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Commerce Authority backs off controversial ‘stipends’

Don Cardon (Photo by Evan Wyloge)

The Arizona Commerce Authority announced late Friday afternoon that it will not be awarding the $5,000 stipends it had earlier promised to15 companies eliminated from a competitive grant program.

The Goldwater Institute’s Clint Bolick sent a letter to the ACA earlier this month, warning that the awards for unsuccessful semifinalists in the agency’s Innovation Challenge could be a violation of a constitutional provision banning government gifts to private companies, unless the money creates a tangible public benefit.

Friday, CEO Don Cardon replied to the institute with a letter of his own, saying that although the ACA doesn’t necessarily agree with Bolick’s concerns, “the ACA operates with public funding and we are committed to being good stewards of taxpayer dollars.”

“Accordingly, we have informed each applicant that the ACA will be unable to process the $5,000 awards at this time,” Cardon added

Cardon unexpectedly announced the awards at a May 2 event to reveal which of the 25 semifinalists would move on to the next round of the competition, a move that caught the assembled companies and other ACA employees by surprise. In his letter, Cardon defended the awards, saying the semifinalists were chosen after extensive evaluation.

“These twenty-five companies represent the brightest and best in innovation, and they are on the brink of success,” he wrote.

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