The Oklahoma Capital Investment Board (OCIB) has sold tax credits to support a state-operated venture capital investment program without following statutory requirements, state Rep. Mike Reynolds said today.
As a result, the Oklahoma City lawmaker today called on law enforcement officials to investigate the agency.
“We cannot allow a quasi-governmental agency to violate state law without consequence,” said Reynolds, R-Oklahoma City. “I have long questioned the legality of OCIB’s activities – this episode is just the most blatant example of the group’s disregard for the rules.”
Oklahoma law (74 O.S. 2001, Section 5085.7), specifically states: “The [Oklahoma Capital Investment] Board shall not transfer tax credits except in conjunction with a legitimate call on a Board guarantee.”
On Aug 18th, Reynolds formally requested if a “legitimate call” had ever been made and if so to provide a copy. After almost three weeks he received a reply from OCIB that did not provide the information requested.
As a result, on Sept. 18 Reynolds contacted Devon Sauzek, who provides advice to the Board of Trustees of the Oklahoma Capital Investment Board, to determine whether or not the bank for whose benefit a guaranty was provided by OCIB ever made a formal demand for payment under the terms of the guaranty.
Sauzek stated that the bank did not make such a demand, Reynolds said.
Without the demand under the terms of the guaranty, OCIB did not have statutory authority to sell the tax credits.
The Oklahoma Capital Investment Board, originally created in 1987, has $100 million in tax credits at its disposal to use as incentives for companies. The agency has no employees and its daily operations have actually been contracted to an outside, private firm that is not required to provide information to lawmakers or members of the public under the state’s Open Records Act.
“This is yet another example of noncompliance by OCIB with the requirements of the statutes that govern its operations, resulting in a loss to the State Treasury and the taxpayers of Oklahoma,” Reynolds said. “I believe this activity warrants a full investigation by the appropriate law enforcement officials.”