It is not often that I see my home town of Madison Indiana mentioned by a syndicated columnist. But right here in Townhall.com, I was surprised to read about Madison in a column by Tad DeHaven. It seems that we just missed the opportunity to waste $4 to 5 million on a manufacturing facility for a California business which, according to the Indianapolis Star, had a rather shady past. Here are some excerpts from the column.
Corporate welfare is a bipartisan problem, and it’s a problem at both the federal and state level. Yesterday, I discussed the recent demise of Obama-subsidized Abound Solar and the fact that Indiana Republicans were also involved in helping the company obtain taxpayer handouts. Adding insult to injury is another example of “crony capitalism” gone awry in Indiana.
The Indy Star recently reported on an attempt by the state’s Indiana Economic Development Corporation to pressure the city of Madison into subsidizing a manufacturing facility for a shady California businesswoman. The entire investigative report needs to be read in order to fully appreciate the incompetence displayed by the IEDC’s wannabe venture capitalists, but here are some excerpts:
In their rush to generate a favorable press release for Gov. Mitch Daniels, which is the IEDC’s real mission, IEDC officials apparently didn’t bother to look into the background of the character they were anxious to fork over taxpayer money to:
An Indianapolis Star investigation has uncovered numerous red flags regarding Global Energy Solutions and its president, Mynette Boykin — red flags that experts say raise questions about the IEDC’s due diligence on a project that would have cost local and regional taxpayers several million dollars:
Boykin claimed that another company of hers, Secured Capital Investment Group, would eventually commit $500,000 to the Indiana project, emails show. That company, however, forfeited its California business license in 2011 because it didn’t pay more than $40,000 in taxes.
Boykin noted in her business plan that DC Solar Solutions would be “working in collaboration” with her on the project. When The Star contacted the owners of DC Solar Solutions, they said they never agreed to work with Boykin.
Boykin filed for bankruptcy in 2005 with $1 million in debts. In April of this year, a company filed suit against her for an unpaid $100,000 loan.
The Star shared Boykin’s business plan with an industry expert, who called it “extremely amateurish” and questioned the validity and viability of the proposal.
The Star also determined that other parts of Boykin’s plan are identical to a sample business plan posted on the website bplans.com. The sample plan was for a company that makes auto tools.
Luckily for us, our city officials actually did their jobs and looked into things. This did not make the IEDC very happy.
The good news is that, unlike the IEDC, the locals in Madison did some probing. As they should have given that the cost to the city would have been $4 to $5 million. When a presentation given by Boykin failed to impress Madison’s city council, it became clear that the deal was dead. That didn’t sit well with the IEDC’s representing bureaucrat:
Regardless, IEDC official Wanda Heath was there, and she addressed the council for the first time. She sounded irritated. “You could tell she wasn’t happy,” said Councilman Darrell Henderson, a Democrat.
She also made it clear that she felt that Madison council members weren’t doing their job properly. “She said, ‘You guys are moving way too slow; you’re making Madison look bad; this process should never take this long; no business is ever going to come to Madison being treated like this,’” said Councilman Rick Berry, a Republican.
“I really thought that was out of order,” another councilman, Republican Jim Lee, said. Lee told The Star that in his 12-plus years as a councilman, he had never before seen a representative from the state at an executive session. He felt like he and the other council members were being talked down to.
After leaving town, a defiant Boykin told the Star that “We will come to a different state. Probably right next to you guys.” Unfortunately, it’s not implausible that another state’s Department of Corporate Welfare will eventually come to her aid as this sort of scheming with taxpayer money is definitely not a problem that is unique to Indiana.
No, it isn’t. What we really need to do is get over the idea that government investing is anything but a waste of tax payer money to schemes that couldn’t attract private investors.
I once had a similar experience with a man who was trying to sell us a water purification system. he kept stating that it was important to sign up right now and was even beginning to talk about financing before we agreed to buy anything. When I said we would have to think about things, he acted as though we were the dumbest people in the world for not immediately signing up to spend $4000 on his system.
- Corporate Welfare Fail in Indiana (cato-at-liberty.org)
- “Snowstorm Hits Madison Indiana” (sindianavisions.wordpress.com)