WEDC, Foxconn, and the need for the return of good government in Wisconsin

Just because State Sen. Kathleen Vinehout finished 4th in the Dems’ gubernatorial primary 2 months ago, it doesn’t mean she has been taken off the scene of Wisconsin politics and government. Sen. Vinehout wrote her most recent column to remind us that the Wisconsin Economic Development Corporation (WEDC) still is not forthcoming about how what happens with taxpayer dollars after they go to businesses to locate and/or expand in Wisconsin.

Vinehout has been on the Joint Audit Committee for the past few years, and despite numerous reports, legislators and the public are still in the dark over well these tax-funded incentives have been working, and why those tax dollars are handed out to certain companies over others.

After four nonpartisan audits over six years, we still cannot answer the questions I raised about state money used for job creation. WEDC is still under scrutiny by the LAB. A new audit is likely to be released in the spring of 2019.

WEDC was created to be the state’s lead economic development organization, however it is not a state agency. It is funded primarily with state funds and has awarded hundreds of millions in loans, grants and tax credits. WEDC is outside the normal rubric of state government which created many problems, resulted in federal penalties, and produced a lack of transparency for lawmakers and the public.

Partly because of this opaque structure, lawmakers have not gotten answers to the most basic questions about state funds used for job creation. Nonpartisan audits provide one of the few windows into what is actually happening with state money. The facts show, for many years, auditors could not corroborate job creation success in numbers used by the governor’s office and WEDC’s own publications.

The three secretaries who disapproved of the governor’s actions shared insight gained from experience in their open letter to the public, “Governor Walker has consistently eschewed sound management practices in favor of schemes or cover-up and has routinely put his future ahead of the state. The result is micromanagement, manipulation and mischief. … It’s time to build a more open and transparent government to ensure the integrity of our public agencies and institutions.”

The Secretary’s letter did not include specific details about the problems which lead them to share their disapproval. But we do know WEDC’s top official publically refused to follow the law after a long history of detailed, audit work showing noncompliance. This should give taxpayers no confidence that the public’s interest was followed.

As usual, I recommend that you listen to her.

The prospect of details and results-oriented public servant like Sen. Vinehout being part of a Tony Evers’ Administration should be yet another reason to back the Dem on November 6. Especially when you contrast it to what The Atlantic has today from former Walker's former Secretary of the Department of Financial Institutions, Peter Bildstein. Bildstein says that Scott Walker could not care less about day-to-day operations of state government, and instead (and I know this will shock you), Walker cared about the needs of donors over what was proper, or even over what might work better.

After he won his recall election, Walker rarely attended cabinet meetings anymore, and radically reduced the number of one-on-one’s with cabinet secretaries. He took more far-right positions, probably because he thought they would play well with the Republican base. Funding for public education and our University of Wisconsin system was cut dramatically. Our infrastructure continued to deteriorate to the point that we ranked 49th in the nation in the quality of our roads and bridges….

Throughout 2014, Walker was traveling the country, gearing up for a presidential run. He was a regular on Fox News, and courting big-money donors. Our marching orders, meanwhile, were to play up each and every administration “success,” and to take care of special interests. Our agencies became politicized.

Wisconsin has some of the laxest laws in the country when it comes to small-dollar lending like payday and auto-title loans. Of the states that allow payday loans, we’re one of just eight with no interest rate cap of any kind. The average interest rate charged on a payday loan here is 585 percent, and some lenders charge as much as 1,000 percent. But my department was not given room to regulate small-dollar lenders during the Walker administration, a fact I attribute to heavy political contributions to the governor and the Republican-controlled legislature by vested interests.

When a lobbyist for the payday lending industry asked to meet with me to discuss yet another request for regulatory “relief,” I rebuffed him. Fifteen minutes later, I got a call from the governor’s office directing me to give full consideration to the lobbyist’s requests because he represented big supporters of the administration. I did, but it was another straw on the camel’s back. It seemed to me that, for Walker, political friends and donors came first.

This seems to be worthy to note when you remember WEDC has oversight of the billions in incentives related to the Foxconn development. That agency and most of the Walker Administration continue to promote the project and overpromise on its economic impact, and Dem Assembly Leader Gordon Hintz called out Walker’s Administration Secretary for lying about Foxconn’s costs and impacts during a tax-funded campaign stop in Tomah.

Under the very best case scenario, expenditures (cash payments) will exceed all direct and indirect state tax revenue through the year 2032-33. The total deficit over the next 15 years is estimated at $1.041 billion.

“I don’t understand how the Secretary of the agency tasked with overseeing the state budget doesn’t think $1 billion diverted from funding state programs is not going to have an ‘impact on entities around the state.’ Secretary Nowak’s comments about Foxconn’s fiscal impact on our state budget are objectively false. It is impossible for the Governor to give billions of dollars in cash payments to a foreign corporation and not have that decision directly impact funding for our public schools, roads, and universities.”

In addition, the Walker Administration has already raided $134 million from statewide highway rehabilitation projects in order to fund local roads supporting the Foxconn project.

And we saw similar lies being spewed by our president last night.

Trump is touting the good economic numbers and the Foxconn investment in Wisconsin, which he claims he himself "handed over" to Scott Walker. "They came to Wisconsin with the most incredible plant...it's the most incredible thing I've ever seen."

— Daniel Dale (@ddale8) October 25, 2018

That claim needed some rebuttal.

The #Foxconn plant isn't open, the plans have been downsized and it's already gotten a slap on the wrist by Walker's DNR (!) for excessive runoff.

But it HAS already gotten nearly $1 bil in subsidies, with $3 bil to go. https://t.co/hlTQvJE4Q2#wiunion #wigov #TrumpInWI

— JakeEdwards (@JakeMadtown) October 25, 2018

Facts matter. Dealing with the reality that comes from those facts matters. And having independent, honest government matters. Scott Walker and the rest of today’s GOP doesn’t want to deal with any of those 3 concepts. And they need to be replaced by people who do on November 6.