Iowa Economic Development Director Debi Durham said her staff kept her in the dark after they found out about a lawsuit that was filed against a subsidiary of an international company the state was trying to woo.
But even if she had known, Durham told a panel of senators Tuesday, it may not have made a difference in the state’s pursuit of Orascom Construction to build a fertilizer plant. She said the suit was more than six years old, it was an unproven civil allegation and the company still did business with the federal government.
“Am I proud of it?” Durham said about not being notified of the lawsuit. “That’s what happened.”
The Egyptian-owned Orascom inked a deal last year to build a $1.4 billion fertilizer plant in Lee County after also considering a site in Scott County. The company took advantage of some $300 million in federal Midwestern Disaster Relief bonds and another roughly $200 million in state and local tax incentives in its plans to build the plant.
Associated Press reported on Feb. 15 that Orascom hadn’t told Iowa officials that it is contesting a lawsuit filed by the federal government in 2004 alleging its subsidiary, Virginia-based Contrack International, was part of a joint venture that improperly won $332 million in U.S.-financed construction contracts in Egypt, officials said.
The Iowa deal irked some lawmakers, particularly Sen. Joe Bolkcom, D-Iowa City, who had Durham appear before the Senate’s Ways and Means committee to explain her thinking.
“The deal was mine,” Durham said.
Bolkcom has walked the line between saying he’s thankful for the jobs that the conglomerate will bring to Iowa — Orascom has operations in 25 countries and income of more than $5 billion a year — while criticizing the incentives that brought it here.
“This isn’t about jobs,” Bolkcom told a standing-room-only crowd of more than 50 who packed the committee room. “It is about the state treasury used in a prudent way …Some say that Iowa got taken to the cleaners.”
Durham pushed the case that bringing Orascom to Iowa was a good deal.
“Your explanations are pretty unsatisfactory in a number of dimensions,” Sen. Herman Quirmbach, D-Ames, said.
Durham asked for a few minutes at the end of the meeting to offer some closing comments, but was shut down.
Bolkcom said she would be asked back to the committee. He made it clear he still had some questions after the meeting.
“Did the governor really not know that $110 million deal was done in his name? Like what did the governor know here? When did he know? The director suggested he wasn’t involved in this,” he said.
Earlier Tuesday, Gov. Terry Branstad suggested the hearing was “political overkill” by Bolkcom and said he had “no regrets” about the deal.
Ernest Schiller, a Lee County Board of Supervisors member who made the trip to Des Moines for the hearing, said he regrets that questions keep coming up.
“We’re concerned with all of this nitpicking,” he said. “From a Lee County standpoint, I’m a little concerned that every time they bring up this issue it just etches one little mark on a county that has very high unemployment and a company that’s coming here to invest.”