Local and state officials are reviewing financial incentives they had extended to Awesome Products Inc. after revelations that its owner pleaded guilty to felony charges related to workers compensation fraud in California.
L.D. Hardas, who owns the company, lives in California, where Awesome Products operates. Last month he pleaded guilty to the charges, receiving a five-year suspended prison sentence, a $250,000 fine, and agreeing to pay $898,000 in restitution.
Apparently he was aware of the investigation for two years prior to that but never disclosed the case to local and North Carolina officials. In February of this year, he announced his firm would open a location in Mount Airy, where it would hire 140 people, with the potential for as many as 300 jobs eventually being created.
To help close the deal, Surry County officials promised nearly $600,000 in local incentives, with roughly another million dollars in state incentives.
Now, several members of the Board of Commissioners have expressed some concern about the deal, and have said that the state Department of Commerce also is reviewing its offer of incentives.
We think a review of the case is justified. As Commissioner Larry Phillips said, this case involves workers compensation insurance, which is vital to employees well-being, and he expressed disappointment that an employer would attempt to under-report payroll in order to avoid paying workers compensation insurance premiums.
We also agree with several of the commissioners who said they would have liked for Hardas to have told them about the case when negotiating here, to have gotten out front on the issue so no nasty surprises could potentially upset the deal.
However, in the end we believe answers to just a few key questions ultimately should lead officials to determine which direction to take.
Is Awesome Products a viable, profitable company? Has Hardas promised, or already undertaken, spending the company’s money here? Are their safeguards in place to ensure the incentives are being spent as the company reaches certain thresholds toward creating the jobs? Will Surry County residents be better served with Awesome Products here in the community?
We believe the answer to those questions is yes, and while we might urge caution, we also believe the county and state should move forward with this project.