Friday, May 20, 2011

Rick Perry Knows Accounting Gimmicks

Texas Governor Rick Perry knows accounting tricks, despite his call to forego financial manipulations.  The Texas Tribune reported:

Gov. Rick Perry sent out a press release that stated he is against using any kind of "accounting gimmicks" to balance the budget. 
Perry used funny numbers to justify Vought Aircraft Industries receipt of $35 million from his Texas Enterprise Fund.

State of Texas grant monies $35.0 million

Vought promised 3,000 new jobs for Texans by 2010.  When that date arrived, Vought hadn't added any jobs.  It cut 35 positions, $1 million in Texas taxpayer subsidy per job eliminated.

Using economic impact gimmicks, Perry claims Vought provided 29,377 jobs for Texans, when Vought reported 3,315 Texas jobs.  His office overstated reality by 25,992 jobs.  When in trouble change the metric or lie like hell.  Rick Perry did both.

Gov. Perry secretly renegotiated the Vought deal, while under the ownership of The Carlyle Group, a politically connected private equity underwriter (PEU).  Vought booked a refund of $2.1 million liability relative to the grant.  It paid $900,000, courtesy of the Governor's largess.

Triumph's financial statements are opaque on the Texas grant.  However, two items likely refer to the TEF grant:

Repayment of governmental grant
-----($1,695,000) )

Deferred grant income

Carlyle/Vought had $35 million in Texas taxpayer money for six years and added not one job. Triumph/Vought purchased the liability from Carlyle, which aims to cash in via a 2.5 million share public offering at $92.75 a share. Carlyle's $232 million in proceeds is more than enough to make Texas taxpayers whole. Yet, they'll pay up when Rick Perry gives an honest accounting. Likely, never.

Update 6-1-11: The Legislature tightened Perry's two corporate slush funds. They gave him nearly $300 million to work with in 2012, Perry's likely Presidential year. 

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