The Wisconsin Economic Development Corporation (WEDC) was supposed to be the crown jewel among Governor Scott Walker’s first term accomplishments. It was part of his agenda to downsize government and privatize government functions in one fell swoop…as well as serve as a lynch pin in his promised job development in Wisconsin.
Well since then WEDC has failed two state audits. The audits essentially found that the agency didn’t follow state law and didn’t even follow their own internal rules on loans and verification of results from the firms receiving loans.
So what does the governor do when faced with issues surrounding the business loans his organization is making? Does he replace anyone in authority? Does he question why WEDC goes through financial officers like water? Does he call a board meeting (as governor he is board chairman) and get everyone in line like a chair of a business would? Does he hold a public forum and discuss the aims and goals of WEDC…it’s fit in the economy of Wisconsin…and the value and purpose of the loans? NO, he just throws up his hands and says that WEDC shouldn’t be making business loans.
A week after an audit documenting failures by the state’s top jobs agency, Gov. Scott Walker is seeking to end the authority’s $19 million a year in lending, shifting his plans for the agency for the second time in as many weeks.
The Republican governor Friday proposed phasing out the Wisconsin Economic Development Corp.’s $74 million loan portfolio — one of the problem areas identified by nonpartisan auditors but not the only one. Within hours of the release of the Legislative Audit Bureau report last week, Walker dropped his proposed merger of WEDC with another state agency that deals with the economy.
GOP legislators voted along with Walker (emphasis mine) to remove him as chairman of the Wisconsin Economic Development Corp. but chose to keep their legislative representatives on the board of the embattled jobs agency.
WEDC has been plagued by lax oversight…
When the going gets tough…the tough bail out? That’s leadership?
I imagine Gov. Walker’s continued leadership of a failing state jobs agency would totally play against the image he is trying to portray on the presidential campaign trail. Time to bail before there is too much national media scrutiny on his major policy failure.
But let’s roll back to the lax oversight statement. Very recently there has been a lot of scrutiny of a loan WEDC made to a now defunct business owned by a contributor to the governor’s campaign.
Gov. Scott Walker’s top aides pressed for a taxpayer-funded $500,000 loan to a now-defunct Milwaukee construction company that was collapsing and created no jobs, according to a newspaper investigation.
Walker’s economic development agency, the Wisconsin Economic Development Corporation, awarded an unsecured loan to Building Committee Inc., owned by William Minahan, according to records the Wisconsin State Journal obtained through an open records request.
The 2011 loan was for a proposed project to retrofit bank and credit union buildings for energy efficiency. The WEDC sued BCI last year in an attempt to get the money back.
It is among several WEDC loans recently questioned by state auditors in a report that led Walker on Friday to ask lawmakers to scrap the loan program.
Paul Jadin, the former head of WEDC, said Minahan and then-Administration Secretary Mike Huebsch pushed for a $4.3 million loan, but the agency couldn’t justify more than $500,000 — which Jadin said he considered “fairly risky.”
Minahan had given Walker’s 2010 gubernatorial campaign a last-minute $10,000 donation on election day — the maximum individual contribution.
State records say that Gov. Scott Walker received a copy of a 2011 letter pledging a $500,000 taxpayer loan to a now-defunct Milwaukee construction company headed by a Walker donor, seemingly contradicting statements by the governor and his aides that he was not aware of the award.
A spokeswoman for Walker said that, in spite of the records, a copy of the letter from the Wisconsin Economic Development Corp. was never delivered to the governor’s office.
So let’s see: the governor’s top aides pushed for a WEDC loan, the governor was copied on the letter regarding the loan, the governor is the board chairman of the loaning organization…and no idea about the loan? That is the definition of lax oversight and typical of Gov. Walker’s organizational style both in the governor’s office and his year’s as county executive in Milwaukee.
What should be happening at WEDC?
1: The governor should be holding up his hand and saying the buck stops here.
2: Attorney General Schimel should be called in to investigate potential violations of state law.
3: The officers of WEDC should make some major changes in the organization to meet state law and internal controls.
4: There should be a public discussion on the value of the WEDC and it’s role in Wisconsin.
And the people of Wisconsin should realize that this is a glaring example of Gov. Walker’s lack of governance in this state as he looks toward his campaign for president. None of us, left or right, are getting any leadership out of the governor’s office.
It is also interesting to examine the sideshow related to all of this:
A week ago when it looked like WEDC might be salvageable, Reed Hall, the secretary and CEO of WEDC, wrote a glowing op ed piece for the Milwaukee Journal Sentinel supporting the bold approach to economic development taken by the agency.
And then four days later as things around WEDC continued to unravel Christian Schneider, the in house GOP mouthpiece at the Milwaukee Journal Sentinel, suggested that we don’t need a business loan state organization and that WEDC should be dismantled.
How quickly fickle the Madison GOP shows itself to be these days. You’d think being in control would be more fun (sarcasm)!
BTW: how’s the jobs thing coming? At the end of his first term the governor was 121,000 jobs short of his announced goal of 250,000 jobs.