The DED Gets Audited . . . Hilarity Does Not Ensue (Part 1)
Last month, the Missouri state auditor’s office released its audit of the Department of Economic Development’s (DED) Division of Business and Community Services (BCS). Among other things, the audit found that in regards to Mamtek, the BCS:
. . . failed to perform adequate due diligence on the startup company, its officials, and information provided by the company.
This is not the first time that the Show-Me Institute has written about Mamtek. Clearly, the BCS did not do a good job managing the entire Mamtek project, but that is not the point. The main point is that the government should not be engaging in economic development projects in the first place.
It would be bad enough for a private entity to fail to perform adequate due diligence on a project; however, at least a private entity would be using its own money when it invests in a project. A government entity, on the other hand, risks the taxpayers’ money in these development projects. People do not have to invest in a private company, they do have to pay taxes.
The government has a few core functions. Picking favorite economic development policies is not one of them. The state should leave economic development to the private sector and let people choose with their own money which project is worthwhile; the decision should not be up to some bureaucrat in Jefferson City.