Capitols and capital

"Capitols and capital" Continued...

During September The Wall Street Journal joined with Texas reporters in questioning Perry's connections. Unimpressed with government's record in picking winners and losers, both conservatives and liberals examined the Texas Emerging Technology Fund created at Perry's request in 2005: It has committed $200 million from taxpayers to fund 133 start-ups. The Journal noted that Perry, along with his allied lieutenant governor and the speaker of the Texas House of Representatives, has final decision-making authority concerning the grants.

The Dallas Morning News found that some $16 million from the tech fund has gone to firms invested in or run by major Perry contributors. This past spring state auditors pushed for greater transparency in fund management but found no evidence of fraud or illegal activity. While Texas-sized grants have not led to enormous losses like Solyndra's, one medical imaging company that received a $1.5 million award in 2007, ThromboVision, went bankrupt last year.

Texas state Rep. David Simpson, elected in 2010 with Tea Party support, said the fund is "fundamentally immoral and arrogant [with] the appearance of impropriety, if not actual impropriety." Another Republican, state Sen. Mike Jackson, noted "criticism about the lack of transparency and insinuations of cronyism." The Texas House of Representatives in May voted 89-37 to close the fund-only to have the legislature's conference committee keep it in business, with $140 million more to spend.

That's not a good conclusion, according to Michael Sullivan, who heads Texans for Fiscal Responsibility. Sullivan points out: "Government should not be playing the role of venture-fund capitalist. ... It's always easy to spend other people's money, and especially easy to spend other people's money to the benefit of one's own friends." Taxing one business to fund another, and forcing taxpayers to invest in companies, is inherently unfair.


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