The former CEO of a company that announced it would open an artificial sweetener plant in a small north Missouri town, but never did, has pleaded guilty to three felony counts connected to the scandal.
In 2010, Mamtek CEO Bruce Cole persuaded city leaders in Moberly to issue $39 million in bonds to build the plant, which was to employ 600 people. Shortly afterward, the state's Economic Development Department kicked in $17 million in tax credits for the project -- however, those credits were never used.
Former Mamtek CEO Bruce Cole has ended his fight to be extradited to Missouri, where he faces charges related to the collapse of a project to build an artificial sweetener plant in the town of Moberly.
After refusing last week to be extradited, Cole reversed course at a hearing today in Orange County, California, and waived extradition. He is charged with diverting $700,000 in bond money to cover personal expenses. That included around $250,000, which was directed towards a failed attempt to prevent foreclosure on his home in Beverly Hills.
The former CEO of Mamtek is fighting extradition to Missouri.
At a court hearing today in Santa Ana, California, Bruce Cole refused to be extradited, which means that he can’t be sent back to Missouri unless the Governor of California asks the court to order it. A spokeswoman for the Missouri Attorney General’s office says that request is being expedited.
Two years ago the small northeast Missouri town issued $39 million in bonds to get the company to build an artificial sweetener plant. Mamtek later missed a bond payment and construction halted, and Moberly’s bond rating was downgraded as a result. State Auditor Tom Schweich (R) said the due diligence procedures used by the DED were woefully inadequate.
UMB Bank says assets from a failed artificial sweetener facility in Moberly will be auctioned this fall.
The bank is the bondholder trustee for the central Missouri project that was to be operated by Mamtek U.S. Inc.
Moberly issued $39 million in bonds to finance construction of the plant, and the state offered about $17 million in incentives. Work stopped last fall on the partially built factory after Mamtek missed a bond payment to Moberly. No state incentives were paid.
The Missouri Senate has passed a tax credit measure after hammering out an agreement between GOP leaders and fiscal conservatives who’ve been trying to reign in tax breaks for years.
The agreement would cap historic preservation tax credits at $75 million per year, give a one-year extension to food pantry and other charitable tax breaks, and create incentives to draw amateur sporting events to Missouri. State Senator Eric Schmitt (R, Glendale) urged the chamber to pass it before time runs out on the regular session.
Mo. lawmakers seek requirements for officials involved in economic development projects
A House panel heard testimony Monday on eight measures aimed at increasing scrutiny of businesses that ask for government money. The legislation would require local governments to get insurance for municipal bonds for economic development projects and to hold public hearings before issuing bonds.
State and local officials would also have to share information they have about companies seeking development incentives.