While the managers of the fund were free to pick which companies to invest in, the state placed two restrictions on their choices: The companies had to be based in Massachusetts and have a renewable energy focus.
William Osborn, a general partner at the Green Energy Fund, said the fund ended up investing in about a dozen companies. While most continue to thrive, Konarka and two others have either gone under or been sold at a loss.
"The idea was a private venture capital fund was best but the state wanted some control on where to direct investment," Osborn said. "That was the big idea of the fund."
Osborn said the loss of three companies out of a dozen isn't unusual in the venture capital world, which inherently involves some risk. He defended the decision to invest in Konarka, saying that in 2003 it was impossible to foresee the scale of investment that China would place on solar manufacturing — the same pressure that officials at Solyndra cited as a key reason for its failure.
Osborn said it's disingenuous for Romney to say he opposes government investment in targeted companies since Massachusetts engaged in a similar practice when he was governor.
During Romney's tenure, Massachusetts also doled out more than $31 million in loans to dozens of companies from two funds created before he took office — the Emerging Technology Fund and the Brownfields Redevelopment Fund, designed to help rehab abandoned urban areas.
Romney in 2004 vetoed $12.5 million for the emerging technology fund, but the Legislature overrode the veto. The brownfields fund is managed by the state's quasi-public economic development agency, MassDevelopment.
"What bothers me about Romney on this issue is that he is pretending he has always had this position when it is not the case," said Osborn, who voted for Obama in 2008 and says he'll probably support him again.
"He supported this kind of thing, he put it in place and suddenly he's trying to walk away from it and saying government should not investing in technology companies," Osborn added. "It's like we've stepped through the mirror."
Miga reported from Washington.
EDITOR'S NOTE _ An occasional look behind the rhetoric of political candidates.
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