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Foundation\u2019s report wrongly characterizes $9 million investment as a loan, State Investment Council spokesman says<\/span><\/p>\n A spokesman for the State Investment Council<\/a> (SIC) takes issue with a libertarian-leaning foundation\u2019s report trashing a $9 million investment made in a company whose use of the cash didn\u2019t work out as planned.<\/p>\n The most egregious inaccuracy in the Rio Grande Foundation\u2019s report<\/a> about the $9 million investment in Earthstone International<\/a> is that it repeatedly characterizes the investment as a loan, said SIC spokesman Charles Wollmann. He provided a copy of a 2004 news release<\/a> to back up the assertion that this was an investment.<\/p>\n There\u2019s a big difference between an investment and a loan, he said. The latter has to be repaid, while the first gives the state a stake in the company and is never expected to be repaid.<\/p>\n The foundation\u2019s report, by investigative journalist Jim Scarantino (a former columnist<\/a> for this site), details how the state\u2019s $9 million was to be used to help create 200 jobs by building a new plant in southern Do\u00f1a Ana County but, according to the foundation, that money has instead \u201cexported jobs to Mexico.\u201d<\/p>\n The Do\u00f1a Ana County facility was never built, and the money was instead used for research and development and marketing. Meanwhile, while some of the company\u2019s work is done in Santa Fe, some is done in Mexico and Arkansas.<\/p>\n \u201cNot one dime\u201d of the \u201cloan\u201d has been repaid, Scarantino wrote on the foundation\u2019s blog, New Mexico Liberty<\/a>. <\/p>\n Wollman said the use of the word \u201cloan\u201d is one of many factors that leads him to believe the foundation\u2019s report is \u201ca politically motivated smear piece aimed at distorting the facts.\u201d He said the investment has since been converted into equity in the company.<\/p>\n The Earthstone investment was part of the state\u2019s thinking outside the Wall Street box in 2004 by investing money in state companies. Wollman said such investing comes with more risk, but also comes with a potentially higher reward.<\/p>\n