Company execs defend office closings, tax breaks
State Senator Mark Montigny grilled key executives from Fidelity Investments and Evergreen Solar Inc. at an oversight hearing today about their recent decision to move hundreds of jobs out of the state, despite receiving tens of millions of state tax breaks.
But Montigny didn't get the answers he was hoping for.
At the hearing on Beacon Hill, Fidelity President Ronald O'Hanley declined to say exactly how much the Boston financial services giant benefited from a tax change in 1996 for the mutual fund industry. The Department of Revenue estimates the mutual fund industry has saved roughly $1.7 billion since the law was changed 15 years ago, including an estimated $142 million this tax year alone
"We honestly don't calculate our taxes in a way other than the way we were asked to," O'Hanley told the Senate Post Audit and Oversight Committee, which Montigny chairs.
Meanwhile, Evergreen Solar Chief Executive Michael El-Hillow rejected Montigny's demand that the company return "every penny" it of the aid it received from the state to help build a new factory in Devens. The company shut down the solar manufacturing plant earlier this month, eliminating more than 800 jobs, despite receiving $58 million in grants, tax breaks and other aid from the state government.
El-Hillow noted that only about $21 million of the aid was in cash. And he said he believed the company complied with 85 percent to 90 percent of the agreement, creating far more jobs than it promised before it was forced to shut down the plant this month.
Evergreen has previously said it believes it will likely have to pay back $3 million to $4 million of the cash grants, similar to an estimate by state officials. And yesterday El-Hillow gave no signs that he was willing to agree pay more than that -- even if it is able to sell the plant.
When Montigny asked El-Hillow if Evergreen would return all the money it received, El-Hillow said "no."
“Our intention is to honor the agreement,” El-Hillow said.
The hearing came just weeks after Fidelity announced plans to close its Marlborough facility and move most of the 1,100 jobs there out of state by the end of 2012. Governor Deval Patrick and other state political leaders complained they were blindsided by the announcement.