WEDC disaster reaches Skyward

Apparently the old "Friday news dump" still works, as another great example of a Scott Walker cronyist failure was revealed over the Super Bowl weekend, and it was largely hidden by the major newspapers in the state. And yes, it involved the money-losing and corrupt Wisconsin Economic Development Corporation (WEDC).

This time it involved the statewide bid for student information for all of Wisconsin's school districts. You may recall this multi-million dollar bid was in the news this Summer, and not for a good reason.

The head of a semi-private state development agency that offered, and then rescinded, tax credits to a Wisconsin company contingent upon it winning a multi-million dollar state contract said Friday he believes the proposal was legal.

[WEDC] leader Paul Jadin told The Associated Press his legal team advised him that the offer to Skyward Inc. was allowed because the year-old agency isn’t bound by procurement laws that forbid bid-rigging.

“It was indicated that we could make a contingency offer,” Jadin said in his first public remarks on the controversy since it came to a head earlier this month. “We’re satisfied that we could make the offer.”

Others in state government didn’t see it that way, and Democrats on Friday issued their most forceful criticisms of the deal to date, calling it sleazy and illegal....

When Gov. Scott Walker found out about the offer the day after he won his recall election on June 5, he said it raised a red flag and he alerted his legal staff (or the WEDC Board Chair realized he wouldn't be able to cover this up, and that people would catch on to how sketchy this was). Walker’s office then contacted the state Department of Administration, which was in charge of putting out the call for bids on the $15 million project to run a new statewide information system for schools.

The day before bids were due, on June 18, DOA halted the process and said the offer Jadin had made to the Stevens Point-based company violated the spirit of a competitive bid. Giving preferential treatment to any company bidding for a state contract is illegal.

I pointed out at the time how this was an example of how WEDC was rife with potential conflicts of interests and a lack of accountability for the millions of taxpayer dollars that go into WEDC's business plans.

Well, the student info project's bid had to be re-done, and it just closed recently. And without the tax credits being included and the bid being messed with, Skyward lost out to Minnesota-based Infinite Campus, and the Wisconsin Department of Administration is scheduled to start negotations with the Minnesotans later this month. So not only did WEDC corruption put an ugly stain on this $15-million project, but now it also has sent the project to an out-of-state company, and Skyward along with Stevens Point-area politicians are decrying the process, and demanding that the state not officially hire Infinite Campus.

By the way, I'm OK with an out-of-state company winning the bid, if Infinite Campus is truly the better company for the student info systems project. As taxpayers, we should demand the best performance and cost-effectiveness when it comes to projects that we fund, and the Stevens Point Journal story notes that Infinite Systems does do student info for some Wisconsin districts already. But what we should ask is why the bid was screwed up in June to begin with, and why did the (now former) head of WEDC feel he could violate clean-government laws. It's almost like sketchy, cronyist bids and avoidance of independent, clean bidding was the intelligence of WEDC's design!

The real coup de grace would be if Skyward tried to shake down the state or the City of Stevens Point for funding or tax breaks by threatening to leave. Or even worse, they could pack up and leave town, they threatened to do over the Summmer if they didn't get this bid. And all of it was avoidable, if only WEDC had done a transparent, open bidding process without any of the monkey business that has now become endemic to the failing Scott Walker creation known as WEDC.

EDIT: This story just broke. WEDC wanted to use $200 million of state pension funds to go toward start-ups of new businesses. Fortunately, the State of Wisconsin Investment Board told WEDC to stuff it, saying "use of WRS trust fund monies to fund economic development initiatives does not meet our fiduciary duty." Given that SWIB has kept the WRS state pension 100% funded despite the horrible downturn in the stock market in 2008 while WEDC has lost track of millions in loans in less than 2 years, I think I'll trust the SWIB's judgment on this one.