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More Enterprise Fund failures

There sure are a lot of them.

Gov. Rick Perry’s office has rewritten three more contracts for companies that are struggling to create the promised number of jobs after getting millions of taxpayer dollars from the Texas Enterprise Fund.

The Associated Press has been tracking the problems of enterprise fund companies and amendments to their contracts for more than two years.

In response to the latest questions from the AP, Perry’s office said Lee Container Corp., Albany Engineered Composites Inc. and Vought Aircraft all fell short of their job creation goals and got their enterprise fund contracts changed this year. Those contracts were amended since the governor told the AP in response to queries in January that 11 other job creation contracts were also changed to make them more favorable to the companies and give them more time to create jobs.

Vought’s initial state contract was for $35 million, while Albany Engineered Composites’ was for $1 million and Lee Container’s was for $300,000.


According to information from Perry’s office this week, Lee Container Corp. was granted an extra five years to create the 105 jobs it promised; Albany Engineered Composites Inc. had its job creation target reduced from 337 to 137 and the amount of taxpayer money it is getting reduced from $1 million to $300,000; and Vought Aircraft slightly lowered the number of jobs it had in place at the start of its contract.

All three companies had to pay “clawback” fees to the state in 2009 or 2010 — ranging from $19,000 to nearly $1 million — for failing to meet deadlines for creating jobs. Vought, meanwhile, stated in a Securities and Exchange Commission filing this year that it may not be able to satisfy its $35 million enterprise fund commitment and could have to pay back some or all of that money over the next nine years.

So what they got was a no-risk interest-free loan, much of which will likely never be paid back even if they ultimately fail to create a single job, as the case almost surely will be with Lexicon. Something that I’ve never understood about the Texas Enterprise Fund is why exactly a guy like Rick Perry, who claims to be a champion of the free market, thinks it’s a good idea for the government to be picking winners and losers in the business world like this. Why not leave job creation to, you know, the free market? You tell me what the answer to that one is. Maybe Perry just wants to prove by example that Governors should not engage in this kind of meddling. Local Texans has more.

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