Day By Day

Sunday, June 03, 2012

Cronyism in the heartland

Although major firms like Solyndra have gotten deserved attention because of their huge federal croynism, that same disease is at work at the state level.  From Media Trackers Ohio comes this account of Toledo Blade reporting:
The Ohio Department of Development recently announced plans to audit Perrysburg solar-panel manufacturer Willard & Kelsey Solar Group LLC — also known as WK Solar — after the company failed to make regular debt payments on money it borrowed from taxpayers.  The company borrowed $5 million in taxpayer funds from Ohio’s Air Quality Development Authority “green jobs” program, as well as another $10 million in funds lent by the Department of Development itself.

The Air Quality Development Authority is a separate state commission but often collaborates on projects with the Department of Development.

As early as 2009, the Ohio Department of Development and the Air Quality Development Authority were aware of the company’s financial woes.  Company records provided to the state showed that WK Solar ran up $4.2 million in debt. Nonetheless, taxpayer funds continued to be pumped into WK Solar’s coffers.

At that time, state and federal officials had great expectations for the Perrysburg “green energy” company. Vice President Joe Biden joined then-Governor Ted Strickland to tour the plant, where Biden said the now-failing company was key to “our folks getting back in the game.” Massive taxpayer funding of the foundering green energy company has led critics to deride WK Solar as “Ohio’s Solyndra.”

In 2010, WK Solar executives — including CEO Michael Cicak and president James Appold — donated almost $25,000 to Gov. Ted Strickland’s re-election campaign. Cicak also donated to Lt. Gov. Lee Fisher’s US Senate campaign. Fisher served as director of the Department of Development under Governor Strickland.

Later that year, in July of 2010, the Department of Development lent WK Solar an additional $10 million in taxpayer dollars. Strickland’s administration also approved multiple deadline extensions for required financial reports, as well as deferrals for required loan repayments.

Records show that department officials were very aware of WK Solar’s financial woes but forged ahead with loan negotiations anyway. However, Strickland and Fisher both claim that they were not aware of any financial problems with the company whatsoever.
and more:
In December of 2011, WK Solar reported that it could not meet its promise to create over four hundred permanent jobs, a condition of the loan agreement with the state. Instead, as of this year, the company has created only fifty-one new jobs and has laid off forty employees. As reported by the Blade, no more than 72 people were employed by the company at any point in time.

William Mitchell, the company’s former chief executive officer, alleged that the company violated its contract by using Department of Development funds to pay other executives and to lend them money. Mitchell was fired in 2009, and died in 2011.

According to the Toledo Blade, before his termination, Mitchell copied company records showing that the firm spent thousands of dollars of taxpayer funds on entertainment expenses, including sports games in Detroit and Pittsburgh.

In the past few months, WK missed two monthly debt payments — $466,000 each — and has only made incomplete payments towards interest owed. The missed payments prompted the state to investigate.
That was Democrat Governor Strickland.  And Democrat Lt. Governor Fisher.   Just so you know.

The cronyism rot runs deep.

Thanks to Breitbart for the pointer.

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