It’s no wonder now why the head of the Department of Economic Development handed in his resignation two weeks ago. He knew what would soon come to light in hearings about the botched deal: that there were serious warnings from the outset, and Nixon’s administration not only should have known better but were likely criminally negligent.
Missouri economic development officials were made aware of concerns about a Chinese artificial sweetener manufacturer several months before they announced they had awarded the company millions of dollars of incentives to build a factory in Moberly.
The emails raising the red flags were publicly released Tuesday by a Missouri House committee investigating whether government officials and private financial advisers failed to thoroughly research Mamtek U.S. Inc. before committing state and local incentives to the company.
It couldn’t get much worse than the truth in this instance... the China-based company had no actual factory in China, despite their claims to the contrary.
And Nixon’s people knew about it before they pushed the project to the city of Moberly, costing them tens of millions of dollars.
According to email records obtained by the House Interim Committee on Government Oversight and Accountability, state economic development officials asked for a background check to be conducted on Mamtek by Armstrong Teasdale attorney Edward Li, who is a Chinese trade consultant for the Missouri Department of Agriculture. In an April 13, 2010 email to two Department of Economic Development officials, Li said that Mamtek's plant in Fujian Province, China, had never started to manufacture artificial sweetener. […]
In May, Department of Economic Development project manager Lynne Shea asked Li to check out other potential addresses for Mamtek in Hong Kong, noting that the company claimed to be producing a product in China. Li responded that there were no manufacturing plants at those addresses.
And to make matters worse, they hid this information from local officials in Moberly.
Corey Mehaffy, president of the Moberly Area Economic Development Corp., testified Tuesday that department officials never shared Li's emails with Moberly officials who were pursuing the Mamtek project. Asked by committee chairman, Rep. Jay Barnes, whether that email would have raised a red flag, Mehaffy responded: "Absolutely."
But Mehaffy said a department official had briefly mentioned to the Moberly city manager that the department was having some trouble verifying the existence of the Chinese facility. Mehaffy said that prompted him to have a June 3, 2010, conversation with Michael Wise, a patent attorney for Mamtek employed by the law firm of Perkins Coie. Mehaffy said Wise assured him that he had observed a production line in November 2009 and had the company's "cookbook" for sucralose - along with an actual, tested sample - in his office in Shanghai.
This whole thing is one gigantic mess, and should provide campaign fodder for whoever the hell ends up running against Jay Nixon in Missouri’s fluid political landscape.
Truly, this situation is embarrassing.
And now we know why David Kerr stepped down from the DED... it’s a horse being led to slaughter. (Although he will have to testify.)
As the state party points out, Gov. Nixon and his administration has done nothing to help the city of Moberly find a tenant for the empty facility Mamtek left in the wake of its collapse, despite obvious malfeasance on the part of his cronies.
Lloyd Smith, Exec. Dir. of the MO Republican Party, summed things up best, saying:
“It is clear that the people of Moberly were the victims of Jay Nixon’s incompetence and lack of due diligence, which directly led to the devastating and costly collapse of the Mamtek project. It is unconscionable that the Nixon administration pushed the project to Moberly and then kept city officials in the dark about critically important information that could have averted this disaster.”
Things are only going to get worse as the investigations roll on, as the SEC and MO’s Atty. Gen. are also attempting to get to the bottom of this catastrophe on top of this House investigation.
One thing can be determined right now: Missouri is in bad shape economically and the Nixon administration has failed in tremendous fashion, not just in this instance, but in general.
But they should be particularly ashamed of themselves for this.