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Slippery Business - Part I
What's Going On at the Harrison County Development Commission?
A GCN  Special Report
by Keith Burton - GCN

Note: Clicking on blue text will access additional information

The October 28th resignation of  Dr. Paige Gutierrez from the Harrison County Development Commission over her concerns that the commission operates improperly and needs reform is more than the result of one person's disgust but represents a serious problem within one of Harrison County's most important agencies. Gutierrez's resignation statement points out the problems.

"I will not continue to serve as a Commissioner charged with oversight of this public agency, in which there is a lack of meaningful accountability, a disregard for lawful procedures, unnecessary secrecy, a disdain for public input and opinion, and wasteful spending of taxpayers' money.  Moreover, as a Commissioner who must vote on issues, I have learned that I cannot trust the information presented to me by staff."

What's at stake for the public is that a successful and efficient economic development commission could be a huge factor on jobs and tax improvement in our area. But is that happening? Huge tracks of our industrial parks are just empty land. And no one has been able to prove the money and tax exemptions the commission authorizes to certain businesses actually result in any significant growth in jobs, according to Gutierrez, an insider who would know.

In addition, despite the huge impact casinos have had on the Coast's development, where are the other businesses that should follow? It is also important to understand that the Development Commission had almost nothing to do with the arrival of casinos on the Coast and has little to do with many other businesses that have opened here.

So, what is the county getting for its $160,000 Development Commission director, and the commission's multi-million dollar operation? It is hard to pin down, according to Gutierrez.

Public Has Stake in Controversy

For years the commission, which  manages the county's industrial parks and purportedly recruits new business here, has worked in virtual anonymity with only occasional press releases on a new business or expansion of the commission's industrial or business parks. To the public, all looks just fine. But actually, by design, the inner workings of the commission have been known only to a few insiders and politicians. And as the saying goes, the devil is in the details.

As a commissioner on the HCDC's board, Gutierrez was in a position to see in detail the workings of this agency.  So her recommendations and comments in her articles published on GulfCoastNews have the weight of a knowledgeable concerned citizen who saw first hand what was going on inside the commission and how it operates. And she saw that changes, what her supporters say are legitimate changes, need to take place.

There has been frequent criticism over the years that the commission doesn't listen to the public, as evidenced by the rock plant controversy that erupted several years ago in Long Beach when the commission authorized the Conrad Yelvington company to operate a thunderously noisy machine that shakes rocks out of railroad cars to which nearby residents objected. Also, the Development Commission authorized the Yelvington company to take over the land at the Long Beach Industrial Park before a duly authorized contract was signed and before the Board of Supervisors approved the contract.

Numerous meetings by the residents with the commission often yielded frustrated feelings by the residents that the commission could care less about the public. Those sentiments remain. But they were a big part of why Marlin Ladner won his post as supervisor representing that part of Harrison County.

Over the past couple of months, GCN published several opinion articles by Gutierrez that were well thought out, thorough and demonstrate that reform would be in the public's and commission's best interests. They raised serious concerns and offered solutions, which appear to be requirements of state law, and make sense. The recommendations she makes should be taken seriously by the HCDC and the Harrison County Board of Supervisors.

For the commission not to take the recommendations seriously suggests that the Harrison County Development Commission is not so much an agency involved in a public trust, but one that has its own interests and those of a few connected individuals at heart. This is the sense of a growing number of Harrison County residents. Someone has to be accountable. And statements that belittle Gutierrez reflect badly on the commission and the Board of Supervisors.

The Board of Supervisors unanimously approved Gutierrez's appointment following her nomination by District Five Supervisor Connie Rockco, an elected representative of a large number of citizens. Citizens who have questions about how the commission operates and would like to see reforms made. And Rockco is not alone. District 3 Supervisor Marlin Ladner also has supported changes in the commission. Thus representatives of a large portion of Harrison County's residents, have a stake in all this. Rockco easily won re-election by a landslide 65 percent on a platform of financial accountability, particularly in regard to how the various commissions are run in the county.

Getting That "Special" Commission Treatment

The commission's response to Gutierrez's resignation  could be construed as an insult to the citizens of Harrison County. It was a personal attack on a citizen who was willing to speak out. Gutierrez's actions should be applauded and not condemned as she was in the commission's official response.

Whether all of Gutierrez's observations are correct or not should be addressed reasonably and without condescension. But the fact that Commissioner Richard Bennett of Long Beach had joined Gutierrez in her most recent commission article, was ignored by the commission's official response, is a telling oversight about how some in the commission treat the facts.

To suggest, as the commission's president does, that Gutierrez "pursued an agenda that is focused on distracting and disgracing the commission and its staff," is not evident in her opinion articles, which represent clear and concise observations and recommendations, many of which are the requirements of the laws of this state. It is clear from Gutierrez's actions that she wanted only to better the commission. If that is an agenda, it is the right one.

It is also unfortunate that the commission's response was delivered by the commission's current president, Bruce Nourse instead of the architect of the commission's problems, its highly paid staff director Michael Olivier who tightly oversees the day-to-day operations of his commission.

Bennett tells GCN that Nourse was not speaking for all of the commission when he made his statement. And that the commission members did not vote as a group for Nourse to release a statement regarding Gutierrez's resignation.

"Paige (Gutierrez) has been an outstanding commissioner," Bennett said in an interview with GCN. "Bruce Nourse does not speak for me. Somewhere he left me out of that."

"Nourse's statement was unwarranted. It was wrong," Bennett said. "Paige was someone who cared about the taxpayers."

Gutierrez wrote in her first article in July about the treatment some commissioners receive.

"Those few who do not march lockstep may be subjected to tongue-lashings, ridicule, character assassination, gossip, attempts to have them removed from the commission, political opposition to the persons who appointed them, and/or reasons to fear if their employers are displeased," Gutierrez wrote.

Bennett says, " I think it may happen to me."

Nourse, like Gutierrez, is a volunteer appointed member to the commission. He could be caught between a rock and a hard place. Olivier's leadership was so visibly absent over Gutierrez's resignation that he had the commission's marketing manager inform the media that only Nourse would reply and that no staff member, even Olivier, would comment on Gutierrez's serious allegations. Thus putting Nourse in a the focus of what could be an awkward event. Some would say that Nourse had to do that because of protocol since he is the president of the board.

HCDC Backtracks on Secret Ballot Vote

Proof of the irregular actions of the commission are easy to document even for an agency known for destroying records. At their October 28th meeting, the board used a secret ballot to select a new attorney and accounting firm. Such a voting procedure is not legal, according to the Mississippi Attorney General's Office. The commission has already had to back up on this an will conduct a public vote in their next meeting November 25th. Nourse said this method wasn't the first time the HCDC board had voted this way.

In the article by The Sun Herald on the vote published Friday, Oct. 31, Nourse blamed the error on the board members not being attorneys. But this is a poor excuse. The most basic tenet of such boards/commissions is that they can only speak through its minutes. A secret vote would cloud that record. In addition, Nourse is not a novice in public service. He has served on several high profile boards and commissions, including a stint as director of the Mississippi Gaming Commission.

This brings to question the reliability of the Development Commission's legal advice and the reliability of the board's minutes on many of its activities. What else has been in error or omitted? This issue adds support for Gutierrez's concerns identified in her resignation letter and in her articles on GCN regarding missing records and improper, even illegal actions.

The commission's official minutes also do not show how individual members vote on issues. The minutes only show the measure passed by a majority of commissioners. State law requires votes of individual members be recorded.

Bennett says it was Olivier that initiated the secret vote and that he had ballots pre-made for the commissioners to use. The results were also counted by Olivier and another staff member.

A Casualty of a War That Shouldn't Be

It is in a difficult environment that Gutierrez was appointed to perform. It was a public duty she accepted in 2000 when she was appointed by Connie Rockco. Rockco and others in the county came to see that things were not quite right within the commission. Whenever records were requested, Olivier was slow to respond. This, and other issues, led Rockco to believe reforms were needed in the commission. Gutierrez clearly was a soldier in that effort. But as a soldier in what never should have been a war, she had a difficult experience.

Considering the evidently poisonous atmosphere she found herself in the commission's offices in the Hancock Bank tower in Gulfport, it is not surprising that she didn't attend every meeting.

Gutierrez says the commission's president, Bruce Norse, mislead the public criticizing her attendance at meetings.

"Attending every rubber stamp-meeting-plus-lunch at the Great Southern Club, paid for by taxpayers, is not necessarily in the public interest, and certainly does not necessarily make a commissioner more knowledgeable about commission business or economic development in general," Gutierrez said in a statement to GCN.

Bennett tells GCN that commissioners that Mike Olivier feels are getting out of line get different treatment.

"Mike isolates the person that gives him trouble," Bennett said. "You don't get all the information the other commissioners get."

Though they come from different towns and backgrounds both Gutierrez and Bennett see an atmosphere where the public is often left out of the loop. "It's like a fraternity, they protect each other," Bennett said.

The bitter battles regarding how the commission has operated over the years, and remarkably acknowledged in the official response to Gutierrez's resignation, have repeatedly been played out before the Harrison County Board of Supervisors with few reforms taking place.

Supervisor Connie Rockco tells GCN that her efforts and those of Supervisor Marlin Ladner to bring about reforms to the commission have often been thwarted by the other members of the Board of Supervisors. But some progress has been made. She says the HCDC isn't destroying records as often as it did and that a system to keep records is gradually being implemented. Rockco says Gutierrez made a major impact on improving some aspects of the operations at the commission, but such efforts are always greeted with great resistance.

Rockco's efforts to learn more about the commission's activities came to a head in August 2002 when Olivier was ordered to appear before the Board of Supervisors to answer questions. According to The Sun Herald, Rockco was accused of being on a "witch hunt" by Supervisor Larry Benefield who refused to attend the meeting. Benefield is a strong supporter of Olivier.

Media Coverage

Gutierrez's resignation was reported by the major local media. But those stories did not provide any real context for readers to understand the nature of the conflict and their importance. The reports neither addressed the legitimate concerns that were made by Gutierrez, or provided any meaningful reason why this event should have been reported at all.

Just another she said, he said story...Go back to sleep Gulf Coast... Nothing here to look at... Move along now.

In fact, much of the coverage of the commission and its conflicts with reformers has looked more like the results of a gossip column. She said this, but he said that. But even when some real information is there it is often buried at the end of the stories.

At the end of a lengthy Aug. 8, 2002 article about Rockco and Ladner grilling Olivier over spending and results, the newspaper acknowledged that it was unable to obtain financial records from the commission.

"When The Sun Herald on Wednesday asked to see the commission's expense reports, Olivier said it would take his staff months to compile the reports," reads the Sun Herald article. The newspaper added that Olivier said some of the financial information is client confidential and Olivier is quoted saying the newspaper "would have to go to court to get them."

The Sun Herald has successfully challenged public officials that refuse to release documents. But not this time.

Later, in an Aug. 31, 2002 article, The Sun Herald showed the commission's records on jobs creation was false without actually saying so.

"According to the information provided by the Development Commission, the commission has been involved in $208 million in new business and expansions and the creation of 2,902 jobs from 1995 to 2002. However, of the 55 companies listed, fewer than a half dozen are new companies. The remaining companies were existing businesses that created additional revenue and jobs by expanding," the Sun Herald reports.

In this case, the story could have added, "Development Commission officials misleads public on job creation," and been right-on. But the story does suggest that the commission takes credit for jobs creation that it has nothing to do with.

In 2002, Olivier sought to make it more difficult for the public to obtain records involved with development commission activities in business recruitment. He pushed a local legislator to sponsor a bill that would have made it nearly impossible for public scrutiny of the type of activity the Development Commission conducts. Fortunately, lawmakers saw through the ruse and rejected the bill.

The Sun Herald went on record in an editorial on August 3, 2003 criticizing Supervisor Marlin Ladner when he sought to get answers to why the Development Commission was sitting on $7 million in cash in the bank. This was during the county's budget hearings. The county was looking for ways to fund this year's budget without raising taxes or cutting services.

Perhaps some of the coverage of the commission by The Sun Herald and WLOX news could be explained by their corporate membership in the Mississippi Gulf Coast Economic Development Council, also known as the Gulf Coast Economic Development Council.

The Development Council is a supposedly "independent" organization made up of some 60 area businesses, banks and law firms.

According to state records, the council was established in 1986 as an independent non-profit organization set up to promote area development. However, the Harrison County Development Commission's taxpayer- supported staff coordinates the activities of this "independent" council. The council actually pays the commission's director Michael Olivier $12,000 a  year in additional salary. This is not money for his staff's work, but a stipend for him as a consultant.

It may be a conflict for some at WLOX and The Sun Herald to fully report on the commission and the "independent" council as they are helping pay Olivier some of his additional income.

"I have a problem with Michael Olivier getting money in additional salary," Bennett says. "You can't serve two masters."

The Sun Herald has reported that Olivier also receives additional income as a consultant in additional businesses but he has refused to release information on who else he works for.

State law requires elected officials and some public officials to file a statement of economic interest regarding the sources of additional income they receive. While the law does not specifically address directors of development commissions, the Board of Supervisors could require it for the same reasons.

This past March, Supervisor Connie Rockco sought to pass a measure requiring commission employees to disclose consulting contracts, but her motion failed to receive support by a majority of the Board of Supervisors.

"The Board of Supervisors should make him disclose who he is getting money from," Bennett says.

Also, some of the businesses that are part of the council also have received tax exemptions recommended by Olivier and approved by the Harrison County Board of Supervisors. These exemptions total nearly $1-million in money that could have arguably been added to the county's treasury.

In the reforms article authored by Gutierrez and Bennett, the issue of tax exemptions recommended by the HCDC and approved by the Board of Supervisors is addressed.

"Unless there are annual hearings or audits on the status of each exemption, how will the Supervisors ever learn whether jobs or investment have been produced as stated in the applications for each exemption?  Commissioners do not receive documented, sworn reports or data of any sort to show that companies are living up to their promises," said Gutierrez in her article.

The Mississippi Gulf Coast Economic Development Council's incorporation documents prohibit some types of important activities:

"No Part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office."

But just last year, the council ignored its own charter-imposed restrictions and issued a statement urging the Board of Supervisors to remove the Rebel flag from the beach display on U.S. 90. While their statement could be interpreted as a positive one, it seems doing so was outside its charter prohibiting propaganda and influencing legislation.

The Public Begins to Notice

What is interesting about all this is what does the commission have to fear with change?

Perhaps they, or someone in the commission, do have something to fear. The public.

Take for example these excerpts from GCN's Message Board where one careful reader noticed that the commission seems to be practically giving away land.....

"Posted by: () 10/13/2003 12:06
In regard to the reference of 300 new jobs being created. Lets examine the public record. On 11/19/02, the HCDC ran a full page ad in the SUNHERALD, titled, "ANOTHER SUCCESS STORY," which proclaimed, "FORTY FOUR YEARS OF SUCCESSFUL BUSINESS RECRUITMENT." The point of the article was to announce that FUTURE PIPE INDUSTRIES was going to locate in the Bernard Bayou Industrial Park and would create up to 300 jobs-average wage of $14 per hour and Future Pipe would make a capital investment of $7.5 million.

On 12/7/02, a SUN HERALD article revealed, according to the agreement, "FUTURE PIPE cannot say how many jobs will be created, economic developers and company officials believe 75 jobs will be created in the company's first year of operation. The company hopes to expand on the 32-acre site, which could create up to 300 jobs."

The article stated, "FUTURE PIPE will pay a little over $200,000 for the site, a more than 25 percent discount on the land. The company qualified for the discount because of the $7.5 million it will invest in the county and because the company will provide well-paying jobs..." The article also cited several more "inducements," in regard to non-payment of taxes.

The article goes on to say that FUTURE PIPE will be eligible for an $8 million low interest loan with the Mississippi Business Finance Corporation.

The article said the company hopes to begin construction in the summer of 2003.

Now lets analyze what you have just read. Future pipe is going to buy 32 acres for a little over $200,000, which is a 25% discount, because they are going to create jobs. $200,000 for 32 acres amounts to $6,250 per acre. It would be hard to find a 1/4 acre residential lot in a bad area for that amount of money. Similar commercial property with water, sewer, and roads brings $60,000 to $100,000 or more per acre. Therefore, it seems that piece of property should bring closer to $3.2 million than $200,000. That may be a slightly larger discount than 25%.

Secondly, it appears that the capital investment of $7.5 million may actually be a loan from the taxpayers through the Mississippi Business Finance Corporation to which Michael Olivier, Executive Director of the HCDC was just appointed by Lt. Governor Amy Tuck, along with Billy Thornton, manager of Regulatory and Federal Legislative Affairs for Mississippi Power, who was appointed by Governor Ronnie Musgrove, according to a news article dated 9/30/03.

A SUN HERALD news article dated 7/2/03, reveals that FUTURE PIPE, "is expanding its plan and will be investing more than the initial $7.5 million." The article also said, "the changes planned by Future Pipe would also mean the company, which plans to hire 75 people initially, would reach its goal of 300 workers sooner than the five years originally announced." The article said, Future Pipe wants to announce the changes during the third of fourth week of September..."

A SUNHERALD article dated 9/11/03, said that Future Pipe was going to double its investment to $15 million and increase the size of the plant by almost four times. The article went on to say that "it (Future Pipe) expects to break ground in the first quarter of next year." In other words, the first job may not have been yet created, in spite of all of the glowing news reports that have been made about 300 jobs being created by Future Pipe. In addition, remember, the article dated 12/7/02, said the company hoped to begin construction in the summer of 2003.

Lastly, why would an agency of government spend approximately $4,000 of taxpayer funds to buy a full page ad in a newspaper to announce that a company was going to locate in the county. Sounds like propaganda to me."...

And from another post on the GCN Message Board:

..."It is amazing how some people can be so easily misled by propaganda while ignoring facts, and who resort to emotional, personal attacks on the messenger rather than use reason, and talk about the facts. The articles written by Dr. Gutierrez are based on facts, not emotion. The article titled, State Law Requires Reform of Harrison County Development Commission, is from the Mississippi Code of Law and Attorney General Opinion letters. Anyone who wants to argue can argue with the law books.

Most of the other information is first-hand information that was obtained from sitting in meetings and from documents.

Dr. Paige Gutierrez, Richard Bennett, and Supervisors Connie Rockco and Marlin Ladner have proven themselves to be courageous and independent public servants, the kind we all say we want in public office, who put the public interest ahead of "special interest." They deserve to be commended by citizens who appreciate quality government, instead of the name-calling they have been subjected to by the misinformed......"

 

The issue of how and what the Development Commission does with its land is questioned above. A reader of the newspaper correctly saw through the fact that the commission is practically giving away land it owns. But this is only evident after you think through what the paper actually said.

What you may have observed from the excerpts above is that the public is beginning to notice what is happening at the Harrison County Development Commission. And are taking notes. Other commissions in Harrison County may also need reforms.

State auditors have been looking over the development commission's records since last Spring. There has been no word on what they are finding. Gutierrez says the county could act as well.

"What could be done by the Board of Supervisors is to call for an independent compliance audit. This audit could provide helpful guidance to the Board of Supervisors to determine that the commission's money is lawfully spent and providing a good return on investment," said Gutierrez.

This is a developing story. More to come.

RELATED:

Text of Gutierrez's Resignation Letter....Click Here
Text of Commission's Response to Gutierrez Resignation....Click Here
Gutierrez First Article....Click Here
Gutierrez Second Article...Click Here
Sun Herald Story on Secret Vote - Click Here
Mississippi Gulf Coast Economic Development Council Charter Document - Click Here   
Link to the Harrison County Board of Supervisors...http://co.harrison.ms.us/bos/index.html

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