Wednesday, October 23, 2013

WEDC fail with a national perspective

Been tied up with things, but I wanted to give you a link to an excellent report from Good Jobs First that's titled Creating Scandals Instead of Jobs: The Failures of State Privatized Economic Development Agencies. As the Executive Summary mentions, organizations like WEDC have been setup throughout the country with Republicans sweeping into power in many states after the 2010 elections, and they have been loaded with fail.
We document here again numerous cases in which the public-private partnerships (PPPs) have become embroiled in scandals involving misuse of taxpayer funds, conflicts of interest, excessive executive pay and bonuses, questionable subsidy awards, exaggerated job-creation claims, lack of public disclosure of key records, and other accountability abuses.

We concluded in 2011, as our title suggested, that the real agenda behind these PPPs was not to make economic development efforts more effective but rather to more tightly concentrate the control over and credit for— job creation events in the hands of governors and their appointees.

Tragically, the history we detailed continues to repeat itself. An examination of the new wave of PPPs shows many of the same problems, especially in Wisconsin and Ohio...
The section on WEDC shouldn't be much of a surprise to those of you that have followed its history of failure on these pages and in other reports. But it's illuminating to have it described from an outside source. For example, here's how they describe the flawed setup of WEDC, and the fiasco involving Skyward, the Stevens Point-based school information system.
Unfortunately, many of the problems with PPPs we cited in our 2011 report came to fruition at the WEDC. It has been revealed that the agency has mismanaged public money, made questionable subsidy awards, lacked adequate transparency, resisted accountability, had conflicts of interest in awarding of subsidies, given management lavish executive pay, and made questionable claims about job creation. While all this was going on, over a fifth of WEDC employees were awarded merit bonuses.

Management of the WEDC has been in a constant state of flux. The first CEO, Paul Jadin, resigned amid two scandals in September 2012, saying he wanted a less public position. The scandals involved a subsidy award to an ineligible company and unauthorized expenditure of federal monies. Prior to the scandals, Jadin claimed the agency had an advantage in its flexibility given to staff in tailoring subsidies to the needs of businesses. He also touted the fact that the WEDC was free from various state rules governing public entities, including procurement rules. But this “flexibility” almost immediately became problematic: the agency awarded a tax break to a company that was simultaneously bidding on a $15 million state contract, a violation of state procurement rules.

Jadin stated publicly that the WEDC legal staff advised him that the offer to the company Skyward, Inc. was legal, because the WEDC was exempt from the state procurement rules. Gov. Walker disagreed with Jadin’s decision, canceled the contract award, and restarted the subsidy award process for the company. This prompted state legislators to begin questioning the transparency of the WEDC. Gov. Walker attempted to rectify the matter by moving his deputy chief of staff, Ryan Murray (a 30-year-old lifetime GOP hack with zero private-sector job experience), into the role of Chief Operating Officer at the WEDC. The WEDC’s Chief Financial Officer, Eric Schroeder, also left the agency.
And from there it gives a concise recollection of WEDC's 32 months of failure, lost funds, and weak record of creating jobs in Wisconsin.

The report also goes over the One Wisconsin Now finding that people who worked for businesses that received WEDC tax credits had given over $600,000 to the campaigns of Scott Walker and the Republican Governor's Association. And with John Doe, Part Deux heating up and seeming to include events after Walker took office in Madison, you have to wonder if WEDC's way of doing business is one of the items being investigated.

As I said before, read the whole Good Jobs Now paper, because it'll also look at states such as Ohio, Arizona, North Carolina and Indiana, and you'll see the same GOP-organized pattern of little to no accountability and oversight, and a whole lot of behavior that seems to be pay-to-play. We can't allow the media to let this issue drop over the next year, because it's symbolic of the cronyism and failed policies that have caused Wisconsin to slide in the 2 1/2 years that WEDC and the Age of Fitzwalkerstan has existed.

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