of throwing good money after bad deals, warns a prominent Oklahoma
And their powers were designed precisely to give them that
ability, counters a well-known state economist.
Asked about the credit judgment of the Oklahoma Industrial
Finance Authority and the Oklahoma Development Finance Authority,
H.E. (Gene) Rainbolt, chairman of BancFirst in Oklahoma City, said
they have the same danger as putting a hydrogen bomb in the hands of
a hostile government.
"I have serious reservations that government can do successfully
what private enterprise has struggled to do, or perhaps has done
unsuccessfully," he said.
But, Neil Dikeman, director of the University of Oklahoma Center
for Economic and Management Research, said the finance authorities
have a real chance for being of assistance to the economy.
"I'll be frank," he said. I don't think private lenders right
now ought to necessarily get too heavily involved in that, because
what we need is venture capital in this state, and that means it's
relatively a high-risk sort of thing."
Dikeman conceded that he is unsure whether bodies such as the
finance authorities, which meet on a regular basis but not daily,
confer as often as they should.
"But I think both these authorities are getting some undue
criticism because of losses, because that's what they were created
for, to take entrepreneurial, high-risk ventures and try to make
them work," he said.
Rainbolt said he is concerned that if the authorities are not
successful, and their losses are presented to the Legislature to be
covered, it will result in a "great diminution of willingness to
fund economic development activity.
"What they're doing is making loans, and we've had a lot of bank
failures, and those of us who have survived have written off
millions of dollars because of failures in our credit-making
decisions," said Rainbolt.
"I don't know why government would be able to be more successful
than we have."
Dikeman said regulators currently have such tight control over
private lenders that venture capital loans are extremely difficult
for them to make.
"Without private lending capability to provide venture capital,
you've got to have something else, and these two state lending
agencies are providing that," he said.
"While it would be nice if they never had a loss, one would
suspect that they're not really performing what they were chartered
to do, and that is lend in areas where private lenders dare not
Meanwhile, Stan Provus, state bond advisor, said he has
encouraged the Oklahoma Development Finance Authority to involve
private lenders in future financing packages. …