Call it the governmental butterfly effect: A congressman takes a bribe in California, and 30 people lose their jobs in Martinsville, Virginia.
The congressional bribery scandal involving defense contractor MZM Inc. directly hit that economically fragile Southside city on July 31, when an office with 30 employees closed operations. That facility, started by MZM with heavy assistance from Rep. Virgil Goode (whose district also includes Charlottesville), promised 150 new jobs when it arrived in 2003 as part of what city officials had once called “Project Goode.”
To add insult to injury, the City of Martinsville will probably have to pay back the Virginia Economic Development Partnership (VEDP) a portion of the $500,000 it used to cement the deal with MZM.
Usually, the company would be on the line to repay such loans. But MZM refused to commit. Instead, in a deal brokered by Goode, a five-term Republican, Martinsville signed a performance agreement that would make the city pay if the company did not create 75 jobs and meet an investment of at least $4.4 million, according to The Roanoke Times.
VEDP will evaluate how much Martinsville owes in January. “It may be we will give them an extension,” says Christie Miller, spokesperson for VEDP. “Clearly we have received value from the employment. There may a portion they will have to pay back.”
“The whole thing is a mess,” says Curt Gleeson, spokesman for Goode’s November challenger, Al Weed. “Virgil needs to be held accountable. It’s [his] bill. He should step up and say he made a mistake and offer to repay any money.”
Shortly after coming to Martinsville, MZM found itself in hot water. Company owner Mitchell Wade has admitted bribing California Congressman Randy “Duke” Cunningham, as well as giving illegal campaign donations to Goode and Florida representative Katherine Harris (neither Goode nor Harris have been formally accused of wrongdoing). Martinsville manager Richard Berglund recently pleaded guilty to giving Goode illegal campaign donations.
As the scandal unfolded in 2005, MZM sold the Martinsville branch to Athena Innovative Solutions. The Defense Department terminated a contract with the facility in June.
Goode did not respond to faxed questions. Calls to Athena headquarters were not returned by press time.
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