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Kulongoski Green Tax Credit Fraud demands investigation

By Taxpayer Association of Oregon [1],

The Oregonian exposed a green tax credit scam on Sunday (must read [2]) . It goes beyond just lying about budget numbers to outright fraud by the Governor’s office to the Legislature. Agency officials estimated the proposed green tax credits would cost $13 million but insider documents show that the Governor pressured these officials to yank it down to $1.2 million so it could better pass legislative muster. Now the cost is tens of millions more, roughly 40 times the promised amount. It is interesting to see that this has been picked up around the web (here [3] and here [4]).

Harry Esteve may have sparked a firestorm. Why not an Attorney General investigation or Legislative review? Will not some lawmaker stand up and call for an immediate investigation?

Here is an excerpt,

According to documents obtained under Oregon’s public records law, agency officials estimated in a Nov. 16, 2006, spreadsheet that expanding the tax credits would cost taxpayers an additional $13 million in 2007-09. But after a series of scratch-outs and scribbled notes, a new spreadsheet pared the cost to $1.8 million. And when energy officials handed their final estimate to the Legislature in February 2007, they pegged the added cost at just $1.2 million for the first two years and $4.1 million for 2009-11. The higher estimates were never shown to lawmakers…The official estimates turned out to be absurdly low. In 2007-09, the business tax credit cost the state $68 million, of which about $40 million can be attributed to the bigger subsidies. The latest estimate for 2009-11 puts the tab for subsidies at $167 million in lost revenue, which is projected to grow to $243 million for 2011-13 — about what Oregon spends now from its general fund on the entire state police budget…

If that wasn’t enough Harry Esteve went further by showing the horror stories of companies receiving the tax credit..

— A Clatskanie ethanol plant got $12 million in tax subsidies plus a $20 million state energy loan, then promptly went bankrupt and stopped operating.

— A Boardman tire recycling plant got $3.4 million even though, after more than two years, it has yet to recycle tires

— Thirty-five companies that had applied for smaller tax breaks under the old rules were granted the higher subsidies — essentially giving them windfalls that cost taxpayers $2.1 million

Read more here! [5]

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