Advocacy group says GE did not follow rules in obtaining R.I. incentives
Patrick Anderson
panderson@providencejournal.com
Who is the chief executive of General Electric?
A liberal advocacy group is asking that question to challenge the corporate incentive package — which could be worth as much as $11.7 million — that Rhode Island leaders offered the industrial giant to open a new digital office in Providence.
When the deal between the state and GE was finalized last month, Chris Drumgoole, GE vice president and chief technology officer, signed it for the company, including a written pledge that the financial incentives under the Rhode Island New Qualified Jobs Incentive Act were necessary for GE to set up shop here.
But Samuel Bell, state coordinator of the Rhode Island Progressive Democrats, argues the Qualified Jobs Act required GE CEO Jeffrey Immelt to sign the forms, not a more junior executive like Drumgoole.
To support his claim, he points to a section of the Qualified Jobs Act specifying "the business's chief executive officer, or equivalent officer" sign a written affidavit promising that no hiring would have occurred without state tax credits, and that financial information provided by the company is accurate.
"It is patently obvious that a vice president is not equivalent to a CEO," Bell wrote in an email. "It is deeply troubling that the CEO of GE is not willing to swear under oath that the corporate welfare payments were necessary, as required by law. It raises serious questions about whether the agency that did the 38 Studios deal negotiated the best possible deal for our state."
That agency, the Rhode Island Commerce Corporation, is the successor to the agency that approved the 38 Studios deal. The commerce corporation rejects Bell's position and points out that, as chief technology officer, Drumgoole leads the division opening an office in Providence.
"GE chose Providence as a location to expand its IT and digital industrial efforts after a competitive, multi-state site-selection process," wrote Commerce Corporation spokesman Matt Sheaf in an email. "Chris Drumgoole, Vice President and Chief Technology Officer of GE IT, leads these efforts for the company. He signed the company's application for the Qualified Jobs Incentive Act, which is appropriate given his leadership position in the business unit that is coming to Providence."
In an email Monday, GE spokeswoman Amy Sarosiek echoed that point, calling GE Digital a "standalone business unit" within GE and saying Drumgoole leads the company's push to expand its information technology products.
"Chris has the authority to bind the company, is the practical head of the Providence site — and is the officer with personal knowledge of the facts to which he certified." Sarosiek wrote. "In this case, Chris falls within the Commerce Corporation's requirements."
The New Qualified Jobs Incentive Act was passed by the General Assembly last year and awards tax credits for companies that hire at least 100 new employees in Rhode Island.
Under the deal approved by the Commerce Corporation Board in August, GE will receive $5.3 million in tax incentives if it hires 100 people in Rhode Island by Jan. 1, 2019 and another $6.4 million if it hires 300 employees by 2021. (All but $650,000 of those incentives are from the Qualified Jobs Act.)
The act was championed in the General Assembly by Rep. Joe Shekarchi, D-Warwick, who on Friday said he is not concerned by the signature questions.
"Who signs it — a division chief or CEO or COO — doesn't really matter," Shekarchi said. "What matters to me is the jobs, and I am excited about the jobs coming to Rhode Island."
"My understanding is that all of the jobs are $100,000 [per year] and over," he added. "It is huge that [the state] get the jobs and huge that they get the taxes."