Town Loses Some 'Magic' After Newspaper Folds

A story that bears many similarities to the one involving Solyndra, the Fremont, Calif., “green energy” company that received $500 million in federal loan guarantees shortly before filing for bankruptcy, is taking place in tiny Moberly, Mo.

Founded in 1866, Moberly is a town that, according to the city’s website, seemed to spring from the prairie overnight in 1873, earning it the title, “The Magic City.” One-hundred-thirty-eight years later, the city of almost 14,000 lost a little bit of its magic when a start-up newspaper founded by Janet Morales closed its doors.

The reasons behind the newspaper’s demise are troubling.

Morales, 54, founded The Moberly (Mo.) Mirror & County Observer after working three years at the long-established daily newspaper, the Moberly Monitor-Index, as a news reporter. Unfortunately, her newspaper venture would end also — in April 2011 — after she caught flak for having had the gumption to ask local officials questions about an economic development project Gov. Jay Nixon (D-Mo.) announced July 9, 2010, would bring 612 jobs to the community.

That economic development project involved Mamtek International, a sucralose-production company that needed a U.S. location for a new facility where it would use a new “green” approach to make its artificial sweetener/sugar substitute, Sweet.Zero™.

While officials in Moberly were working hard to attract the company, Morales was asking questions about the project. Unfortunately, those on the receiving end of her questions — namely senior officials at Mamtek — did not appreciate a snoopy reporter asking questions, according to Morales. And that’s when, in July 2010, her troubles began.

Her troubles increased after the Moberly Chamber of Commerce held a meeting of its board in November 2010. Soon after the meeting, she said, business owners in town began pulling their ads and revenue for her newspaper began to dry up.

Like any good journalist who encounters resistance, Morales began to digging deeper and looking elsewhere for answers. After all, the details “just didn’t add up.”

Following the loss of revenue, Morales opted to close The Mirror the following spring — but not before mailing every Moberly resident a copy of its final issue that explained about the Mamtek company and the speed — 72 days! — with which it was welcomed to town, about the potential conflicts of interest that existed among Moberly officials and about the questions concerning the validity of the Mamtek company, especially concerning its plant in China.

The Mirror‘s original website was shut down the day of the mailing, but a new one — http://www.TheMoberlyMirror.com — was quickly set up. There, Morales’ Mamtek stories — published March 31 under the headline, Mamtek & the Mirror Experience — were posted so everyone could read them and have access to the information.

Six months later, the Moberly officials who didn’t like answering Morales’ questions find themselves having to answer even tougher questions on the heels of news that Mamtek failed to make a $3.2 million bond payment and has named Peter Kravitz, an attorney well-known in restructuring and liquidation circles, as its interim president.

Today, as the promised economic boom appears to have gone bust and the city of Moberly appears to be on the hook for more than $37 million in bond payments, there is a very narrow silver lining for most Missouri taxpayers.

According to a Columbia (Mo.) Daily Tribune report Tuesday, Missouri Department of Economic Development Director David Kerr said the public should be comforted that no state tax money — more than $17 million worth — has been actually applied to the project. Better still, no federal stimulus dollars appear to have gone to Mamtek.

Conversely, there’s no silver lining for the job-hungry Missourians in Moberly.

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