Then-Gov. Perrry Gave $30 Million To Non-Existent "Texas Energy Center"; Shoveled Cash To Oil Majors
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In theory, companies receiving Enterprise Fund grants were accountable for their job-creation pledges and had to make refunds when they fell short. In practice, the numbers proved hard to quantify and few companies had to make refunds. The watchdog group Texans for Public Justice determined that by the end of 2010, companies had created barely more than a third of the jobs promised, even with Perry’s administration having lowered the standard for counting jobs. And in 2014, the state auditor found that $222 million had been given out to companies that hadn’t even formally applied for funds or made concrete promises for job creation. “The final word on the funds is that they were first and foremost political, to allow [Perry] to stand in front of a podium and say that he was bringing jobs back to Texas,” said Craig McDonald, the director of Texans for Public Justice. “From the very start those funds lacked transparency and accountability.”
This being Texas, it was not surprising that many of the leading beneficiaries of the taxpayer funds were in the energy industry. Citgo got $5 million from the Enterprise Fund when it moved to the state from Tulsa in 2004, even though it made clear that it had strategic reasons to move there regardless of the incentive. Chevron got $12 million in 2013 after agreeing to build a 50-story office tower in downtown Houston — a building that three years later remained unbuilt.
Most revealing of the problems associated with the Perry model of taxpayer-funded economic development, though, may have been a $30 million grant in 2004 to a lesser-known outfit called the Texas Energy Center. The center was created in 2003 to be a public-private consortium for research and innovation in so-called clean-coal technology, deep-sea drilling, and other areas. Not coincidentally, it was located in the suburban Houston district of Rep. Tom DeLay, the powerful House Republican, who, it was envisioned, would steer billions in federal funding to the center, with the help of Washington lobbyists hired by the Perry administration, including DeLay’s former chief of staff, Drew Maloney.
But the federal windfall didn’t come through, and the Enterprise Fund grant was cut to $3.6 million, which was to be used as incentives for energy firms in the area. Perry made the award official with a 2004 visit to the Sugar Land office of the Greater Fort Bend Economic Development Council, one of the consortium’s members, housed inside the glass tower of the Fluor Corporation. In 2013, when I visited Sugar Land for an article on Perry’s economic development approach, his administration still listed the Texas Energy Center as a going concern that had nearly reached its target of 1,500 jobs and resulted in $20 million in capital investment.
There was just one problem: There was no Texas Energy Center to be found. Here, from the 2013 article in The New Republic, is what I discovered:
The address listed on its tax forms is the address of the Fort Bend Economic Development Council, inside the Fluor tower. I arrived there late one Friday morning and asked for the Texas Energy Center. The secretary said: “Oh, it’s not here. It’s across the street. But there’s nothing there now. Jeff handles it here.” Jeff Wiley, the council’s president, would be out playing golf the rest of the day, she said. I went to the building across the street and asked for directions from an aide in the office of DeLay’s successor, which happened to be in the same building. She had not heard of the Texas Energy Center. But then I found its former haunt, a small vacant office space upstairs with a sign on an interior wall — the only mark of the center’s brief existence. Later, I got Wiley on the phone. There has never been any $20 million investment, he said. The center survives only on paper, sustained by Wiley, who, for a cut of the $3.6 million, has filed the center’s tax forms and kept a tally of the jobs that have been “created” by the state’s money at local energy companies. I asked him how this worked — how, for instance, was the Texas Energy Center responsible for the 600 jobs attributed to EMS Pipeline Services, a company spun off from the rubble of Enron? Wiley said he would have to check the paperwork to see what had been reported to the state. He called back and said that the man who helped launch EMS had been one of the few people originally on staff at the Texas Energy Center, which Wiley said justified claiming the 600 jobs for the barely existing center.
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https://www.propublica.org/article/rick-perrys-energy-grants-in-texas
