Re Detailed statement by former President of Quartz Mountain Aerospace on false tax credit claims email sent Oklahoma State House Oversight Committee Re: Letter Of Testimony by Former QMA President Sent to: Recorded. May 3, 2010 From: Nick Baker Prowlingowl.com To: Oklahoma House of Representatives government oversight committee members John Auffet Mike Brown Samson Ray Buck Joe Dorman Dan Kirby Steve Martin Earl Sears John Wright Jason Murphey Oklahoma House of Representatives government oversight committee members Note Confidential – for the use of this committee. Attached is a statement, from John Daniel former general manager, Quartz Mountain Aerospace (formerly Luscombe Aircraft company). You will find this information very informative and useful for your committee's current work. FYI, John, has long been a most important source of information, but preferred to remain anonymous. Understanding the importance of your work, John, was willing to step forward and provide this statement only yesterday. John was QMA GM from early 2001 until October 2007. The essence of John’s statement is found in paragraph 7. “All of the funding from Tax Credits amounted to $32 million over the years from 2003 to 2006. This was the money that LAC/QMA actually received to operate on. The $221 million that was claimed to have been invested in LAC/QMA for working capital is not true, we never received that kind of money.” While John only alludes to the $221 million claim that was well publicized in early 2006 when lawmakers were passing SB 1577 to ostensibly close the loophole, his statement covers all claims 2003 to 2006. While information is not available for all the claims we do have evidence for the $221 million 2005 claim and two claims of investing another $222 million in QMA during 2006; Altus Venture $200,000,000 Affinity Ventures $21,635,000. This totals $443 million in known claims yet only $32 million was invested. Lastly, I personally contacted Dawn Cash at OTC on several occasion between March 16 and 26 2009 to provide this information and asked that OTC investigated. Although, Dawn informed me the matter would be looked into, several means have revealed this was totally ignored. It is well documented in OTC emails Mike Reynolds obtained, that OTC was in the process of issuing, $ millions in tax refund checks for these very tax credits, when I informed Dawn. Yet OTC continued issuing tax refund checks to at an accelerated pace, after Dawn was informed. In that context I would ask you please keep the identity of the source confidential, at least for now. I am sure John would be willing to discuss any questions directly, and I can get you in contact with John. I will send supporting information in a follow up email, or you can contact me at XXX-XXXX or reply to this email. Nick