State Rep. Tom Letson, D-Warren, failed to get a ''clawback'' clause in a recent House bill, but he should continue to shine the light every time regulators violate the rules of the Ohio Venture Capital Program.
The program created six years ago has provided $84 million in tax credits that private funds use as collateral for loans to invest in high-risk, high-growth startup companies. One stipulation is that 50 percent of the money must be invested in Ohio companies. Venture Capital Program advocates say that would translate into more jobs in Ohio. There is another $46 million worth of tax credits yet to be awarded, and a bill that overwhelmingly passed the House recently would add another $100 million.
The program is credited with creating 766 jobs. That's about $110,000 per job.
The biggest problem is that eight of the 24 funds do not meet the 50 percent Ohio investment criteria and two of the funds have not, and said they would not, invest any money in Ohio companies.
Letson proposed a clawback that would force funds to return state money if they do not reach the 50 percent threshhold. Letson's amendment to the bill providing additional money was defeated. So too was a proposal, introduced by State Rep. Mike Foley, D-Cleveland, to raise the in-state investment to 75 percent.
Letson's legislation shouldn't even be necessary. Those running the program should automatically enforce its own rules. If not, Letson and other critics should continue to clamor.
It doesn't make sense for the state government to get involved in high-risk venture capital outside of Ohio.