JEFFERSON CITY, Mo. (KMOX) – Members of the Senate Governmental Accountability Committee questioned representatives of the Department of Economic Development Wednesday in a continued investigation of the failed Mamtek Moberly project.
The Mamtek project fell through after the company defaulted on a $39 million bond payment to Moberly after promising to create around 600 jobs by building an artificial sweetener plant in the community. The failed project is also being investigated by the Securities and Exchange Commission and the state Attorney General, among others.
Chairman Jim Lembke, R-St. Louis County, said it is necessary to look at the Mamtek project and create a mechanism to stop the same situation from reoccurring.
“The bottom line, for me, is, how do we keep this from happening to another community,” Lembke said.
Sallie Hemenway, Business and Community Services Director, said the department carried out due diligence throughout the process of vetting the China-based company, and continued to work with Moberly, even after the community moved forward and accepted Mamtek’s proposal.
“We were still working with the community to investigate the company when they went ahead,” Hemenway said. “We didn’t lead them to this deal.”
Hemenway said the project was unique because the domestic branch of the company, Mamtek U.S. Inc., was a startup, making it difficult to research a company with no financial history. According to emails between the department and Mamtek presented by Lembke during the hearing, the DED repeatedly requested financial information from Mamtek International without receiving a timely response.
The committee requested all correspondence from the DED regarding the Mamtek deal this past October.
Lembke said he will move quickly with the committee’s investigation and plans to hold additional hearings and discussions with the DED.
“I’m not satisfied the DED has enough protections for citizens and there seems to be a lot of circular arguments and pointing of fingers,” Lembke said. “I want them to be frank and honest with us, if they made a mistake.”
The House Government Oversight and Accountability Committee will hold a hearing about the project Thursday, continuing its own investigation of Mamtek.
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