A former state development official says a struggling solar-panel manufacturer might have been denied $10 million in state loans and a $500,000 grant if the state had known executives were loaning themselves company funds, according to a newspaper investigation.
Loans to five executives at Willard & Kelsey Solar Group in suburban Toledo totaled more than $500,000 from August to October 2008, and the top five executives also received payments of almost $1 million from November 2008 through March 2009, The Blade newspaper reported (http://bit.ly/HJy6CD ) Sunday.
The internal loans started the same day the company received $5 million from a group of Italian investors, according to records reviewed by the newspaper. Michael Cicak, Willard & Kelsey's chairman of the board and chief executive officer, received a $40,000 loan that day while Mossie Murphy, chief financial officer at the time, received a $30,000 loan.
The state might have denied Willard & Kelsey funding if it knew about the company's internal payments, said former Ohio Lt. Gov. Lee Fisher, who led the Ohio Department of Development through February 2009.
"This is the first time I've heard about this," Fisher told the newspaper. "That would have raised serious concerns in my eyes. There's no question if I had known that information, I would have had our staff do an ever deeper dive."
Generally, the state doesn't ask about executive compensation when it's vetting loan and grant candidates, Fisher said.
The financial records obtained by The Blade detailing Willard & Kelsey's spending in its early days were maintained by William Mitchell, the company's former CEO, who died last year.
The records detailed the company's spending before it received its first round of state money in March 2009.
The company has been plagued with production delays and financial issues since it moved into its headquarters in Perrysburg in 2008. State documents indicate the company had about 72 employees in April 2011, though it laid off most of its employees in January.
Vice President Joe Biden and former Ohio Gov. Ted Strickland in 2009 and U.S. Secretary of Labor Hilda Solis last year all toured the company's facility, praising the firm as a promising alternative-energy company.
Murphy, now Willard & Kelsey's vice president of development, said the company never misused state funds and always complied with state law. He said company executives use private funding at their discretion.
Murphy declined to comment on how the Italian investment money was spent, citing a legal agreement between the firm and its investors.
"There is clearly a distinction between state funds and private funds," Murphy said. "Our private funding, I can say, exponentially is many, many times the state funding. As a private company, it would be fairly typical of a private company to use its own private funds as it sees fit in the normal course of things."
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Information from: The Blade, http://www.toledoblade.com/