Empire State Development Corp. and SOTK:
High-tech grants are just tip of pork-berg
BY BENJAMIN LESSER and ROBERT GEARTY
DAILY NEWS STAFF WRITERS
Originally published on December 21, 2006
The private company at the center of the federal probe of state Senate Majority Leader Joe Bruno has received more than $1.2 million in public funding, including a $525,000 venture capital grant that gave the state a piece of the action.
The equity investment in Evident Technologies Inc. was made through a program administered by the Empire State Development Corp., which also processed $500,000 in "member item" grants that Bruno secured for the private nano-tech firm.
A Daily News review of ESDC records shows that Evident is not the only for-profit firm that has given the state an equity share in return for seed money.
For example, the ESDC has a $500,000 interest in Niagara Dispensing Technology, a Tonawanda firm developing a rapid beer-dispensing unit that promises to pour the perfect pint of draft in three seconds.
ESDC officials acknowledged yesterday that since 1999 the agency has been granted equity in more than 80 companies that it gave a total of about $40 million.
The grants behind the equity positions are given to help create jobs and spur economic growth. The state hopes the investments eventually prove profitable and enable the ESDC to invest in even more startups.
According to records, the state's stake in Evident Technologies, processed through the ESDC's Small Business Technology Investment Fund, arrived in two chunks - $400,000 in November 2001 and $125,000 in November 2002.
Approval for the second investment occurred just days before Evident received the first of two $250,000 member items secured by Bruno.
The term "member items" is used to describe pork-barrel spending by lawmakers for pet projects in their districts.
The second chunk of Bruno member money was approved in April 2004, according to ESDC records.
The News could not determine through official records if Bruno played a direct role in getting the ESDC to give Evident the additional $525,000 in technology money.
However, Bruno was at Gov. Pataki's side during a September 2002 news conference where Evident officials announced that the firm was expanding its operations in upstate Troy.
"I am pleased to have helped Evident Technologies move forward with this major expansion," Bruno said in a press release at that time.
Records show that in June 2004, Evident also received a $199,000 grant from the New York State Energy Research and Development Authority, to help the company develop white-light-emitting diodes.
The ESDC's investment of taxpayer dollars has run the gamut in the high-tech world, with the beer-tap project perhaps the most unusual.
In pursuit of the ESDC funding, Niagara officials pointed out that regular beer taps take 12 seconds. While promoting its three-second pour, Niagara said its eXacTap system would lower spillage and speed up lines at football stadiums.
"Draft-beer dispensing methods have not changed in two centuries," CEO Iver Phallen said in April, when the state's investment was disclosed. "Niagara Dispensing brings new technology that will fundamentally improve the way draft beer is served."
The ESDC also has invested $500,000 in Float Technology, a firm that started out as a college class project and is producing an inflatable life vest.
Bad investments
Not every investment has panned out, records show.
The ESDC invested $500,000 in DrugRisk Solutions in October 2003 and $100,000 in December 2004 so the company could perfect a portable system to detect drug use through hair analysis. The firm declared bankruptcy last March and is out of business.
Other tech companies of which the state owns pieces include Kirtas Technology, manufacturer of a robotic book scanner; Sono-Tek Corp., which makes ultrasonic-powered spray nozzles, and Gaia Power Technologies, maker of devices for electricity infrastructure.
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