Speaker Tilley letter to Auditor Schweich by politicmo


									     CAPITOL OFFICE                                                                     DISTRICT OFFICE

           State Capitol                                                                 108 West Columbia
    201 West Capitol Avenue                                                            Farmington, MO 63640
           Room 308A
                                                                                        Tele: (573) 756-5572
Jefferson City, MO 65101-6806
      Tele: (573) 751-1488                                                              Fax: (573) 756-2520
      Fax: (573) 526-0881                   STEVEN TILLEY
                                         Speaker of the House
                                   Missouri House of Representatives

       October 28, 2011

       The Honorable Thomas A. Schweich
       State Auditor
       State of Missouri
       State Capitol, Room 121
       Jefferson City, MO 65101

       Dear Auditor Schweich,

       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. As you know, in June of 2010 Governor Nixon visited Moberly and announced
       several state incentives to entice Mamtek to purportedly build and operate a sucralose
       manufacturing facility. At that time Governor Nixon stated he was, “pleased that my
       administration was able to provide a competitive package of strategic economic incentives to
       help bring these jobs to Missouri.”

       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 Governor 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.

       I am aware of applications for economic development funds and for tax credits that would lead to
       real job creation languishing for 15-20 months without receiving approval. The media reports
       indicate the Mamtek project was rushed through in a matter of days. Why would this deal garner
       approval in just a few weeks while other economic development opportunities remain in limbo?

       We must act quickly. Governor Nixon has lobbied for months to expand his discretion in
       awarding tens of millions of taxpayer dollars to companies through DED. Unfortunately, the
       recent Mamtek case is now a key impediment to passing a job creation bill in the ongoing special
       session called by the Governor.

       Taxpayers will not stand and watch the Legislature reward Governor Nixon with expanded
       discretionary powers until we have answers as to why his department is failing to exercise the
due diligence to determine viability of companies to which he is awarding millions of taxpayer

Records show the Nixon Administration did advise, coordinate, recommend and encourage
multiple communities to make significant financial investments in the Mamtek project. The
Nixon Administration lobbied the Missouri Development Finance Board to issue bonds for the
project. On the Nixon administration’s recommendations, and based on DED’s representation
that they had done due diligence, both the community and the MDFB supported the project. Now
Moberly’s taxpayers, and/or small investors who bought the bonds, will pay for this failure when
a simple Google search by the Nixon administration would have uncovered glaring red flags.

You may remember that this is not the first time fraudulent applications were received and
prematurely approved by Governor Nixon and DED. In the same period as the Mamtek
announcement, Governor Nixon awarded over $2 million in state incentives to a dental practice
in Southeast Missouri whose CEO had been convicted of, and was still on probation for writing
bad checks. Another emerging issue was reported in the media just days ago involving a
Kirksville company called Wi-Fi Sensors and their having defaulted on a $1 million state loan
Governor Nixon had approved.

We need you to determine how many more projects are out there failing. 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 DED.

This pattern of recklessness and complete disregard for the Missouri taxpayer must end. It is
unfortunate that the Governor and DED continue to miss the purpose of our state’s economic
development incentives. The legislature has defended these programs because they assist in job
creation and help move Missouri forward when properly used, not because they create photo-ops
for the Governor.

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 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 Governor 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
    • 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.

Missourians expect more accountability and more transparency from their state government. We
must put an end to the carelessness and lack of due diligence in the Office of the Governor and
DED. I urge you to take immediate action in the interest of Missouri taxpayers.

Steven Tilley
Speaker of the House

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