Canoo’s latest deal for up to $7.5 million in cash from the Governor’s Quick Action Closing Fund omits an earlier requirement for the company to purchase a factory in Oklahoma City to collect any of the incentive money. The company had been facing a deadline later this month to purchase the facility or lose out on the incentives. 

The Quick Action money is part of more than $113 million in incentives Canoo is eligible to collect through state tax breaks, economic development incentives and a Cherokee Nation job training program. 

Oklahoma Department of Commerce spokeswoman Becky Samples said Oklahoma’s latest incentive package is only the first round of funding. Once Canoo meets all of the benchmarks in its most recent agreements, future incentives are not out of the question, Samples said.

Canoo has yet to collect any state money, because all of the deals have been contingent on the company hitting hiring and development goals that haven’t been met. 

In 2021, Canoo announced that Oklahoma had pledged incentives valued at $300 million to help build a vehicle production facility at the Mid-America Industrial Park in Pryor and hire 1,500 workers. The state-run industrial park offered incentives including land and infrastructure for the factory. Canoo also said it would develop a tech hub in Tulsa that would create 700 new jobs in the fields of software development, research, customer support and financing. 

In early 2022, Canoo signed deals to receive up to $15 million in cash from the Quick Action Closing fund to help create jobs in Pryor and Tulsa. Canoo’s deal was the largest the state had ever pledged since the Quick Action program was created in 2011.

But Canoo missed a deadline to start construction on the Pryor factory by January 2023, losing out on the opportunity to collect up to $10 million of the Quick Action money. While plans for a Canoo battery factory in Pryor are still moving forward, the larger vehicle manufacturing plant is on hold for now, said David Stewart, chief administrative officer for the Mid-America Industrial Park

Stewart said that the industrial park is still a long-term partner with Canoo, and the 400-acre plot of land that it offered the company during the first incentive package is still available, should it decide to go forward with a vehicle production factory there.

“Basically, the site is still there, we haven’t deeded it or transferred it to anyone,” Stewart said. “And we’re there when Canoo is ready to be supportive and deal with it at that time.”

Canoo’s contract for the other $5 million chunk of Quick Action money to create jobs at the Tulsa tech hub has also been canceled. Chris Moore, vice president of Canoo, said the Tech Hub still remains part of Canoo’s future plans.

In late 2022, Canoo’s shifted its plans to buy an existing factory site owned by the company Terex in Oklahoma City and launch manufacturing there. 

The state made two new Quick Action agreements with Canoo in February, promising a combined $7.5 million to create 1,200 new jobs at the Pryor battery plant and the Oklahoma City factory. There was a catch, however — Canoo would be required to close on the purchase of the Terex facility by Aug. 20.

The Terex property was later purchased by AFV Partners, a separate company owned by Canoo CEO Tony Aquila and leased to Canoo under a 10-year agreement. The lease arrangement helped ease financial strain on the company, Aquila told investors. 

Canoo has yet to turn a profit and has also faced cash shortage as it tries to ramp up production. 

The new Quick Action Closing Fund agreement with Canoo, which overrides the previous ones, offers up to $7.5 million in exchange for creating 1,362 new jobs with an average wage of $60,512 and a capital investment of $321.6 million by Canoo over a period of 10 years. The agreement would provide Canoo with $1 million if it creates 100 jobs this year.

Canoo can also receive up to $40 million from the state’s Quality Jobs Program over a period of 10 years. The deal is subject to the company generating $2.5 million in new gross taxable payroll within three years on jobs that pay at least $40,472 a year and at least 340 full-time jobs with average salary of $60,512.

During Monday’s call with shareholders, Aquila told investors that the company was entering a “new era” after settling charges with the U.S. Securities and Exchange Commission for $1.5 million on Aug. 4 in connection with misleading revenue revenue projections under two former executives. 

The settlement has helped put the company in a stronger financial position moving forward, Aquila said. 

“This has been a significant burden on the company’s time, resources, and the process has taken us 28 months and millions of dollars, which reduced our ability to access the capital markets into higher cost channels during this period because of perceived uncertainty,” Aquila said.

The company currently has $3 billion in orders booked, he said, 70% are from commercial customers. 

Oklahoma awarded Canoo a no-bid contract  in 2022 to purchase up to 1,000 of its electric vehicles over five years. The deal could be worth as much as $35 million to $50 million over the life of the deal, but it’s still unclear how many vehicles state agencies will actually buy. Canoo has yet to start full-scale production. 

Canoo could also be in line to collect millions more in local and federal incentives. 

The company is finalizing an agreement with Oklahoma City for a $1 million incentive from the city’s Strategic Investment Program to help Canoo create 550 jobs. 

The company’s battery production facility in Pryor also could be eligible for around $35 million in federal tax credits annually, said Jacob Whiton, researcher for Good Jobs First, a national policy resource center that promotes corporate and government accountability in economic development.

A breakdown of Canoo’s most-recent $113- million incentive package

• $40 million in Quality Jobs Program payroll incentive payments over 10 years
• $7.5 million from the Governor’s Quick Action Closing Fund
• $28 million from Oklahoma’s Investment/new Jobs tax credit
• $19.7 million from state sales and use tax exemptions on machinery and equipment
• $5.4 million from the state freeport tax exemption
• $7.9 million from sales and use tax exemption on energy used in manufacturing
• $1.9 million from the Oklahoma Training Incentive Program
• $1.7 million from the state’s automotive engineer tax credit
• $663,312 from the Cherokee Nation’s workforce development program 
• A to-be-determined amount from the state’s sales and use tax exemption for goods consumed during manufacturing

The post Canoo could collect up to $110 million in state incentives over the next decade, but three previous Oklahoma deals fell through appeared first on The Frontier.

Russ summoned the leaders of Oklahoma’s state pension funds to discuss implementation of the state’s Energy Discrimination Elimination Act. Oklahoma enacted the law in 2022 to crack-down on Environment, Social, and Governance investing. The practice screens investments for ethical considerations including environmental degradation and corporate leadership. 

State pension fund directors and legal experts have already said they are concerned that millions of dollars in state retirement funds could be lost because of the law’s requirements. 

Oklahoma is one of at least seven states to ban business with financial institutions that allegedly “boycott” the fossil fuel industry. Critics say these practices unfairly punish the fossil fuel industry, which contributes to man-made climate change through the release of carbon dioxide into the atmosphere, heating the earth, ocean and atmosphere.

At the beginning of the meeting, Russ said the meeting was not public. No agenda was posted and no meeting notice filed with the Secretary of State’s Office. Russ asked that all attorneys and journalists leave the meeting room.

“First of all, how many attorneys are in the room? How many practicing attorneys are here representing someone,” Russ asked.

Marc Edwards, who serves as general counsel for three Oklahoma pension funds that serve police officers, firefighters and other law enforcement in the state, was present and raised his hand.

Edwards told Russ he was present on behalf of Duane Michael, executive director of the Oklahoma Law Enforcement Retirement System, who could not attend Tuesday’s meeting. Russ again asked him to leave.

“I hate to tell you, but you’ve got to leave,” Russ said, adding “this is not a public meeting.”

Jordan Harvey, Russ’s chief of staff, said the meeting was only for leaders of state pension systems to help implement the new law. State pension fund heads told The Frontier in May they had reached out to the treasurer’s office for guidance on implementing the law, but received little to no feedback.

“You guys have indicated you would like some direction,” Russ said. “I’m here to help. But we have to have some kind of rules for engagement and guidelines to go by.”

Some of those present pushed back, telling Russ it was important for attorneys to be present since there are many legal issues involved in implementing the law. Russ responded that the attorneys will eventually be brought in to the discussion at a future meeting, but wanted this gathering to be held out of public view so everyone involved could speak candidly.

“We want candid, interactive collaboration,” Russ told the group before asking a Frontier reporter to also leave the room. “We don’t want attorneys who can pick up parts or misquote or anything. Rule number-one was no attorneys in the room.”

Russ said implementing the requirements of the law was new ground for him as well, and many of the state pension system heads have been asking for direction in how to implement the new law.

“We’re just just trying to walk through this together,” Russ said. “I’m trying to collaborate with you guys to help us all be successful as best we can. Based on how this turns out in our discussions, and questions and answers and information that we can provide. It may be clear enough that you guys know what your path is.”

Russ later told The Frontier that the meeting was just to go over how those pension systems could implement the provisions of the Energy Discrimination Elimination Act, and that there will likely be some exceptions allowed once the new list is published.

“They just want to be on the same page, to execute the law and understand how to do that and protect the investors and the taxpayers of Oklahoma and still comply with the law,” Russ said. “I think it’s clear, I think there’ll be some exceptions that we’ll have to make and I think there’s some areas that will be much easier for them to transition to new money managers without causing any loss in the pension portfolios.”

In other states, similar blacklists have been blamed for higher government borrowing costs, and some public pension systems have warned that their retirees could lose tens of millions of dollars each year. Oklahoma pension fund directors have similar worries — that the state’s retirement systems could lose millions if they are forced to pull their money from blacklisted investment managers and end contracts for services with blacklisted banks and other financial firms.

Nearly all of the language in Oklahoma’s Energy Discrimination Act is copied directly from Texas’s law, which was passed in June 2021 and later picked up by the American Legislative Exchange Council, an organization that provides model legislation mostly to conservative state lawmakers to introduce in their legislatures though it was ultimately not adopted by the group’s task forces.

The law requires that state pension systems divest funds invested through firms found to be boycotting the fossil fuel industry — with some exemptions, such as cases where divesting or ending a contract would breach the pension system’s fiduciary duty to pensioners. The law also prohibits any state or local government entity from contracting with firms that end up on the state’s blacklist of boycotting firms.

The Oklahoma State Treasurer also currently uses blacklisted bank JPMorgan Chase & Co. to issue most of the state’s financial disbursements, such as employee payroll and retirement checks. Bank of America, also on the blacklist, contracts with the state for its state debit card system. After Tuesday’s meeting, Russ said no decision has yet been made on whether he will end those relationships with the blacklisted firms.

Early this year, Russ sent questionnaires to numerous investment firms and banks the state’s pension systems do business with asking whether they boycott the fossil fuel industry, as well as questions on specific energy company shareholder votes, environmental group membership.  

Though none of the companies surveyed by Russ said they were  boycotting the fossil fuel industry, Russ presented a list of 13 companies he said were doing so in May, despite some of those companies not qualifying under the law to be placed on the list.

Those companies have 90 days after being notified they are on the blacklist to submit appeals to Russ’s office showing that they have ended their alleged boycotts in order to be taken off the list. For nearly all of the firms on the first list, that deadline comes on Aug. 3.

During the meeting, Russ said he will probably issue a revised list of companies by the end of August, said Chase Rankin, executive director for the Oklahoma Firefighters Pension and Retirement System. That means the firefighters pension will likely take the issue up in September, once the new list is out, he said.

The Firefighters Pension and Retirement System has around $18 million in direct holdings through blacklisted companies, and contracts with the blacklisted State Street Bank for its banking services.

Rankin said it has been more than a decade since the system has requested proposals, and so putting out a request for proposals now is probably prudent, though if State Street does come back with the best offer, the pension system could sign a new contract with the company.

Rankin said he asked during the meeting about exemption reporting — the state pension funds are required to submit a report to the treasurer if they determine it would be a breach of fiduciary duty to divest or end a contract with a blacklisted company. Rankin said he asked what the treasurer wanted in the report.

“I didn’t honestly didn’t get a good answer from that, but I think that I think that there may be some scenarios, and he’s anticipating some scenarios, where the funds may have some exceptions,” Rankin said.

Rankin also said several pension fund directors made clear to the treasurer that he does not have the power to enforce the law. That responsibility, he said, is with the state Attorney General’s Office.

“I think ultimately the Attorney General is going to have to issue some kind of opinion at some point,” Rankin said.

The post Oklahoma treasurer says exemptions for ‘woke’ investment ban likely in closed-door meeting with state retirement fund leaders appeared first on The Frontier.

Enel North America is eying the Tulsa Port of Inola as a potential site for the plant, which would create an estimated 1,500 jobs. 

Oklahoma is the leading candidate to land the facility and Enel is “excited about the possibility to expand our presence in the state,” Giovanni Bertolino, the head of Enel North America’s 3Sun USA solar panel affiliate, told The Frontier in a statement.

Stitt told a group of visitors to the Oklahoma Capitol on Wednesday the state was on “the one-yard line” to land a major economic development deal, but he needs the Legislature on board to make it happen.

“These guys are ready to go,” Stitt told The Frontier after the speech. “Sometimes, as we get close to May, things are kind of tied to other things and I wish it wasn’t like that, but that’s the nature of politics.”

State economic development officials have named efforts to recruit Enel “Project Sirius.”

Senate Pro Tempore Greg Treat said that landing the company would require a smaller, but similar incentive package to a $698-million package the state has offered previous companies. Treat declined to go into further detail about specific amounts or terms of any deal. He said Senate leadership supports the plan and sent Stitt a letter bolstering that sentiment on Wednesday.

The terms of the deal would have to be approved by the Legislature and signed by the governor. The earliest that could happen would be next week.

A disagreement over tax cuts has stalled things. House Speaker Charles McCall, R-Atoka, said the House needs to have tax cuts in order to give Enel incentives, while the Senate does not want to cut taxes.

McCall said the House is ready to help the governor and do what is necessary to land Enel, but he “sees tax cuts or some relief necessary for the people of Oklahoma,” and if the state is going to go along with large incentive packages for big companies they “can’t forget about the everyday taxpayer.”

But Senate leadership has made clear they don’t want to cut taxes this year and want to see the incentives pass on their own.

“We’re not going to agree to any other unrelated bill to get this through,” Treat said. “We are agreeing to get an economic development project landed and do what that takes, but no ancillary issues tied to it.”

Stitt spoke to the House Republican Caucus at a closed-door emergency meeting on Thursday morning to iron out details of incentives for Enel.

The post International clean energy company eyes Oklahoma as lawmakers weigh incentives  appeared first on The Frontier.

But when news broke that Volkswagen picked Canada instead, it marked the third time in less than three years that a major company had passed over Oklahoma.

In 2020, Oklahoma tried to entice the electric vehicle company Tesla to open a factory in Tulsa. But key Tesla executives said they would prefer to live in Austin,Texas. 

Last year, it was Panasonic. Oklahoma tried to lure the Japanese-based company to build a battery plant in Pryor using a nearly $700-million incentive package. But, even this massive amount wasn’t enough to compete with larger incentives offered by Kansas.

Some officials blame a combination of a lack of qualified workers, infrastructure and incentives that haven’t kept pace with other states. Others say Oklahoma’s conservative politics are holding the state back, including a near-total ban on abortion and pending legislation to restrict gender-affirming care. 

A new bipartisan select committee in the Oklahoma state Senate will look to examine some of these root causes. 

“I share a frustration with a lot of my colleagues that we keep being considered for these things, and it’s an honor to be considered, but that honor only goes so far,” said Senate Pro Tempore Greg Treat, R-Oklahoma City, who is creating the committee. “Finishing second place or getting a participation trophy is not good enough.”

The committee will be similar to one created by former Oklahoma City Mayor Ronald Norick in 1992 after United Airlines chose Indianapolis over Oklahoma City for its headquarters. That effort led to Oklahoma City launching the MAPS program, which has funded improvements for schools, sports and entertainment facilities in the city through a series of temporary sales tax increases. 

The Senate committee, made up of 10 Republicans and two Democrats, will meet for the first time Tuesday. Brent Kisling, executive director of the Oklahoma Department of Commerce, will likely be one of the first witnesses. Kisling believes Oklahoma lacks adequate “shovel-ready sites with water, wastewater, electric, gas, fiber and roads,” to attract companies, he said in an emailed response to The Frontier. Oklahoma also needs to invest more into developing its workforce, he said. 

At a hearing on economic development at the Oklahoma Capitol last year, Department of Commerce officials told legislators that local municipalities in the state need to be able to show they have the infrastructure necessary to support 5,000 jobs.

The state Legislature has tried to address some of the problems with a new $250-million fund created in 2022 intended to fuel economic development throughout Oklahoma by improving infrastructure at industrial parks and rural airports. 

But Oklahoma’s workforce problem is a little harder to solve. Some of the companies that have passed on locating in Oklahoma didn’t have faith in the state’s ability to provide enough workers, Kisling said.

While a growing number of people are moving to Oklahoma from other places, the state still needs to add 140,000 new workers on top of projected population growth over the next decade, Jennifer Springer, director of Business Development at the Commerce Department, told lawmakers at the hearing on economic development last year.

“This has always been a problem for Oklahoma. We simply have not had the capacity to produce a workforce sufficient for these industries and firms,” said Keith Gåddie, a longtime political observer and associate dean of the Gibbs College of Architecture at the University of Oklahoma.

Kinnee Tilley, the Vice President of the Oklahoma Manufacturing Alliance, said the organization is creating apprenticeship programs across the state to grow the number of skilled workers.

This will help when companies look at Oklahoma and see there are workers who already have the training, she said. 

“I feel like we’re really investing our time, talent and ability in helping manufacturers grow their pipeline,” Tilley said.

Oklahoma has also lost out to states that have offered more lucrative incentive packages, which can include millions or even billions of dollars in tax breaks and other subsidies. 

Oklahoma has worked to ensure its incentives are performance-based, meaning a company doesn’t receive them until it meets certain performance measures, Kisling said. And while that works for the state’s benefit in protecting its assets, it’s not always the best choice for the company. 

Panasonic was eligible to receive millions of dollars in tax breaks in Kansas before the battery plant was up and running. The company’s incentive package from Kansas would eventually exceed $1 billion, compared to the competing bid of nearly $700 million from Oklahoma.

When Volkswagen chose Ontario over Oklahoma, the company became eligible for billions in incentives from both the United States and Canada. According to the Financial Times, Volkswagen is eligible for up to $10 billion in U.S. incentives under the Inflation Reduction Act that was passed last year. The exact incentive package Canada offered is unknown, but according to Reuters, the country has agreed to help the company secure access to raw minerals needed to make the batteries.

Kisling said in the future, Oklahoma might need to consider offering companies incentives up front to compete with other locations. While it’s not without risks, the upside could be worth it, he said. 

Meanwhile, Democrats in the Legislature say they believe Oklahoma keeps getting passed over because of the state’s conservative social policies. They referenced the Republican-controlled state’s hardline stances against abortion and access to health care for transgender people. 

Rep. Monroe Nichols, D-Tulsa, places some of the blame on State Superintendent Ryan Walters’ attacks on public schools and teachers. 

“​​Anybody who reads the newspaper, as they’re looking into the state and doing their due diligence, what do they see? They see a public education system led by somebody who works every day to dismantle it,” Rep. Monroe Nichols, D-Tulsa, said. “…  I would understand that somebody’s doing their due diligence, we would select elsewhere.”

House Minority Leader Cyndi Munson, D-Oklahoma City, said she believes Oklahoma needs “lawmakers to stop making laws that limit access to healthcare for women and transgender Oklahomans” in order to attract more companies. 

But Republicans and other officials told The Frontier that while these points make good sound bites, they are not based in fact. They pointed to states like Texas, South Carolina and Florida, which are also conservative but still land major companies.

“Our culture matches much more closely with those economic growth states than those that are slowly dying,” Kisling said. 

While social issues might not be the main deciding factor, they can create an “easy out” for companies looking to move here, Gåddie said.

“If you’ve got a global corporation that is concerned about the look of things and actually is concerned about the quality of life all their employees will have, sometimes Oklahoma makes itself tough to sell and that’s a shame,” he said. 

The post Why three major companies have passed on expanding in Oklahoma appeared first on The Frontier.

Oklahoma is in the running for Volkswagen to open a battery plant at the MidAmerica Industrial Park in Pryor, according to multiple sources familiar with Project Connect. 

Dave Stewart, the Chief Administrative Officer for MidAmerica Industrial Park, Gov. Kevin Stitt’s office and the Oklahoma Department of Commerce each declined to comment. 

Oklahoma is in competition with Canada for the battery plant. Canada has already signed a non-binding Memorandum of Understanding with Volkswagen to identify “suitable sites for a cell factory” and an amendment to the memorandum “to secure raw materials” in the country, Volkswagen Vice-President of Communications Cameron Batten told The Frontier on Tuesday. Batten did not comment on Oklahoma’s plans.

According to Reuters, Volkswagen CEO Oliver Blume and Canadian industry minister Francois-Philippe Champagne signed the Memorandum of Understanding in August of 2022.

Stitt told reporters Friday that Project Connect would qualify for the Large-scale Economic Activity and Development Act, also known as the LEAD Act. However, he wouldn’t give any more details about the project. Those involved in the talks are under non-disclosure agreements.

“We should know by April, but it’s a really big economic development project that we’re looking at in the eastern part of the state,” Stitt said. “It’s just another project on the same lines as Project Ocean and it’s just another group that’s looking for that site.”

The LEAD Act was created by lawmakers in 2022 and is a $698 million fund meant to provide economic development incentives to a major manufacturer that would invest at least $3.6 billion and create 4,000 new jobs in the state within five years.

Project Ocean was the codename for Panasonic when it was considering opening a battery plant in Oklahoma. The Japanese-based company ultimately chose Kansas as its location to open the plant. Last year The Wall Street Journal reported Panasonic was still considering Oklahoma as a possible site to open another battery plant.

Stitt told reporters whoever comes to the table first will likely get the incentives.

“So we’re just saying, ‘Hey, first come, first serve,’ we want the best for Oklahoma,” he said.

The post Sources: Oklahoma trying to lure Volkswagen to MidAmerica Industrial Park appeared first on The Frontier.

The Oklahoma City-based restaurant company billed the Oklahoma Tourism and Recreation Department $12,433 for a vintage 1956 camper to display at the Sequoyah State Park restaurant near Hulbert. Another $119,440 went to build an elaborate fake mine shaft and cover other construction costs at Robbers Cave State Park near Wilburton. 

Foggy Bottom also charged the Tourism Department $48,000 to paint murals and build a faux cave entryway at the Robbers Cave restaurant and raised a 12-foot tall illuminated sign bearing the Swadley’s name. The restaurant company commissioned features like a waterfall and a lazy river at some of the restaurants. Decorative upside-down canoes hung from dining room rafters.  

Cost for the Foggy Bottom restaurants soon ballooned to $16.7 million, as the state paid the company management fees, covered its financial losses, and reimbursed for construction expenses and kitchen equipment, according to a report from the Oklahoma Legislative Office of Fiscal Transparency.

Foggy Bottom also charged extra fees on top of some expenses it billed to the state, according to invoices the Tourism Department provided to The Frontier. 

The Frontier found $546,890 in additional management and consulting fees that Swadley’s Foggy Bottom charged the Tourism Department on invoices for equipment and renovation costs between May and August 2021. 

Those fees were in addition to monthly restaurant management fees outlined in the Swadley’s Foggy Bottom Kitchen contract with the Tourism Department. The contract authorized the company to oversee restaurant renovations, purchase equipment and hire subcontractors at the state’s expense but make no mention of these additional fees. 

Beginning in mid-2021, many invoices show that Foggy Bottom charged the Tourism Department consulting and management fees ranging from 5% to 20% on top of some construction and equipment expenses. On some invoices, the restaurant company billed the state for both a management and a consulting fee for up to a 30% markup. 

Foggy Bottom restaurants owner Brent Swadley declined to answer written questions from The Frontier about fees and other expenses the company billed to the Tourism Department. Swadley directed all questions to his attorney, who did not return a phone call to his office on Thursday. 

On Wednesday, Swadley told the news outlet NonDoc “That’s just standard stuff. We charge for our services.”

David White, a spokesman for the Tourism Department, said the agency couldn’t answer The Frontier’s questions about Foggy Bottom’s billing practices or the terms of the company’s contract with the state because of “ongoing internal and external investigations.” 

The Tourism Department has invested in updating the state parks system over the past two years after “decades of deferred maintenance due to underfunding,” White said in an email. 

“We respect the Legislature’s important agency oversight role and look forward to working together to continue improving the state park system,” he wrote. 

Some of the invoices from Foggy Bottom submitted to the state also didn’t include detailed product descriptions or model numbers for kitchen equipment the company purchased for restaurants. For invoices that did include more detailed information, The Frontier was able to find some items priced for significantly less. 

In August 2021, Foggy Bottom billed the Tourism Department for two barbecue smoker pits from the Oklahoma City-based company Quality Food Equipment, priced at $51,346 each. The Frontier found the same model of smoker at another restaurant supply company priced at $29,570. The Frontier also reached out to the Missouri-based manufacturer of the smoker, Ole Hickory Pits. A representative said the same model of a smoker costs $22,700 ordered directly from the manufacturer, plus shipping costs. 

Quality Food Equipment owner Mike McWhorter declined to comment.

Foggy Bottom Kitchen billed the Department of Tourism $107,442 for the two smokers and other related equipment and installation, plus a 15% management fee of $16,116. 

The Tourism Department stopped paying Foggy Bottom’s invoices after August 2021 and is now conducting an internal audit of items the restaurant company billed to the agency. 

Tourism officials told a legislative oversight committee in March that teams are visiting each Foggy Bottom restaurant to audit all of the equipment the company purchased.

Lt. Gov. Matt Pinnell, who acts as the state’s Secretary of Tourism, declined to comment through a spokesperson.

Lawmakers have questioned some of the Foggy Bottom project costs, and a criminal investigation is also now underway. 

At the oversight hearing, Rep. Ryan Martinez, R-Edmond, asked how Foggy Bottom selected subcontractors and vendors and whether the Tourism Department verified costs before it paid invoices. He also questioned the terms of the restaurant company’s contract with the Tourism Department. The agency agreed to cover $2.1 million of Foggy Bottom’s financial losses for the 2021 fiscal year.

“​​This is a pretty sweetheart deal. if I can operate a business and be guaranteed that my losses would be covered, that’s pretty tempting,” Martinez said. 

Other lawmakers asked how such a contract ever got signed.

Jerry Winchester, executive director of the Tourism Department, told lawmakers at the hearing that he approved the Foggy Bottom contract and that he and agency staff reviewed the scope of renovations at state park restaurants. 

The Oklahoma Tourism and Recreation Commission once had the authority to approve contracts, but legislation that Rep. Mark Lepak, R-Claremore, sponsored in 2018 stripped the board’s powers.  

Lepak sponsored the legislation as part of an effort to take decision-making authority away from disparate state boards and consolidate power under agency leaders appointed by the governor. Then-Gov. Mary Fallin signed the bill near the end of her second term.

Sen. Julia Kirt, D-Oklahoma City, believes the shift in power has led to less transparency and oversight of government spending.

“We have to create an environment that leads to accountability and open information,” she said. “So if there is a fundamental problem with something not seeming appropriate for public funds, to me that is a problem with our systems.” 

But Lepak believes if any wrongdoing has occurred in the Foggy Bottom affair, the people in charge of the agency bear responsibility, he said in an interview with The Frontier. 

“If there really truly is some kind of misdeed that has occurred, that’s about people, not process,” he said. 

After the legislative oversight hearing, a spokeswoman for the Oklahoma State Bureau of Investigation said the agency was looking into “allegations of potential criminal conduct between the state of Oklahoma and Swadley’s.” That investigation is still open and ongoing, an OSBI official said this week. 

Rep. Jim Grego, R-Wilburton, vice chairman of the House Tourism Committee, said he hopes the criminal investigation won’t damage people’s faith in state government and hurt the image of state parks. Tourism is one of rural Oklahoma’s most vital emerging industries, he said. 

“As oil and gas leave and agriculture is moving to bigger operations in other parts of the country, we still have a lot to offer in the area of tourism,” Grego said. “I don’t think it will deter people from coming to see what we have.”

The post Swadley’s Foggy Bottom Kitchen sometimes charged extra fees as part of a costly restaurant overhaul at state parks appeared first on The Frontier.

While Canoo is a startup that has yet to bring its electric vehicles to market, Canoo CEO Tony Aquila said he believes Oklahoma’s gamble on the company will ultimately pay off. 

“There’s risk in every venture you have,” Aquila said. “And when you’re innovating, there’s more risk. But that’s also where the big rewards are huge.”  

Aquila spoke to The Frontier during a March visit to MidAmerica Industrial Park in Pryor where the company displayed models of its electric vehicles to the public. 

Canoo is now building electric vehicles for final pre-market testing with a contractor in Michigan in order to ramp up production by the end of the year in Arkansas. The company initially said it would have its Pryor factory opened by the end of 2023, but it now could be 2024 before the facility comes online. Canoo first plans to begin production at a factory in Bentonville, Arkansas this year.  

Oklahoma officials waived competitive bidding requirements to award Canoo a five-year contract for state agencies to purchase up to 1,000 vehicles. Aquila believes Canoo will save the state money over time in gas and maintenance costs but admits that some of the vehicles the state could purchase won’t be made in Oklahoma. 

“Most likely, we’ll give them some of the vehicles out of Northwest Arkansas, but not a lot,” Aquila said.  

Inflation has increased the cost of building materials, contributing to pushing back an opening date for the Pryor factory, Aquila said. 

While the company is still clearing land for the Pryor plant, a development agreement with the state-run MidAmerica Industrial Park also hasn’t been finalized. The deal could include up to 400 acres of land for the factory valued at $16 million, according to an incentive package the park has offered Canoo. 

Oklahoma and Arkansas each courted Canoo, engaging in an incentive bidding war to win jobs in the rapidly expanding electric vehicle industry. The company eventually announced it would build its corporate headquarters and a factory over the state line in Bentonville as well as a technology and software development hub in Tulsa.

Flush with federal pandemic relief money, many states are offering big incentive deals to attract investment and new jobs in the electric vehicle industry, said Greg LeRoy, executive director of the economic development watchdog group Good Jobs First. In March, Michigan lawmakers approved $666.1 million in incentives for General Motors electric vehicle projects. Georgia is considering giving electric truck startup Rivian state incentives worth as much as $125 million, on top of millions more in local tax breaks the company could reap. Kansas and Oklahoma are rumored to be in an incentive bidding war to win a Panasonic battery plant that will supply Tesla and other EV manufacturers. 

“One of the problems is that some of the entrants to the market like Canoo are just unproven,” LeRoy said. “Rushing into this market, it’s hard to see them all succeeding.” 

Aquila said the decision to spread operations over three sites in two states was based on the company’s infrastructure needs as well as the challenges of finding enough people to fill thousands of manufacturing, tech and engineering jobs. Incentives have also played a role.  Arkansas and Oklahoma have offered Canoo a combined $400 million. 

“Oklahoma by itself couldn’t win. Arkansas by itself couldn’t win,” Aquila said. 

At the event in Pryor, Canoo exhibited an electric van the company is marketing as a “lifestyle vehicle” surrounded by an array of high-end camping equipment. Another vehicle wrapped in the Oklahoma state logo and the slogan “Made in native America ” was also on display. A sculptor carved a model of a Canoo sedan out of automotive clay for onlookers. 

The exhibition attracted electric vehicle enthusiasts and Canoo investors from as far away as Denver. 

Investor Timur Safin made the 150-mile drive from Oklahoma City to Pryor to see the Canoo vehicles. He said he likes the company’s vision and is encouraged by a federal contract Canoo recently won to build crew transport vehicles for NASA. The contract is only valued at $147,855 but is a big win for the company’s name recognition and credibility. 

The large incentives Oklahoma has offered Canoo don’t bother Safin.

“Oklahoma is not known as a technologically advanced place, so they have to incentivize other companies to come and manufacture products here,” he said. 

Some observers have said Canoo isn’t on track to meet its production goal of 3,000 to 6,000 vehicles this year and is burning through cash in the meantime. Canoo reported in February that it had about $225 million in cash at the end of 2021 and expected to spend $155 million to $195 million in operational and capital expenses during the first quarter of this year. 

“They’re either gonna go manufacture the vehicle or they’re gonna run out of money,” Safin said. 

As first reported by The Frontier, the state has agreed to give Canoo up to $15 million in cash incentives over the next four years, including $10 million to help it build the Pryor factory if the company meets hiring targets and other goals.

Canoo will be able to collect $3 million of that money after it spends at least $48 million and completes 10% of construction on the Pryor plant. The company says Oklahoma has pledged a total package of incentives valued at $300 million to bring new jobs to the state, but many details have been subject to a confidentiality agreement.

The state has yet to pay Canoo any incentive money, the Oklahoma Department of Commerce said this week. 

A Canoo spokeswoman said the company is training more than 100 people for manufacturing jobs and will continue to ramp up hiring workers in Bentonville and Pryor through the end of the year. 

The Cherokee Nation is helping the company recruit workers with job fairs and training.

“The goal is to get as many Cherokee citizens as possible into sustainable manufacturing jobs with a great company, such as Canoo,” Cherokee Nation Principal Chief Chuck Hoskin Jr. said in an emailed statement. 

Correction: An earlier version of this story misstated the date that Canoo expects to begin production at a factory in Arkansas. The company expects to begin production this year, not next year.

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House Bill 1602 would have required companies to disclose what specific information they are collecting from Oklahomans and how they use it for financial gain. It would also have given Oklahomans the opportunity to request that their personal information be permanently deleted.

But the part of HB 1602 that has drawn the most attention is a component that would have required consumers to opt-in before tech companies collected most of their personal information. 

Rep. Collin Walke, D-Oklahoma City, the bill’s author, said he tried to negotiate a compromise with opponents to cut most of the language of the proposal,  except for the opt-in part.

“They said no,” he said.

The “they” Walke referred to are a slew of tech and communication giants, including AT&T and Cox Communications, who he said lobbied hard against the bill. 

The bill passed the House this month with a bipartisan 85 to 11 vote. 

But Walke said Sen. John Michael Montgomery, R-Lawton, the bill’s co-author, informed him the legislation won’t be heard by Sen. Julie Daniels, the chair of the judiciary committee. 

Daniels, R-Bartlesville, did not return a message seeking comment. 

“It is a shame that someone who has never practiced law and has managed to make her way to the chair of the judiciary just killed a bill that protects women who are rape survivors and children who are being exploited, all to protect big tech,” Walke told The Frontier. 

In an interview with The Frontier earlier this month, Montgomery, the bill’s Senate author, said he wasn’t sure the large support found in the House indicated a smooth path in the Senate. 

“I think the dynamics are a little different over here in the Senate,” Montgomery said. “For the House’s perspective, they have a little more familiarity with the issue because they had an internal study on it last year.”

Most tech companies, including Cox Communications and Facebook, declined to comment on the legislation but AT&T told The Frontier it wanted to work with the bill’s authors to make some changes. 

“AT&T believes fundamentally in the privacy rights of our customers,” said Sammie Valentino, area manager of public affairs for AT&T. “HB 1602, while well-intentioned, will have unintended consequences that we do not think are good for Oklahomans. We look forward to working with legislators to ensure intent matches outcome.”

A person’s online habits are a lucrative tool many online companies use to sell targeted advertising and promote their own products. 

HB 1602 would require a company to first receive permission from an Oklahoma resident before collecting personal information like an address, date of birth, phone number, email address, search history, and other personally identifying information and then selling it. 

Consumers would also be able to request specifics about how their personal information is being used, which is similar to new laws passed in the European Union. 

Just two other states – California and Virginia – have passed comprehensive data privacy protection laws, but Oklahoma’s law would have been unique because of the opt-in requirement, rather than an opt-out. 

“An opt-in requirement is the holy grail,” Walke said. “That’s the only way to stop what’s going on because we know most people won’t take the time to opt-out. But most would probably decline to opt-in.” 

Walke said a recent data privacy bill passed by lawmakers in Virginia may have hurt his effort as that bill was considered much more friendly towards tech companies. 

“This bill has some important privacy provisions, but consumers need more practical options for controlling their data,” said Maureen Mahoney, senior policy analyst for Consumer Reports, addressing Virginia’s new law. 

Walke said he plans to focus on data privacy again next year. 

“Every bill I file next year is going to be focused on data privacy protection,” Walke said. “This isn’t going away.”

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Overall, about $100 million in recurring, dedicated education funding could be eliminated over the next several years if the tax plans become law, according to figures from the state’s Office of Management and Enterprise Services.

Oklahoma’s House of Representatives approved plans on March 11 to completely phase out the state’s corporate income tax over five years and lower the personal income tax for all income levels. 

The corporate income tax generates over $350 million a year on average for the state, and the personal income tax is slated to bring in well over $3 billion for the next fiscal year. 

House Bill 2083 would allow deductions to be used over the next five years to reduce the corporate income tax rate by 20 percent a year until it is phased out in 2026. House Bill 2041 would reduce individual income tax rates by a quarter of a percent through credits.

The plans would cut into funding state lawmakers dedicated to education in a landmark piece of legislation to end a teacher strike in 1990. The reforms created a dedicated pool of money intended to better fund schools in the state. 

Appropriations for the Education Reform Revolving Fund, also known as the 1017 fund, topped $1 billion for the 2021 fiscal year that started last July. 

Corporate income taxes are projected to contribute nearly $60 million to the 1017 fund by the end of the fiscal year, or about 5 percent of the funding. That funding stream would completely end if the tax is eventually phased out.

Personal income taxes are estimated to contribute over $340 million to the 1017 fund next year. If income taxes are lowered, the fund could take another nearly $16 million hit by 2023. 

And the Teacher’s Retirement Fund stands to lose an estimated $24 million a year if corporate income taxes are phased out and personal income taxes are reduced, according to data provided by OMES. 

The bills are a Republican-backed strategy to recruit more businesses to Oklahoma and broaden the state’s taxpayer base, said House Speaker Charles McCall, R-Atoka, who wrote the bills. McCall believes the tax relief will generate enough new revenue to keep education funding whole.

McCall included language in House Bill 2083, the corporate income tax bill, saying the Legislature intends to put together a system that would “ensure” education revenues are not “adversely affected,” but there currently is no concrete plan for shoring up the funding. 

“I will not allow that fund to go backwards as a result of this bill if it passes,” McCall said in an interview with The Frontier. “Education is a priority, and we want to continue to make strides.” 

Senate Pro Tem Greg Treat, R-OKC, said he hadn’t looked through the bill yet, but echoed that he would not allow education funding to decline because of tax restructuring. 

But without detailed plans already crafted, Oklahoma Education Association President Alicia Priest said it is “irresponsible” to cut education funding. 

Priest pointed to data from the National Education Association that currently puts Oklahoma schools 49th nationally in per pupil spending. 

“If we’re trying to attract new business, how well we invest in public education will be a deciding factor,” she said.

Senate Minority Leader Kay Floyd, D-OKC, would also like to see detailed plans before voting on the measure. 

“We need to see the plan and see exactly how this is going to work in real time, not just commitments and promises,” she said.

When asked if there were any concerns, a Department of Education spokeswoman pointed back to the promise of protecting education funding in the bill and didn’t provide further comment.

McCall said he sees two ways to address the education funding: Lawmakers can increase the general appropriations they make to the state’s Education Department every year, or they could find another tax stream — he mentioned redirecting a portion of existing sales tax revenue — and dedicate it to education. 

“At the end of the day, we are not going to let education erode,” he said. 

McCall’s bills, if approved, will be an eventual decline of over $500 million in existing yearly revenue that lawmakers hope will be restored through economic growth. 

This move comes three years after lawmakers raised taxes on oil and gas production, cigarettes and fuel to afford roughly $531 million in teacher pay raises and other educational expenses following the state’s historic teacher walkouts in 2018. 

Still, lawmakers supporting the bills say the timing is right. 

As the pandemic begins to wane and the economy starts to ramp up, businesses may be looking to relocate, lawmakers say. Oklahoma’s officials want to capitalize on that opportunity. And the state’s economy is already doing better than most, allowing lawmakers a $1 billion budget surplus this year. 

Plus, they say, the corporate income tax is a volatile, unreliable revenue stream. It’s a 6 percent tax that accounts for roughly 4 percent of the state’s general revenue. The $350 million a year on average in taxes that it brings in has been called “insignificant” compared to the state’s $9.6 billion budget. 

Democratic lawmakers and some policy analysts say the move is over-hopeful and hasn’t been vetted thoroughly in the public discourse. 

And Sen. Floyd said she doesn’t view over $350 million as insignificant when lawmakers are still sorting through the COVID-19 pandemic and trying to fund Medicaid expansion mandated by voters, which has a $160-million price tag many conservative lawmakers have balked at. 

Paul Shinn, a budget and tax analyst with the left-leaning think tank Oklahoma Policy Institute, believes phasing out the corporate income tax will probably not increase the state’s revenue.

The state’s budget is doing well now, Shinn said, but he attributes that to one-time savings and billions of dollars in COVID-19 relief from the federal government, such as unemployment benefits, stimulus checks and direct payments to the state. 

“The economy is on what can only be called a sugar high,” Shinn said. “Without those things, we’d be in a much different position and you’d never even have a discussion about whether you’re cutting revenues.” 

In a speech on the House floor to garner support for the plan, McCall said the cuts would grow Oklahoma’s economy and new revenues would “exceed any loss, without doubt.” 

McCall said businesses are leaving the state or passing over Oklahoma to go to places like Texas, where there is no corporate income tax. He also added that when Oklahoma has cut personal income taxes in the past, those revenue streams have eventually grown.

“I think what we all agree on is that we want there to be funding for core services. And I think these bills will provide that path,” he said. 

Data and studies, some from the libertarian think-tank the Cato Institute and the Tax Foundation, provided by McCall’s office point to years-long trends of businesses and individuals moving to low-tax states, which has been amplified by the pandemic and the option of remote working.

But the studies also noted that taxes are only one of many factors — one usually considered by those with wealth — that entice businesses or people to move, an argument that Democrats made while debating the bill on the House floor. 

“The most recent major economic development attempt that we tried to get, Tesla, do you not remember the reason why they chose not to be here?” asked Rep. Meloyde Blancett, D-Tulsa. “It wasn’t a tax issue for them. It was they polled their engineers, and their engineers simply did not want to live here.” 

McCall said he fully believes the corporate income tax is what keeps the economy from growing and that increasing the amount of disposable income individuals have is what will increase quality of life. 

While Democrats voted against the corporate income tax bill, there was bipartisan support for lowering the personal income tax. This is mainly because the Earned Income Tax Credit will be restored, a longtime Democratic priority in the state. 

If corporate incomes taxes are phased out, next year the state would have over $30 million less to appropriate. In 2023, it would have $100 million less to appropriate, according to a House press release. 

If personal income taxes are lowered, the state would have roughly $70 million less next year and $180 million less in 2023. 

“We have taken this hopeful approach before,” Shinn said, pointing to the tax cuts that preceded and, he says, eventually led to the teacher walkouts. “I feel like I’ve seen this movie before. And I don’t like the ending.” 

House Appropriations and Budget Chairman Kevin Wallace, R-Wellston, noted that the legislation, since it uses deductions rather than tax cuts, will allow future lawmakers to stop or pause the changes by a simple majority vote rather than the super majority that is usually necessary to raise taxes. 

“If it doesn’t work out, 51 votes can stop it,” Wallace told fellow lawmakers. 

The post Republican tax cut plans could eliminate $100 million in Oklahoma education funding appeared first on The Frontier.

Documents show that many of the price increases in early and mid-February  — especially spikes in natural gas prices brought partly by supply issues created by frozen natural gas infrastructure, increased demand by customers and utility companies and major failures in the Texas power system — sent several utilities that serve Oklahoma scrambling to find funds and open new lines of credit to pay for the increased fuel and electrical costs, most of which begin coming due by the end of March.

Some reports indicate that in some areas during the height of the winter storm, natural gas, which usually sells for between $2 and $3 per dekatherm, was selling for as high as $1,000 per dekatherm.

Natural gas is the largest fuel source for power generated in Oklahoma, producing nearly half of all electricity generated.

While customers may see an increased bill for February, officials said, it will most likely be because of increased usage. The earliest officials expect a reflection of the increased natural gas prices would likely be in April, based on how natural gas purchases from suppliers are billed to utility companies.

The two largest electrical utilities in Oklahoma — OG&E, which serves 858,000 customers in Oklahoma, and Public Service Company of Oklahoma (PSO), a division of Ohio-based American Electric Power and serves 557,000 customers in the state — both submitted applications to the Oklahoma Corporation Commission this week with plans to spread their costs to purchase fuel and electricity from other sources over several years, so that customers aren’t hit with large bills at one time.

Meanwhile, some of the state’s gas utility companies — Oklahoma Natural Gas, a division of Tulsa-based ONE Gas that serves 884,000 customers in the state, CenterPoint Energy, which covers tens of thousands of customers in western and southeastern Oklahoma, and Arkansas Oklahoma Gas Company, which provides gas distribution to around 13,000 customers in eastern Oklahoma, to — also filed emergency applications with the commission requesting it to waive rules that require customers pay full pass-through costs of natural gas and defer other costs in billing.

Though OG&E’s and PSO’s applications have yet to be scheduled before the Corporation Commission, which must approve any plans to change how customers are billed as a result of fuel price increases, Oklahoma Natural Gas’s plan is scheduled to be heard by the commission on Tuesday morning.

In Texas, which has less regulation on utility prices than Oklahoma, some customers have filed lawsuits over massive electricity bills that resulted from the cold snap.

Brian Alford, spokesman for OG&E said the company’s filing with the Corporation Commission will seek to spread the additional costs incurred by the company for fuel and electical purchases out over the course of 10 years.

OG&E spent nearly $1 billion on fuel and electricity purchases over the winter weather event, Alford said, and the company is hoping to keep the increase to customers’ monthly bills to a less-than-10 percent increase.

“Had we followed our typical fuel cost recovery methodology, the impact to customers’ bills would have been extraordinary,” Alford said. “That would have put an undue burden on our customers. When we looked, a 10-year time horizon seemed appropriate.”

Earlier this week, Oklahoma Attorney General Mike Hunter requested that utilities suspend automatic bill payments for customers and said his office was looking into the earlier price spikes on the natural gas markets that sent utilities costs skyrocketing, citing possible evidence of market manipulation and violations of the state’s price-gouging law.

Stan Whiteford, spokesman for Public Service Company of Oklahoma, said that’s one reason the company’s actual final costs coming out of the winter storm has yet to be determined.

“We have heard from different public officials who are looking into those prices, and whether or not something may be done about that may factor into what those final costs actually are,” Whiteford said.

Though the exact numbers are not finalized yet, Whiteford said, PSO’s plan will likely look similar to OG&E’s.

So far, preliminary cost estimates by utility companies for the month of February exceed costs for entire previous years.

Between Feb. 9 and Feb. 20, PSO spent $175 million on natural gas expenses and $650 million on electricity purchases from other entities, for an estimated total of $825 million, according to a filing this week by PSO’s parent company American Electric Power with the Securities Exchange Commission. The filing states that another of AEP’s companies, Southwestern Electric Power Company, which serves parts of Arkansas, Texas and Louisiana, incurred fuel costs of $375 million.

“Given the significance of these costs, PSO and SWEPCo expect regulators to perform a heightened review of the costs,” the SEC filing states. “Management believes these costs are probable of future recovery. However, the recovery of these costs from customers may be extended over longer than usual time periods to mitigate the impact on customer bills.”

In an SEC filing this week by OG&E, the utility said it has secured a $1 billion delayed draw term loan from Wells Fargo, in addition to short term financing, to cover the costs from the winter storm, which come due in late March.

While the company hopes to eventually recover its fuel and purchased power costs from most customers, it may not be able to do so from the 58,000 customers who signed up for flat billing — where utility bill prices are averaged out over the year, the SEC filing states.

Meanwhile, Oklahoma Natural Gas also issued a statement saying it hopes to spread the cost out over several months.

In a Securities Exchange Commission filing this week, ONE Gas, Oklahoma Natural Gas company’s parent company, states it was faced with a limited supply of natural gas thanks to increased customer demand, increased demand to fuel electrical generation and freeze-offs of wellheads, pipelines and processing plants, and had to purchase gas through the spot and daily index markets.

The result — the company’s gas costs in Kansas, Oklahoma and Texas for the month of February alone was between an estimated $1.5 billion and $2.2 billion, according to ONG’s filings. For the entire year of 2019, the company’s costs for natural gas supply was only $306 million.

To get the required funds to pay for the purchases, payment for which are due at the end of March, ONE Gas procured a $2.5 billion unsecured term loan from Bank of America, N.A., according to ONE Gas’s SEC filing.

In its filing with the state’s Corporation Commission Oklahoma Natural Gas estimates that, if not approved by the commission, gas prices for customers beginning during the first billing cycle in April, could require payments of $95 to $100 per dekatherm. Usually, gas sells on the market for between $2 and $3 per dekatherm.

“At this level customers may not have the ability to pay, resulting in possible loss of service and bad debt,” Cory Slaughter, director of Oklahoma Natural Gas’s rates and regulatory division, wrote in an affidavit submitted to the commission.

ONG proposed an alternative regulatory mechanism that would defer the costs it paid for escalated spot and daily index natural gas prices, costs pertaining to emergency supplies of liquified and compressed natural gas that was temporarily used to reinforce and maintain line pressure in operationally distressed or isolated locations, pipeline maintenance, outage response costs, carrying costs related to financing used to pay for the deferred costs related to the weather emergency.

The Kansas Corporation Commission and the Texas Railroad Commission have both issued similar relief, ONG’s filing states.

CenterPoint Energy’s filing with the Oklahoma Corporation Commission also requests regulatory relief so that the company can spread the cost out over an extended period of time.

“The company incurred extraordinary costs and will incur carrying charges for these emergency measures,” the filing states. “Absent regulatory intervention, those costs will adversely affect customers’ monthly utility bills.”

In an SEC filing this week, CenterPoint Energy estimated its fuel and power purchase costs for February exceeded expectations by $2.3 billion.

The post Utility companies to spread winter weather costs to customers out over years, as expenses run in the billions appeared first on The Frontier.