Questions for Vogt about Corporate Welfare

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Questions for Vogt about Corporate Welfare

by Ari Armstrong, October 1, 2005

[I sent the following letter to Brian Vogt, Director of Colorado's Office of Economic Development and International Trade, on October 1. In a preliminary reply the same day, Vogt said he'd respond to my questions about the Economic Development Commission in the coming week. The subject is the source of funds for various corporate-welfare grants described in Wasteful Spending by Colorado Government. -- Ari Armstrong]

Dear Mr. Vogt,

I need your help clarifying some issues about the Economic Development Commission. Even though we will disagree about policy conclusions, I think we can agree that getting the complete set of basic facts straight is important. Please send your e-mail reply to me and to the others listed above [Bob Ewegen, Lynn Bartels, Vincent Carroll, Dave Kopel, Ed Quillen, Jon Caldara, John Ziegler, and me]. I thank you for your help in this matter.

Based on budget documents, EDC was allocated $5,246,886 from 2001 through this year, all from the general fund:

SB01-212, page 46
"Economic Development Commission -- General Economic Incentives and Marketing"
$1,189,017 (2.0 FTE [Full-Time Equivalent]), all general fund

HB02-1420, page 49
"Economic Development Commission -- General Economic Incentives and Marketing"
$1,184,459 (2.0 FTE), all general fund

SB03-258, page 48
"Economic Development Commission -- General Economic Incentives and Marketing"
$956,946 (2.0 FTE), all general fund

HB04-1422, page 49
"Economic Development Commission -- General Economic Incentives and Marketing"
$956,669 (2.0 FTE), all general fund

SB05-209, page 53
"Economic Development Commission -- General Economic Incentives and Marketing"
$959,795 (2.0 FTE), all general fund

On August 3, 2005, I called John Ziegler of the Joint Budget Committee. He said the following: "You had asked a question about the Economic Development Commission, where the sources of the funding for the grants comes from. It's general fund. So general fund monies are put into the Colorado Economic Development Fund, and then they use the money in that fund to get the grants."

On September 27, 2005, Lynn Bartels wrote for the Rocky Mountain News, "Vogt said his office in 2002 received an infusion of federal money via the governor for job creation, tourism and job training."

As I'm sure everyone is aware, EDC is only one division of economic development. [A complete list of the economic "development" offices is provided here.]

On October 1, 2005, Bob Ewegen wrote for The Denver Post, "[Red Robin] has been offered some federal job creation funds awarded to this state after the Sept. 11 terrorist attacks, but it won't get that money unless it meets rigid targets for job creation. If it does meet those targets, the chain gets $500 per job created. Vogt outlined the incentive program to me Friday and confirmed that the federal funds involved were earmarked for such economic development projects and can't be switched to other needs like roads or schools, as Caldara suggested they should have been."

EDC's "Activity Report 2004" -- http://www.state.co.us/oed/edc/pdf/EDCReport04.pdf -- lists a $54,000 EDC grant to Red Robin, plus a $43,200 grant to Red Robin from Colorado First.

Please explain how much federal money went into your office, when, and how much of it went into EDC and Colorado First.

As I note in my "Wasteful Spending" paper, EDC grants are listed as "contracted" or "pending." That means that EDC grants are typically awarded one year but paid out in future years. However, that also suggests that grants awarded prior to 2001 were paid out, in part or in whole, since 2001. Please provide a list of corporations that were awarded EDC grants prior to 2001, but paid by EDC, in part or in whole, since 2001. Please include dollar amounts.

Your biography -- http://www.state.co.us/oed/about/bios.html -- states that you hold a "BA degree in Classical Antiquity from the University of Colorado." Please explain how your background qualifies you to run Economic Development.

Finally, how much is your annual salary?

Sincerely,
Ari Armstrong

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