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Utah investigates Silicon Slopes company over CEO's remarks on tax incentives

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Posted at 4:55 PM, Nov 05, 2021
and last updated 2021-11-16 12:03:57-05

SALT LAKE CITY — The Governor's Office of Economic Opportunity confirmed to FOX 13 it is investigating the Silicon Slopes tech company Domo over comments its CEO made at a breakfast with legislators.

"We are investigating Domo, but we can’t say anything about that investigation until it’s concluded," said Dan Hemmert, the executive director of the Governor's Office of Economic Opportunity.

The investigation apparently centers around comments Domo CEO Josh James made at a breakfast meeting with legislators at the Silicon Slopes Tech Summit. At the event, some tech executives were a little critical of lawmakers about bills that were being run on Capitol Hill.

James referenced economic incentives the state offers companies, suggesting he was offered millions for his company to stay in Utah, without plans to leave.

While not speaking specifically about Domo, Hemmert told FOX 13 that economic development tax increment financing deals the state strikes with companies come with terms attached.

"That contract has certain representations and warranties. Among which is you are looking at other states, etc., etc., and if those representations and warranties turn out to be false then it’s a breach of contract and that contract can be canceled and the incentive goes away," he said.

In a statement to FOX 13 on Friday, Domo said it did not breach any agreements.

"We are fully cooperating with GOEO and are confident that we did not breach any of our obligations under the contract and that all representation and warranties by us were true and correct in all material respects," the company said.

There was no timeline on when the investigation may be completed. A spokesperson for the House Majority Caucus declined to comment on the investigation. So did Silicon Slopes Commons, which puts on the annual tech summit.

FOX 13 is told Silicon Slopes tech firms have in years past been threatened with investigations or having incentives yanked after aggravating lawmakers with stances they've taken on political issues. Silicon Slopes, the nickname for the rapidly growing number of tech firms based in Salt Lake and Utah counties, has recently gotten more involved in state politics, even forming a political action committee to advocate for its interests in the legislature.

But many lawmakers, both Republican and Democrat, have been critical about economic incentives being offered by the state to lure companies to Utah, especially with the state's red hot economy. After Governor Spencer Cox took office, he pushed for a review of incentives the state offers to lure companies to Utah. Speaking himself at Silicon Slopes Summit, the governor said they may be coming to an end.

The incentives that the state offers are also not direct money.

"There’s a lot of misinformation about it. People think we give away or that people receive a certain amount of money. They don’t. We don’t give any money away," Hemmert said.

Instead, the state will offer a "post-performance" tax credit to companies that can show they have either added jobs or contributed to Utah's economic success. Some companies have lost their incentives before if they couldn't show they made the capital investment they promised or added the jobs.

Editor's note: FOX 13 has retrieved some of its original footage from the breakfast meeting. This is the video of James’ comments that are the subject of the investigation.

Josh James Comments

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