A week after referring to the Rhode Island Economic Development Corporation’s approach to communicating with North Kingstown officials as “arrogant” and suggesting that it might be time to put the EDC directly under the control of the executive branch, House Majority Whip Suzanne Henseler (D-North Kingstown) reiterated that she is seriously considering filing legislation that would take the “quasi” out of RIEDC.
The legislator’s comments came on the heels of a mercury spill at a Quonset Point power plant that drew the RIEDC under fire when officials of the agency failed to notify five employees there immediately of the potential danger — and were slow in reporting the incident to officials in North Kingstown.
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Henseler believes the quasi-public RIEDC is not as accountable to the public as it could be — if it were set up like other state departments, such as the Department of Environmental Management or Department of Transportation.
But Gov. Lincoln Almond stands behind the agency. He said the way the RIEDC now operates is working well.
Lisa Pelosi, Almond’s director of communications, said the governor “has some concerns,” but he dismisses the notion that the RIEDC is less accountable to the public than other state agencies.
“The whole reason we went from the Department of Economic Development to the Rhode Island Economic Development Corporation was to make EDC more accountable,” she said.
Clare Eckert, director of communications at the RIEDC, said there are several reasons the agency should be quasi-public.
In many cases, said Eckert, it is important for the RIEDC to be able to ensure confidentiality while it negotiates deals with businesses that may not want particular financial information made public.
In some cases, state law protects the privacy of financial information.
And as for the issue of accountability, Eckert said the RIEDC is no less accountable because of its quasi-public status.
“We are overseen by a corporate board of directors that we must report to – as well as the general public,” she said. “The kind of creative ideas and the dialogue that occurs at the board level makes us accountable and allows us to respond to questions.”
Eckert added that the RIEDC operates more like a business than a government agency in other ways. For example, she said, employee raises at the RIEDC are based strictly on performance.
“There is an incentive for our employees to perform,” she said.
She also mentions training and the fact that workers at the RIEDC are exposed to a wide range of business-sector experiences, particularly when it comes to recruiting new businesses to the state or helping existing ones to expand.
“We attract young people who are interested in a business environment,” said Eckert.
The RIEDC, said Eckert, “is best suited to run from a quasi-public environment.”
Under scrutiny
But Henseler doesn’t see that accountability.
Henseler, along with four other North Kingstown legislators, serves as a non-voting member of the Quonset Point/Davisville Management Corporation.
She told Providence Business News last week that in hindsight, it may have been a mistake to shift the Economic Development Corporation into the realm of the quasi-public entity that it is. At the time, she said, the argument was made that being quasi-public would help when it came to certain bonding procedures – that being a “regular” state agency would hinder economic development efforts.
The QPDMC gives recommendations – but there is no control, said Henseler. In short, she said, the system that now exists is not acceptable.
“It’s not working well,” said Henseler. “The communication is not there.”
The mercury spill was not the first incident to draw a negative response to the RIEDC.
The agency has in fact been under public scrutiny in recent weeks because of two controversies. Several weeks ago, the agency was ordered by Attorney General Sheldon Whitehouse to release the full text of a “white paper” document related to the proposed development of a container port at Quonset Point. The agency – with the support of the governor – balked at that order.
After weeks of arguing that the document was more of an internal working memo than a public document, the governor and the RIEDC relented – releasing the document.
Henseler believes that with the current system, the RIEDC “can make decisions in a vacuum.”
“I’m accountable to the voters,” said Henseler. “If they don’t like what I am doing, they can vote me out of office. The quasi-publicthey don’t have to be accountable to anyone.”
Pelosi counters:
“The EDC has a board of directors and those meetings are open to the public,” she said. “People can come in and see how it is operating.”
She adds that the agency’s budget is also brought before that board – in a public forum.
“It’s as if there is an extra layer,” said Pelosi.
Pelosi also took a shot at the media – suggesting that a few problems were getting much more attention than a lot of positive economic development initiatives.
“It’s frustrating when these issues receive the amount of media attention they do,” she said. “A lot is going on down at Quonset Point – and it’s a good story, the companies, the jobs”
Legislation stalled
The discussion of quasi-public agencies and how they operate is not a new one within the halls of the State House.
For nearly a year, Sen. J. Michael Lenihan, as chairman of a special Senate Select Committee, studied the ins and outs of quasi-public state agencies. A retired teacher with a reputation for painstakingly doing his homework, Lenihan learned a lot.
The committee was formed after several employees at the Rhode Island Economic Development Corporation were disciplined for misuse of state-issued credit cards.
The committee’s year-long efforts resulted in Lenihan sponsoring legislation this spring that would have created a legislative panel to oversee some 25 quasi-public agencies in Rhode Island.
The crux of the legislation, according to Lenihan, was that quasi-public agencies be clearly defined under state law – which they currently are not – and that there be a requirement for the quasi-public agencies to appear before a panel every three years — to justify their very existence as a quasi-public.
The legislation was approved unanimously by the Senate and according to Lenihan, had a good hearing before the House Corporations Committee.
“Nobody testified against the legislation,” said Lenihan.
And then it stopped – not to be heard from again in the 2001 legislative session.
It will be back, however. Lenihan promised that much. He will resubmit legislation in 2002.
And it’s not as if he is crusading in opposition to the quasi-public designation. In fact, Lenihan said after his research he clearly sees a justification for them. “I think there is a justification for quasi-publics,” he said. “There is a function that can be filled by them.”
Because by their very nature they operate outside of government, they need to be monitored closely, said Lenihan.
“Government has a real stake in what they are doing,” he said.
Lenihan is convinced that closely monitoring quasi-public agencies would make a world of difference. In fact, he has seen evidence of it first-hand. He remembers when the Senate Select Committee was conducting its early hearings — asking questions of quasi-public agency officials.
“You never saw so many people scramble to get their act together so quickly,” he said.
