04:30 PM EST on Monday, November 3, 2003

By JEFF SONIER / 6NEWS

BELMONT, N.C. -- North Carolina's multi million dollar textile training center in Belmont is supposed to take donations for education, but that's not how most of the donations are being spent.

The North Carolina Textile Training Center has brand new textile laboratories with full-time faculty and expensive new equipment. But the 6NEWS investigators were there earlier, they did not see any students.

Some state lawmakers call it all a waste of taxpayer’s money.

"It's not a pretty picture at all for taxpayers,” said Debbie Clary, North Carolina state representative. “Like I said, these are the type things that embarrass us."

The response from textile center president Jim Lemons was, “If we cannot justify the existence of this school, then I would say taxpayers would have some questions."

But tax dollars are not the only dollars they spend at the textile center. They also get thousands every year in private contributions, to a textile center educational foundation. Only 6NEWS has learned that most of those donated dollars are headed eventually into the pockets of Dr. Lemons and his staff.

"No, I would not give to the textile school if they were taking that money and giving it to the employees," said Tom Novinc, ex-board member.

Novinc said the thousands he contributed were supposed to pay for textile center scholarships, and he ought to know. Novinc is a former textile center trustee, who signed the papers creating the fundraising foundation in the first place.

"I donated money from our company and I didn't know it was not being used for anything but scholarships," Novinc said.

He said he did not know when or why it changed.

Tax forms back in 1997 show the foundation spent more than $44,000 that year for what it called educational reimbursements with a blank space indicating zero was spent on employee benefits.

But the investigators also checked the foundation's more recent tax returns and they showed scholarship funding now falling to only $2,000 or $3,000 a year.

At the same time, contributions went instead to a textile center's employee pension plan of more than $28,000 three years ago, to more than $32,000 two years ago. And the state treasurer estimates up to $82,000 more last year and so far this year the textile center staff getting a generous retirement payoff, while thousands of textile workers got laid off.

"Doing this for 21 years I've never seen that type of connection as far as use of funds,” said Tom Barthlomy, president of the Charlotte area Better Business Bureau.

6NEWS showed the foundation figures to Bartholomy who said they fail that test rather miserably, as far as being accountable to the public."

President Lemons responded on the phone, explaining the pension plan money helps the textile center attract and keep good faculty members. But the Better Business Bureau says the textile center foundation has a lot of other explaining to do about the thousands in unexplained travel expenses, and the tens of thousands spent on unexplained special events, all included on tax forms signed by the textile center president.

"That's part of what we do," Lemons said.

He refused a request for those details, but the investigators found one year, the textile center fund actually spent more on golf tournament fees and t-shirts than it did on scholarships.

"Entries in golf tournaments, travel expenses, how that is furthering the mission of that foundation is more than a stretch," Bartholomy said. "So this is basically the exact opposite of what you'd expect to see from a charitable organization."

And the exact opposite of what Novinc expected when he donated.

"It's way out of line,” Novinc said. “Way out of line.”