Tuesday, April 11, 2006

Texas Gubernatorial Campaign Might Reveal Stench of Corporate Welfare

Dear President Bush,

The San Angelo Standard Times ran an editorial this morning on the sweetheart deals between the State of Texas and Vought Aircraft Industries. The editor focused on a $35 million incentive for jobs creation and the questionable performance by Vought in meeting their promised obligation. He noted their plans to cut 600 jobs, primarily in Dallas.

Mr. Meighan's story reveals only the tip of the iceberg. What remains below the surface?

1) Since the original deal, the State has entered into a $65 million land deal with Vought that reduces the companies cost for land as well as their state property tax bill. In November 2005, the City of Dallas agreed to a 10 year 75% tax abatement totaling $5.6 million for Vought's expansion

2) During the land negotiation period, Vought located its new, up to 600 employee assembly plant in Charleston, South Carolina. Their CEO gave this reason for selecting South Carolina. Vought wants to locate the plant "where we think we can get assistance on the Hill for our military programs”. What can Senator Lindsey Graham deliver that Senators Cornyn and Hutcheson cannot? Is it an extra vote on the Senate Armed Services and Budget Committees?

3) The CEO understands the political game all too well as Vought is owned by The Carlyle Group, famous for it’s “A list” of insiders with strong connections to the Bush administration.

4) During the time Vought needed $100 million of state assistance, the Carlyle Group returned $2.1 billion to its investors due to the “stellar performance of its investments”. Does this sound like a group in need of corporate welfare?

5) The Carlyle Group also owns LifeCare Hospitals where 24 patients died post Hurricane Katrina. That your White House Lessons Learned report omits any mention of the company and the patient deaths is most puzzling as it mentions a nursing home where 6 or 7 patients expired. Does it benefit LifeCare and the Carlyle Group to have the federal government silent on their actions as cases enter civil court?

Those are the highlights of what might be included in future articles. Who knows how deep the iceberg goes? Do you have an idea of what lies beneath?

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