We’ve previously discussed how NCInnovation is not the answer for growing North Carolina’s economy.
Letting a nonprofit pick which university research will receive extra backing and a fast track to commercialization creates winners and losers, something that is not worth $500 million taxpayer dollars.
This type of government intervention does NOT have a good track record. Because of its questionable transparency, similar programs in other states allowed political corruption to run rampant.
In fact, Carolina Journal just released another scathing report on NCInnovation's lack of transparency by seemingly failing to adhere to general accepted accounting principles. One of NCI's own board members has even gone so far as to ask the state auditor to investigate.
In this week’s Locke Notes, we’ll discuss a failed Texas program that should warn us about the risks of doling out taxpayer funds to NCInnovation.
But if anything, the Texas ETF is a poster child for why we should avoid such programs.
Created in 2005 to move ideas from “lab to market” and invest in startups, the fund saw a high degree of corruption and cronyism. In fact, then-Texas Governor Rick Perry’s campaign donors and ETF board members saw millions awarded to their companies.
Could this happen with NCInnovation?
One failure of the Texas ETF was that its board featured powerful Texas politicians such as the governor and lieutenant governor. While the NCInnovation board does not include these prominent officials, it is still dominated by political appointees.
The North Carolina state government should open its eyes to the potential for corruption and wasted taxpayer dollars.
Nearly a decade after the Texas program’s founding, one disillusioned ETF recipient remarked, “Not for any money in the world would I do business with ETF.”
Although NCInnovation will not invest taxpayer funds directly into private companies, the fundamental criticisms of the program remain valid. NCInnovation is still using taxpayer money to pick winners and losers.
