Monday, February 29, 2016

Earned mistrust at MDA

What do Apple vs the FBI and taxpayers vs the Mississippi Development Authority have in common? Both are consequences of earned mistrust.

The FBI wants Apple to tell it how to look inside a terrorist’s iPhone for national security reasons. The iPhone might have some names and places and links to other terrorists that could prevent other terrorist attacks. Sounds reasonable. Like something any American company or citizen should gladly do – would do as a patriotic duty. Except you can’t trust the FBI.

Wait, you say, the FBI is an American icon. Elliot Ness, “The Untouchables,” and all that. Well, actually Ness worked for the Treasury Department. His brother-in-law worked for the FBI. But whatever, there may have been a time when there was some law enforcement agency that was “untouchable.” There may still be some. But they don’t get the benefit of the doubt anymore. They are all government agencies. They have earned our mistrust.

So Apple’s logical concern is: how do I know you (FBI) will only use the information for the intended purpose this one time? And Apple’s customers may be thinking: you don’t know that, you can’t know that.

That’s the consequence of “if you like your doctor, you can keep him” and other lies. That’s the consequence of “laws are for little people” or for not so little people like an army general who violates security, but not for a presidential candidate with worse violations. That may be why people who mistrust government are staunch supporters of freedom of the press and the right of citizens to bear arms.

Mississippi Development Authority. Which brings us to the MDA. It recently sprinkled economic holy water over the Continental Tire plant deal and its $528 million (or whatever it is) in state incentives passed by the legislature. Is it a good deal for taxpayers? The Northside Sun and others asked this logical question and more detailed questions about the MDA’s numbers and methodology. The answers so far have not been reassuring.

But hey, what’s new about the MDA? It has earned our mistrust. It has frequently had help from a popular governor. It’s hard to tell if the MDA is speaking for itself or if it’s the dummy for a popular governor ventriloquist. A tell (clue) is that the MDA never says the popular governor’s idea is a bad idea. That may be because the governor is the boss of the MDA. Not surprisingly, they tend to see eye-to-eye.

So if the popular governor is not infallible and tries to pick economic winners (when his expertise is politics), the MDA tends to say: “That’s a great idea.” And it tells the legislature it’s a great idea. And the legislature tells taxpayers it’s a great idea. Remember the chair of the Senate Finance Committee’s description of the KIOR pine trees to diesel scam: “It’s an unbelievable technology.” It was unbelievable, it didn’t work. And the state is out $70 million on a bad loan.

But wait, the MDA had said not to worry, it’s a loan, not a grant. If it doesn’t work, taxpayers will get their money back. Good luck with that. How do you get money from an insolvent shell corporation? You don’t. The state hasn’t. Why wasn’t there a corporate guarantee from the parent? Err, what’s that? Err, that might look like we don’t trust the promoter who’s tight with the popular governor. Err, let’s talk about jobs.

But the MDA has learned. It reportedly has “claw backs” in place if the tire plant doesn’t work out. It apparently has learned how to claw back money from a corpse even though it can’t collect a loan from a corpse.

The legislature. And what has the legislature learned? Legislators whine about hot box deals with deadlines that don’t give them enough time to vet the deal. But except for a handful of no votes, they all voted for the tire deal. Same whining and rubber stamp votes about the Base Load Act that makes customers pay for power plants before they are built and for the Billion Dollar Bond Bill that makes customers liable for Mississippi Power’s Kemper debt. And about KIOR and so on.

So, is the state legislature a third branch of government? Or does the executive branch run things at the state level too – not with executive orders, but with compliant legislators. Hey, what’s this checks and balances stuff? If I’m a legislator and know the speaker and the lieutenant governor are tight with the governor and are in on the deal, and if I want a good committee assignment, I better not make waves. I would have to be pretty stupid or pretty ballsy or not care about my legislative career if I’m a house member and vote against a plant that’s going in the speaker’s back yard.

Speaking of ballsy, have you noticed the presidential primaries? It looks like a dog fight on the Republican side and two cats in a sack on the Democrat side. Anything goes. Not a place for the politically correct. Establishment get-along-go-along types don’t get no respect. Seems voters don’t think they’ve earned it. Voters are restive.

Voters here aren’t that restive about state government yet. Or sweetheart deals. Or lies. But some are attentive and curious.

Lies. Speaking of lies. Mississippi Watchdog reported this week that a former Kemper project manager, turned whistle blower, says Mississippi Power and its parent’s executives lied to the SEC about Kemper’s gasifier problems and to the Public Service Commission in 2012 when the project was up for recertification. (Also see Bigger Pie’s “The Old Quarterback’s Resume” February 2015.) Maybe the PSC will finally get curious too and ask the project manager and the executives to testify.

If something can’t go on forever, it won’t – even in Mississippi.

Kelley Williams is the Chairman of Bigger Pie Forum and author of this post.  

This post is sponsored content provided by Bigger Pie Forum. 


Fred said...

Can you cite a reference that suggests Mississippi's form of government is based on a 'checks and balances' model?

Anonymous said...

Not taking sides, but we've all made investments that didn't goes as well as we had hoped. My question is what is the net result of these investments over the long run? Is the state on the positive side of the ledger when all the incentives are considered? Nothing ventured, nothing aimed you know.

Anonymous said...

9:20 , when an investment is made there should be 2 plans: one if it works and other that is does not. If is does not, the plan that is put in place up front protects and limits the losses. You know going in how much can be lost if all goes bad and naturally try to limit it. This done with airtight legal work and not real hard.If all this real "banking" is not done than just call it a gift and see if the Constitution allows it. Public money has rules.

Anonymous said...

Why is MDA called an Authority and not just another State agency? Does it have some type of free standing right to do business as it sees fit not permitted in other state agencies?? If so where is that found?

Anonymous said...

So the State of Mississippi continues to be run like a venture capital firm, by a bunch of drunks using the tax payer's money.

At the end of the day it is just another fraudulent business deal. It serves no purpose, than to funnel tax payer money into the pockets of the politicians and their cronies.

I have a way to stop this garbage; As an elected official you vote for it, you own it. The "claw back" should start with their salary and a lot of personal liability with no loopholes.

Most corrupt state in the union...

Anonymous said...

Haven't gotten through your entire diatribe, but two comments on the early end.

1) The MDA tells the Governor plenty of times 'its a bad deal'. That has been true for Governors for many years. Thing is, you never hear of those deals. They fail on their behinds because they don't meet the basic tests, and so they are never touted or brought forward.
2) The Continental Tire deal is guaranteed not by a 'shell company' as you allege, but is guaranteed by the parent company - one of the biggest international corporate giants around. If the requirements aren't met, the clawback provisions go to the parent, which is a pretty good guarantee. Granted, not 100%, nothing ever is. But neither is the millions of dollars we subsidize college educations for kids - many of them never pan out but we continue to do it because, overall, its a good deal.

Anonymous said...

If it has anything to do with the government it is best to be very careful. We, the people, are the cause of this. People voting for the party rather than the person. No one will hold a political party to their word. That is the reason politicians belong to a party. They can say and do just about anything they choose and the party members will defend them. One party is not better than another party. They are all crooked and the politicians we, the people, continue to elect are crooked.
Vote for the politician for what they have done instead of their party. We can blame a single person for what they do.

Anonymous said...

1013, the MDA name has evolved over the years. Been called several different things, cant remember them all. Started with the R&D Center concept in the 70's. Was MEDC in the 80's. Couple of different iterations after that. The Authority doesn't mean anything, except it sounded good to some PR person that wanted to brand it.

Anonymous said...


The Mississippi Supreme Court has stated in numerous decisions that checks and balances is part of the separation of powers in the Mississippi government.

Fred said...

10:46; The Mississippi Supreme Court does not define Mississippi State Government or its operations and inter-workings. The State Constitution does. The Supreme Court might also say the Mississippi Halls of Government are places of mercy, fairness, goodness and progress but that is just as hollow. Try again.


Anonymous said...


You asked for a reference that suggests Mississippi's government was based on a checks and balances model, not one that defined it.

Anonymous said...

Speaking of Kemper, I am glad Phil did not get his boy elected to the PSC or the ratepayers would be totally screwed.

Authority History said...

Actually goes all the way back to 1936 with the old Mississippi A&I Board, balancing agriculture with industry.

Fred On Civics said...

Maybe I was unclear. My point is Mississippi Government does not operate from a model of checks and balances and the constitution does not set it up to do that. Kingfish referred to checks and balances as if it's an institutional, systemic structure. It's not. All of the power rests with a combination of the Lt. Gov. and the Legislature. But, thanks to 11:41 for the (un)useful rabbit-trail.


Anonymous said...

10:33 is correct. MDA advises the governor on all merits and all drawbacks of all potential deals and arrangements. No one is interested in executing a bad deal. Bigger Pie, like many others who have zero direct knowledge of a situation, fancy themselves to be all knowing and justified in their sweeping opinions and assertions. They rarely even get it half right.

Anonymous said...

I see that this column by Kelley Williams of the Bigger Pie Forum is "sponsored content" which I assume means they pay for it to be posted. From where does the Bigger Pie Forum get their funding? How much do they pay for "sponsored content."

Anonymous said...

Mississippi government most assuredly does operate on the checks and balances model.

Want someone's thumb on the balance so as to get your subsidies and/or tax breaks? All you need is to write a few checks (aka political donations folks) and you'll get all the heavy thumbs you need.

Then the hard working elected officials can buy their own rv and take the family to Disneyland.

Anonymous said...


Since you are wanting to quote the Mississippi Constitution, it would seem you should be aware that Article 1, Section 1 of the constitution separates the powers of government into three branches. Section 2 states those branches shall not encroach upon the others' powers.

I will agree that it has not always been carried out as such, but if you're saying the Constitution gives all power to the Lt. Gov. and the legislature, you're just plain wrong.

Anonymous said...

Google the author's name. The irony in supporting Apple vs terrorists and mentioning Eliot Ness, IRS Treasury Agent, is rich.

Kingfish said...

1231: "How much do they pay?"

None of your business. Do you go on the CL, WAPT, WJTV, or WLBT websites asking how much their advertisers pay?

Anonymous said...

Authority History, you are correct and win the prize for more accuracy - one slight correction. The beginning 'agency' I believe was called the Industry Commission, 1936 in the term of Hugh White. Later changed to the A&I Board and many names since.

Interesting history about the BAWI program. Just as now, many disliked it saying it only helped established businesses. Others claiming that bringing industry to the agricultural state of MS during the depression was necessary. Today there are still several plants in towns throughout the state that started with BAWI bonds. And, some have failed. Others have moved. But overall state seems to have benefited from getting involved in getting industry to the state.

Anonymous said...

Easy to see genesis of these problems. Simply look at political contributions to legislators and statewide officials.

Anonymous said...

Never been good but is much worse since there are 0 professionals left in State government. All a bunch of political hacks and young ones who do not even know where the bodies are buried.

Anonymous said...

All a bunch of political hacks and young ones who do not even know where the bodies are buried.



Balance This said...

1:03....It takes a dim bulb indeed to suggest that the governmental power in Mississippi does NOT lie with the Lt. Governor and the legislature.

As long as your check is made out to the Lt. Governor (and it's been this way forever), everything will balance in your favor. No prollem.

Anonymous said...

8:02 pm You are right. When party loyalty trumps knowledge and experience for the position held, you can't expect good decisions. Also, institutional knowledge is a casualty. Gone are the people who understood why certain procedures and safeguards were in place.
There actually used to be a few people in government who tried to stay out of the partisan games being played and whose priority was the good of the State rather than the good of the party.

Chaney's Photo Is Boring said...

Ingalls Shipyard and it's predecessor and all its successors was/is one of the earliest examples of BAWI and Industrial Development in this state. It probably brought a couple of jobs and a slight infusion of money into the Pascagoula area economy.

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