The Rio Grande Foundation released our latest story on the poor record of New Mexico’s State Investment Council this week. The release can be found here and the full story is available here. The story was also covered on Joe Monahan’s blog.
The gist of the story is as follows:
In 2004, at the urging of Governor Bill Richardson, the State Investment Council (SIC) loaned $9 million dollars to Earthstone International. Governor Richardson said he was “encouraged by Earthstone International’s pledge to create high-paying jobs in Doña Ana County.” The problem, Scarantino found, is that Earthstone appears to have used the state’s money to create jobs in Old Mexico and Arkansas instead of New Mexico.
Earthstone orignially pledged to construct a 200,000 square foot plant at Doña Ana County’s Santa Teresa border crossing. At least 200 new jobs were touted. In one report, Andrew Ungerleider, the company’s co-founder, said that plant would be operational within approximately 18 months from when the loan was approved.
In researching Earthstone and the company’s use of the $9 million loan the SIC made on behalf of taxpayers, Scarantino found that Earthstone never built a New Mexico plant. Instead, New Mexicans’ money has helped Earthstone shift money and jobs to Juarez, Mexico and Bentonville, Arkansas. The loan has never been repaid. In fact, it has been converted to an ownership stake in Earthstone itself.
Given this poor track record, it is clear that the SIC is in need of serious reform.