Louisiana Democratic Gov. John Bel Edwards has promised a chemical manufacturing company in China $4.3 million in taxpayer money to get them to build a plant in his state, despite the fact that the company is owned in part by the Communist Party in the Chinese government, the Washington Free Beacon reported Wednesday. According to the report, the state monies will go to the Chinese company in the form of a grant.
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Edwards announced Monday that Wanhua Chemical had agreed to invest $1.1 billion to build a plant in Louisiana in exchange for the grant and a series of tax breaks, including an exemption from property taxes on the plant for 10 years.
The company also will benefit from the state's Quality Jobs Rebate program, which will grant a 6 percent cash rebate for up to 80 percent of the company's payroll for new jobs over the next decade. Wanhua Chemical's entire payroll will be eligible for the rebate beginning in 2018.
Edwards told CBS affiliate WAFB that this is "a testament to the strength of Louisiana's business climate and unmatched transportation logistics."
The taxpayer dollars will be going to the Chinese government entity Yantai State-owned Assets Supervision and Administration Commission (SASAC), and members of the Communist Party, which owns 40 percent of Wanhua Chemical.
Richard Carbo, spokesman for the governor's office, has denied that any Louisiana money is going to the Chinese Communist Party — or any government entity — and has said that the money is going to private investors alone. However, several members of Wanhua Chemical's board are members of the Chinese Communist Party.
Edwards and Communist Party Secretary Zengtai Liao, president of Wanhua Chemical, are expected to reveal the location of the new plant "in the coming months," according Louisiana Economic Development.
If the project does not bring in the promised number of jobs, Carbo said, then Wanhua Chemical will not receive the $4.3 million:
"If they don't meet those obligations, they don't receive the performance-based grants," Carbo told the Washington Free Beacon. "If they do meet those obligations, the state of Louisiana and its people will be the beneficiaries of billions of dollars of new economic output in our state, as well as the additional infrastructure improvements."
Currently, Edwards is embroiled in a lawsuit with Louisiana Attorney General Jeff Landry, who is suing the governor for not paying $4 million owed to the attorney general's office for operations. Landry has said that the governor's refusal to pay has caused problems with running the agency.