Did Mississippi help tire firm squeeze states for subsidies?

When Mississippi Governor Haley Barbour signed into law last week a $19 million package of incentives designed to keep Cooper Tire from closing its Tupelo, Miss. plant, he touted it as a victory for his state.

"People ask me all the time, 'What does the state do about job losses?'" Barbour announced at the signing. "Well, the first thing we do is we've got to do is keep the jobs we've got."

Barbour's job-retention strategy for Mississippi is in sharp contrast to President Barack Obama's proposed stimulus plan, which Barbour has condemned on the grounds that it "includes excess spending and impedes states' abilities to manage their own programs." Barbour has even indicated that he might refuse federal funds if they come with strings attached, to the dismay of many of his state's own legislators.

However, the Cooper Tire deal appears questionable on a number of grounds beyond that of political ideology, with one blog even describing it as a form of extortion.

"In a grim variation of the subsidy game that may become more common in a tanking economy," writes Clawback.org, "Cooper Tire last month successfully squeezed over $66 million in subsidies for plants in three states, pushed down union wages and benefits, and eliminated one plant altogether. ... The real lesson is how easily Cooper Tire could compound the pain of a plant shutdown in one state by extracting wealth from workers and taxpayers in three others."

Cooper Tire donates to politicians in all the states where it has plants, but it has been particularly generous in Mississippi. For example, it donated $2000 to Governor Barbour's 2007 reelection campaign. However, the Mississippi politician most favored by Cooper is Senator Roger Wicker, who resides in Tupelo, where Cooper's Mississippi plant is located.

When Wicker ran for re-election to the House of Representatives in 2006, Cooper donated $4000 to his campaign. In the 2007-08 campaign cycle, Wicker received $7000 from Cooper -- most of it following his appointment by Governor Barbour in December 2007 to fill the Senate seat that had just been vacated by Trent Lott. This is more than twice as much as Cooper donated to federal campaigns in either Ohio or Arkansas, and more than three times as much as it donated in Georgia.

Read on.