You’ve heard of good ideas and bad ideas. Today, meet the bad “good idea.”
Earlier this month, I previewed a job-creation program that Lt. Gov. Casey Cagle and other state leaders are expected to champion next year. The state would use some to-be-determined revenue stream to partner with private investors and pump money into Georgia start-up companies in certain strategic industries.
It’s a variation on an idea I’ve advocated before, on the premise that Georgia creates many promising young businesses — only to watch them move to places like Boston or Silicon Valley, because that’s where the capital they so desperately need is located.
Most of the details of this specific plan are still being worked out, or at least Cagle didn’t share them with me when I interviewed him. On the surface, it might sound like a good idea.
Less than a week later, however, AJC readers learned why it could be one of those bad “good ideas.” That’s when my colleague, Aaron Gould Sheinin, reported that lobbyists representing a for-profit cancer hospital paid $5,000 for Cagle to attend a charity golf weekend last month at The Cloister resort on St. Simons Island.
Now, I have nothing against golf, resorts, cancer hospitals or profits. Nor against lobbyists, per se. But I have a real problem with elected officials who accept golfing trips at resorts on the dime of anyone promoting any interest, regardless of industry or profitability.
So should all taxpayers, especially if said elected officials are thinking of investing public money in a way that might benefit such interests. That’s how a “good idea” turns bad.
Lobbyist-funded junkets are only the public — shamelessly public, you might say — manifestation of the web of special interests that stand to outweigh the public’s interest when taxpayer dollars are involved.
It’s one thing for the state to seek out and choose, very transparently, a VC fund that invests in a wide variety of start-ups and put some money in that fund — asking in return only that the fund open an office in Georgia, potentially leading it to recognize and invest in our homegrown companies. That’s particularly true if the investment is made with money, such as money from a pension fund, that the state is going to invest in equities anyway.
It’s an entirely different matter to launch a new state investment vehicle, make a bunch of rules about which sectors or even companies are eligible for investment, and ask private investors to participate. Who thinks that’s wise, what with Solyndra, the latest federal failure at picking winners and losers, still in the news?
Just for a moment, remove specific personalities such as Cagle or Speaker David Ralston, and the particulars of Cagle’s trip to the coast and Ralston’s journey to Germany this time last year to examine that country’s rail system. Who among us doesn’t see the potential for future politicians, any number of years hence, to treat such a state-led investment program as a slush fund to reward cronies and supporters?
The problem is even more glaring when you consider that today’s politicians in Georgia, before such a temptation even exists, reject even a modest cap on gifts from lobbyists.
Attracting much-needed capital to Georgia and our fledgling businesses is a very good idea. It can be done responsibly. But doing it in a way that invites conflicts of interest would make it a very bad one. Tread carefully here.
– By Kyle Wingfield