Thursday, March 18, 2010
(517) 335-4590 email@example.com
regarding RASCO, LLC
Among 13 projects approved yesterday for tax credits by the Michigan Economic Growth Authority, one was awarded to RASCO (The Renewable and Sustainable Companies).
We have since been advised that a person identified by the company as “Principal & Chief Executive Officer,” Richard (Rick) Short is currently on parole after being convicted and serving two years in prison for financial fraud. We are advised that Mr. Short is under investigation for possible parole violations.
It bears noting and repeating that the State has lost nothing from yesterday’s approval of the MEGA for RASCO. There is no upfront cash involved in this award and the State has not granted any funds to this company or any other MEGA awardee.
When a MEGA award is approved, the company and the state agree it will receive tax credits when it reaches investment and job creation or retention measures as spelled out in the agreement. There is no cash involved as part of the MEGA award except an application fee paid by the company. The MEGA award is performance-based and costs the state nothing if the company fails to meet the terms of its agreement.
No one associated with the Michigan Economic Development Corporation and the Michigan Economic Growth Authority (MEGA) was aware of Mr. Short’s personal history.
The MEDC conducts due diligence on all MEGA applications prior to submission for consideration by the MEGA board. Included in the company’s MEGA application is a requirement for disclosure of any current, pending or expected legal action that may impact the company’s ability to meet the obligations set forth in the MEGA agreement. There was no disclosure by the company of Mr. Short’s ongoing parole requirements and supervision.
In this light, we will add to the MEGA application a more explicit requirement of the company that it disclose any prior felony convictions by senior company executives. In addition we will perform a background check of all company officers prior to any final MEGA award.
Needless to say we are embarrassed by this matter. We work hard to grow, expand and attract business in Michigan and are proud of our achievements. We are taking the necessary steps to ensure situations such as this do not happen in the future.