Kestrel failure gives a bad preview for how WEDC will screw us with Fox-con

As the Wisconsin Economic Development Corporation (WEDC) continues to try to work out final details of its $3 billion giveaway to Foxconn, Matt De Four of the Wisconsin State Journal reminded us of another big headline deal from years past that was supposed to be a "game-changer" for an economically lagging area of Wisconsin- Kestrel Aircraft.

A day before Democrats submitted a petition to recall him in 2012, Gov. Scott Walker flew to Superior to announce a $20 million award for an aviation start-up promising to create 665 jobs and to invest more than $50 million in the state.

Five years later, Kestrel Aircraft has defaulted on its loan repayments after investing $1.4 million and creating 25 jobs, and the Wisconsin Economic Development Corp. says it is initiating legal action against the company.

5 years later? Shouldn't you have given them a bit of accountability before that, WEDC?

De Four talks to the guy who was in charge of WEDC at the time, and we get a good indication why the state went ahead with this half-baked plan that would fail. Because Scott Walker wanted headlines to try to convince voters that his agenda was working.

In an interview, Paul Jadin, former WEDC secretary and now CEO of the Madison Region Economic Partnership, said some awards didn’t have staff reviews, which at the time were presented to the agency’s top executives before contracts were finalized, because an agency executive, rather than an underwriter, led the review. In other cases, such as Kestrel, Walker’s public announcement occurred before the management review committee took place, Jadin said.

“I think we may well have had to forego the management review committee to meet the deadline for that press conference, but that doesn’t mean the deal was rushed,” Jadin said.

Oh NOOOOOOO! Of course not, Paul. I mean, why would you want to do any research that might have revealed details like this.?

The agency awarded a second $2 million Small Business Credit Initiative loan, which was federally funded, after Jadin left the agency. WEDC’s second CEO Reed Hall, who signed off, didn’t respond to a request for comment.

Separately the company was working with the Wisconsin Housing and Economic Development Association and other groups to obtain $90 million through a federal tax credit program that required private investors. WHEDA agreed to provide $30 million, but Kestrel was unable to access additional funds because the project had been in default with two other investors, did not have $60 million of qualifying expenses and other backers wouldn’t accept the intellectual property pledged as collateral for subsequent allocations, WHEDA spokesman Kevin Fischer said.

In addition, WEDC refused to admit to the public that they'd been had ahead of Walker re-election campaign in 2014, and allowed Kestrel to defer payments on loans it had obtained from WEDC. De Four reports that Kestrel still owes Wisconsin taxpayers $3.4 million from these loans.

And what did we get out of it? Two dozen jobs in a small office in Superior and taxpayers being on the hook for big bucks. But hey, Scotty got the headlines he wanted from gullible media and voters, and that's what most important, isn't it?

Let's throw it ahead to the latest WEDC scam in process - Foxconn. Just last week, we saw potential action by the WEDC Board get scuttled when it turned out that WEDC hadn't nailed down all the needed details to hold the Chinese company accountable.

The Wisconsin Economic Development Corp. delayed a vote on a nearly $3 billion incentive package for Taiwanese manufacturer Foxconn until November after an unspecified problem was discovered with the deal board members were set to vote on Tuesday.

Sen. Tim Carpenter, D-Milwaukee, declined to describe the problem but characterized it as a “nuclear bomb” that, had it not been addressed, would have resulted in a contract that “would not have protected taxpayers whatsoever.”

WEDC board chairwoman Lisa Mauer confirmed the vote was pushed back because of a particular concern but also declined to provide specifics. She said it was detected late in the negotiating process.

And still, the Walker Administration and WEDC are insistent that the WEDC Board only gets to vote on the outline of the deal with Foxconn, and they refuse to bring the final details of the bill to the Joint Finance Committee and/or State Legislature for their approval. They want to do all of the negotiating in secret, and not let the taxpayers of Wisconsin and their representatives be able to say "NO" if the final deal turns out to be something they didn't agree with.

Oh, and interesting that De Four's article about how the state is finally going after Kestrel just happens to come out the weekend before WEDC is slated to go before the Legislature's Joint Audit Committee on Tuesday. It's almost like the Walker Administration and WEDC know that they've been allowing their recipients of corporate welfare off the hook, and now they're trying to give the image of giving a crap instead of being the unaccountable slush fund to GOP donors that we all know them to be.

Don't fall for it. WEDC's ongoing failures to protect taxpayers and its unchecked decision-making are exactly why the ALEC-GOPs created it. And it's one of the biggest reason the Fox-con and the Walker Administration's economic strategy cannot be trusted to work out.