March 24, 2015

How New Subsidies Started

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It all began with a Kerr-McGee spinoff.

A “change-in-control” provision was added to the Quality Jobs program by the Legislature in 2006 and signed into law by then-Gov. Brad Henry.

Commerce Department spokeswoman Leslie Blair said it was done at the request of McAfee & Taft, an Oklahoma City law firm acting on behalf of a new company called Tronox Inc.

Tronox was a spinoff of Kerr-McGee Corp., the big Oklahoma-based oil and gas company. It contained all of Kerr-McGee’s former chemical operations. It remains one of the world’s leading producers of titanium ore, titanium dioxide and zircon. In 2006, Tronox was headquartered in Oklahoma City.

Tronox received the state’s first change-in-control contract in August 2006. Over the next two years, it received $2.1 million in Quality Jobs payments for maintaining a minimum of 260 jobs in Oklahoma City.

The payments ended in 2008 for unstated reasons. In 2009, Tronox filed for reorganization under federal bankruptcy law.

It turned out Tronox not only got all of Kerr-McGee’s chemical operations, it also inherited billions of dollars in undisclosed legal liability for toxic waste sites in several states. Last year, the company that had acquired Kerr-McGee in 2006, Anadarko Petroleum Corp., entered into a $5 billion waste cleanup settlement with the federal government, the biggest ever.

The spinoff emerged from bankruptcy in 2012 as Tronox Ltd. It is headquartered in Stamford, Conn., but maintains an Oklahoma City division office with about 130 employees.

Tronox Vice President Bud Grebey said neither he nor any of the company’s executives had any knowledge of the Quality Jobs subsidies the company received before its bankruptcy reorganization.

“There is no one currently with Tronox Limited who was involved the 2006 change in the Quality Jobs law,” Grebey said in an email.

Commerce Department spokeswoman Blair said in an email that McAfee & Taft “was the driving force” behind the 2006 change in the law. “This was not a request from Commerce,” she said.

McAfee & Taft spokeswoman Robin Croninger confirmed that the law firm had represented a “variety of clients” who applied for and received Quality Jobs contracts.

“However, due to attorney-client confidentiality, we are unable to provide any details of that representation,” Croninger said in an email.