The cost of getting a public loan When a company gets public assist, taxpayers have a right to know.

October 20, 1995

WHEN CARROLL TAXPAYERS guarantee a loan of $1.2 million, they have a right to know more than just the name of the borrower. County officials owe the people -- who will be stuck with the bill should this business fail -- a lot more information than they have released so far on the deal to locate Unigen Pharmaceutical Inc. in Westminster's Airport Business Park.

When Jack Lyburn, the county's economic development director, complied with the wishes of Unigen, a start-up biotechnology company, and refused to divulge much beyond the company's name and the number of prospective employees, he mistook his role in the county. His job is not to represent the interests of Unigen stockholders, but those of Carroll County taxpayers -- his employer. Denying them information is a dereliction of duty.

Admittedly, publicity about economic development deals can be problematic -- although the impact of premature disclosure of these deals is often exaggerated. Most businesses that stand to gain in revenue and profits would not abandon deals because word leaks out before they are ready to make an announcement. Nevertheless, negotiating the size and terms of public loans, loan guarantees and land sales need not be conducted in public.

However, once the terms are hammered out and money from the public treasury has been turned over to a private enterprise or loans secured by public guarantees, taxpayers -- who are now the creditors and guarantors and, in some cases, partners -- have the right to know a great deal of information about these companies. Who are they? What business experience do they have? How do they plan to repay the loan? What collateral has been offered? These are but a few of the legitimate questions that must be answered.

If the Unigen executives had reservations about divulging this type of information, they should not have asked for public money. Full disclosure is the price of borrowing money from the taxpayers. Had this company issued stock to the public, it would have had to file a prospectus with even more detailed information about every aspect of its business, current officers and directors, business plan and possible financial pitfalls.

Carroll's taxpayers deserve similar treatment.

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