Citizen Ronald Reagan once championed "the good news" about Bath Iron Works Corp. in a syndicated radio show. Indeed, the venerable shipyard at the mouth of the Kennebec River in Bath, Maine, has had much to crow about. With an outstanding record of turning out naval warships on time and under budget, BIW, a subsidiary of Congoleum Corp., is the largest private employer (7,600 workers) in Maine and perhaps the state's most politically powerful. Everyone up there loves Bath.

Well, almost everyone. Two years ago, BIW wanted to expand its ship-repair facilities. When Maine officials heard that Bath might open a branch in Boston rather than down the road in Portland, they scrambled to put together a more attactive package of their own. The contents of that package -- including $15 million apiece in bonds from the city and state to buy a pier and dry dock and a rent-free deal for BIW for the first 40 years -- went before the legislature and general public for separate votes. Both approved it by the necessary two-thirds majority, although not without some touches of good old Yankee consternation. Opponents of the deal argued that the mere hope of more jobs and enhanced tax revenues was not enough; if public money were going to benefit a private company, stricter guarantees were needed. The voters did not see things that way, but even the superior court judge who ruled on the matter later agreed that they might have been confused by the "grab bag of various projects" lumped in with the BIW bond referendum.

The local Common Cause office in Augusta was more pointed in its criticism. It filed suit against the deal in 1982 -- and lost, twice. Along the way, its motives were impugned, and state officials, including Gov. Joseph Brennan, suggested that legal opponents were woefully out of touch with the concerns of the working person in Maine. The actual number of new jobs remains in doubt, but the larger principle has been established: Maine can now be "more flexible" in subsidizing private enterprise with public welfare.

Critics are not entirely appeased. After all, they say, BIW had over $1 billion in backlogged orders at the time of the bond issue and should not have needed a whole bunch of carrots to keep it in its own backyard garden. "Without a doubt this is the sleaziest development project concocted [using state moneys] in the last 50 years," says Michael Barker, a Common Cause witness and former director of policy studies for the National Governors' Association's Council of State Planning Agencies "Bath Iron Works has finally figured out how to take the capital out of capitalism."