Harry Smith

Pitt

Perhaps the most controversial member of the BOG, Harry Smith is a Greenville businessman and ECU alum who joined the BOG in 2013 after being nominated by Sen. Phil Berger. Berger said Smith’s business background and interest in public education made him a good fit for the BOG. Smith himself said he wanted to make the university system “quicker, smarter, faster and better.” In May of 2018 Smith was elected chairman; his rise to leadership represented a “changing of the guard” from a governing body made up of people with professional connections to the UNC System to a core group of conservative business leaders. BOG member James Holmes was reportedly a “key ally” in getting Smith appointed. 

When Berger first called Smith to ask about his interest in serving on the BOG, Smith refused, saying, “I didn’t even know what the Board of Governors was.”

Smith is a Republican mega-donor. He has donated about $180,000 to mostly Republican legislative candidates since 2000. Smith donated $4,000 in 2012, one year before Smith was nominated to the BOG. Smith gave a $50,000 gift to the N.C. Republican Party, yet when pressed about the contributions, he said “I’m no puppet” and he would support the system by focusing on “efficiency and affordability.” 

“If I were to meet another Harry Smith today, I would do my best to get that person involved in public service and put his talents and background to good use for the state of North Carolina” – Sen. Phil Berger

Smith made his money by selling the Flanders corporation, an air filter company, in 2014. He holds stakes in several other companies such as Pitt Electric, co-owns two apartment complexes that cater to college students in Georgia and Greensboro, and has invested in multiple off-campus apartments. His real estate holdings are valued at over $1.1 million.

Smith’s tenure on the BOG has been mired in what seems like nonstop controversy since the beginning of his term ranging from his bullish approach to governance and alleged conflicts of interest involving profiteering from student housing.

He was involved in a merger between ECU’s physician practice plan and Vidant Medical Group where he pushed for the UNC System to get a better deal and  cited pressing UNC to take a “stronger stand” on the merger as one of his “most important success.” He also favored studying whether the UNC System offices should move out of Chapel Hill in a move largely regarded as a power play aimed at System President Margaret Spellings. 

In 2016 Smith stirred up controversy when he encouraged ECU to purchase a foreclosed apartment complex adjacent to the school’s campus that would benefit Smith’s apartment group, Preiss. Smith said the Preiss Company, a group with which Smith co-owns off-campus student apartment complexes, approached him about the ECU deal. However, Smith maintains that he has “never owned an asset that had ANY support or relationship with any university.” Smith’s group, looking to get the complex “at a steal,” acknowledged that Smith would profit from the facility. Under the proposal, Smith’s company would own the apartment complex and lease about 800 beds back to the university to rent to students. In order to meet this demand, sophomores would have had to live in university housing. Kieran Shanahan, who was then the chairman of the ECU Board of Trustees, said the proposal did not make good business sense.

Smith’s connections to the Preiss Company emerged again in a 2018 lawsuit. Specifically, the group was named in a whistleblower lawsuit involving a NC Central chancellor who alleged that Smith and fellow board member Darrell Allison tried to steer North Carolina Central University to Preiss for a public/private partnership to build and operate a 1,240-bed housing project on campus. Smith denied the allegations. 

(WRAL, 5/2/18)

According to prior SEIs, Smith held ownership interest in apartment companies that Preiss manages. The Crest Apartments are owned by the Preiss company.

One of the buildings managed by Preiss had to evacuate students because of a “sagging concrete floor.” Students complained of a lack of responsiveness and transparency from Preiss in the aftermath of the condemned building.

More recently, BOG members have openly clashed with Smith in the aftermath of Margaret Spellings’ resignation and the ousting of ECU Chancellor Cecil Staton.

When Margaret Spellings announced her resignation at the end of 2018, Long immediately blamed Smith for her departure. He specifically cited meddling by “the leadership of our board” and noted that Smith would bombard Spellings with constant communication.

“[Smith] does not have a full-time job. He treats the UNC system as his full-time job, and he supplanted [Spellings] in managing the university [system]. He would call her five times a day, text or email 20 times a day. I mean, this is just not what a president of an organization wants from their board chair. And she had had it, and just went back to Texas.”

Steve Long, in a WUNC Interview.

When ECU Chancellor Cecil Staton announced his exit a few months later, Long refused to stay silent. Smith has clashed with ECU on several issues ranging from the purchase of a $1.3 million home for the chancellor to pushing for the school to get more money out of a deal with Vidant during a merger. Long accused Smith of conspiring with interim UNC System President Bill Roper to force out ECU Chancellor Bill Staton after only three years on the job. Long went as far as to recommend that Smith be removed as chair of the BOG. 

Specifically, Long alleged in a written letter that Staton was “pushed out” by Smith over political disputes rather than an issue with the chancellor’s performance. Long accused Smith of having an “irrational personal vendetta” against Staton and that Smith had sought to have Staton removed since Staton and ECU trustees rejected Smith’s 2016 proposal to buy an apartment complex near ECU. Long then claimed Smith became “obsessed” with removing the chancellor, deemed Smith’s action “persistent and extreme,” and said it consisted of “daily threats and attacks.” While Smith said he had “nothing to do with Chancellor Staton’s forced resignation,” ECU’s Chairman of the Board of Trustees Kieran Shanahan disagreed and accused Smith of lying.

“Harry Smith has done damage to the University of North Carolina system and particularly to East Carolina University. Until he is gone, Harry Smith will continue to do damage to our state’s greatest asset.”

from Comments Regarding the Departure of ECU Chancellor Cecil Staton, authored by Steve Long on March 18, 2019.

Smith denied Long’s allegations and accused his fellow board members of “leading with anger.”

Smith donated $1 million for a basketball facility at ECU and likened himself to Bill O’Reilly. 

Sources