The Legislative Press and Public Information Bureau
Distributed May 20, 2002
For more information,
contact: Meredyth R. Waterman, Publicist
State House Room 20
(401) 222-2457
Email: mwaterman@rilin.state.ri.us
Rep. Naughton bill to require more accountability for Slater Centers comes before House Finance Committee
STATE HOUSE -- The Finance Committee is scheduled to hear testimony tomorrow on legislation
Rep. Eileen S. Naughton (D-Dist. 32) has submitted to establish more openness
and accountability to a state-funded program meant to incubate home-grown
technology development and commercialization in Rhode Island. The hearing will
be held tomorrow beginning around 2:30 p.m. in Room 35 of the State House.
The bill
(2002-H 8106)
would move the Samuel Slater Technology Fund out of the control of the
non-statutory Economic Policy Council (EPC) and put it into the hands of the
statutory Economic Development Corporation (EDC). Representative Naughton, who
sits on the EPC as the designee of House Speaker John Harwood, submitted the
legislation this month after learning that the EPC’s administrative staff
moved to consolidate some of the Slater Centers without the knowledge or consent
of the full council. A similar bill has been submitted in the Senate.
“Because the
Economic Policy Council is legally a corporation rather than a statutory state
agency, its executive director can just make business decisions on their own
without public knowledge or council input, even though he’s working with
taxpayers’ money,” said Representative Naughton.
“The EPC,
unlike regular state agencies, doesn’t automatically make its audits public,
and its administration isn’t required to get permission from the full council
to make changes in the manner in which the fund is used. This is no way to run a
publicly funded institution. I want the Slater Technology Fund moved into the
EDC’s control, where it will be subject to laws that require openness and
accountability,” she continued.
The Slater
Centers were launched in 1997 to concentrate on specific aspects of technology
and development for Rhode Island businesses. The Samuel Slater Technology Fund
was created to support them, and has received an annual appropriation of $3
million from the state each year since then, but the state has not received any
annual reports from it.
Each Slater
Center concentrates on incubating a different aspect of home-grown business in
Rhode Island, with the goal of helping local businesses develop and become
globally competitive. Until recently, there were five fully functional Slater
Centers: The Slater Center for Ocean Technology, The Slater Center for
Environmental Biotechnology, The Slater Center for Biomedical Technology, The
Slater Center for Design Innovation at RISD and The Slater Center for
Interactive Technologies. A sixth center, The Slater Center for Manufacturing
was being organized.
But earlier
this year, without consultation with the council, the EPC’s administrative
staff consolidated the centers for Ocean Technology and Environmental Technology
into one center. They also merged the Center for Design Innovation with the
proposed Center for Manufacturing. The council was not given input into the move
or even notified of it in advance, and was asked afterwards by fax to ratify it,
said Representative Naughton.
Representative
Naughton said she was disturbed by the move, both because it was made without
council input and because it jeopardized ongoing Slater Fund projects. For
instance, a small Providence startup company, TTI Technologies, Inc., suspended
its loan application and sought other funding sources because the consolidation
would slow down its time-sensitive product development.
Representative
Naughton said she questioned Governor Lincoln Almond, who serves as co-chairman
of the EPC, and EPC Executive Director Christopher “Kip” Bergstrom about the
reasoning behind the consolidation and was left unsatisfied with their answers.
“They said
they were trying to optimize use of the funds and get rid of ‘weak’ centers.
But I’ve asked for documentation of how they decided which centers were weak,
and so far they haven’t given me any,” said Representative Naughton. “That
may work with private businesses, but not with public funds.”
Representative
Naughton said moving the fund to the EDC’s control would also allow the Slater
Centers to use the EDC’s resources, such as its complete portfolio of state
and federal economic development programs and administrative services. She
believes the EDC is a more appropriate agency for management of the fund anyway,
since it is meant as an implementing agency, while the EPC was set up to provide
policy advice to the governor.
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