March 23, 2012
Indiana

Delaware County officials cited millions in debt from the failed streetlight maker

Written by KEITH ROYSDON, www.thestarpress.com 22 March 2012

MUNCIE – Although German businessman Oliver Viehweider received $1.5 million in Delaware County funds for a wind-and-solar-powered streetlight project that never got off the ground, officials acknowledged Thursday they will be lucky to get an agreed-to $300,000 from him.

That’s because Viehweider has liabilities of more than $1.4 million euros – worth up to a third more in U.S. dollars – and few assets, members of the Delaware County Redevelopment Commission were told Thursday morning.

And while the county also has an agreement to get 50 percent of Viehweider’s annual income over $60,000, officials don’t expect a payday there either.

“How much does he make?” local government critic and county commissioner candidate Cary Malchow asked officials.

The answer: Less than $60,000 a year.

The county commissioners, working through Indianapolis attorneys, negotiated for months in the wake of the failure of Viehweider’s VAT Energies, which had been announced in June 2009 as a “green energy” project that would employ 100 people locally making high-tech streetlights. Viehweider was to get $1.5 million in incentives to create the jobs and provide dozens of streetlights and a vertical wind vane.

Because of Viehweider’s association with Brevini Wind, a maker of gearboxes also hoping to break into the wind energy industry in Delaware County, negotiations were sensitive.

Ultimately, the commissioners on Monday announced the $300,000 settlement with VAT and Viehweider as well as a deal in which Brevini would receive $1.69 million in tax increment financing (TIF) funds but give up their claim to another $5 million in TIF money. Officials hope to use the $5 million to complete a rail spur that would service Brevini and other tenants in the Park One/332 industrial park near Interstate 69.

More details about the agreement and the financial status of Viehweider and VAT came out in Thursday’s executive session and public meeting of the DCRC. During the meeting, Malchow – who has raised questions about VAT for the past two years – quizzed attorney Paul Jefferson, who represented the county in negotiations.

Some of Malchow’s questions were answered Thursday by Delaware County Commissioner Todd Donati. At times the exchanges between the two were tense. Malchow is a Republican candidate for the commissioners seat Donati holds. Depending on the outcome of May primary elections, the two could face each other in the November election.

“You can sit there all day and ask questions,” Donati told Malchow at one point. “We’re going to give you the same answers. You can’t get blood from a turnip.”

Redevelopment commission official Brad Bookout and attorney Jefferson outlined details of the agreement with VAT and Brevini during Thursday’s meeting. Jefferson said that while the county could have pursued litigation against Viehweider, a lawsuit “would likely net the county zero and might have been a loss.”

Besides Viehweider’s $1.4 million euros in liabilities, Jefferson said, VAT “has very little in the way of assets.”

In the weeks and months after the 2009 announcement of the VAT project, the DCRC and county commissioners authorized three payments of $450,000 each to VAT. Smaller payments followed.

The payments to VAT did not escape scrutiny at the time. The Indiana State Board of Accounts issued reports critical of the expenditures – some of which were made before Viehweider had delivered on his contractual obligations – in December 2009 and August 2011.

“Dates of transactions indicate that payments were made for the purchase of wind turbines to companies prior to the receipt of goods or services,” state auditors noted in the 2011 report. “Compensation and any other payments for goods and services should not be paid in advance of receipt of the goods or services unless specifically authorized by statute. Payments made for goods or services which are not received may be the personal obligation of the responsible official or employee.”

During Thursday’s meeting, Malchow asked whether Viehweider had spent money toward more than $3 million in capital improvements he had promised and whether a criminal investigation had been considered.

Jefferson noted that the DCRC didn’t have the authority to launch a criminal investigation. The attorney also noted that while the commission did “due diligence,” its focus was on the lack of results, not Viehweider’s expenditures.

Donati complained about “the perception we gave Oliver a million dollars and we didn’t anything to this point, which is false.” He said Viehweider has a good business plan and “excellent references” and the county was “jumping on” the green energy movement.

“We made every attempt possible,” Donati added. “We were promised there would be movement and progress. It failed.”

URL to article:  https://www.wind-watch.org/news/2012/03/23/delaware-county-officials-cited-millions-in-debt-from-the-failed-streetlight-maker/