This article first appeared in the St. Louis Beacon, Oct. 29, 2011 - Missouri House Speaker Steve Tilley has formally asked state Auditor Tom Schweich to probe various aspects of the controversy that continues to swirl around a defunct project in Moberly, Mo. involving a Chinese-American-owned company known as Mamtek.
The Mamtek matter continues to be a hot one for Missouri Republicans, who -- aside from the policy questions -- see it as damaging Gov. Jay Nixon, a Democrat who has yet to attract a formally declared Republican opponent.
(Tilley, R-Dexter, so far has resisted some GOP pressure that he consider challenging Nixon since Lt. Gov. Peter Kinder, a fellow Republican, has run into problems. Tilley has maintained that he's sticking to his plan to run for lieutenant governor in 2012.)
Republican legislators, including Tilley, have raised questions about the state Department of Economic Development's initial support for the project, which called for building a plant to produce artificial sweetener. The state offered $17 million in tax credits, while Moberly guaranteed close to $40 million in bonds to construct the plant.
The plant is now closed, and any workers have been laid off. The state did not pay out any incentives because all hinged on the actual creation of permanent jobs, which did not happen. But Moberly may be on the hook for repayment of the bonds, with some officials saying they wouldn't have been so accommodating if it hadn't been for the strong initial support from Nixon's economic development team.
In his letter, Tilley told Schweich, a fellow Republican:
"I am writing today to request your immediate assistance in investigating the Mamtek situation in Moberly that has threatened to bankrupt a community of approximately fourteen thousand Missourians.
"Until recently, the members of the state House of Representatives assumed the Nixon administration would have basic procedures in place to determine the financial viability of a company before authorizing millions of taxpayer dollars for such a project. However, in light of recent events in Moberly, I worry that Gov. Nixon's Department of Economic Development does not have these procedures in place or, even worse, they have allowed their procedures to be circumvented by political pressure to produce jobs numbers for public announcements."
Tilley asserted that he was aware of legitimate business applications for state tax credits and financial help that have been "languishing for 15-20 months without receiving approval."
The letter goes on to condemn Nixon and blame the Mamtek fiasco, in part, for the General Assembly's failure to pass an economic development package during the seven-week special session that just ended. Tilley asserts that Schweich's probe is needed, to determine if the governor's discretionary powers need to be curbed.
"We need you to determine how many more projects are out there failing," Tilley wrote. "We need to determine the cost to taxpayers because of these projects. Most importantly, we need to determine how so many 'bad deals' for Missourians were approved" by Nixon's economic development team.
As for Mamtek, Tilley told Schweich:
"I am specifically requesting that you use the authority of your office to do the following:
- Audit the tax credits awarded to Mamtek.
- Audit the Nixon administration's DED (Department of Economic Development) to see why Mamtek and the other companies I referenced received incentives and what safeguards are in place to protect the taxpayers from these reckless deals.
- Upon a request from Gov. Nixon, and by copy of this correspondence I am asking him to make that request, audit the city of Moberly so that its citizens are not left to wonder for years what will happen to their city in light of the Mamtek failure. I understand that your office does not have the authority to audit the city without a petition from its residents that could cost them even more money, or without this request from the governor.
- Take any other action you feel prudent within your constitutional authority to protect Missouri taxpayers from a governor more interested in keeping his job than creating jobs for thousands of unemployed Missourians."
But others note that a number of prominent Republicans also played a role, and point to a July 2010 press release in which Mamtek chief executive Bruce Cole singles out for praise several major GOP figures, including Kinder and then-U.S. Sen. Christopher "Kit" Bond.
"Lieutenant Governor Peter Kinder and the Missouri Development Finance Board assisted with a superior financial program," Cole said in the release. "Senator Bond and Congressman (Blaine) Luetkemeyer each took personal interest in encouraging our location here."