Sunday, August 9, 2015

State Journal hammers WEDC in massive front-page spread

I've gotten on the Wisconsin State Journal's Matt DeFour in the past for his admittance that he couldn't call out Scott Walker for lying. But he's made up for that in other stories in recent months, and deserves major props for today's front-page story detailing just how much of a disaster the Wisconsin Economic Development Corporation (WEDC) has been under Gov Scott Walker.

WEDC was one of Walker's first bills that was put through in early 2011, even before the union-busting Act 10. It replaced the Department of Commerce as the state's main economic development agency, and it's major selling point was increased privatization and less oversight to add to "flexibility." Not surprisingly, this has led to major corruption and corners being cut, with at least $124 million in taxpayer-funded loans improperly handed out. In addition, 60% of all the funds and incentives WEDC has handed out ended up in the hands of Walker donors.

As DeFour's article from the Sunday State Journal points out, WEDC became "a toxic mix of hasty decision-making, competing public and private sector objectives and political pressure to create jobs threatened to undermine the Wisconsin Economic Development Corp. from the start, according to several former employees and top managers who spoke with the State Journal." Add in a rushed, partisan agenda from Walker in 2011, and it made WEDC's initial loss of records an inevitable outcome.
The challenge [of getting WEDC to replace Commerce by July 1, 2011] was exacerbated by the loss of many senior Commerce staff who opted not to stay after the battle over Act 10, the landmark 2011 law that severely curtailed the collective bargaining power of public workers, said Todd Jensen, an underwriter for Commerce and WEDC from 1999 until 2013.

One key departure was the employee who oversaw loan collections. Auditors later found the agency wasn’t properly tracking delinquent loans.

“There was nobody there doing this work. We made this clear to the higher-ups, and it appeared that nothing was done,” Jensen said. “The attitude from the beginning was: ‘We’re just here to get this thing up and running and get some good headlines and do it as quickly as possible.’”
And then came the new people that moved into jobs at WEDC, which were often GOP hacks and business owners who really didn't care very much when it came to following rules for grant money, or in having a proper criteria for determining a grantee's applications. It was exemplified by a mess that happened in 2012, when the U.S. Department of Housing and Urban Development [HUD] punished WEDC for handing out $9.6 million in federal funds without being authorized to do so. As a result, the grants had to be covered by state money as a result, and oversight for those grants had to be shifted to the Department of Administration, leading to delays for needed services (see Scott Wittkopf's Badger Democracy for a great summary of that fiasco).

In DeFour's story, there are an excellent couple of quotes from Doug Thurlow, who was a grants specialist with the Department of Commerce and WEDC for over 20 years. He describes how the "politics over everything" mentality that has defined the Walker era was especially true at WEDC, where rewarding connections and "getting some good headlines" meant more than actual job creation or prudent use of taxpayer dollars.
“In 1991 [at Commerce] you could get in trouble for not following the rules, and by 2013 when I left you could get in trouble for following the rules,” Thurlow said.

Thurlow said he raised concerns at WEDC staff meetings about the agency’s use of [HUD's Community Development Block Grant] funds amid HUD’s warnings but was told by [WEDC VP of of Economic and Community Development Brenda] Hicks-Sorensen: “We don’t want to hear what we can’t do; we want to hear what we can.....

"They were like kids you put in a candy shop,” Thurlow said of the new managers. “They were hired because they had experience in a related field and were all trusted by Republicans. You knew who the real boss was there. It was Scott Walker."
Brenda Hicks-Sorenson is no longer with WEDC, as she left in 2014 to go to Nebraska to head up Gov. Pete Ricketts' economic development agency. If the name "Ricketts" rings a bell, it should, because Pete's brother Tom gave Walker's Presidential SuperPAC $5 million, and is actively involved in the Walker 2016 campaign. Funny that.

Go read the whole DeFour article, and realize that while this is one of the most in-depth reports on WEDC so far, it barely scratches the surface on the rampant pay-for-play that has plagued that organization since Scott Walker created it 4 1/2 years ago.

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