In bid to be green governor, Patrick bungles investment

January 20, 2011

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RE “PLANT will shut after $58m in state aid: Evergreen Solar to cut 800 jobs as it tries to compete with China’’ (Page A1, Jan. 12): Did the state invest in Evergreen Solar because it was a good move from a venture capital perspective or because it looked good from a political perspective? It seems clear to me that Deval Patrick wanted to be the alternative-energy governor and Evergreen Solar was his statement. However, the investment proposition did not stand on its own feet, and any bona fide venture capitalist would have declined to invest. The result: The taxpayer has to pick up the tab.

In the mid-1970s, during the Dukakis administration, the Massachusetts Technology Development Corp. was established to provide venture funding to start-ups. Each investment by the MTDC had to include in the syndicate the participation of an experienced venture capitalist. This rule helped ensure that due diligence was conducted. The result was successful performance from both an investment and job creation standpoint. Would that such a rule had been followed by the current administration.

Now the governor has announced a junket that will bring business to Massachusetts. I am sure that the incentive to come to the state will include generous subsidies — the Evergreen Solar model. Unfortunately, when the subsidies run out, the companies will run out as well.

We have many assets that appeal to a knowledge-based company. If the governor can sell these advantages, fine, but if he is off to burnish his image as an alternative-energy governor, using subsidies as an incentive, permanent jobs will not be created, and the taxpayer will be the poorer.

Peter Brooke
The writer is chairman of Advent International, a private-equity firm.