Governor Terry Branstad traveled to Fort Madison yesterday to discuss a fertilizer plant project involving the largest tax incentive package in Iowa history. Previewing a likely theme of his re-election campaign next year, Branstad spun questions over his administration’s handling of the Orascom deal into an attack on Iowa Senate Democrats and the Koch brothers.

Brian Crozier of KBUR Radio reported the story for Radio Iowa. Click through to find audio clips from Branstad’s remarks to supporters of the project.

“I’m here to make it clear that the chief executive of this state is on your side and we will fight for these jobs and I want to make it clear that when we make a promise to Lee County – or to any county in Iowa for that matter – it’s a promise we’re going to keep, no matter what they might say in Des Moines in any committee meeting,” Branstad said.

Branstad accused Senator Joe Bolkcom, a Democrat from Iowa City, of trying to “bully” the governor’s economic development chief during a February 27th committee meeting. Branstad’s voice rose as he defended the project.

“We’re going what’s right and what’s good for Lee County and for Iowa and it’s time to quit this politics,”Branstad said. “Iowans deserve better.”

In addition, Branstad accused Senator Rich Taylor, a Democrat from Mount Pleasant, of siding against his own constituents.

“For Senator Taylor to join the critics opposing the construction of this plant rather than supporting new jobs in Lee County is politics of the worst kind,” Branstad said. “He needs to quit following Senator Bolkcom and, instead, needs to start listening to the constituents in this county that need these jobs desperately.”

Branstad also sought to blame the ultra-conservative Koch brothers for recent negative publicity about a federal lawsuit alleging fraud by an Orascom subsidiary. Donnelle Eller reported for the Des Moines Register,

In a fiery meeting with reporters in Lee County, where Orascom Construction Industries plans to build a controversial fertilizer plant, the governor said “the Koch brothers” were behind recent negative reports about the project, including a federal lawsuit alleging fraud against a company subsidiary “that’s 6 years old.”

“I understand the Koch brothers don’t want the competition and they’re behind a lot of the negatives that are being thrown out there,” Branstad said following a meeting with residents, and economic development and government leaders in Fort Madison about the project.

When asked if he had evidence, Branstad said: “They’re feeding certain people information” then added, “I don’t have anything against them. They want to keep out competition. We want competition. We want good jobs in Iowa, whether it’s from them or Iowa Fertilizer, CF Industries or John Deere.”

Wichita-based Koch Industries is a major U.S. supplier of anhydrous ammonia, the main product the Iowa Fertilizer plant will produce. Brothers Charles and David Koch, who lead the company, also are large Republican contributors.

Bolkcom has repeatedly said the state of Iowa and Lee County taxpayers got “taken to the cleaners” when more than $200 million in incentives were offered to the Egyptian corporation Orascom. Branstad’s economic development director, Debi Durham, has admitted that she believed what Orascom executives told her, despite strong evidence that the company never would have built a plant in Illinois.

Last month, Bolkcom made several speeches about this issue on the Iowa Senate floor. He said, “Both Democratic and Republican members of the Senate have expressed their concerns to me about the Orascam deal and the Governor’s decisions in this matter.” He again explained Iowa’s “$300 million advantage” over possible sites in Illinois, even without any state tax credits or local property tax exemptions. He laid out what was “on the table” for Orascom:

Lee County has anted up, agreeing to not charge property taxes on the ORASCOM fertilizer plant for the next 20 years.  That’s amounts to about a 133 million dollars that ORASCOM won’t have to pay, thanks to Lee County’s taxpayers.

Then the state package includes:

A sales tax refund during construction;

A loan and a forgivable loan from the Iowa economic development authority;

A grant from the Iowa DOT which I think we just saw last week that is 5 million dollars,

Some job training money,

Some research and development tax credits.

All those are total about 12 million dollars.

And then the big thing happens.  The  governor tosses in another 100 million dollars in investment tax credits over the next four years.

Here’s the balance sheet so far this deal, the worst economic development deal in Iowa history.

We start with the 300 million ORASCOM saved through the disaster bonds, only available here in Iowa.

Lee County’s residents pony up for 133 million dollars to ORASCOM.

The state of Iowa caps it all off with a 112 million dollars.

The total federal, local and state subsidy of ORASCOM’s fertilizer plant, that is going to bring 165 jobs to the state, is almost $550 million dollars, more than a third of the cost of building the plant

On February 20, Bolkcom emphasized that Senate Democrats are not against the fertilizer plant:

Welcome to day three of the story of the Iowa’s worst economic deal ever.

Before I make my point this morning, I want to make something perfectly clear.  That is that the jobs are coming from the fertilizer plant down in lee county are welcomed.  This plant is welcomed.

We are open for business. Iowa has a very good business climate. That is one of the reasons this company has chosen Iowa.

So I just want to make it clear that I’m totally supportive, as is I I think every member of the Senate, to see these jobs coming to Iowa.

Politically, it makes sense for Branstad to fight the straw man (Senate Democrats who supposedly are against jobs for Lee County). The best defense is a good offense. Answering substantive questions about his administration’s failure to do due diligence before making this deal would be more difficult.

Branstad told a group of officials from the Sioux City area a few weeks ago, “Our real challenge is Sen. Bolkcom, he’s the one who said all the nasty things on the fertilizer plant.” Bolkcom responded,

Wrong. Wrong. Wrong.

Governor, your “real challenge” is that you and your administration gave ORASCOM $112 million in state funds, then pressured Lee County to toss in a $133 million in property taxes cuts over a 20 year period when we did not need to.

Your real challenge is that you wasted a quarter billion dollars in state and local taxpayer money.

Governor Branstad, until you figure out that you made that mistake, and fix it, your administration risks throwing more money at sharp corporate lawyers from around the world.

While we’re at it, maybe Branstad can explain why Iowa can afford to give a profitable corporation more than $100 million for a project that would create 165 permanent jobs, but we can’t afford to expand Medicaid, which would create more than 2,300 jobs in this state.

Bolkcom responded to Branstad’s latest comments today on the Iowa Senate floor:

Yesterday, Governor Branstad had a lot to say about the ORASCOM, the worst Iowa economic development deal ever.

Unfortunately, if the news reports are accurate, much of what the Governor said was inaccurate. Among the many and interesting things the governor said, I only want to address two points this morning.

One, the governor accused me of complaining about Lee County getting jobs.

Wrong, Governor. I have consistently supported the fertilizer plant and the jobs in Lee County. It is the waste of more than 100 million dollars in state and local incentives that I oppose.

Two, Governor Branstad also said I opposed using the bonds to build the plant, either because doing so would have been “stupid” or because I wanted all the bonds for Iowa City.

Wrong and wrong, Governor. I’m all for the using bonds for the plant . Anytime the federal government wants to give Iowa money, I’m for it. And if you want to visit me about Medicaid expansion sometime.

Here’s my point about the bonds, governor, something that anyone in this chamber could surely have told you.

The flood disaster bonds gave Iowa a $300 million dollar advantage over Illinois from the start.

Your mistake, governor, was giving away more than a 100 million in state tax dollars in state and local tax dollars after ORASCOM got the bonding.

That’s what makes the ORASCOM deal the worst economic development deal in state history.

Here is the most important thing we learned yesterday.

Governor Branstad still doesn’t understand what went wrong with the ORASCOM deal.

That should concern each and every Iowan.

Because until Governor Branstad understands what went wrong with ORASCOM, we are all at risk of watching Governor Branstad suddenly announce a new economic deal, one that will be even worse than the one we just experienced with the “worst economic development deal in Iowa history.”

Share any relevant thoughts in this thread.

UPDATE: Several other Iowa Senate Democrats responded to Branstad’s comments this morning. Senator Rob Hogg commented,

“I don’t know what’s gotten into Governor Branstad…For him, who’s not there, to create this false, revisionist history and tell the people of Iowa about it is very misleading and it calls into question, you know, what else is he saying that’s not true?”

Republican Senator Brad Zaun “jumped to his feet on the Senate floor and objected to Hogg’s remarks as an inappropriate personal attack on Branstad.”

Democratic Senator Bill Dotzler focused on Branstad’s failure to negotiate a better deal for Iowans.

“I play a lot of Texas hold-em and when you are negotiating with cards and trying to win the pot, you say that you have more than you do … I believe that the governor got fooled. I have to really hand it to (Orascom executives). They played Iowa,” Dotzler said.

Senate Majority Leader Mike Gronstal added,

“The governor mischaracterized the concerns that Democrats raised about this deal as somehow being against the deal. That was never the concern of Democrats,” Gronstal said. “The concern was the governor got bluffed out of an extra $100 million.”

Gronstal said he met personally with Branstad last week and offered to let the governor’s economic development director appear again before a senate committee to answer more questions about the project.

“I think he’s decided rather than defend a decision that appears to be weak, he’s going to go on offense,” Gronstal said, “so I understand that game in politics and everybody in this institution does.”