The Roanoke Times deserves credit for providing the resources for writer Laurence Hammack and researcher Belinda Harris to research the relationship between Martinsville, the state, MZM, and Rep. Virgil Goode, using FOIA requests to gain access to internal documents. The resulting story suggests that Martinsville may have gotten the short end of the stick in this deal, and that things may not turn out so well for Martinsville in their relationship with MZM. Here’s one of the more interesting bits, about Goode’s role in engineering MZM’s sweetheart with the state:
According to the documents and interviews, Goode’s involvement — combined with a desire by everyone involved to help a job-starved area — led to a state incentives package that ventured “outside the normal procedures.”
The result was a sweet deal for MZM.
The company acquired the shell building at less than half its value. To make up the difference, Martinsville obtained $500,000 in state grants and agreed to pay back the money if the company did not deliver on its promises of jobs and site improvements.
“That’s not the way we do things,” said John Sternlicht, general counsel to the Virginia Economic Development Partnership, the state agency that drafted a performance agreement.
“The company is usually on the hook,” Sternlicht said. “But in this instance, based on [Martinsville’s] urgent request, this is what we did.”
Goode was the one who suggested the unusual agreement, which was reached at a time when negotiations between MZM and Martinsville appeared to be bogging down, according to e-mails.
As Hammack explains, the MZM/Goode/Martinsville/Virginia relationship was both odd and strained. MZM clearly wanted to squeeze every possible penny out of Virginia and Martinsville. They’ve now left Martinsville in the awkward position of potentially owing hundreds of thousands of dollars to the state if MZM — over which Martinsville presumably has no control — fails to meet their projected 75 people employed or $4.4M in capital investments within thirty months. To date, halfway through that period, MZM has created 35 jobs and nearly half of those capital investments are completed.
The trouble, though, is that MZM is in bad shape. The Pentagon ordered a freeze on any new MZM work in late June, and their sugar daddy, Duke Cunningham, has been forced to resign from congress and is facing prison time. The man who built and ran the company, Mitchell Wade, was forced to quit the company this past summer, and he’ll inevitably be facing prison time, too. MZM’s entire business model is premised on receiving contracts in exchange for bribes. With the end of the bribery will come the end of the contracts. So why would they double the size of their operations in Martinsville? If they’re not getting new work, presumably operations would, at best, remain static in size. More likely, they would shrink.
If Martinsville ends up having to pay out hundreds of thousands of dollars for MZM’s non-performance thanks to a deal designed and brokered by Rep. Virgil Goode, that’s going to put Goode in a tight spot. For Martinsville’s economic situation, that would really just be adding insult to injury. Or, more accurately, injury to injury.
Anyhow, read the Roanoke Times article — I haven’t done justice to the long investigative piece for which, again, the Times deserves a lot of credit for putting their resources towards.
MZM’s entire business model is
There is no MZM. The company was restructured and renamed, with a new board, new officers and new name. Athena, MZM’s successor, is growing in Charlottesville, Martinsville, and elsewhere — and presumably (absent evidence to the contrary) doing so in the traditional defense contractor way. With all eyes on the company, and every gubmint dime subject to intense scrutiny, it’s inconceivable that any current or future work will be tainted.
What makes you so sure that they’re not getting new work? Do you know that they’re not?
There is no MZM. The company was restructured and renamed, with a new board, new officers and new name.
Every newspaper continues to call them “MZM.” If you have a problem with that, take it up with the entire news industry, not me. And, yes, my point is that the entire company has received an overhaul, and yet it functioned as a sole tool of Mitchell Wade. Without Wade, they’re in a lot of trouble.
With all eyes on the company, and every gubmint dime subject to intense scrutiny, it’s inconceivable that any current or future work will be tainted.
Again, that’s my point. Their work has been received thanks to bribes. Without bribes, no work.
What makes you so sure that they’re not getting new work?
I didn’t say that they’re not getting new work. I said that they’re not getting new work from The Pentagon which, for a military contractor, is a real bummer.
You’ve got to read this stuff more closely. I seem to spend a lot of time explaining to you what I already wrote.
could someone tell me how to make comments appear in italics like that? i must be missing something really obvious cause everyone seems to know how to do it but me.
1) How do you know they’re not getting any new work from the Pentagon? You’re 100% sure that a 5-month old freeze order is still in effect? Could it be that one reason for the restructuring was to get around that?
2) All military contracts go through the Pentagon? Since when?
could someone tell me how to make comments appear in italics like that?
Sure, Mark — just wrap <em>the italicized text</em> in those little “em” tags.
How do you know they’re not getting any new work from the Pentagon? You’re 100% sure that a 5-month old freeze order is still in effect?
How do you know that the Pentagon still exists? Have you checked this afternoon? It could be gone. How about Washington D.C.? Are you 100% sure?
All military contracts go through the Pentagon?
They do? Who said that?
thanks
The point is that you claim that the company will wither and die without money from the Pentagon, leaving Martinsville on the hook for hundreds of thousands of dollars, and all of this is Virgil Goode’s fault.
If you don’t know that a company is no longer getting military contracts, from the Pentagon or elsewhere, then it doesn’t make a whole lot of sense to make the claim.
With respect the MZM, clearly the best thing they had going for them was their “connections”. Now, even if they do clean up their act, who on capitol hill will do business with them? If I were a politician I would not be caught dead within a hundred feet of an MZM executive or an executive from whatever company MZM will morph into.
Altria = Philip Morris
Athena = MZM
You can run, but you can’t hide.
The Roanoke Times story forced Virgil Goode to come clean. Landmark a step ahead of Media General.