June 29, 2006

Good ROI: $10,500 in Campaign Donations Nets $5 Million Budget Grant

I have seen an advance copy of the Tennessee Center for Policy Research's "Monthly Misuse" for June, which will be released later today, along with the information and public records they used to compile it, and it provides yet another example of how well-connected lobbyists for special interests are getting what they want from the Bredesen administration.

This month's TCPR report looks at a budget earmark that gave $5 million to Memphis Bioworks, a 501(c)3 nonprofit that was created to lure Biotech talent and firms to Memphis. Typically what organizations like that do is create "studies" to support their mission, and use tax dollars to provide corporate welfare to the target industry via the building of a taxpayer-subsidized business park

According to the documents I've seen, the Bredesen administration's original state budget recommendations released after Gov. Bredesen's State of the State address included a $3.5 million earmark for Memphis Bioworks, the first time Bioworks has received state funding. After the state's huge revenue surplus was revealed in May, the administration upped the Memphis Bioworks earmark to $5 million.

Here are the interesting facts:

1. Memphis Bioworks has 18 board members, two of whom are university presidents (UT and U of Memphis). As TCPR notes, university presidents rarely donate to political campaigns. Of the remaining 16 board members, 12 of them have made campaign contributions to Bredesen. Contributions to Bredesen's campaign fund by those 12 board members and their spouses total $36,500 over the past three years. A 13th board member didn't donate directly to Bredesen but did give $1,750 to a PAC that contributed $5,000 to Bredesen in 2005. Also, Memphis Bioworks President and Executive Director Steven Bares contributed $500 to Bredesen in December of 2003.

2. Six of the Memphis Bioworks board members contributed a total of $10,500 to Bredesen in a twelve-day span in December of 2005, only days before the beginning of the Special Session on Ethics and as the administration was finalizing its preliminary budget recommendations for Fiscal Year 2006-07.

3. Calvin Anderson, a member of the Memphis Bioworks Board of Directors is both an annual contributor to Bredesen and a registered lobbyist for BlueCross BlueShield of Tennessee.

4. A former Bredesen donor and current member of the Memphis Bioworks Board of Director is Dr. Kenneth Robinson who now serves in Bredesen's cabinet as the state's Commissioner of Health.

5. Memphis Bioworks is a 501(c)3 not-for-profit corporation which, by law, can do only a very limited of lobbying. But Memphis Bioworks has a contract a lobbying firm that employs super-lobbyist Betty Anderson to lobby the state government. Anderson, of course, is the wife of House Speaker Jimmy Naifeh.

Did the campaign donations make the governor more amenable to giving $5 million of your tax dollars to a corporate welfare program called Memphis Bioworks? You do the math. It certainly didn't hurt.

The TCPR;s "Monthly Misuse" will be posted around lunchtime today at their website.

Update: The full text of the TCPR press release is in the extended portion of this blog entry, or online here.

Is Memphis Bioworks' Pork Project a Political Payoff?
In the final days of Tennessee's legislative session, state revenue collectors revealed an estimated $300 million state surplus. The Bredesen administration quickly seized the surplus funds, offering $244.1 million in new spending amendments to the appropriations bill.

Buried among the administration's 146 project requests was a $1.5 million increase to the Memphis Bioworks' original $3.5 million line item from the initial budget proposal. The $5 million in taxpayer funding is intended to offset a portion of the construction costs of Memphis Bioworks' new research park.

The research park is an arm of the Memphis Bioworks Foundation, a nonprofit organization attempting to expand the bioscience industry in Memphis. One way that Memphis Bioworks lures biotech-related companies to Memphis is to offer corporate welfare through building laboratory facilities and other infrastructure at no cost to the private businesses that use them.

"It should not be the role of the State government to plunder $5 million from the pockets of taxpayers for what amounts to corporate welfare for the private companies benefited by the research park," said Drew Johnson, president of the Tennessee Center for Policy Research. "I think it's wonderful that the city of Memphis wants to attract biotech firms, but they should not rely on state tax dollars to do so."

Another question that arises from this expenditure is why this special interest group, who has never received state funding before this year and only benefits one industry in one city in Tennessee, received $5 million in taxpayer funds. The answer may be found in the political contributions made by Memphis Bioworks' board members.

Twelve of Memphis Bioworks' 18 board members have made campaign contributions to the Governor's campaign coffers. In total, Memphis Bioworks' board members and their spouses have contributed $36,500 to Bredesen over the past three years. Another board member who did not donate directly to the campaign gave $1,750 to a PAC that contributed $5,000 to Bredesen in 2005.

Of these contributions, $10,500 came in a twelve-day period in December of 2005. This was only days before the start of the Special Session on Ethics and just as the administration was finalizing its preliminary budget recommendations for the new fiscal year, which included the initial $3.5 million in funding for Memphis Bioworks.

"Given the Governor's commitment to improving ethics in the state government, I hope that these well-timed contributions are only a coincidence," Johnson said. "However, many taxpayers fear that the state government bases decisions about how to spend Tennesseans' hard-earned money on campaign contributions. The $5 million funding of the Memphis Bioworks pork project certainly shows that those fears may be justified."

Memphis Bioworks is a 501(c)3 nonprofit, which, by law, can do only very limited lobbying. The organization, however, has a contract with a major Nashville firm to lobby the state government. In addition, Calvin Anderson and Dr. Kenneth Robinson both serve on the board of Memphis Bioworks. Anderson is a registered lobbyist for his employer, BlueCross BlueShield of Tennessee, and Robinson serves as the state Commissioner of Health. These connections potentially offer further opportunities to encourage state funding of Memphis Bioworks. In addition to state lobbying activities, Memphis Bioworks has also spent tens of thousands of dollars in each of the past two years on federal lobbying.

The "Monthly Misuse" is a monthly feature produced by the Tennessee Center for Policy Research to highlight an example of wasteful or questionable spending of tax dollars by the Tennessee state government.