2/2/2011

FOR IMMEDIATE RELEASE February 2, 2010

http://www.iowapolitics.com/index.iml?Article=225543

Branstad’s proposal to allow big-moneyed special interest groups to make tax-deductible donations to a shadowy foundation that will then be doled out alongside public subsidies to corporations without any kind of public accountability, oversight, or transparency is akin to legalized money laundering, Iowa CCI members say

Des Moines, Iowa –

Privatized economic development agencies have been at the center of several high-profile scandals in all seven states that have them, scandals that include the misuse of taxpayer funds, excessive executive bonuses, questionable subsidy awards, conflicts of interest, questionable claims about the effectiveness of the agency’s job creation efforts, resistance to accountability, favoritism, and “pay-to-play”, according to a new report published this month by the nonpartisan Good Jobs First titled Public-Private Power Grab: The Risks in Privatizing State Economic Development Agencies.

The report raises serious doubts about Iowa Governor Terry Branstad’s controversial proposal to privatize economic development by creating a private, nonprofit, tax-exempt foundation that will not be subject to the state’s open records laws.

“Branstad’s proposal to allow big-moneyed special interest groups to make tax-deductible donations to a shadowy foundation that will then be doled out alongside public subsidies to corporations without any kind of public accountability, oversight, or transparency is akin to legalized money laundering,” said Adam Mason, Iowa Citizens for Community Improvement’s (Iowa CCI’s) statewide policy organizing director.

“This proposal would allow unaccountable corporate business interests to pick economic winners and losers, using our taxpayer money, without our consent,” Mason continued. “This is part of Branstad’s corporate agenda to dismantle our democratic institutions, hand over control to big-moneyed special interest groups, and dole out the wealth of this state from everyday Iowans to the largest big businesses.”

Seven states have privatized economic development through the use of so-called “public/private” partnerships - Florida, Indiana, Michigan, Rhode Island, Utah, Virginia, and Wyoming, according to the Good Jobs First report. All seven have been involved in high-profile scandals. An eighth state, Wisconsin, previously had a privatized economic development agency but abandoned the concept because of performance problems and subsidy scandals.

“Based on these experiences, we conclude that the creation of economic development public/private partnerships is not a wise course of action and recommend states focus instead on making their existing agencies more effective and accountable,” the Good Jobs First report concludes.

“This is more evidence that Branstad is putting corporate interests ahead of the interests of everyday people,” Mason said. “We need economic development that works for all Iowans – not more power-grabs by a corporate governor and his big-moneyed donors.”

The mission of Good Jobs is to make economic development subsidies more accountable and effective, according to their website.

Iowa Citizens for Community Improvement is a group of everyday people who talk, act and get things done on issues that matter most. With thousands of members from all walks of life -- urban and rural, black and white, immigrants and lifelong Iowans -- CCI has been tackling tough issues and getting things done for more than 35 years.