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The Scoop

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Verbatim: Pence withdraws incentives in Pakistani fertilizer deal

Gov. Mike Pence's office issued this statement today:

Indianapolis, IN -- Following careful review, Governor Mike Pence announced today that Indiana has withdrawn the incentives the state offered to Midwest Fertilizer Company to build a fertilizer plant in Posey County.

On November 30, 2012, the Indiana Economic Development Corporation (IEDC) offered a package of incentives to Midwest Fertilizer Company to build a fertilizer manufacturing facility in Posey County. The Fatima Group, a Pakistan-based fertilizer company, owns 48 percent of Midwest Fertilizer Company.

In December 2012, Lt. Gen. Michael Barbero, the director of the U.S. Department of Defense's Joint Improvised Explosive Device Defeat Organization (JIEDDO), testified before the U.S. Senate that Fatima Group had been "less than cooperative" in efforts to reduce the improvised explosive device (IED) threat in Central and South Asia.

On January 15, 2013, the day after his inauguration, Governor Pence directed the IEDC to place the incentives for the Posey County project on hold pending a review in light of Fatima Group's ownership interest in Midwest Fertilizer Company.

For the past four months Governor Pence and officials from Indiana have worked closely with officials from the U.S. Department of Defense and others in the federal government to conduct a review of Fatima Group. The company has informed U.S. defense officials that they have a reformulated product that is less explosive, but U.S. officials have not yet tested the product. While testing of Fatima's product may address U.S. concerns, the testing will not be done in time to satisfy what the State understands is the company's financing time schedule.

Governor Pence's statement follows.

"I did not take this decision lightly. Economic development is important, but the safety and security of our soldiers in harm's way is more important.

"Throughout the past four months, our administration has worked in good faith to evaluate whether our state should be involved in this project. I am aware of Fatima Group's efforts and cooperation with federal defense officials in recent weeks and believe their actions to be sincere.

"While we have been encouraged by promises made by Fatima Group to replace production of their current fertilizer with a more inert and less explosive formula in Pakistan, at this point in time, U.S. officials have not been able to independently confirm this fact and, as such, Indiana will not be moving forward with this project.

"Without assurances from our Defense Department that the materials which have been misused by the enemy in Afghanistan will be permanently removed from production by Fatima Group in Pakistan, I cannot in good conscience tell our soldiers and their families that this deal should move forward."

The Indiana Economic Development Corporation informed Midwest Fertilizer Company of the State's decision in a letter.

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