ASLEEP AT THE WHEEL? - Con Artists 100 - Taxpayers 0

(06/01/2002)

Bob Weaver

It would seem many ill-fated West Virginia economic development projects that bit the dust, had at least one good con artist associated with the venture. A person of convincing passion for the project, who convinced some local folks and the politicians the deal would bring jobs to jobless counties.

A Charleston Gazette editorial (see below) says just a little checking would have prevented lots of problems, referring to Filcon of Clay County, and other "economic development" projects that went down the tube.

It could well have been the case in Sunny Cal with the DP and PDR debacle, where several hundreds of thousands of taxpayer dollars, and a lot of cash from at least one local investor, got sucked into the soon-defuncted auto parts project.

In the middle of that scheme was a new-to-the-county guy who was buying an expensive house with some pricey color coordinated cars, and who was well-defended by the other shakers-and-movers.

While the shakers and movers may have been well intended, desperate to provide jobs, they didn't do their homework and everyone lost, nor did they ever offer a good explanation to the public.

More recently, the Calhoun Commission and others dickered with a "promising" manufacturing company that said they would bring jobs to Calhoun, but background checks threw red flags all over the place.

Despite a failure to create jobs, a prudent public decision was made.

It is a hard to swallow fact, light manufacturing jobs that have provided stable income in the greater central West Virginia and LK region are rapidly moving to foreign counties.

Workers who have been driving out of their counties will not have those jobs. Well over 1000 jobs have left or are in the process of leaving the region, many of them held by Calhoun people.

It makes for a desperate situation, and with NAFTA and GATT it will likely become worse.

From The Charleston Gazette

Filcon
‘Development' Disaster

Friday May 31, 2002

EVEN those companies that offer car loans for people with bad credit would have thought twice about signing up Manfred Kuenster, owner of the now-defunct Filcon Inc. in Clay County.

This is, after all, a man who pleaded guilty to writing bad checks in New York state. He was extradited to his native Germany to face fraud and misappropriation charges. A development official for the city of Oswego said Kuenster skipped out from business incubator quarters in 1998, owing five months' back rent.

Despite all these black marks, Kuenster had little problem convincing state and Clay County development officials and a local bank to pump nearly half a million dollars into his filter-making facility.

Kuenster promised 300 jobs. He produced only five at the height of his success. Now the business is shut down. Development and bank officials are foreclosing on his property to try to cut their losses. Kuenster blames the state for not offering enough support.

This is the problem with so many "economic development" efforts in West Virginia. To put it bluntly, too many are stupid, uninformed gambles on questionable characters or unwise business ventures.

Remember when state and local development agencies sank $10 million into the Dominion Hardwoods furniture plant in Mercer County, but it died after five months?

Remember when former Gov. Arch Moore lent $5 million of taxpayer money to a bankrupt operator who took over the St. Marys gasoline refinery, and he went bankrupt again?

Remember when Video Graphic Technologies of Beckley and MAP International of Fairmont blew millions in public funds, then crashed?

Remember when coal mine owners were given $60 million in a year in super tax credits for "creating jobs," but they took the giveaway and cut their payrolls?

In the Clay County fiasco, did no one think to run a simple credit check on Kuenster before writing him a check for $121,000? That's how much the Central Appalachian Empowerment Zone lent the entrepreneur. He got another $50,000 from the Legislature's Budget Digest. He got $78,000 in training money from the federal government.

The Clay County Business Development Authority gave him nine acres of land worth $90,000. Kuenster used that nine acres as collateral for a $255,000 loan from Clay County Bank.

A couple of hours on the Internet could have saved taxpayers (and the bank) an awful lot of money.

Development officials and politicians should not get so blinded by the prospect of new jobs that they give away the store to any fly-by-night character who comes into town with a good story, a firm handshake and a convincing smile.


Hur Herald ®from Sunny Cal
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