Rick Perry boasts that his Texas Enterprise Fund, which has dispersed more than $400 million, has created tens of thousands of jobs for Texans, but troubling questions have been raised by The Texas Observer and Austin American-Statesman about the use of the fund.
It seems the recipients of the fund have given hundreds of thousands of dollars to Perry's campaigns and to the Republican Governors' Association, while Perry was chairman of the organization; and the businesses getting the money have not come close to creating the jobs they promised. In one case, a business run by a close associate of Perry received $4.5 million from the fund, while putting up just $1,000 of his own money.
The Enterprise Fund is such a sacred cow, that Perry increased its funding while cutting $4 billion from public education.
Last September, Texans for Public Justice released a report that shows two-thirds of the projects financed by the fund failed to meet their job targets, and that while Perry claimed 54,600 new jobs over the past 7 years, fully one-third were "phantom" jobs, promised but never delivered. And when the companies failed to deliver the jobs, they only paid back $2.8 million of the more than $400 million dispersed.
The Texas Observer reportedObserver that 20 of the 55 firms that had gotten money from the fund at that point had given money directly to Perry's campaign ( through their political Action committees or executives or donated to the Republican Governors Association, while Perry presided over it in 2008.
"The 20 companies have received a combined $174.2 million from the Enterprise Fund. During the same time period, those 20 corporations have donated $2.2 million to Perry and the governors association. Several companies made donations around the time they received grants from the Enterprise Fund. It’s even possible that taxpayer money from the fund came full circle into Perry’s own campaign."
Perhaps the most questionable use of the funds came in Aug. 2010, when the Austin American-Statesman reported that $4.5 million from the fund went to a company owned by a friend of Perry, David Nance. The company, Convergen LifeSciences Inc, got the second largest award to an individual company from the Texas Emerging Technology Fund, managed by the governor's office.
The state gave Convergen half the money on Aug. 13, the day the contract was signed, after Convergen either ignored or sidestepped lower reviewing panels.
Nance's application for the money did not follow usual channels for approval. An Austin-area screening board rejected the initial application, and then Nance sidestepped another screening by a board that focuses on life sciences applications.
Instead, he took his application to a 17-member statewide advisory board, made up mostly of Perry appointees, and asked Alan Kirchhoff, Perry's director of economic development at the time, to intervene.
The article details the relationship between Nance and Perry, that includes Perry appointing Nance to state advisory boards and Nance contributing to Perry campaigns.
One other item of note on that deal, the American-Statesman noted that the company's application to the state listed 3 board members, two of whom denied to the paper any involvement in the company.
It's also worth reading to find the lengths Perry and Convergen went to to keep the applications secret, including fighting a Public Information lawsuit filed by the paper