Report: Defense contractor secures STEM funding

RED SPRINGS — On its face, the Emerging Technology Institute in Red Springs promotes STEM education — wowing school kids with drones and dog robots. But behind the scenes, the well-connected defense contractor reveals its other mission: Offering military-style urban and rural tactical training with role players and drones. Rifle and pistol marksmanship. Exercises in countering “emerging threats.” A 250-foot firing range capable of handling up to 5.56-caliber weapons, which includes assault rifles, such as AR-15s.

ETI is among several private military training complexes in North Carolina, some of which also allow civilians to shoot guns and participate in war games: Reservoir International in Raeford, Oak Grove Technologies in Hoffman; Spartan Ranch in Maysville, and Constellis in Moyock, which acquired the company formerly known as Blackwater. Another facility planned for southern Robeson County was denied by county commissioners last year because of residents’ concerns about noise, environmental contamination and decreased property values.

But what distinguishes the Emerging Technology Institute from the other military training companies is that it’s receiving $2 million in state taxpayer money. Public records show ETI plans to use some of it for kids’ STEM education, but allocates a significant portion for “cameras, gates, fences and sensors,” as well as unspecified uses. In a video produced by N.C. State University, ETI President James Freeman called it “an integration hub for the Department of Defense.”

State funds earmarked for military-style training and other activities

The 2023-2024 fiscal state budget earmarked the one-time funding to the Town of Red Springs but specifies that the $2 million is a grant for the Emerging Technology Institute.

For context, the town’s total General Fund budget for 2023-24 is $4.8 million.

Sen. Danny Britt (R-Hoke, Robeson, Scotland) and Rep. Jarrod Lowery (R-Robeson) were behind the earmark, according to a 2023 article in the Robesonian.

While neither Britt nor Lowery responded to questions from Newsline for today’s report, Britt laid out the benefits available to Robeson County residents in the state budget.

In that story, Sen. Britt said “After many months of negotiation with my house counterparts, we have crafted another monumental budget for the citizens of Robeson County. This budget includes pay raises for all teachers, state employees, law enforcement agencies as well as decreased individual personal income taxes. By the year 2027, all personal income taxes will be reduced to 2.49 %. No citizen will pay more than 2.49% individual income tax.” Britt also pointed to millions of dollars he secured in the state budget for many other projects in Robeson County, saying, “There are also numerous other items within this budget that I am very proud of. There is $20 million in funding for a health center to be constructed at Robeson Community college, hundreds of thousands for training for our law enforcement, thousands for STEAM funding for schools across Robeson County.”

Britt pointed to millions set aside for water and sewer upgrades for municipalities across the county. He also was able to secure “over $10 million for upgrades and renovations at the Lumberton Regional Airport, and hundreds of thousands to assist volunteer fire departments to purchase turn out gear,” he said. “This budget provides additional funding to complete work at the Industrial Park in Lumberton, and at the Carolina Civic Center. I have also been able to fund the Lumberton Downtown Riverwalk which is a project that I have been passionate about since I began serving as a Senator,” Britt said. “Additionally, I worked to continue funding for the drug treatment court program which I initially funded in 2020. Also, to deal with addiction in Robeson County and our ongoing opioid epidemic, I worked to secure $1.1 million in opioid addiction treatment funding for Breeches Buoy program in conjunction with UNC Health Southeastern.” In the Sept. 23, 2023 Robesonian story, he thanked Lowery for his support in the House.

“I greatly appreciate the assistance of my counterparts in the House to craft this legislation. Rep. Jarrod Lowery, R-Robeson County, also worked very hard to ensure these items were in the budget.” ETI in Red Springs

ETI operates out of a one-story, town-owned building and former mill on more than 40 acres at 16824 N.C. 211. As of 2022, the company had a two-year lease with Red Springs and an option to purchase the property, according to an ETI presentation.

ETI is a subsidiary of Eco Building Corporation, whose state filings list its purpose as “business development.”

To receive the state money, the town and ETI have to create a scope of work for the Office of State Budget and Management, which disburses the funds. The scope of work, signed Jan. 5 by President James Freeman and then a month later by Town Manager Jane O’Neal, shows how the money would be spent:

$900,000 for supplies and equipment, including “cameras and sensors, gates and fencing and more” as well as “supplies to complete STEM projects”

$700,000 for unspecified contract and service expenses

$300,000 for three full-time employees: a project manager, onsite coordinator and administrative assistant. (North Carolina law prohibits nonprofits receiving public funds from paying an employee more than $140,000, according to the Office of State Budget and Management.)

$75,000 for “other expenses”

$25,000 for administrative expenses, such as utilities

According to the Scope of Work, the funding would be used for two projects. One of them is to “increase STEM kit development by not less than 20% over current projection. Increase the number of local student internships by not less than 20% for the upcoming year.”

Freeman did not respond to questions about current projections for the STEM kits and the baseline number of local student internships, on which the goals would be based.

The Office of State Budget and Management released the funds to Red Springs on Feb. 22, according to an OSBM spokesperson. The Town of Red Springs has yet to disburse them; Mayor Ed Henderson did not respond to a question from Newsline about the delay.

Once ETI receives the money, it will have to file quarterly expense reports with OSBM. Those reports will be public.

Several of ETI’s current and former employees are Army veterans who served in the 82nd Airborne at Fort Liberty, according to their respective LinkedIn pages. Freeman did not serve in the military; he received degrees in mass communications and health care administration from UNC Pembroke, according to LinkedIn. He earned his doctorate in business administration from Capella University, a for-profit online institution.

Nonetheless Freeman has extensive contacts in the defense world. He sits on the advisory board of N.C. State’s Defense Manufacturing Community Support Program; two of his fellow board members work for RTI International, based in RTP. That group gave ETI $93,000 in federal funding for STEM education over three years, according to public government contracting websites.

RTI International acknowledged an email inquiry from Newsline, but did not respond to questions about what Emerging Technology Institute produced as part of the grant. [ Editor’s Note: When the original Newsline story was published, Newsline sent a link to RTI. Only then, after missing two opportunities to respond to questions, did they do so. This portion of the story has been corrected from original reporting to say the amount of money was $93,000 as part of the National Defense Education Program and that STEM kits were not part of the grant.]

STEM kits for kids … but much more

It is true that ETI has introduced hundreds of children to STEM concepts in several North Carolina school districts. And the company already has received generous federal funding for that purpose. Since 2021, the company has received $2.8 million from the Department of Defense to provide STEM camp services and “education kits” for ages 13-21, according to public federal contracting data.

Since Freeman is a member of the Lumbee Tribe, ETI is categorized as a minority-owned business.

The kits, which students can keep, include “a protective case, touchscreen monitor, keyboard, and additional gadgets such as fingerprint scanners, NCRs [digital card readers] and other commercial off-the-shelf products,” according to an article by the National Center for American Indian Enterprise Development. Students can complete an online portion of the STEM program at their own pace. Yet while ETI’s YouTube channel features children enchanted by robots and virtual reality goggles, a section of the company’s website boasts of a facility catered toward adults: “Meticulously designed with privacy in mind, our spacious and exclusive workspace promotes creativity and fuels innovation,” reads the ETI website, which lists no staff. “Join us for an exceptional workspace experience tailored to the unique requirements of our unique customers.”

That description dovetails with the second state-funded ETI project: “to improve exterior and interior security features, procure new information technology equipment … Improve exterior and interior security features for military personnel who participate in demonstration days for natural security purposes and military readiness.”

This includes “procurement of a specialized construction team to provide improved physical security services inside and outside of property” and to provide materials for students participating in STEM internships to “ensure a safe working environment.”

The recent legislative earmark is the second time ETI and town officials have asked for state money. In July 2022, Red Springs Mayor Ed Henderson sent a letter to N.C. Department of Transportation Secretary Eric Boyette asking for $2 million in contingency funds.

A DOT spokesperson told Newsline that the agency denied the request after reviewing “the project scope with our General Counsel,” and determining “the project was not eligible for contingency funding.”

The money would have helped fund “major on-site projects” including “fortifying the entranceway with vehicle deterrent equipment, reinforcing perimeter fencing to protect military personnel on-site, and other infrastructure improvements to protect military personnel and sensitive intellectual property related to advanced weaponry,” Henderson wrote. “By supporting their needed roadway infrastructure needs, the entire community will benefit.”

The mayor’s correspondence with DOT included a nine-page handout from ETI that claimed it had commitments from seven companies to lease space at the building. The handout did not name the companies but described them as a “construction company” from Robeson County, “software development” entity from Seattle, Wash., and an aerospace company from Huntsville, Ala.

Freeman did not respond to questions about the status of those commitments.

ETI’s presentation, which is a public record, touted the strategic partnership with Red Springs. The town has tried to attract new business and investment since the textile industry largely abandoned the area decades ago. Thirty-seven percent of the town’s population — 3,100 — lives at or below the federal poverty level, census data show.

On ETI’s YouTube channel, one episode features kids with a robotic dog at a career day, while others learn to operate remote-control cars using wifi. And in an Episode 3, Freeman has flown to Los Angeles with a video crew documenting his meeting with the CEO of OpenCV, a company that specializes in AI, computer vision and image and video manipulation. In the video, Freeman is driving a rented BMW convertible, the top down, the relentless Southern California sun drenching his face.

Assistant Editor and Environmental Reporter Lisa Sorg helps manage newsroom operations while covering the environment, climate change, agriculture and energy.