The liberal watchdog group Texans for Public Justice has called for a state investigation into a prominent tech firm that appears to be moving out of Austin and has much bigger plans in New York state, despite having received $40 million in state funds intended to create and keep jobs in Texas.
The tech consortium, whose members include Hewlett-Packard, IBM, Intel and Samsung, inked a 2004 contract with Perry's Texas Enterprise Fund and received a $40 million grant to set up the Advanced Material Research Center in Austin. The firm also received an additional $40 million loan and "the promise to make a 'good faith effort' to raise an additional $120 million," the Austin American-Statesman reported over the weekend.
"That money never materialized," the story said, and cited an unnamed source as saying that Sematech considered the state to have defaulted when it could not come up with the $120 million.
In 2007, TPJ says, Sematech pledged to put $300 million into a new facility in Albany, New York, "and move most, if not all, of its Texas operations and employees there," TPJ said.
Perry's office says Sematech is still in compliance with the Texas contract, and that the $300 million spent in New York is "an expansion of an existing operation there, not the creation of a new one," the Statesman said.
But TPJ says the firm's contract with Texas specifically forbade it from negotiating with other states in that way. It also said Sematech had to keep an average of 400 employees in Texas, but there were less than 125 last year, TPJ said.
The group called on Perry, Lt.Gov. David Dewhurst and House Speaker Joe Straus, all Republicans, to investigate Sematech's adherence to the Texas contract. TPJ earlier this year blasted the Texas Enterprise Fund in a report that found that enterprise fund projects had created only 65 percent of the jobs they were supposed to create.
"The Enterprise Fund is crying out for greater accountability, transparency and oversight. The Sematech fiasco highlights Governor Perry's conflicts in both awarding and enforcing Enterprise Fund grants," McDonald said. "The governor is quick to tout the promised jobs but slow to make corporate welfare recipients live up to the terms of their handouts."