Associated Press - October 6, 2007

AUSTIN, Texas (AP) - When Countrywide Financial announced it was bringing 7,500 jobs to Texas, Gov. Rick Perry called it a "crowning jewel" deserving $20 million in taxpayers' money from his job-creation fund.

That was three years ago. Today, Countrywide is at the center of the mortgage industry meltdown and is laying off up to 12,000 workers nationally. It won't say how many jobs will be slashed in Texas, home to about one-fifth of its employees. But Countrywide announced in September that it's closing its 100-person Midland office.

An Associated Press review of the Texas Enterprise Fund program finds that Countrywide isn't the first company to lay off workers after securing millions of dollars in grants from the fund.

At least five other major companies laid off Texas workers after entering agreements with the job creation fund. They're Vought Aircraft Industries, Texas Instruments, Washington Mutual, Raytheon and Lockheed Martin.

None has been required to repay grant money to the state. Most companies have a multiyear deal allowing them to add jobs gradually as they aim for a target number of jobs by a specified date. That's regardless of whether they lay off employees along the way.

Phil Wilson administers the fund for the Republican governor. He says that even if a company has layoffs, the business must maintain an agreed-upon base level of jobs in Texas.

But some say it tends to help big firms that would have come to Texas anyway and that the money serves as a bonus rather than an incentive. They point out that money is paid to companies up front, rather than after jobs are created. They say there's not enough vetting of the companies receiving the grants, the types of jobs created or how the cash will be spent.