2003 passed over North Carolina for a new facility, and Toyota this year shunned the state for Mississippi to build a new auto plant.

An Easley staffer told the auditor's office that the governor serves best as a deal closer. Effron said that Easley regularly meets and calls executives but declined to elaborate because of confidentiality agreements.

In Virginia, which often competes with North Carolina for jobs, Gov. Tim Kaine has at least a call a week with prospects, said his spokesman, Kevin Hall. In the 17 months he has been in office, Kaine has traveled to Canada and Asia to meet with companies.

Virginia governors "nurture these relationships sometimes for many years," Hall said. "A governor's delegation opens doors at a much higher corporate level."

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WHAT REPORT FOUND

An auditor's report on economic development focused on three main findings:

Problem: Many groups are involved in economic development, leaving no clear vision, objectives and roles in recruiting.

Recommendation: The Department of Commerce should seek legislation clarifying its authority. It should then be the traffic cop for recruiting, defining responsibilities and marketing.

Problem: Recruiters, especially at the local level, don't think Gov. Mike Easley is doing enough to help woo new companies.

Recommendation: His office should recognize the concerns and take action.

Problem: Regional partnerships, which get state funding, need more oversight.

Recommendation: The Commerce Department should establish more comprehensive monitoring.