Finally! An issue we can all agree upon: Our elected officials should ask lots of personal questions before bestowing any “gifts” from the government. And we must demand the highest moral conduct from any recipients.
I’m talking of course, about the state’s commitment – if certain sales tax projections are met – of up to $25 million a year for the next 10 years in subsidies to investors who made possible the Formula One race, held at the newly constructed Circuit of the Americas built outside Austin.
Last weekend, thousands of wealthy globe-trotters descended upon Austin to enjoy perfect weather and a unique racing event staged by the Formula One Group, led by chief executive Bernie Ecclestone, a British businessman.
Here’s what the Wall Street Journal reported about Ecclestone on Nov. 5: “Prosecutors in Munich are considering whether to charge Formula One Group Chief Executive Bernie Ecclestone for bribery in connection with $44 million he paid to a banker in 2006-07. A decision, which has been hanging over the sport for months, is expected in the coming weeks … Mr. Ecclestone’s legal troubles threaten to upend the multibillion-dollar racing circuit’s ties to major sponsors, teams and fans.”
While Ecclestone insists that he’s not guilty, the recipient of the $44 million, a German banker, is serving a prison term for accepting it.
But in 2010, our state leaders leapt at the opportunity to reimburse wealthy investors, who ponied up $450 million to build the Austin race track, for the $25 million licensing fee required to hold Ecclestone’s Formula One race.
The investor group includes San Antonio businessman Red McCombs.
The deal was set in motion when Comptroller Susan Combs, in a May 2010 letter, unequivocally pledged to fork over $25 million for the race licensing fee, every year for 10 years.
Stating, “I hereby certify the following,” Combs promised full funding of the fee even before the races were held.
Combs had to walk back that pledge when other Texas elected officials, notably Land Commissioner Jerry Patterson, cried foul, pointing out that she had skipped a couple of important legal steps before pledging Texas tax money.
For example, Formula One was supposed to actually apply to the state and meet certain requirements.
Confronted with the criticism, Combs claimed she meant only to express “optimism and support.” Also, we shouldn’t take it so literally when she writes, “I hereby certify the following.” As she noted in a television interview: “It’s not a legal term.”
Linked to tax receipts
Because of the kerfuffle, the state clarified that it would fork over the $25 million after the event each year, but only if the region’s sales tax receipts showed a positive economic impact in excess of that amount.