As the Senate Committee on Governmental Accountability continues to delve into the Mamtek project, it will look into whether the Department of Economic Development did its due diligence where it was involved. At this point, the Committee has not answered that question.
At its hearing on Tuesday, the Committee heard from two DED representatives: Legal Counsel Chris Pieper and Director of the Division of Business and Community Services Sallie Hemenway. They testified that the Department did not issue bonds, but it was responsible for granting “tax exempt” status on $27 million worth of them through the “Recovery Zone Bond” program, part of the American Recovery and Reinvestment Act (ARRA).
Columbia Senator Kurt Schaefer asked what due diligence DED did before granting that status. Pieper said generally that the decision was based on information that was submitted to the City of Moberly, potential investors and the Department, but he was not specific on what that information was or how thoroughly DED investigated any of it.
As to the criteria DED looked for, Pieper said the single, most critical piece was “that the project was able to close prior to the December 31, 2010 deadline under ARRA to use those bonds.” Pieper told the Committee that because Moberly had done its inducement resolution in May of 2010 and additional amounts were available for allocation in July, it seemed clear the project could close by that deadline. Other criteria involved job creation potential and investment.
Senator Schaefer and Pieper went several rounds, as the former tried to get more specific information out of the latter…
AUDIO: Senator Kurt Schaefer presses Department of Economic Development General Counsel Chris Pieper for details of DED’s due diligence :31
Pieper told the Committee he and Hemenway did not come to the Hearing prepared to discuss issues of due diligence, but said more specific information on that would be included in documentation DED will provide the body at the request of its chairman, Senator Jim Lembke. Senator Schaefer says he hopes that will include the answers he is looking for. He anticipates those will be released in a “couple of weeks.”
When asked by Senator Lembke if the state was “on the hook” for any of the bonds, Pieper said nothing he “has seen indicates that the state has any obligation for these bonds.”
The Committee’s next meeting date has not been set.
AUDIO: The Senate Committee on Governmental Accountability hears testimony from the Department of Economic Development’s Legal Counsel Chris Pieper and Director of the Division of Business and Community Services Sallie Hemenway :43:41