DALLAS - The Texas Enterprise Fund, created by the state legislature in 2003 to lure new employers to Texas, awarded $222 million to organizations that never even applied for the funds or promised any jobs, according to a report from the State Auditor's Office.
Gov. Rick Perry, recently indicted for his alleged role in cutting off funds to a unit of the Travis County District Attorney's Office tasked with investigating state malfeasance, has direct control over the Texas Enterprise Fund.
According to the report released Sept. 25, the governor's office did not require recipients to submit applications or create direct jobs for 11 projects that received Texas Enterprise Fund awards in 2004 and 2005.
The 11 projects received awards totaling $222.3 million, which made up 44% of the $505.9 million awarded between September 2003 and August 2013, according to the report.
A $40 million award to Sematech, Inc. did not require the recipient to create direct jobs, the auditor said. Sematech also did not submit an application for that award.
The University of Texas at Dallas received $50 million from the fund without applying or promising jobs, the report said.
Triumph Aerostructures received $35 million, UT Health Science Center and M.D. Anderson Cancer Center received $25 million, Citgo Petroleum Corp. got $5 million and sporting goods chain Cabela's got $400,000 without submitting formal applications.
Lexicon Genetics Inc. has not created a single job but received $50 million for its joint project with Perry's alma mater Texas A&M University, the report said.
The audit found no "objective scoring tool" to determine whether applicants deserved the awards.
Earlier this year, the TEF awarded $40 million to Toyota Motor Corp. for moving its North American headquarters to Plano, Texas, from Torrance, Calif.
In its defense, the governor's office said it reclaimed more than $14 million in "clawback" payments from companies and organizations that were not qualified to receive the awards.
"The Texas Enterprise Fund is a critical deal-closing tool that has helped attract businesses to Texas that have in turn created thousands of jobs and billions of dollars in capital investment, and the Legislature has continued to recognize its value by reauthorizing it every session since it was created," according to a prepared statement from Perry's office.
"This audit confirms that funds awarded through the program have been allocated in accordance with state law," the statement adds. "Administrative processes and procedures are regularly reviewed and updated as necessary to ensure effective, efficient and responsible distribution and oversight of all TEF awards."
Perry, the longest-serving governor in Texas history, is the first to control the fund that he said allows him to personally close deals with private companies.
The audit recommended more oversight in how the money is used.
