Monday, May 30, 2016

Continued WEDC theft demands more action than Schimel will give

The Wisconsin Economic Development Corporation (WEDC) continues to grab headlines, and not for reaching its alleged goal of job creation. For most of the 5 years since Scott Walker signed the bill that brought WEDC into existence, it has been racked by incompetence, and has been categorized as a slush fund due to the fact that a majority of recipients of WEDC tax write-offs were donors to Scott Walker and other Wisconsin Republicans.

And yet, even after 5 years of this, we continue to find out about the misuse of tax breaks, as shown in this story from WKOW in Madison, where Greg Neumann has been consistently strong on WEDC for the last couple of years.
Since 2012, the Wisconsin Economic Development Corporation has awarded $2 million to Specialty Retail Shops Holding Corporation, a subsidiary of Sun Capital that serves as the parent company to Shopko, which is headquartered in Green Bay. $1 million of that award was for job creation tax credits.

To date, WEDC records show Shopko has created 94 of a planned 129 new jobs since the award was originally handed out.

But a 27 News investigation found Shopko has also outsourced jobs to southeast Asia since receiving the award.

On May 6, the U.S. Department of Labor awarded Trade Adjustment Assistance (TAA) benefits to seven former employees whose data entry jobs were outsourced from the company's corporate headquarters to India in late 2014.
Funny, I seem to recall Scott Walker telling the WEDC Board around that time that policies would be put in place to prevent outsourcings like this from happening. Interesting how that went down the memory hole after the November 2014 elections, eh?

And also- $1 million for 94 jobs created? At flippin' Shopko? That in itself is robbery of Wisconsin taxpayers, and we still don't know how WEDC decided on that number or why they chose Shopko to give those tax breaks to (couldn't be related to Shopko employees making donations to WisGOP politicians, could it?)

And that story came on top of an article in the Wisconsin State Journal by Matt DeFour which showed taxpayers may be out a whole lot more money because of bad record-keeping at WEDC.
The state’s job creation agency has so far identified more than $412,000 in erroneously awarded tax credits — a figure that could stretch into the millions of dollars — based on a preliminary review released Thursday.

The Wisconsin Economic Development Corp. is reviewing 222 tax credits awarded since 2006, including under the former Commerce Department, for discrepancies in how jobs should have been counted.

Based on 18 awards reviewed so far totaling $4.5 million, the agency found it over-awarded $448,674, for a net excess credit of about $25,000 per award. The agency also found $36,479 in under-awarded credits.

WEDC first disclosed the tax credit problem at a board meeting last month. The report Thursday was the first time WEDC indicated the scope of the problem.
But I imagine Attorney General Brad Schimel will be all over this ripoff of taxpayers. Oh wait, Homer J. Schimel was busy last week defending WisGOP's voter suppression laws and filing lawsuits with Confederate states to instill the bathroom police in Wisconsin, and can't be bothered with something that might show wrongdoing by his campaign contributors.

Guess it's good timing that the following item is part of the Democratic Party of Wisconsin's list of resolutions to be discussed at next weekend's DPW Convention.
WHEREAS, Wisconsin Manufacturers and Commerce (WMC) spent an estimated $1.5M to elect Attorney Brad Schimel in 2014;

WHEREAS, the new Chair of the WEDC Board [Dan Ariens] is also the WMC Board Chair, and WEDC’s new CEO [John Hogan] is a major GOP donor who gave three times to Schimel’s campaign; and,

WHEREAS, the Attorney General has a conflict of interest, and cannot be trusted to fairly investigate WEDC’s wrongdoing;

THEREFORE, RESOLVED, the DPW asks the Dane County District Attorney’s office and the U.S. Department of Justice to open their own investigation of WEDC.
At this point, how much more evidence do you need that WEDC is a slush fund that kicks back to WisGOP donors? The Dems would be wise to follow this resolution and push the issue hard over the next 2 years, as it's not just liberals in Madison who are noticing that WEDC is corrupted and a clear failure when it comes to improving Wisconsin's record on adding jobs.


  1. Not surprisingly, the Walker adminstration last year objected to, and criticized the reading an audit of WEDC by the Dane County DA.

  2. Good point MAL. There are clearly things the WisGOPs want to hide with WEDC.

    Also thanks to you for

    this excellent piece on Big Ag pollution in Central Wisconsin. Yet another example where Schimel turns a blind eye and allows the WisGOP-connected interest to get an advantafe, while shirking his duty to the taxpayers who pay his 6-figure salary

  3. So the DPW has a resolution. Whoop-de-doo. All will be well. Add irony emoticon here.

    1. Well, if the DPW woukd stick to the platform and hit on a central theme of "WisGOP is corrupt and out of control," it would. They just don't seem willing to follow through on their members' wishes all that much.

      Makes you wonder why...

  4. Why ShopKo, you ask? It probably isn't all the little 3-figure WIGOP donations. Look higher up the foodchain. ShopKo is owned by Specialty Retail Holdings, which is in turn owned by Sun Capital Partners... and they happened to give a cool $950,000 to Romney's PAC (Restore Our Future), plus another $212k to the RNC. Very likely they were also generous with some of Walker's preferred groups (WICfG?).

    That's the case with a lot of these WEDC awards. Sometimes it's obvious and right there on, but there's more if you dig into who owns the companies.

    1. I knew there was some kind of Shopko-GOPconnection. Thanks for doing the work, lufthase.

      By the way, note my story later in where WEDC is asking for $8 million more in these type of tax breaks, and taking them away from start-ups