Politics & Government

PayPal criticized, but NC and firms it supports have ties with pariah nations

San Jose, Calif.-based PayPal said Tuesday it’s canceling plans to bring 400 jobs to North Carolina after lawmakers passed a law that restricts protections for lesbian, gay, bisexual and transgender people.
San Jose, Calif.-based PayPal said Tuesday it’s canceling plans to bring 400 jobs to North Carolina after lawmakers passed a law that restricts protections for lesbian, gay, bisexual and transgender people. AP

After PayPal said Tuesday that it would cancel a 400-job expansion in Charlotte because of concerns over the new state law concerning LGBT rights and other employment and discrimination issues, Republican leaders shot back.

“PayPal did business in Cuba, Sudan and Iran, but has a problem with North Carolina?” the state GOP said in a news release Tuesday.

PayPal was fined $7.7 million in 2015 after it reported that it had violated U.S. economic sanctions against those countries.

There had been no mention of the violations less than a month earlier, when Gov. Pat McCrory announced PayPal’s Charlotte expansion – and $3.7 million in state incentives the company is now giving up.

North Carolina taxpayers have paid millions of dollars in incentives to other companies under federal scrutiny for working in Iran and Sudan. And exports to Cuba account for millions in revenue for North Carolina businesses.

Yet, Cuba has become a punching bag for supporters of the new state law, popularly called HB2.

The law, enacted March 23, prevents local governments from passing nondiscrimination ordinances and from opening public bathrooms to people based on their gender identity. It bans discrimination on the basis of “race, religion, color, national origin or biological sex” at businesses and other “places of public accommodation,” but it bars North Carolinians from going to state court to challenge this discrimination.

Michelle Nix, the NCGOP’s vice chairman, criticized PayPal’s ties to Cuba and its communist government in a Facebook post Tuesday.

“Hasta la buh-bye,” she wrote to the company.

McCrory brought up Cuba in a Fox News appearance in late March, after New York Gov. Andrew Cuomo banned nonessential state travel to North Carolina because of HB2.

“It’s just demagoguery at its worst,” McCrory said. “Is this the type of democracy we’re going to have, where you go to Cuba and then you tell your citizens not to come to North Carolina?”

Ties with Cuba

Cuomo did visit Cuba about a year ago. Several months later, in September 2015, a North Carolina delegation also visited the island nation – including officials from the state Department of Agriculture & Consumer Services, whose elected commissioner is Republican Steve Troxler.

Some North Carolina businesses have been working in Cuba for years, under a 2000 federal law that created exemptions to a decades-old trade embargo. A study at Texas A&M University found that in 2009, North Carolina companies did $19.6 million in business with Cuba.

Outreach to Cuba has bipartisan support. The N.C. Farm Bureau – a group whose campaign contributions heavily favor Republicans – organized the September trip to Cuba.

U.S. Rep. David Price, a Democrat, visited the country last month with President Barack Obama and others, including PayPal CEO Daniel Schulman.

Ties with Iran

In 2012, state Treasurer Janet Cowell ordered the state retirement system to divest from all companies that were under federal scrutiny over ties to Iran’s state-run energy sector.

That decision was authorized by a 2010 federal law citing concerns that those companies were directly or indirectly helping fund the country’s nuclear program.

The North Carolina Retirement System had more than $150 million invested in such companies. Among them was Siemens AG, a German company whose Siemens Energy branch also has directly received millions of dollars from North Carolina taxpayers.

In 2011, Siemens began receiving a $22 million state incentives package to build a manufacturing plant in Charlotte, and $2.6 million in incentives for a Wake County project. Local governments also contributed millions.

The company was put on the state’s do-not-invest list in 2012, after the incentives began. In June 2015, North Carolina passed a state law mandating divestment from Iran-tied companies, yet including significantly fewer companies than what Cowell’s office had banned previously.

The law went into effect in February. Siemens was one of the companies removed by the legislature from the list of banned investments.

Even while it was on the prohibited list, from 2012 to 2015, Siemens remained able to receive taxpayer-funded incentives payments. Under the incentives agreement, the company was due $9.4 million from the state over those four years.

The state payments for both Siemens projects continue. The Wake project will get $444,000 a year until 2019. The Mecklenburg project will receive nearly $3 million a year until 2022. The company now employs hundreds of people in Charlotte and Wendell.

Ties with Sudan

Caterpillar has won more than $40 million in state and local incentives since 2011 to expand its workforce in North Carolina. It’s also under federal scrutiny for the work of its foreign subsidiaries in Sudan.

The country is under U.S. economic sanctions and is run by Omar al-Bashir, who is wanted on international war crimes charges, including genocide.

As with Iran in 2015, a state law in 2007 mandated that Cowell order the state retirement system to divest from all companies under federal scrutiny for their work in Sudan.

No state funds were invested in Caterpillar, but the state divested nearly $24 million that was invested in three other companies – PetroChina, Bharat Heavy Electricals, and the Oil and Natural Gas Corp. Ltd.

Caterpillar still receives incentives despite being on the state treasurer’s do-not-invest list. For building a plant in Winston-Salem, expanding a plant in Sanford and creating hundreds of manufacturing jobs, it’s slated to receive about $1 million per year from the state until 2021.

Doran: 919-836-2858; Twitter: @will_doran

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