Taxes

GA Out Big Bucks on Business Subsidies After Failing To Do Due Diligence

Missed lots of red flags

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George Thorogood's "Bad to the Bone" pumped through loudspeakers at Fort Benning's Redcloud Range in 2004 as a nine-man squad leaped from an armed personnel carrier and blasted away with sleek new XM-8 assault rifles at targets on a nearby hillside.

The state was on board; it chipped in a $300,000 grant to entice the rifle's maker, the German company Heckler & Koch, to build a new gun factory in Columbus. H&K promised at least 200 jobs.

There was just one catch, which neither H&K nor county officials apparently told the state: No $1 billion federal contract for the XM-8, no plant. When the Pentagon cancelled the weapons program, the promised plant was downsized to a distribution center that employed 15 people, according to state records.

As the H&K saga suggests, state officials who awarded hundreds of millions of dollars to lure jobs here sometimes missed critical red flags in vetting the grant recipients. A review by The Atlanta Journal-Constitution of more than 150 economic development incentive files found that some companies omitted critical information. Other times, state officials noted a troubling trail of financial clues and awarded the money anyway.