Sinsheimer to Perdue: Rand is the wrong choice for the NC Parole Commission

Joe Sinsheimer today called on Governor Perdue reconsider the appointment of Tony Rand to the state's Parole Commission. I couldn't agree more.

Senator Rand’s statements to the Raleigh News & Observer on Friday, December 11, 2009 (“Rand says he knows little of LEA”) are absurd and misleading and raise questions as to whether Rand is the right person to try to reform the state’s broken parole system. Rand’s comments to the News & Observer indicate that he either shirked his duties in apparent violation of federal securities law or is deliberating misrepresenting his role at Law Enforcement Associates Inc. In either case, Rand’s activity should disqualify him from serving as head of the state’s parole commission.

In the article, Rand told N&O reporter Michael Biesecker that he did not know who the company’s largest customers were; was unfamiliar with the names of law Enforcement Associates Inc.’s (LEA) investors ; and was “not sure” how long he had been chairman of the company board of directors. Rand also said he had never visited the company’s factory floor except “I think I might have come back here once, looking for the bathroom,” Rand told the N&O.

As a member of LEA’s Board of Directors, Rand had a fiduciary duty to know these and other facts about the company. Even more importantly, as a member of the Audit Committee of the Board of Directors, Rand was one of the few people that outside shareholders specifically relied on to monitor the company’s financial, legal and regulatory responsibilities (The company’s SEC filings indicate that Mr. Rand has been a member of the Audit Committee since 2007 and possibly before that date).

The specific responsibilities of the company’s Audit Committee are spelled in a seven-page “Audit Committee Charter” that is housed in the Investors Relations section of the company’s website under the “Corporate Governance” tab. A link is provided below.

http://www.ir-site.com/images/library/leacorp/auditcommittecharter.pdf

Is Rand now saying he failed to perform even basic due diligence on a company on which he served on the Board of Directors for more than six years? Is Rand now admitting that he shirked his fiduciary duties as a member of the company’s audit committee? Could his cavalier attitude toward corporate governance be partly responsible for the 98-99% loss that outside shareholders have suffered since 2005? North Carolina taxpayers and outside shareholders can only hope that the SEC aggressively investigates former CEO Paul Feldman’s claims of corporate and director malfeasance.

Given Mr. Rand’s public admission that he has failed to execute his board responsibilities at Law Enforcement Associates, is he really the right person to head the state’s parole commission? Governor Perdue should immediately rethink her decision to appoint Senator Rand to this important post. If the governor is serious about her new code of responsibility for board and commission appointees, surely she can find a better choice among the state’s more than nine million residents.

For a link to the “Rand says he knows little of LEA” story see:
http://www.newsobserver.com/business/story/235539.html

For additional background on the company’s problems see “Rand friends own stock in company”:
http://www.fayobserver.com/Articles/2009/12/05/957790

Given Mr. Rand’s public admission that he has failed to execute his board responsibilities at Law Enforcement Associates, is he really the right person to head the state’s parole commission? Governor Perdue should immediately rethink her decision to appoint Senator Rand to this important post. If the governor is serious about her new code of responsibility for board and commission appointees, surely she can find a better choice among the state’s more than nine million residents.

Emphasis added

As Joe says, I guess we'll find out if the Governor is going to make the tough choices required to fulfill her commitment to ethics, competence and integrity in state government. Should Tony Rand end up on the NC Parole Commission, that commitment will be proven to be little more than gubernatorial happy talk.