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Many State Grant Recipients Failed To Deliver Promised Jobs
Companies receiving state money failed to deliver thousands of promised positions and in some cases state officials inadequately vetted the corporations and their executives, a newspaper investigation published Sunday found.
The Blade of Toledo cited as an example Buckeye Silicon, whose machinery at a nearly empty warehouse is South Toledo is dormant three years after it received almost $3 million from the state. The company failed to launch, never created the nine jobs promised and never produced the 50 metric tons of polysilicon annually it said it would.
The newspaper review of taxpayer-funded loans and grants between July 2007 and June 2012 found more than dozen such examples that the report said represented a breakdown in the vetting, oversight or management of state economic-development loans and grants. Key Ohio job-creation duties have since migrated to the private nonprofit JobsOhio.
The issues highlighted spanned the administrations of Govs. Ted Strickland and John Kasich, a Democrat and Republican.
About half the companies receiving public grants during the period failed to create the jobs they’d promised after receiving awards totaling $45.5 million. Much of that money is now lost.
Just $2.6 million of the $47.5 million in bad loans and grants that Attorney General DeWine has been asked to collect since fiscal year 2009 had been recouped as of Oct. 16, largely because severely troubled companies have no money or assets to pursue.
“Sometimes these deals are cut and they shouldn’t have been cut,” DeWine said.
Ohio Development Services Agency director David Goodman said Ohio overhauled how it tracks job-creation awards last fall.
“We’ve made significant strides,” he said. “I would say we’re never going to be completely there, but I definitely think we make better investments than we ever have.”
The agency placed Buckeye Silicon’s loan in default this month. To date, the firm has repaid the agency $33,044 of the $1.3 million it borrowed. The company also faces a lawsuit by the Ohio Air Quality Development Authority alleging fraud and has been kicked out of the University of Toledo’s Research Technology Complex for not paying rent.
“I look at this loan and I keep wondering is this somebody who just stole money from the state?” said air authority chairman Jeff Jacobson. “I really can’t see that they did anything.”
Buckeye Silicon CEO Harrison Choi said Ohio’s generous cash offer enticed the company to set up shop in Ohio: “We surveyed many different states that offered good packages for the renewable companies.” He says the company has done nothing wrong.