EDITORIALS
With critics already looking askance at the state’s entry into the capital venture game, it’s a bad time for state officials to cloud the issue — intentionally or otherwise.
That happened with Mesa Semiconductors, a startup company formed by two Philips Semiconductor executives at the behest of a California-based venture capital firm, the Anila Fund. Mesa Semiconductor proposes to take over the Philips facility in north Albuquerque — which will close by the end of the year — and manufacture computer chips for other companies, including Philips.
Mesa Semiconductors is one of three companies that got the unanimous nod Tuesday for the first-ever direct investments by the State Investment Council.
With expected fanfare, Gov. Bill Richardson and state investment officer Gary Bland announced plans on July 10 to invest $15 million in Mesa Semiconductors. (The other recipients are Eclipse Aviation at $10 million and PowerWAN at $4 million — the latter another recipient of Anila Fund investments).
Economic Development Secretary Rick Homans noted that the aforementioned Anila Fund would also invest $15 million in Mesa Semiconductors.
So, where did the Anila Fund get its $15 million? Arguably from the Investment Council, via its ability to invest in venture capital funds. State officials were less than forthcoming by failing to mention this when touting Anila’s investment in the project.
Since there isn’t much hope of arguing that this wasn’t simply a $15 million pass-through, perhaps the administration will concede the need to keep such investments completely transparent to the public.
Coupled with the reality that startups — especially high-tech ones — have high failure rates, such financial sleight of hand won’t help win public acceptance of this new financial tool.
Whether the state’s new investment policy will produce windfalls or red ink remains to be seen. But unless New Mexico taxpayers are convinced that these deals are completely above-board, those policies could be short-lived.
