Sunday, March 2, 2014

Carlyle Group DBD's Should Refund Texas Taxpayers

All three Carlyle co-founders, known collectively by their initials (DBD), brought home $750 million between them last year.  That's more than enough to refund Texas taxpayers who gave $35 million to Carlyle for 3,000 new jobs that never appeared. From 2004 to 2010 Carlyle's Vought Aircraft Industries cut 35 jobs, making Governor Rick Perry's award a stunning $1 million per job lost.

The Perry distortion continues in his latest Texas Enterprise Fund report.  Vought's final 10-k filed under Carlyle ownership referred to the minor obligation for holding onto to $35 million in Texas taxpayer money for six years

We reclassified $0.9 million related to the Texas grant to the Accrued and Other Liabilities caption in our Consolidated Balance Sheet due to a repayment of grant funds in 2010 based on the agreement.

Perry's 2013 report shows a mere $6.9 million has been repaid after nearly a decade of holding Texas taxpayer money. recently reported:

Perry credits the tech fund and the Texas Enterprise Fund, which similarly gives companies taxpayer dollars to companies, as economic engines helping make Texas the envy of the nation in creating jobs. His office stresses taking a long view with inherently risky early-stage startups, and says job creation and outside funding attracted by companies are important performance measures.

Here's what they missed.  Governor Rick Perry is an embarrassment on several levels in his pandering to Carlyle's co-founders.

One, Perry knew fairly quickly during the six year time span that Vought would not locate Boeing 787 Dreamliner production in Texas, instead choosing South Caroline which gave $65 million.  It would seem fair if Texas lost the bidding war, our $35 million would be refunded.  That was not the case

Two, Governor Perry renegotiated the TEF deal prior to Carlyle's sale of Vought to Triumph.

Three, Perry has bald-face lied in his TEF report on the number of jobs created, choosing to offer the most absurd number of 29,377, instead of the actual number - 35 jobs lost as of 2010. 

Consider what Vought's CEO said in 2007:

To his disappointment, (Vought CEO Kyle) Doty added in an April 17 interview with the Dallas Business Journal, expanding in Dallas is unlikely, as are plans to buy the old Naval Air Station from the U.S. Navy. So a $35 million cash grant in 2004 from Gov. Rick Perry's Texas Enterprise Fund most likely will be repaid.  

Seven years later and Texas taxpayers await repayment.  It's Texas "Just Us," the heady world described by Representative Drew Darby, where politicians meet with captains of industry.  It's clear who Governor Perry serves and its not the public. 

Update 3-4-14:  Two of the three DBD's are selling a miniscule portion of their Carlyle stock.  Combined they'll rake in $85.6 million.  That's enough to refund Texas taxpayers and have $50 million left over.