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ABOUT THIS BLOG: No single quality better defines The News & Observer than its dogged investigative reporting.

Our work is aimed at revealing things our readers don’t know. Examples include shining light on rogue agents and disturbing practices and policies at the State Bureau of Investigation; probationers who commit murder while under the state's watch; the state's failed mental health system; the perks of power claimed by former Gov. Mike Easley; and Pulitzer-Prize-winning work on the North Carolina hog industry.

The N&O's Investigations team has won numerous awards, including recognition from Investigative Reporters and Editors; the Associated Press Managing Editors; the Associated Press Sports Editors; the Goldsmith Prize for Investigative Reporting; the National Headliner Awards; the Sigma Delta Chi Awards from the Society of Professional Journalists; the McClatchy Co. President's Awards; and the N.C. Press Association's investigative and public service awards.

This blog contains some of our previous work and news we think you'll find interesting. We post fresh updates and follow-ups to stories, as well as supplemental information to our investigations. We also try to point you to other great investigations from around the country.

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Reaction to fracking-for-incentives proposal

There is skepticism from left- and right-leaning organizations about the plan backed by the McCrory administration to add a tax on fracking to raise money for corporate incentives.

As we reported Friday, Commerce Secretary Sharon Decker is a particularly strong advocate of the plan. She said Gov. Pat McCrory calls her the greatest advocate of fracking around. (Click here to read the story.)

Reaction from Jon Sanders, Director of Regulatory Studies at the libertarian/conservative leaning John Locke Foundation, was blistering.

"Follow the logic there," he wrote in a blog post about the proposal. "Decker wants fracking here not because it will create new jobs and drive new investment, but because it will, in the course of creating new jobs and driving new investment, also be a possible source of new taxation, the proceeds of which Decker can give away to her chosen 'winners' and then claim credit for creating new jobs and driving investment."

From the left, Rob Schofield, Director of Research and Policy Development at N.C. Policy Watch, wrote in a blog post that the plan highlights an area in which "conservatives and progressives" have shared skepticism.

He expresses concern that McCrory "seems bent upon not just using corporate incentives, but dramatically expanding them."

The use and abuse of civil forfeiture

The New Yorker magazine will publish on Aug. 12 a deeply reported article on civil forfeiture laws.

"Under civil forfeiture, Americans who haven’t been charged with wrongdoing can be stripped of their cash, cars, and even homes. Is that all we’re losing?" the magazine asks.

The report includes a North Carolina mention in this passage that sums it up:

"The basic principle behind asset forfeiture is appealing. It enables authorities to confiscate cash or property obtained through illicit means, and, in many states, funnel the proceeds directly into the fight against crime.

"In Tulsa, Oklahoma, cops drive a Cadillac Escalade stencilled with the words 'This Used To Be a Drug Dealer’s Car, Now It’s Ours!' In Monroe, North Carolina, police recently proposed using forty-four thousand dollars in confiscated drug money to buy a surveillance drone, which might be deployed to catch fleeing suspects, conduct rescue missions, and, perhaps, seize more drug money. Hundreds of state and federal laws authorize forfeiture for cockfighting, drag racing, basement gambling, endangered-fish poaching, securities fraud, and countless other misdeeds.

"In general, you needn’t be found guilty to have your assets claimed by law enforcement; in some states, suspicion on a par with 'probable cause' is sufficient. Nor must you be charged with a crime, or even be accused of one. Unlike criminal forfeiture, which requires that a person be convicted of an offense before his or her property is confiscated, civil forfeiture amounts to a lawsuit filed directly against a possession, regardless of its owner’s guilt or innocence.

"One result is the rise of improbable case names such as United States v. One Pearl Necklace and United States v. Approximately 64,695 Pounds of Shark Fins. (Jennifer Boatright and Ron Henderson’s forfeiture was slugged State of Texas v. $6,037.) “The protections our Constitution usually affords are out the window,” Louis Rulli, a clinical law professor at the University of Pennsylvania and a leading forfeiture expert, observes. A piece of property does not share the rights of a person. There’s no right to an attorney and, in most states, no presumption of innocence. Owners who wish to contest often find that the cost of hiring a lawyer far exceeds the value of their seized goods. Washington, D.C., charges up to twenty-five hundred dollars simply for the right to challenge a police seizure in court, which can take months or even years to resolve."

But the piece also makes clear that North Carolina stands alone in trying to eliminate the "abuse" of the practice. North Carolina is the only state, according to the article, that requires a criminal conviction before a person’s property can be seized.

Click on this link to read the full article

Legislature to eliminate Rural Center, create new rural agencies

By J. Andrew Curliss

Leading lawmakers in the House and Senate would cut off any new state funding to the troubled N.C. Rural Economic Development Center as part of settling the next state budget.

In striking a deal to wind up budget negotiations, legislators announced Sunday they are steering the state toward a new approach on rural assistance.

They would cut off the Rural Center from a proposed $36 million in the next two years -- an amount sought by the House.

Instead, using about that same amount of money, they would create several new initiatives under the administration of Gov. Pat McCrory that have traditionally been a focus of the taxpayer-funded but nonprofit Rural Center.

Among them:

* A new Rural Economic Development Division in the state Department of Commerce that would focus on rural needs. It would receive $24.2 million over the next two years and its mission would include grant making. It would also handle a one-time $350,000 to assist with extending broadband connections to rural areas.

* A new Water Infrastructure Authority. It would address critical water needs in rural counties. It would receive $9.5 million over the next two years.

* A new Limited Resource Communities grant program. It would be a competitive grant program for rural areas and would be funded with $2.5 million in the second year of the two-year state budget.

In joint news releases, House and Senate officials said the idea would provide more accountability and invest in a "streamlined and efficient program where our rural communities can get support and resources they need without regard to political connections."

A News & Observer series last month documented a host of problems at the Rural Center, which was created by lawmakers in 1987, including how political influence steered some grants.

A state audit last week found a lack of adequate grant monitoring and a lack of internal financial controls, but auditors said they did not conduct a broader performance review.

The McCrory administration last week halted the Rural Center from spending state money, citing the audit and the center's response to the audit, which State Auditor Beth Wood said was inaccurate.

'Prognosis:Profits' team wins RFK Journalism Award

Our series on nonprofit hospitals, "Prognosis: Profits," has been honored with another national award: The Robert F. Kennedy Journalism Award.

The series, which was published last year, revealed huge salaries for urban hospital executives, substantial cash reserves, weak charity-care efforts and reported on the hospitals' aggressive efforts to collect payments from poor patients. It was a joint effort with The Charlotte Observer and won the domestic print category. Primary congratulations go to Joseph Neff, David Raynor, Ames Alexander and Karen Garloch.

This is the 12th national contest in which the hospital series has either won or placed, and the seventh first place. We don't do the work for awards, but it's nice to hear that others with knowledge of our work think it's worthy of notice.

To my knowledge, this is the N&O's first time to win the RFK award. It honors "outstanding reporting on issues that reflect Robert Kennedy’s dedication to human rights and social justice," and includes categories in books, international journalism, TV, radio and new media. The award will be presented Sept. 26 in Washington, when the organization's grand prize will also be announced.

Steve Riley, senior editor

Fast track may be too quick for special committee on Rural Center

Former state Rep. Carolyn Justice, a Republican from Pender County, said she has doubts that the committee she is preparing to lead in a review of the taxpayer-funded Rural Center can finish its work by an announced deadline of July 31.

She said a "thorough review" probably cannot happen in that quick of a timeframe.

Justice, who has participated in Rural Center events over the years, said her goal would be to get to the bottom of any problems at the center, fix them, and ensure there is confidence in how it awards, monitors and handles grants with taxpayer funds.

The Center has received about $25 million a year over the past four years.

She said she did not know how long a complete review would take. She said the Rural Center's budget is in doubt as part of the state budget process, and she would intend to "tread carefully" until that process is complete.

"I'm concerned about protecting the rural counties in North Carolina," she said. "My effort is not to protect the Rural Center."

A news release from the Rural Center's board chairwoman on Wednesday said the plan would be to complete a review by the end of July. Justice said she could not predict a timeframe for a review that she would agree to lead.

June 20: Rural Center says it plans 'aggressive' review

The N.C. Rural Economic Development Center said Wednesday it will conduct a “timely, aggressive, and responsive” review of its grants after reporting in The News & Observer raised questions about how taxpayer money has been handled by the nonprofit organization.

The Rural Center’s board chairwoman, Valeria Lee, wrote in a letter to board members Wednesday that she would appoint an eight-person committee to address “the concerns of board members and the public” by July 31 about how the center awards, monitors and reports on its grants.

Read more by clicking here

June 19: Debate forms around Rural Center

Several board members of the taxpayer-funded N.C. Rural Economic Development Center say they are concerned about practices brought to light in a recent News & Observer series and welcome additional oversight.

Read more by clicking here.

June 15 and June 16: Series on how the Rural Center spends money

Part 1 of 2

Main story: NC rural agency claims jobs that don't exist, funds retail, service and other questioned jobs. Click here to read more

Sidebar: A sewer grant but no jobs. (And a senator intervenes). Click here to read more

Sidebar: Rural Center finds a way on president's $200,000-plus salary. Click here to read more

Online only

Searchable database of Rural Center grant projects: Click here to read more

Documents. Sweepstakes file: Click here to read more

Documents. Shelby project: Click here to read more

Documents. Wal-Mart letters: Click here to read more


Part 2 of 2

Main story: Politicians and the powerful touch NC Rural Center cash. Click here to read more

Sidebar: Rural Center to factor in state budget battle. It did last year, too, emails show. Click here to read more

Online only

Searchable database of Rural Center grant projects: Click here to read more

Documents. Roses file: Click here to read more

Documents. Movie theater file: Click here to read more

Baker Tilly's work on UNC academic fraud scandal tops $900K

The final tally for the accounting firm UNC-Chapel Hill hired to delve into the academic fraud scandal and review various reforms is $941,000, a spokeswoman said last week.
UNC officials originally hired Baker Tilly, a national firm, to look at numerous reforms the university had put in place or planned to put in place after initially finding more than 50 lecture-style classes in the African studies department that never met, but only required a term paper instead.
They expanded the firm's work to assisting former Gov. Jim Martin in determining how far back the no-show classes went and why they happened in the first place. That report came out in December and was updated a few weeks later.
Like the prior internal report, the Martin report did not find an athletic scandal, but did find that the no-show classes and unauthorized grade changes went at least as far back as the mid 1990s.
Martin, a former Davidson College chemistry professor, worked at no charge, and only billed the university for his expenses.
In March, the university said it had spent roughly $490,000 on Baker Tilly. UNC spokeswoman Karen Moon said the remaining $450,000 largely reflected billings processed by the university since then.
According to a copy of UNC's agreement with Baker Tilly, the firm was to provide five employees at a combined cost of $1,520 per hour for the work.
Martin's report has drawn controversy. He and Baker Tilly had to back off of one of the report's key findings -- that athletics officials had raised questions about the African studies department's no-show classes only to be told by a faculty committee not to be concerned about the classes -- after they could not produce evidence in support of that conclusion from anyone other than the claims of the athletics officials and the university's faculty representative to the NCAA.
On Sunday, the News & Observer reported on email correspondence that challenged another finding, that the academic support program for athletes at UNC did not collaborate with African studies chairman Julius Nyang'oro or his department manager, Deborah Crowder, to create the no-show classes.
Moon said in an email response that the university stands by the work of Martin and Baker Tilly. "Their analysis was independent, objective and thorough," she said.
The Baker Tilly expenses, combined with money spent on outside public relations related to the scandal, means the university has spent more than $1.4 million on consultants to address the academic fraud.
Moon said all of that money is coming from a university foundation that takes in private donations, so no taxpayer dollars have been spent.

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