New Revelations Rock(er) Project Blue Credibility
By Paul Gable
New revelations this week about Covation LLC COO David Rocker’s criminal past brought further questions to the viability of the Myrtle Beach Regional Economic Development Corporation’s now infamous “Project Blue.”
The expose by Charles Perry and Michael Smith, on Waccamaw Publishers’ myhorrynews.com website, quotes from court records. Among other revelations, Rocker failed to file income tax returns for 14 consecutive years while participating in a Klein conspiracy to interfere with the lawful government functions of the IRS. (Link to the story below)
This new information comes to light as the EDC is lobbying for third reading approval, by county council, of an ordinance that would approve the issuance of $8 million in county general obligation debt as part of an estimated overall $24 million incentive package to lure the project to the county.
New revelations often spur new investigations. Rocker’s legal problems do not seem to be the only thing that does not hold up to increased scrutiny.
Council has been told by the EDC that Horry County is in competition with Rome, Ga. for the Covation business and that no actual contract has been signed for either location.
Reportedly, AT&T, the Fortune 100 company Covation is looking to contract with for call center services, was more interested in the Rome, Ga. site. But, Covation was more interested in Horry County because the EDC and the county were offering considerably more in incentives for Covation to locate here.
Reportedly, the county is providing upfront money of $1.25 million to get the company up and running. Santee Cooper will provide a grant, applied for by the county, of an additional $550,000 for total upfront cash of $1.8 million.
The land and building will be provided by the developer with the county guaranteeing it will purchase the land and facility for $7 million plus approximately $1 million in additional costs, after five years, if the call center is no longer in operation. The state will vote in December on a $750,000 grant that will go directly to the developer, if approved, to help offset the cost of construction.
However, recent research on the internet appears to take Rome out of the equation of possible locations.
A May 2012 story in the Rome (Ga) News and Tribune announced Covation was close to locking in plans to open an approximately 300 person call center by July 1, 2012. Interestingly, the article called Covation a California based company. (A link to the article is listed at the end of this article.)
A recent Extract from Rome, Ga. headlines: http://www.hometownheadlines.com/ refers to recent stories on Covation COO David Rocker’s legal problems. It further states that the proposed call center site in Rome is now for sale and nothing came from the earlier announcement. The extract is quoted below:
“Call center company that looked at Rome site under scrutiny
“-Television station WMBF of Myrtle Beach, S.C., reports that an executive with Georgia-based Covation reportedly has hid his earning from the IRS. According to the NBC affiliate: Covation “could bring more than 1,000 new jobs to Horry County. But those jobs could be in jeopardy, as county officials consider some troubling new information about one of Covation’s top executives. Court documents show Covation Chief Operating Officer David Rocker didn’t pay taxes for a span of 14 years, and purposely hid his earnings from the IRS.”
“-Local impact: Covation was in talks to bring between 250 and 300 call center jobs to the former Dell/Perot Systems complex starting July 1. Contractors had been called about getting the Rome site ready but nothing ever came of it. The site is for sale for around $6.2 million, according to LoopNet.”
The Rome, Ga. story is the second time Covation has made the news for failed plans. The first was in 2009 when a proposed Covation call center project in Hickory, NC failed to materialize. At that time, David Rocker’s father, Bill Rocker, was listed as the CEO of Covation. (A link to the full article is listed below.)
The Rockers, Bill and David, are the only direct, continuous link to Covation, LLC from the 2009 Hickory, N.C. deal to present.
According to records provided to council members by the EDC, Craig Mento is listed as the Chairman of Covation. An internet search lists him as CEO and president at NexxLinx, Inc. of Microdyne Outsourcing, Inc.
Those same records list Jef Wallace as Covation CEO. Wallace first appears with Covation in March 2012, with prior management experience at Knowlagent.
Rocker, Mento and Knowlagent CEO Matt McConnell are listed as participants in a May 16, 2012 Webinar titled “Islands of Excellence in a Sea of Mediocrity” subtitled “Blueprint for a modern Call Center.”
This whole project has the appearance of being thrown together at the last second to attempt to take advantage of an opportunity that may exist with AT&T. Nothing is wrong with that from a business perspective.
However, just how many public dollars should the county give away in incentives to a start-up company? Shouldn’t the principals in the company have to accept some of the upfront risk if they are to gain the hoped for rewards down the line?
Should the county get involved in giving away incentives to a company with one principal who has a less than stellar financial background?
How many, if any, of the three principals mentioned to the county are full-time employees of Covation who will oversee and manage day to day operations of the call center?
Or is Covation just trying to put together an arms length deal that may or may not pay off, but will require no risk from the principals?
Myhorrynews.com article: http://myhorrynews.com/v2/content.aspx?ID=53730&MemberID=2156
Hickory Record article: http://www2.hickoryrecord.com/news/2009/jul/30/call-center-plans-hold-ar-90672/?referer=http://www.google.com/url?sa=t&rct=j&q=covation%20llc%20hickory%20nc&source=web&cd=4&sqi=2&ved=0CDIQFjAD&url=http%3A%2F%2Fwww2.hickoryrecord.com%2Far%2F90672%2F&ei=wkxbUKecGo6C8QSqxIHYAQ&usg=AFQjCNHbQOeEb58_TEy16iJh3tObNh-4kA&shorturl=http://bit.ly/hgLaQI