Getting a handle on the scandal

While the White House is taking heat for the failure of one of solar panel company, originally green-flagged for assistance by the Bush administration and constituting 1.3% of the Department of Energy's green-energy investment guarantee portfolio, Governor Rick "Good-Hair" Perry of Texas has shown leadership in forging a path for true believers in Free Enterprise to encourage the development of emerging technologies in the Lone Star state.  Via the conservative Frum Forum:

As Governor, Rick Perry presides over a fund that has doled out over $200m in grants to private firms. While Obama is in trouble because his aides might have begged the Energy Department accelerate lending to one promising solar panel maker, Perry is laughing his boots off.

The Texas Emerging Technology Fund (ETF) is practically Perry’s own, personal multi-million dollar fundraising machine. When it comes to doling out money to private firms he doesn’t have to beg anyone for anything.

The fund, signed into law largely by and for Perry in 2005, is controlled by his office and operates largely in secret. Many states have similar investment programs, but the concentration of power in the Governor’s office under Perry’s program is unique.

From the Dallas Morning News, “Under the law, companies that receive tech fund money must have approval from the governor, the lieutenant governor and the House speaker. However, the speaker and lieutenant governor don’t act until Perry decides to back an applicant or gives them detailed information prepared by his staff about the recommended firms, aides said.”

Here’s a successful Texas investment strategy. Put a $1000 of your own money into a business. Invest $75,000 in the Governor’s campaigns. Then fund the rest of your business with a $4.5m taxpayer funded grant from the Governor’s ETF. That’s not a loan like Solyndra received, that’s cash on the barrelhead, delivered from the state and never to be repaid.

What might you do with a pile of free taxpayer money and a ton of political influence? Perhaps you could get your hands on patents developed by the University of Texas.

Another Perry contributor cashed in his chits for a $1.5m investment from the Texas ETF. Charles Tate is a major Perry donor who had managed to get himself put in charge of a board that “vetted” candidates for the ETF. He recommended the ETF give money to Thrombovision, and then invested in the company himself.

He and his partners accepted that state grant in 2007. The company failed to submit annual reports and finally sought bankruptcy protection in 2010. Since the taxpayers under Perry’s program are doling out grants instead of loans and taking no equity interest in the companies to which they give money, the state gets nothing from the bankrupt entity, unlike the Solyndra case. The folks who got the state grant just walk away. And Perry doesn’t have to give back the campaign contributions.

That’s how you do business in Rick Perry’s Texas.