According to a report released by State Auditor Stacey Pickering last week, taxpayers have lost $185 million on various failed projects.
Most of them were during the tenure of two-term Mississippi Gov. Haley Barbour and three biggest — KiOR, Greentech and Stion — added up to $155 million in lost funds.
According to the report, incentive programs administered by the Mississippi Development Authority disbursed $672.9 million on various economic development projects between 2010 and 2017. Of the 243 projects issued grants and/or loans by the MDA and audited in the report, 112 projects are active and have not met all of the requirements for receiving taxpayer funds, such as job creation and investment goals.
Of the rest, 103 are considered inactive, which means they've met either all commitments in their agreements with the MDA or have ceased operations in the state. As for the remainder, 17 are considered canceled and 11 are considered to have failed.
Here are the top four money-eating failures:
When ground broke on KiOR’s Columbus plant in 2011, Barbour said the technology supposed to convert wood pulp into gasoline and diesel fuel was like “making straw into gold.”
KiOR's lone Mississippi plant, which cost $230 million to build and was partially funded by a $75 million loan from state taxpayers, opened in 2011 and closed only four years later, unable to meet its production goals. The plant’s equipment was dismantled and sold to a pair of companies for about $3.6 million in 2015.
Attorney General Jim Hood's office has filed a lawsuit seeking to recover the state's lost funds.
Federal regulators from the U.S. Securities and Exchange Commission reached a settlement with Texas-based biofuels maker KiOR and its former CEO in 2016 over the company’s claims regarding the efficiency of its proprietary process.
Upon its initial stock offering in April 2011, KiOR said that it achieved a yield of 67 gallons of fuel per ton of biomass. What the company didn’t disclose, according to the SEC, was this was based on assumptions of technologies that remained under development. The yield was later revealed to be 18 to 30 percent less than the 67-gallon figure repeated in later SEC filings.
KiOR’s Columbus plant never met its production goals of 13 million gallons of fuel per year. It achieved a steady production state only intermittently. KiOR sold 5,000 gallons of gasoline, diesel and fuel oil in 2013 and 39,000 gallons in the first three months of 2014 before shutting down. That amounted to only 0.3 percent of the plant’s capacity.
Khosla Ventures — a venture capital firm that invests heavily in green energy and is owned by former Sun Microsystems founder Vinod Khosla — was a key investor in KiOR and in Stion Solar, which has a plant in Hattiesburg.
When Stion Solar opened its factory in Hattiesburg in 2011, it received received a $75 million loan from Mississippi and promised to employ 1,000 workers with a $400 million capital investment. The company never met its job creation goals.
The company closed the plant in December and the auditor's office issued a demand for more than $93 million in March for return of the state's funds plus interest.
In 2013, Khosla Ventures took a controlling interest in Stion Solar.
It was the ultimate odd couple: Barbour, a former Republican National Committee chairman, and McAuliffe, who had the same post with the Democratic National Committee. The two partnered to bring an electric car manufacturer to Tunica, with Barbour okaying more than $6 million in a loan to the company and McAuliffe as Greentech Automotive’s co-founder bringing the investors.
McAuliffe left the company in the run-up to the 2013 Virginia governor’s race and everything has gone sour since. The company — which manufactures a two-seat car with a top speed of 25 mph and a range of only 65 miles per charge that isn’t certified for use on U.S. roads — declared bankruptcy in February.
Pickering issued a nearly $6.4 million demand in July for the return of the state’s $5 million loan to Greentech plus interest and other fees.
The state of Mississippi and Tunica County, which also provided incentives for GreenTech, are suing the company for $4.8 million. The company says it has debts of between $100 million and $150 million, with a similar amount of assets.
Twin Creeks Solar
Twin Creeks Solar was loaned $27.7 million in 2010 by the state to build a solar panel plant in Senatobia without selling any panels or meeting its goal of hiring 1,500 employees. The 85,000-square foot plant closed in 2012. The state later reached a settlement with the company in 2013 to pay back some of the money.
In 2015, the MDA announced that it would lease the facility to Swiss power and automation company ABB and provided $3.5 million for infrastructure and workforce training.