Money for AK-47s? No more shady deals

Thanks to reporting by the investigative news website Florida Bulldog, we have new evidence to challenge the idea of giving public money to private businesses in private.

In 2015, Broward County and Pompano Beach pledged money toward a state effort to recruit the American maker of the Russian AK-47 — known as the Kalashnikov, after its inventor. Designed in 1947, it became the model for military-style assault rifles.

According to Florida Bulldog, local elected officials knew only that the company — Kalashnikov USA — dealt in “firearms.” Otherwise, it was Project 762. Kalashnikov USA was to receive a combined $162,000 for bringing 54 jobs to Pompano Beach with an average salary of $51,000.

It didn’t happen. The company couldn’t meet its obligations. Though this happened well before the Marjory Stoneman Douglas massacre, the revelation is embarrassing in a county where so many people are grieving. Nikolas Cruz owned an AK-47.

The Greater Fort Lauderdale Alliance served as local supporter of the deal. President and CEO Bob Swindell told the website, “Right now, it’s easy to say it was a bad decision, but we looked at it as 54 skilled advance manufacturing jobs. Obviously, we don’t want jobs at any cost…(but) it’s a challenge for us if we have to become an arbiter of social policy. Is the company legally licensed to do business? If those boxes are checked, we feel an obligation to help them.”

Even if we grant Swindell his point about “social policy,” there wasn’t any debate in 2015 because almost no one knew which company was involved. More important, no one knew about the company itself.

The Florida Department of Economic Opportunity, which Gov. Rick Scott supervises, proposed the incentives for Kalashnikov USA one year after President Obama imposed sanctions on Russia. Obama was responding to Russia’s invasion of Crimea and its attempt to destabilize the pro-Western leadership of Ukraine.

Florida Bulldog reported there were signs that Kalashnikov USA was violating the sanctions. Yet the Department of Economic Opportunity as late as 2016 was urging Broward County to extend the deadline for the incentives package.

Scott’s office denies that the incentives package violated the sanctions. Florida Bulldog has filed a public records request for documents related to the deal, to determine whether the governor’s administration vetted the deal and, if so, how thoroughly.

But let’s go back to 2015. If the Broward County Commission had known that Project 762 involved a company that made military-style weapons, would the commission have gone along? Would the commission and the Alliance have supported the deal if they had known it could violate sanctions? Would they have gone along if they had known that, as Bloomberg Businessweek reported, the company had links to Russian President Vladimir Putin?

Broward County Mayor Beam Furr was on the commission when it approved Project 762. During his recent State of the County Address, Furr noted that the Alliance is “rethinking its approach regarding how we attract new businesses and corporations to this area.

“Historically, we would try to offer a corporation some kind of incentive package to entice them here. We have offered thousands of dollars trying to lure businesses to Broward. … But that gets expensive after a while, and it doesn’t always work out or it only works while the money lasts or the tax break is in effect.”

Indeed, multiple news reports have shown that Florida’s record on incentives is spotty at best. There are successes, but there also are huge failures. Exhibit A is the animation company Digital Domain. Port St. Lucie approved $40 million for a studio. Lawmakers sneaked another $20 million for it into the state budget. Digital Domain collapsed and a church now occupies the property.

Instead of incentives, Furr said, Broward should market its “talent,” which he called “our new currency. … We want businesses to know, if they bring their business to Broward, we can offer the talent.”

As a long-term strategy, talent makes much more sense. Talent also helps all businesses, not just those singled out for favors. And there are no secrets on how public money is spent.

Project 762 was a bust. So is the process that created it.