Rivian project deserved more due diligence, transparency, expert says

(The Center Square) — John Mozena hopes that one day he can stop saying “I told you so” about corporate welfare in America.

However, Mozena, president of The Center for Economic Accountability, won’t be able to make such a declaration after Rivian Automotive paused its $5 billion plant in Georgia.

Rivian’s latest news “demonstrates something that we were warning about when it was first announced: It was a massive and speculative investment of taxpayer dollars in a project that deserved far more due diligence and transparency than it received,” Mozena told The Center Square via email. “Economic development agency bureaucrats admitted under oath in a Georgia courtroom that they hadn’t even bothered to look at Rivian’s basic SEC filings to make sure they had even a surface-level understanding of Rivian’s business fundamentals.

“In her ruling, the judge noted that the Joint Development Authority’s representatives had admitted that ‘the JDA did not employ an investment banker, economist, financial analyst or other third-party to evaluate the financial wherewithal of Rivian and its ability to commence and complete the project,’ or even review Rivian’s 10-K or 10-Q SEC filings,” Mozena added. “With that egregious lack of due diligence up front, it’s not surprising at all that a deal with that kind of bureaucratic malpractice baked in from the beginning would end up having problems like this over time.”

In December 2021, state officials announced that Rivian planned to build a manufacturing facility in Georgia. The state gave the company $1.5 billion in incentives, and the Michigan-based group named the deal 2022’s “Worst Economic Development Deal of the Year.”

“It’s a perfect example of how politicians and bureaucrats coopt the rhetoric of ‘investment’ with taxpayers to justify their corporate welfare deals, but the way they do those deals would have any private-sector investment professional fired, sued and probably jailed,” Mozena said. “Economic development agencies are supposed to be the sharp-penciled, green-eyeshaded protectors of taxpayers’ wallets and the public interest. If they’re not doing that, then there’s nobody in the entire process who is — and that’s how you get messes like Georgia’s Rivian deal.”

The fallout from the Rivian announcement made its way to the Georgia Senate floor on Friday, with state Sen. Nabilah Islam Parkes, D-Lawrenceville, saying the auto manufacturer “is pivoting to focus on Illinois, which does not have a draconian six-week abortion ban [and] where women have the right to make their own health care decisions.”

“It is pretty notable that … Gov. Brian Kemp’s signature economic development deal, that he ran for reelection on, will fail to create a single job in Georgia,” Islam Parkes said. “Rivian’s announcement proves that Governor Kemp’s plan for economic development is all about corporate handouts and not job creation or workforce development.”

“…Our governor chose to hand out 1.5 billion in incentives to an untested corporation that will never open its doors in Georgia,” Islam Parkes added.

Republicans, however, balked at the suggestion.

“To say that the decision made by a company based on economic factors that were propped up by the federal government to no longer come to our state is based on a ban of ending a life at a heartbeat is political,” state Sen. Blake Tillery, R-Vidalia, said. “And if we have a workforce issue, I would suggest perhaps that might be caused by the millions of lives that never were.”