“In terms of company stability, Caterpillar owns 35 percent of Firefly, and Cat is a company that does its homework. This battery technology is unique and promising enough that Firefly had little trouble raising $20 million in private equity. Company officials figure 80 percent of that money is spent locally, so there’s economic spin-off.” –Journal Star Editorial Board, May 22, 2007

The Journal Star said the risk was worth taking, and endorsed the loan guarantee. I just thought this quote was notable because there’s this attitude in Peoria that if Cat invests in something, then it must be a sure thing. Obviously, Cat didn’t get as successful as it is by making a string of poor investments, but the Firefly bankruptcy does show that Cat isn’t perfect, and their investment is no substitute for municipalities doing their own due diligence. Then again, Cat did tip its hand even in 2007. A May 23, 2007, article carried this ominous statement: “Although Caterpillar Inc. owns 35 percent of Firefly, it wasn’t clear Tuesday why it wouldn’t guarantee the loan.”

“The Firefly package was being worked on for a number of weeks between Firefly, the county and the city,” Ardis wrote in an e-mail. “The proposal went through various stages and changed a number of times. It would have been difficult to update people on financial discussions when they were fluid and evolving into what was the final proposal. Once made public, there wasn’t anything hard to understand about the deal.” –Mayor Jim Ardis, quoted in “Word on the Street,” Peoria Journal Star, May 28, 2007

This was Ardis’s defense of “dropping the deal late on the public — [and] his council colleagues — and pushing the vote” with very little deliberation and without any policy discussion. The whole article is interesting. It recounts the story of how former Mayor Dick Carver was in town to talk to the City Council about the Kellar Branch rail-to-trail initiative, and during his stay here, he set up a meeting between Mayor Ardis, Rep. David Leitch, and president of G&D Integrated Joe O’Neill. They met at Le Peep restaurant for breakfast, and, “Over toast, these four men toasted a commitment to finding a solution that would keep Firefly Energy Inc. in Peoria.” Firefly moved into the former Foster & Gallagher building on Galena Road — a building owned by O’Neill’s company — and “O’Neill also hopes his Morton firm will eventually secure contracts with Firefly to build the high-tech core components that would then be shipped to battery plants in Missouri and Ohio,” the paper reported at the time. Leitch was a VP at National City at the time, the bank that provided the loan to Firefly.

“Ultimately, this is new ground for Peoria County.” –Peoria County Administrator Patrick Urich, quoted in Journal Star, June 1, 2007

The news article added, “But he [Urich] told the committees it was a worthwhile investment because the company has promised to keep its headquarters here and may manufacture in Peoria its high-tech components, parts that would then be shipped to battery plants in Missouri and Ohio.”

“I see it as one of the safest loans that we could make. If I had the money, I’d make it myself.” –County Board Chairman Bill Prather, quoted in Journal Star, June 10, 2007

If it were really that safe, why did National City require the City and County to guarantee the loan? If it were really that safe, why didn’t Caterpillar guarantee the loan? Well, now we know.

“I’m happy to be doing what I can to get them these defense dollars. In the end, I want them in Peoria. That’s going to be the icing on the cake for us.” Then-Congressman Ray LaHood, quoted in the Journal Star, June 10, 2007.

LaHood helped Firefly get millions in defense contracts. Icing on the cake? What cake?

“This is the highest and best use of this money that we have.” –Peoria County Board member Allen Mayer, quoted in the Journal Star, June 15, 2007

Note to future board candidates: Mark this quote for your campaign literature.

Before someone else says it, I concede that hindsight is 20/20. But I’m more concerned about another proverb: Those who don’t learn from history are doomed to repeat it. Will our elected officials take this very hard and expensive lesson to heart and stop using taxpayer money for risky private ventures?