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The head of the Economic Development Corporation of Utah recently announced his retirement ahead of the release what is expected to be a critical audit of the business practices and oversight of the agency that lost its tax-exempt status after failing to file tax returns for five straight years.
Jeff Edwards' retirement, effective at month's end, was announced with a statement from him calling his tenure as CEO "a privilege." He said he was "honored to be part of the creation of more than 80,000 jobs and nearly $14 billion in new capital investment across our state."
The public announcement of Edwards' departure made no mention of the audit, and Michael Flynn, chief marketing officer for EDCUtah, said that it is unrelated to any of the findings of the legislative auditor general's roughly yearlong review of the agency.
"I think he's retiring for a lot of reasons," Flynn said. "He's been at this for 15 years now. The bulk of the last year for us has been a lot of organizational and governance restructuring and for the most part that is in place, and I think, in his mind, with the audit coming to a close … I think he felt like it was a good time to do it."
EDCUtah is a nonprofit entity funded mainly by taxpayers, and created to woo new businesses to the state and help existing businesses expand in partnership with state and local governments. Last week, EDCUtah touted "one of the most successful years" for the organization, including commitments by companies to create more than 13,000 jobs and invest close to $1 billion in capital in the state "despite significant internal challenges this year."
The corporation was central to the recent failed effort to persuade Facebook to build a data center in West Jordan and has been involved in campaigns to bring 20 other corporations to locate or expand in the state.
EDCUtah's business practices and oversight were called into question when it was revealed that it had failed to file its required tax returns for five years, beginning in 2010. The mistake was caught when someone outside the organization notified EDCUtah that the IRS had revoked the entity's tax-exempt status more than two years earlier.
The revelation prompted legislative leaders to ask the legislative auditor general to expand a narrower audit that was already underway. The findings of that audit are set to be presented to lawmakers at a hearing Tuesday.
"It came as a big surprise to us that that had happened," Edwards told The Salt Lake Tribune at the time. "As the CEO, I just went about what I was doing and just assumed certain things were happening, but, in fact, they were not."
This year, West Valley City, one of the largest dues-paying members of EDCUtah, dropped out of the organization, deciding that it could better handle economic development on its own.
EDCUtah hired an auditing firm to reconstruct the past tax returns and filed them with the IRS in February. The IRS reinstated EDCUtah's tax-exempt status in May, and Edwards said at that time that EDCUtah had strengthened its internal financial controls, such as hiring a new chief financial officer and changing accounting policies to make sure expenditures are more easily tracked.
It also created a new finance board with heavyweights from the banking world, including Wells Fargo regional vice president and EDCUtah board chairman Dean Luikart, Zions Bank President and CEO Scott Anderson, Goldman Sachs managing director David Lang and Workers Compensation Fund CEO Ray Pickup.
Luikart, in the statement announcing Edwards' retirement, praised his dedication to the organization. "Over his tenure," he said, "the state of Utah has benefited greatly from new business entering the state, and existing businesses expanding their operations."
Twitter: @RobertGehrke