TEDCO’s leader said a critical audit allowed the agency to open a conversation with legislators about its mission and where it should be spending its resources.
The Maryland Senate Thursday approved legislation to create more oversight and direction for the agency, something George Davis, TEDCO’s CEO, said was welcomed.
“We were invited into the conversation, something I very much appreciate from the legislators,” Davis said. “(The bill) does something that we really needed, relative to providing good clarity.”
While Davis was happy with that outcome, the marquee financial initiative for TEDCO didn’t fare so well.
The General Assembly zeroed out $16 million from TEDCO’s budget that was meant for a proposed Maryland Technology Infrastructure Program. That proposal is one of several economic development bills proposed by Gov. Larry Hogan that has not advanced in the legislature this year.
Davis dismissed the idea that not getting the funding for the program was a punishment for the audit.
“That was the governor’s bill and an administration bill to be housed at TEDCO. At the end of the day, I think there were some bigger issues than TEDCO,” he said. “It’s my understanding … it wasn’t cut it was repurposed.”
A legislative audit issued last month found issues that included how TEDCO, the Maryland Technology Development Corporation, directed funding to companies that were not primarily based in Maryland and invested in companies that had associations with the Maryland Venture Fund’s advisory committee.
All of the issues the audit identified were found within the Maryland Venture Fund, one of eight investment funds operated by TEDCO.
In the aftermath of the audit, lawmakers expressed a desire to put more restrictions in place to govern how TEDCO invests its money and what oversights are in place to govern the agency.
“I think that the audit picked up some things that people were concerned about, some investments made that even though we thought they were very good for the state, were a little gray for policy, Davis said. “They really took the lead on this and listened to us.”
As a result, lawmakers heavily amended a bill introduced by Sen. Cheryl Kagan, D-Montgomery.
The bill limits TEDCO investments to companies that are primarily located in Maryland or that will have a “substantial economic impact” in the state. They must also use the investment to support business operations in Maryland or to establish business operations ins Maryland.
It also requires more significant reporting requirements from TEDCO. A new quarterly report must include for all businesses receiving TEDCO investments:
- the number of employees in the state;
- the number of employees outside the state;
- capital or other investments made by the company in the state;
- proposed job creation or capital investment in the state as a result of the investment or support.
It also added requirements to TEDCO’s annual report that must include some additional information, including:
- the salaries of TEDCO employees;
- information about advisory committees the agency has created;
- details about its efforts to help create women-owned and minority-owned businesses;
- a list of businesses that have received TEDCO funding but would no longer qualify as a qualified business.
“They’ve added some reporting things that we’ll figure out, but I actually think that some of the things they are asking for are things that we should be working on anyway,” Davis said, specifically pointing out reporting on TEDCO’s efforts to spur minority-owned startups.
The legislation also adds more significant public disclosures for members of TEDCO’s Board of Directors and for members of any advisory committees the board creates, including whether they are employed by or have a financial interest in firms that have applied for or will apply for TEDCO investment.