The Chairman of the House Committee studying the failed deal to bring a Mamtek sucralose plant to Moberly says there are many who could have halted that deal before its collapse, but did not. Representative Jay Barnes (R-Jefferson City) says the City of Moberly relied on a series of third-party professionals and the Department of Economic Development to back the project and do due diligence on it.
Patent attorney Michael Wise testified by video conference from California at Thursday's hearing.
One person Barnes says could have stopped the project is Michael Wise, a patent attorney for Los Angeles, California-based law firm Perkins Coie.
Wise testified under subpoena Thursday afternoon before the Committee on Government Oversight and Accountability. He said that he had been to Mamtek’s production facility in Wuyishan City in Fujian Province, China on three occasions: in November 2007, November 2009 and August 2010. The existence and status of that plant has been at question for those investigating the situation.
Wise says on the first visit he observed a production line capable of making 18 tons a year. By the second visit, a larger line had been added that was capable of putting out 60 tons a year. When he returned in August 2010, neither line was in operation and a cooling tower was being added to the larger line.
What those lines were making was less clear. Wise says the Mamtek executives he worked with said it was sucralose, adding he drank tea they said was sweetened with product made there. A sample was later sent to his firm in Los Angeles via its Shanghai office. Wise says he never confirmed sucralose was being made at the site, however.
“I never questioned my client’s (Mamtek) representation to me that they were making sucralose because that’s the nature of the relationship. I’m a patent attorney.”
It was before his last visit, Wise testified, and before the Moberly deal closed that he learned the plant’s future operation was in question. He explained the area had been put under a protected status he equated to that of a national park in the U.S. “The central government had decided that Wuyishan (City) was a protected area, kind of like Yosemite, and as a result of that they weren’t allowing new factories or new lines to be allowed to produce anything in that area, and I assumed it was because of the national park-like status of that area.”
Representative Jay Barnes (right) is joined Thursday by Senator Jim Lembke, who chairs the Senate version of Barnes' committee.
Barnes says, “If Michael Wise would have told people … the Chinese government has some problems with Mamtek’s operation it’s very likely possible that none of this would have happened.”
Wise noted in his testimony the disclaimer that he offered the City of Moberly in a letter to its attorney Tom Cunningham, making clear that he was working for Mamtek and suggesting that the City should do its own due diligence with its own patent lawyers, independently.
Barnes also points to Standard and Poor’s as an entity that could have delayed or stopped the project if it had evaluated the status of Mamtek’s China operation before giving Moberly’s bonds an A-minus rating. S&P Managing Director Geoffrey Buswick, also under subpoena, said the rating was based on Moberly’s promise to pay off the bonds.
The Chairman is now weighing whether to move on to considering legislation related to the Mamtek situation, or to call at least one more witness: former Mamtek CEO and project point man Bruce Cole.
“The conundrum is: our role as a legislative committee is to figure out what we can do to prevent this from happening in the future. I’m not sure what exactly Bruce Cole adds to that question. Given that we’ve spoken to so many other different fact witnesses, I think we’ve got a general idea of what the facts indeed were.” Barnes says he may call Cole if other committee members, or “Maybe I change my mind and think that maybe he (Cole) has something to say that maybe we need to propose X.”
AUDIO: Listen to the testimony of attorney Michael Wise – 1 hour, 26 minutes
