Too often in politics the rumor mill comes into the picture. And it’s often negative in nature to the person, issue or whatever the case may be. I try to not deal in rumors but sometimes with a lack of information about a particular issue I listen to some of the rumors and try to consider the larger issue in context to what is being said. This post will be laced with both facts as I know them and several rumors that I’ve heard recently, I’ll clearly identify the rumors and their effect to the underlying issue as I hope to find the answers to my questions and not deal in rumors.
The issue begins sometime in 2006 when I was reading the agenda of an upcoming Governor and Council meeting and I noticed an item relative to using a state loan guarantee for a Gorham based company called Steel Elements Inc. I would later come to understand that the loan was for about $560,000.00 for the purpose of providing machinery and capital for Steel Elements Inc. to enter the light gauge steel manufacturing business. The state loan guarantee documents were prepared by the New Hampshire Business Finance Authority and its Executive Director, Jack Donovan which was later approved by the Governor and Executive Council.
At this time I contacted Mr. Donovan to express my concern and reservations about this loan guarantee including the overall market for steel including some of the trade issues involving both China and Russia dumping steel onto U.S. markets via Canada. Mr. Donovan explained that the loan to Steel Elements Inc. was secured by collateral that was worth 130% of the loan amt. the principals at Steel Elements Inc were experienced in the steel market conditions and that this project would create 20-30 jobs in an area of the state that needs job creation. I accepted this explanation; now I’m thinking that I shouldn’t have.
I’m driving near Park Street in Gorham to the site of Steel Elements Inc. and expecting to find a light gauge steel operation that was made possible though a state loan guarantee. Instead I find a vacant and nearly empty building and the growing weeds in the driveway seem to be saying that this area hasn’t been used for some time.
No operations. no jobs and no local economic development and my question instantly becomes: “What is the status of the state loan guarantee?” I’m very cynical about NH politics these days and I’m envisioning the taxpayers being screwed while some clever businessman sitting on an island resort sipping a martini.
And then the rumors begin…
“They had an auction.” said a source that I will not name “The auctioneer never checked to see that all the components for the machinery was in place before the auction and then the auction was attended by the owners of Steel Elements Inc. and their supporters came to the auction to bid up the prices on the equipment that was later sold.” My source didn’t have the number(s).
Like I stated at the onset dealing in rumors is dangerous and at times unfair. I haven’t yet contacted Mr. Donovan at the New Hampshire Business Finance Authority to see if the state and the lender got the value from auction that was secured as collateral under the loan guarantee documents, if they didn’t the NH taxpayers are liable for the balance.
I really hope that the rumors I’ve heard are wrong.