Saturday, July 21, 2012

WEDC- Unaccountable Fitzwalkerstani cronyism that is loaded with fail

Looks like a couple of other shoes dropped on the sketchiness associated with the new Wisconsin Economic Development Corporation (WEDC) in the last few days. The first was the giveaway of $62.5 million in tax credit corporate welfare to Kohl's Corporation to allow them to expand their headquarters in Menomonee Falls.

Add in other giveaways and TIF write-offs by the Village of Menomonee Falls, this Forbes 200 company now stands to get $100 million in tax breaks that'll have to be made up by people who actually do pay taxes over the next 15-20 years (and that's not even bringing up the increasing need to maintenance up the Zoo Interchange and Hwy. 45 due to the sprawl caused by having a major employer headquarters in the sticks). But hey, when you lost more jobs than any other state in the country last month, I suppose you need some kind of headline that can misdirect the media's attention- no matter what the cost is to us that are left behind after Walker leaves, either to prison or to go to the Sarah Palin Memorial Wingnut Welfare Circuit.

And it's not like it's the first time WEDC has given away millions to huge Wisconsin corporations. Such as the $2 million in write-offs to Shopko or the $4 million loan it gave to Spectrum Brands to help it move headquarters from Madison to Middleton. These giveaways will be shown in lower tax revenues to the state in the next few years, and despite the promises given by the corporations and this pro-corporate administration, I can bet the jobs "created or saved" won't make up for those losses, putting the state even further in the hole.

But let's back up and take a look at WEDC itself, and you can see why they take part in such failed policies. Remember that WEDC was spun off of the state Department of Commerce as part of one of those "special session jobs bills" that Walker got the Legislature to jam through at the start of his tenure in January 2011, and the first WEDC annual report goes over the goals of WEDC and I'll also emphasize a few passages that shows how they removed regulation from the agency.
Act 7 designated WEDC as the lead economic development organization in the state, and charged it with:
􀂃 Developing and implementing economic programs to provide business support, expertise, and financial assistance to companies that are investing and creating jobs in Wisconsin;
􀂃 Supporting new business start‐ups and business expansion and growth in Wisconsin;
􀂃 Developing and implementing any other programs related to economic development in Wisconsin.

To implement these objectives, WEDC created a four year strategic plan with the mission of elevating the Wisconsin economy to be the best in the world by providing a positive business climate, world‐class support services, and economic development tools to accelerate business start‐up, attraction, and growth. The strategic plan identified key goals and indicators to be targeted by WEDC and an extended network of economic development organizations in Wisconsin known collectively as the “Accelerate Wisconsin” partnership.

In conjunction with Act 7, the 2011‐2013 Budget provided the mechanisms for transitioning Commerce’s economic and community development functions to WEDC. Effective July 1st, contracts primarily related to community and economic development were expressly transferred to WEDC. The regulatory functions of Commerce along with the Department of Regulation and Licensing were merged into a new state agency, the Department of Safety and Professional Services (DSPS).

The creation of WEDC in Act 7 has added benefits for accountability and transparency of economic development objectives. The transfer of non‐economic development functions allows WEDC to focus on business and job growth objectives. The increased flexibility and elimination of specific program mandates improves the ability to have consistent metrics and evaluation protocols for all WEDC initiatives. The public‐private structure and approach of WEDC increases the likelihood that performance metrics will be used for ongoing continuous improvement management rather than solely as a biannual audit report to drive policy change.
So Walker removed the oversight functions from Commerce, and stuck it in a new department that would take a while to get everything coordinated and figured out. This allowed WEDC to concentrate on meeting with corporations to figure out where to plan their next taxpayer-funded giveaway without some pesky, independent unionized employee to say "Hey, this deal makes no sense," or ask "Doesn't this seem to be corrupt favortism to you?"

Then combine this with the fact that Walker stacked the WEDC board with his own appointments as well as members of the GOP-controlled Legislature, and you have a system set up to reward cronies and contributors instead of independently awarding credits and incentives to the best-qualified businesses and needs.

So with that lack of oversight and internal control, can you be surprised at the attempted bid-rigging involving the state's information system for schools? Heck, the head of WEDC admitted he was told that they didn't need to follow state rules on fair and open competition.
Wisconsin Economic Development Corp. leader Paul Jadin told The Associated Press his legal team advised him that the offer to Skyward Inc. was allowed because the year-old agency isn’t bound by procurement laws that forbid bid-rigging.

“It was indicated that we could make a contingency offer,” Jadin said in his first public remarks on the controversy since it came to a head earlier this month. “We’re satisfied that we could make the offer.”

Others in state government didn’t see it that way, and Democrats on Friday issued their most forceful criticisms of the deal to date, calling it sleazy and illegal.
Now the Walker Administration backed out of the contingency-laden bid to Skyward, but we all know that was only because they got caught trying to put one over on the taxpayer and other companies that wanted the business. And it makes you wonder if the public-private nature of WEDC exempt it from Open Records Requests that can be filed to see just what kind of decision process went into giving these tax credits away, and if there were any backroom deals associated with it? Don't doubt that Walker's puppetmasters had this very secrecy in mind when they set WEDC up.

The other two stories on WEDC this week doesn't exactly fill me with confidence that they'll clean things up in the future. First was the hiring of 30-year old political lifer Ryan Murray to be the No. 2 guy at WEDC at $106,000 a year. Given Ryan's zero years of corporate or civil service experience, I'm gonna bet he'll be following quite a bit of orders from his boss in the Governor's Mansion and the contributors that kept that Governor in power. After all, there's tens of millions in campaign contributions to pay back from the last 18 months.

And WEDC is already more than $14 million in the hole, contrary to its earlier promises. This means that taxpayers could well be shelling out more money toward this unaccountable agency in future years (and increasing Walker's already-large 2013-2015 budget deficit). It also means that WEDC won't be able to use as many incentives like grants and loans in future years, when they may be needed more and could go to more deserving candidates, and tying the hands of future governors and politicians.

Of course, today's GOP loves to take short-term gains and headlines in favor of FUBARing things for the next guy, because fiscal constraints make it more likely that failed policies can't be replaced with something that might actually work for both taxpayer and corporation. It also gives them the extra bonus of being able to whine about the "lack of results" when Democrats try to fix up the mess they caused. It's the same routine that the GOP has tried on Obama the last 3 1/2 years, (it sure worked in Wisconsin in 2010) and it's even more effective at the state level, where governments can't run deficits to finance the transition.

It almost makes you think the mismanagement and cronyism of WEDC isn't a drawback in Walker World. Instead, these crooks probably view it is as a positive thing that allows both WEDC officials and corporate contributors to grab as many short-term gains at taxpayer expense as they can. And it allows them to skip town when the bill comes due, leaving us holding the bag.

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