Spence criticizes Nixon’s handling of economy
Thursday, November 1, 2012
MOBERLY (AP) — Republican gubernatorial candidate Dave Spence called for improved efforts on economic development while campaigning Wednesday near an abandoned artificial sweetener plant that Democratic Gov. Jay Nixon had said could employ more than 600 people.
Spence said the failure of the Mamtek U.S. plant could have been avoided with a “lick of commonsense” and sufficient research and due diligence. He said a similar project would not get through under his watch and that Nixon owes an apology.
“Mamtek represents what happens when you try to go for photo ops and headlines and not do what business is intended to do,” Spence said. “Anybody in the real world, anybody who’s in the private sector would have picked up in two seconds that this was not a viable project.”
Mamtek received $39 million in industrial development bonds from Moberly and authorization for up to $17 million of state incentives to build an artificial sweetener plant in the central Missouri city about 30 miles north of Columbia. Construction was halted on the partially completed facility after the company missed a bond payment in August 2011.
Bruce Cole, the chairman and CEO of Mamtek, has been charged with theft and securities fraud and is accused of using bond revenues to avoid foreclosure on his home in Beverly Hills, Calif. The federal Securities Exchange Commission also has filed a lawsuit against Cole seeking financial penalties. Last week, the remaining assets for the plant were sold at auction by UMB Bank, the trustee for bondholders.
Nixon’s administration frequently has said no state incentives were paid to Mamtek, but Spence countered that the state incentives helped prompt Moberly to issue its bonds.
“The fact is that no state tax dollars were lost on that project because Missouri has strong protections in place for taxpayers,” Nixon campaign spokeswoman Channing Ansley said.
Ansley highlighted a business deal of Spence’s in New York that led to his company repaying $75,000 worth of incentives after failing to meet job targets.
Spence’s company bought a Brooklyn-based plastics manufacturer and received a $125,000 grant from New York’s main economic development agency. The grant called for keeping the facility’s 55 full-time employees and adding 45 workers by January 2006. In March 2005, the New York agency said the job requirements were not met and that 60 percent of the grant should be returned. No payment immediately was made, and the New York agency filed a lawsuit in December 2005. The company wrote a check the next month.
Spence’s campaign has said New York was not a business-friendly state. It has said criticism of the business deal was an effort to distract from a poor record of economic growth in Missouri.
In an interview after a Columbia campaign appearance highlighting his work to expand disability services, Nixon reiterated his spokeswoman’s comments that the state didn’t pay any tax incentives for the Mamtek project. The governor also criticized his opponent for voting in early 2011, as a board member of Reliant Bancshares, to forgo repaying a $40 million bailout from the federal government. Spence resigned from the bank board shortly after that vote and has said regulators actually suggested the bank not repay the money because of its continued financial struggles.
“We paid zero during that process,” Nixon said of Mamtek. “Much different than what the taxpayers had to pay when he voted not to pay the taxpayers back when he was on a bank (board).”