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Chairwoman of Rural Center board resigns

By J. Andrew Curliss
acurliss@newsobserver.com

RALEIGH Valeria Lee, chairwoman of the board of directors of the struggling Rural Economic Development Center, resigned Wednesday, two weeks after Gov. Pat McCrory called for her to go.

Lee, who was head of the board since 2009, said in a letter to the board that “the past few months have been incredibly difficult.” She didn’t elaborate on why she chose to quit now. After a Rural Center board meeting four days ago, Lee told reporters only that she was still the chairwoman and declined to elaborate in a recent interview on her intentions.

The Rural Center is a private nonprofit funded primarily the state. It has been under stress for several weeks, starting with a series of stories in The (Raleigh) News & Observer that revealed political interference in grants, claims of jobs that did not exist and millions in taxpayer money spent to create low-wage retail jobs.

A state audit in July criticized the center’s management of grants and noted a $242,000 severance account the board set up for the center’s president, Billy Ray Hall. The governor’s office has prevented the center from spending state money and has begun the process of taking control of $100 million in state money already in the Rural Center’s accounts. Additionally, the legislature recently voted to send all money for rural development to the state Department of Commerce.

Hall resigned in July after release of the state audit. He was the public face of the organization, which works with local governments to try to stimulate economic activity in troubled rural areas. In 26 years, the state has sent more than $650 million to the center.

In her letter Wednesday, Lee said her recent goal had been to create a new process so the center could continue its work. She had formed a special committee to evaluate the center after The N&O reports, but its work is unlikely to continue now that the state has taken control of the center’s money.

“I am honored to have served with you, and I salute you and the center’s staff for your dedication,” Lee’s letter said. “It is impossible to calculate the positive impact that you have had on rural North Carolina and the State.”

Lee previously had defended the severance deal for Hall. An attorney for the center’s board said Monday that Hall’s attorney had inquired about when he would receive the severance; the board has voted to withhold payment while it studies the legal framework.

Lee said first Vice Chairman Bill Gibson would now preside over the center’s board. Senior vice president Elaine Matthews has assumed Hall’s duties.

Senior editor Steve Riley contributed.

Curliss: 919-829-4840
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