Court Fights End For Failed Development In Mid-Missouri
The five-year legal saga of Mamtek, a mid-Missouri failed development project that caused political headaches for Gov. Jay Nixon, is apparently over.
A civil trial slated to get under way this week came to an end Wednesday morning during jury selection when the two sides reached a confidential settlement.
According to the Columbia Tribune, the case centered on whether “banker Morgan Keegan and its legal adviser, Armstrong Teasdale, misled investors to sell bonds” to pay for the construction of the now defunct artificial-sweetener plant in Moberly, Mo.
Mamtek’s former chief executive, Bruce Cole, is serving a seven-year prison sentence after pleading guilty in November to securities fraud and felony stealing.
An investigation by Attorney General Chris Koster’s office, along with the Randolph County prosecutor, determined that Cole had illegally used more than $700,000 in Moberly municipal bonds for his personal use. Almost $300,000 of that money was used to stop the foreclosure of his home in Beverly Hills, Calif.
Cole was sentenced in St. Charles County, while the civil case was set in Jefferson City.
The case had drawn in the governor because Nixon had joined Cole at a news conference in 2010 to highlight the project, which was expected to create hundreds of jobs. However, several prominent Republicans – including former U.S. Sen. Christopher S. Bond and Lt. Gov. Peter Kinder – also had lent their support to the project.
Missouri was offering $17 million in tax credits, while Moberly guaranteed close to $40 million in bonds.
By 2011, it was clear the project was failing. The state did not pay out any tax breaks because no permanent jobs had been created. Even so, then-Missouri House Speaker Steve Tilley, R-Perryville, was calling for state Auditor Tom Schweich to investigate.
Schweich's audit subsequently faulted Nixon's economic team for failing to screen the project more closely. That led to Republicans in the state Capitol to blast the governor repeatedly for his lack of economic prowess. Nixon countered that no state money was lost -- which he said was evidence of his office’s due diligence in protecting state resources by requiring a project's success before money was paid out.
Former House Speaker Tim Jones, Re-Eureka, said the whole controversy "highlights the need for oversight by the legislative branch'' when it comes to state aid for projects, including tax credits.