Today, April 1, 2000, we are honoring those companies which most aggressively exploit New Mexico's corporate welfare system for their unending commitment to increase their profits.

The SouthWest Organizing Project proudly presents...
The 2000 IRBie Corporate Welfare Awards

...an event dedicated to exposing the injustices of the corporate welfare system in New Mexico.

MUST SEE PRESS RELEASE, CLICK HERE.

On April 1, 1998, SWOP awarded the first annual IRBies. The IRBie is a much coveted tribute to those corporate and public officials who have successfully exploited the corporate welfare system in New Mexico, often providing little or no benefits to our citizens nor our government.

The 1998 IRBie of the year award went to Sumitomo Sitex for capturing the largest IRB in the history of the City of Albuquerque--in the shortest time ever. The 1997 IRB proposal indicated that the first phase would provide a net income loss to the City over the first 7 years of the project, would more than double the company water usage and would provide a new 20 year tax abatement for the second phase. The company reported to the City of Albuquerque in August 1999: "No new positions were created . . .Sumitomo’s only hiring activity was to replace existing positions." With no clawbacks in the City approval, Sumitomo continues to get the tax breaks and the City has no recourse. The SWOP panel approved an Honorable Mention IRBie for Sumitomo, now a two-time winner.

The Third Runner-up IRBie goes jointly to the City of Albuquerque, Los Ranchos De Albuquerque and the Bosque Preparatory School. These three entities put together $4 Million as a "Qualified tax-exempt obligation." What a building! And what an innovative use of a tax break designed to produce industry--not! An Industrial Revenue Bond for a private college prep school! What a scam!

Fulcrum Direct obtained 2 IRBs in 1995 ($7.9 Million) and 2 IRBs in 1996 ($4 Million). They then filed an application for an additional 2 IRBs at $36 million in 1997. Fulcrum was a highly leveraged distributor of children’s clothing, created by two former Hotpoint attorneys. In the 1996 application there were clear danger signs that the company was not fiscally sound and that failure was a very possible outcome. By the 1997 application there were lawsuits pending against the company, for non-payment of debts. The company went down in 1998—SHOCKER! But their manner in closing and filing of bankruptcy was a classic case of corporate disdain. Employees had 1 hour to pack up and get their stuff out when they showed up for work that day. The plant remains tax-exempt and closed. There are no clawbacks, so they can now sell their tax exemptions. Traffic on Fulcrum Way is not very congested these days.

The Albuquerque Development Commission receives this IRBie for the approval of a $6.8 million IRB to Albuquerque Tortilla Company. Why pick on a local, home-grown enterprise like Albuquerque Tortilla, when the foot-loose multi-nationals got lots of breaks too? The SWOP Panel felt that the ironies of this IRB were screaming for recognition, and it’s the Development Commission who’s the real loser, um winner, here. Bueno Foods received 4 IRBs, the latest in 1997. The purpose of IRB legislation is not to destroy local competitors. SWOP argued this point during the Bueno Foods application. Bueno argued that they needed the IRB not to flatten Albuquerque Tortilla, but rather to fight the evil empire of Mission tortillas out of California. Albuquerque Tortilla was a hero when it expanded with over $1 million in investment without the IRB abatements in 1997. So now here comes Albuquerque Tortilla. With a $6.8 million IRB to take over the old Plastech building, which, by the way, received two IRBs from the City in 1994 totalling $6.7 million. What is next? The City approved the Albuquerque Tortilla Company request based in part on the fact that they had already approved the Bueno request, even though there should not be competition between IRB applicants. So if there are 20 other tortilla factories in town, do they all deserve the abatement, and what about the bread companies and the bagel brewers? Where will it end? To date, the company hasn’t made a tortilla at the new plant and the wages are still low because the Council rejected a proposal requiring IRB recipients to pay their workers a livable wage.

  And...

This year's...

IRBie of the year...

Goes to...Sun Healthcare Group!

Like Sumitomo Sitex, Sun Healthcare Group received an IRB from the City of Albuquerque in 1997. The proposal projected 1000 new jobs. The company reports to the city in 1999: "Commencing in the last quarter of 1998 and continuing through 1999, the Company has experienced layoffs and a hiring freeze and will continue to do so...In addition to the elimination of positions, we expect that there will be no wage increases and no new positions created in 1999." Sun Healthcare is in Chapter 11 Bankruptcy. Just off IRB Alley, aka Jefferson, sits the not quite completed, palatial tax abated monument to this Albuquerque IRB--a classic example of how economic incentives are abused and corporate welfare sustained.