‘Dell is too big for its breaches’

by Jim Longworth

This country is in an economic crisis which was caused by sleazy insurance companies, sleazy mortgage bankers, sleazy brokers, sleazy regulators and sleazy politicians. We are understandably angry at all of the above, especially those of us who have suffered the loss of a job, a home, medical insurance or savings. We trusted our federal government to protect us, and it failed us miserably. Of course it is easy to play the blame game with Washington and Wall Street because there is a great disconnect between “us and them.” First, there is the obvious geographical distance, and second, there’s our lack of access to the processes and people who betrayed us. So much for the preamble. Now to today’s text. Perhaps we cannot control what goes on hundreds of miles away, but we damn well ought to be able and willing to keep an eye on what happens here at home. Yet time and again, we’ve fallen asleep at the switch in demanding more accountability and results from our local and area elected officials. We have allowed our mayors, councilmen, commissioners and legislators to throw away tax dollars on flim-flam schemes which they like to call “necessary industry incentives.” Skybus was one example; Dell was another. Both have proven to be disastrous failures. While other airports were nurturing their relationships with proven air carriers, PTI fell prey to Skybus, which promised hundreds of new jobs and predicted that their cheap, no-frills service would drive the majors to lower their fares. Miami airport, for example, supported their major carriers with a mere $600,000 incentives package, while PTI gave away a whopping $57 million in perks to one small airline. Rather than follow the Miami example of rewarding success, PTI put all of its eggs into one discount basket and, in doing so, made a bigger investment in Skybus than Skybus did. Then, one day, without any advance notice, Skybus departed Greensboro, leaving hundreds of passengers stranded, and the promise of high-paying jobs unrealized. Local officials said the Skybus incentives were funded by the airport authority and not by taxpayers, but who do they think funded the airport authority in the first place? Those same officials also said we had to make the Skybus deal or else the sleazy airline would locate in Virginia. That threat alone should have suggested to us that Skybus did not have the best of intentions. That’s because Dell had made the same threat several years earlier. Back then, Dell officials demanded an incentives package worth over $330 million, and gave us a deadline to comply or else. Again, the “or else” was a threat to locate in the Old Dominion. The implication was that Virginia had met Dell’s demands and it was up to us to meet or exceed them, lest we lose hundreds of good jobs. Gov. Mike Easley reacted by steamrolling the perk package over legislators who had less than a day to study the details. Dell and Mediocre Mike knew that no politician would dare speak in opposition for fear of being anti-jobs. With lighting speed, our lawmakers approved $270 million in corporate welfare, paving the way for Winston-Salem and Forsyth County to chip in another $22 million. The total incentive package was worth $305 million, or, roughly two and a half times the cost of the new plant. Buthold onto your seats. After the deal was consummated, it was disclosedthat Virginia had only offered the computer maker less than $30 millionin perks. So we were duped into topping that offer 10 times over. Todate, there has been no proof that any elected official knew of the biddisparity, but if such proof were to surface, then those officialsshould do jail time for misappropriation of state funds. Meanwhile, notso hidden were the terms of the incentive deal itself. Unbelievably,the agreement allowed Dell to lay off up to 40 percent of its localworkforce without forfeiting a penny of the perk money. That’s why,earlier this month, without fear of retribution, Dell announced a majorworkforce reduction at the Forsyth County plant. To add insult toinjury, Dell refused to release accurate data regarding number of jobsactually cut. Rumors put the job losses at between 150 and 300, butthere’s no way to confirm that. In a statement to the Winston-Salem Journal, Dell spokesperson David Frink said, “We are no longer providing specific site employment totals.” Saywhat, David? Does anyone recall that our incentive deal was tied to jobcreation? That means our “contract” with Dell is predicated on fulldisclosure. Instead we, the taxpayer investors, are now being told togo Google ourselves. Given these latest developments, here’swhat needs to happen: First, local business leader Don Flow needs tohave a sit down with his buddy Michael Dell. It was Flow who lured Dellto the area and set the incentive deal in motion. Flow needs to tellhis friend that stonewalling taxpayers and the media is not in anyone’sbest interest. Dell must release all employment data and instruct hispeople to work cooperatively with local officials in determining ifDell must abdicate some of its perks. If the diplomatic routefails, then attorneys for the city and county should go to court anddemand access to Dell’s books. If Dell is then shown to have violatedthe terms of our incentive deal, then the state attorney general, andthe aforementioned municipal attorneys should sue Dell for breach ofcontract. We must make an example out of industry pirates whoraid local coffers. Concurrently, Gov. Beverly Perdue must also makegood on a campaign promise she made during an appearance on my “TriadToday” television program last year. If elected, Perdue pledged tolobby the National Governors Association to put a moratorium onincentives. These perk packages have become nothing but a cruel shellgame in which greedy companies simply shift jobs from one state toanother depending upon who offers them the best deal to relocate. Inthe end, our state lawmakers, city council members and countycommissioners made a bad deal with Dell. They didn’t do their homework,and they let taxpayers be taken advantage of, all of which could havebeen prevented had they just called Dell’s bluff and voted to delay anyaction until the incentives deal could be properly vetted, includingtime for public comment. If nothing else, our lawmakers should haveemployed a retail model to the proceedings — that is, if someone wantsyou to match or beat a certain price from another store, the customermust show you in writing that other store’s offer. That practice alonewould have saved the state nearly $300 million on the Dell deal, andmade the pill for us to swallow somewhat less bitter. Socomplain all you want about the mess in Washington, but realize, too,that we also need to take control of what’s happening in our ownbackyard. The first step is to punish every elected officialwho had anything to do with the Dell deal, by throwing them out ofoffice at the next election. That would send a signal to prospectivecandidates that we lowly voters aren’t going to take things lying downany longer. We can’t be expected to monitor every industry that wantsto do business here, but we can demand that our elected officials bewary of any company with one hand outstretched and the other handhidden behind their back with crossed fingers. I am told thatmemory is important in a computer, and so it is too with goodgovernment. To paraphrase the philosopher George Santayana, if we failto remember the mistakes we made with Dell, we are destined to repeatthem. Politicians count on us having short memories. Let’s disappointthem.

Jim Longworth is the host of “TriadToday,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).