A smart financier once remarked that investing was a matter of gambling with the odds tilted in your favor. Smart investors scrutinize and study; they learn from their mistakes, discover what works and doesn't work and gravitate to the winning strategies.
What's so infuriating about the latest audit of the Maryland Department of Business and Economic Development is that it appears such scrutiny was severely lacking when appointed officials chose to gamble on marketing strategies on behalf of the state.
Here's what the auditors working for the Department of Legislative Services uncovered: In 2005 and 2006, the agency held some fairly pricey promotional events, and to this day, no one has any idea whether they helped or hurt efforts to bring jobs and new investment to Maryland.
Ironically, one of those events was in the nation's gambling capital, Las Vegas, where they know a sucker when they see one coming from 2,000 miles away. About 60 business site consultants in town for a convention in October 2005 were invited to a private evening of poker at a cost to DBED of more than $400 each.
A similar event was staged the same month at the Cambridge Hyatt. And then there were the catered Chesapeake Bay cruises onboard a 61-foot yacht offered the following year that attracted a modest number of local business people (only 10 of 58 invited showed up for one and 10 of 75 for the other, and most of those were state employees).
Auditors found a total of $184,000 in promotional and marketing events that were never evaluated or documented. That's a disgrace.
The real shame of it is that these kinds of events might be productive. They may help grease the skids for serious investment. But how would anyone know? This isn't how successful corporations do business, and it shouldn't be how the state makes decisions either.
Current DBED management claims such activities are much more closely monitored and documented today - and certainly that would be consistent with Gov. Martin O'Malley's statistic-obsessed approach to management. It would be unfortunate if genuinely cost-effective promotions fell under the budget-cutting ax because of these past mistakes, but then that's the risk of gambling rather than investing.