State Auditor Stacey Pickering visited Columbia on a day his office issued its largest-ever demand, $92 million against a failed Pine Belt firm.
Stion Corp. was one of several “green energy” firms that former Gov. Haley Barbour convinced the legislature to invest public dollars in only to have the companies close — and leave the taxpayers holding the bill.
“Stion is just one more example of a risky investment made by Mississippi in which the company and its management did not keep their commitments,” Pickering, a Republican from Laurel, told the Kiwanis Club of Columbia Wednesday. “Today is the first step to begin the process of recovering monies on behalf of Mississippi taxpayers.”
The solar panel manufacturer announced closure of its Hattiesburg operation on Oct. 13, 2017. It will have 30 days to repay the funds to the State of Mississippi before the demand is referred to the attorney general’s office for litigation.
Although the company is closed, it was backed by Vinod Khosla, a billionaire Silicon Valley investor. Khosla also backed KiOR, a company that with Barbour’s backing and a $75 million state loan promised to turn wood chips into diesel in Columbus but failed. Attorney General Jim Hood is currently suing KiOR.
Other failed green projects backed by Mississippi taxpayers included Twin Creek Technologies, a solar technology company with a plant in Senatobia, and Green Tech Automotive, an electric car startup in Tunica.
As for Stion, it operated under multiple corporate names and originally signed a memorandum of understanding with the Mississippi Development Authority in 2011. One of the business names appearing on MDA-approved loan documents included a business that was not registered with the Mississippi Secretary of State, according to Pickering.
“Due to this fact, they should not have been authorized to conduct business within the State of Mississippi,” he said.
The $75 million loan from MDA was originally contingent upon Stion making a $400 million capital investment before January 2017 and creating 1,000 jobs within six years of operation. The agreement was amended in 2015 to only require $250 million of capital investment by January 2020 and the creation of 500 jobs by January 2023.
When it closed in October, it had only hired 137 employees and did not respond to requests from the state auditor about how much capital investment it had made.
During his presentation, Pickering spoke about other issues his office has dealt with.
“I could show your pictures of the bulldozers some counties have rented for six years that have no engines,” he said. “Think about that for a second. I could show you pictures of the jail up in Alcorn County with all of the cellphones and marijuana, drugs, clothes and keys. Prisoners actually had keys to the jail, so we showed up and sent them to Parchman. We tell those stories, and that’s kind of the glamorous part of what we do, but what we really do is the comprehensive annual financial report for the state.”
Pickering said that out of the 140 employees in his office, about 80 of them help assemble the report, which is basically the key to the state’s financial health.
“These are our CPAs and accountants,” he said. “It’s the state’s financial health. It is important to us. The document is about two inches thick. It gets sent to the rating companies.”
The state auditor also checks individual department budgets to ensure money is spent wisely and legally.
“We want rating companies like Morningstar, Moody, Fitch and the Government Accounting Office and Office of Budget Management to understand our budgets and audits,” he said. “We don’t want adverse opinion on them. The good news is that for 40 years, we have had an unmodified opinion on Mississippi’s finances. Our financial house is in good order in Mississippi and this document tells that. We have standards that my auditors and accountants have to meet.”
Pickering said his office also audits Medicaid operations to ensure legal use of public funds.
“’I’ll give you an example for Massachusetts,” he said. “They found a dentist who was working 60 hours a week and for three years never took a day off and 100 percent of his patients were Medicaid. You think there might have been a problem? He wound up going to jail. He was billing for patients he’d never seen. Do we have some of that going on in Mississippi? I’ll tell you later this year when I release our findings. We will have more to come later on Medicaid.”
Barbour’s big green disaster
• KiOR, $75 million state loan, Columbus, turn wood chips into diesel, opened 2011, closed 2014. • Twin Creek Technologies, $26 million state loan, Senatobia, solar technology, opened 2011, closed 2012.
• Green Tech Automotive, $3 million state loan, Tunica, electric car maker, opened 2014, closed 2017.
• Stion, $75 million state loan, Hattiesburg, make solar panels, opened 2011, closed 2017.
Pictured Above: State Auditor Stacey Pickering addresses the Kiwanis Club of Columbia Wednesday. His office is demanding $92 million from Stion Corp., a failed solar panel manufacturer in Hattiesburg.
