Friday, June 19, 2015

Connections count- aka $124 million in WEDC cash

I had a couple of casual budget-related items ready to go on this Friday night. Then I was riding home with the wife around 4:30pm, and flipped by The Wheeler Report (a great source of state headlines if you don't use it) to see if anything had dropped in the last hour. I then saw that there was a release from the Wisconsin Economic Development Corporation (WEDC), dated at 4:24pm. On a Friday. Needless to say, I clicked the link.

It dealt with the scandal where $500,000 was loaned out by WEDC to Building Committee Inc (BCI), a business owned by someone who gave Scott Walker's campaign a max donation, and the taxpayers never got their money back (more on that scandal here) . But WEDC also dumped all of their other records regarding its loans, and it shows that BCI was not alone in having a lack of oversight.
In addition to the BCI loan files, WEDC also today provided the board with the results of a review of 371 awards that WEDC made from July 1, 2011, and June 30, 2013. That review uncovered 26 awards that were made without a formal Staff Review by our underwriting department – all of which took place in the first 15 months of WEDC’s existence.
26 awards were made without a formal Staff Review??? Jaw-dropping to be sure, but then we got to find out just how much improperly went out when the Milwaukee Journal-Sentinel's Jason Stein tweeted this out about 30 minutes later.

$124 MILLION IN TAXPAYER DOLLARS HANDED OUT IMPROPERLY?? This is where I remind you that Scott Walker is the Chair of the WEDC Board, and that one of his first acts as governor was to create WEDC as a public-private hybrid, to allow for "greater flexibility" in offering financial incentives to companies to expand in Wisconsin. And now they're handing out $124 million without adequate oversight? Tell me more, Mr. Stein.
The awards included incentives given to major Wisconsin companies such as Spectrum Brands, Kestrel Aircraft Co. Plexus Corp and Kohl's - a department store Walker has woven into his campaign talks by saying the company's business approach would be a good economic model for the country.

The incentives were supposed to create 6,165 jobs, but so far only 2,106 jobs have been created, according to the records In most cases, however, the companies still have years to meet those job creation targets.

The 27 awards included grants, loans and tax credits. The biggest one, worth $62.5 million, went to Kohl's. Coming in second was Kestrel at $18 million (which has not built one plane in Superior in the 3 1/2 years since it got its award), and Plexus at $15 million (who promptly outsourced 116 jobs instead of creating them) .
The Journal-Sentinel article goes on to mention how top Walker officials tried to find creative ways to get WEDC money into the pockets of BCI and other businesses, and went over the heads of lower-level workers who questioned the abilities of BCI and other companies to deliver on their promises.

This story's got serious legs, and you have to wonder how many WEDC grants are tied up with what's being discussed in the John Doe investigation, which the Wisconsin Supreme Court has suspiciously refused to release a ruling on despite hearing the case several weeks ago. And you have to wonder if all funding for WEDC should be taken out of the still-to-be-completed state budget. A Walker scheme that would have allowed WEDC to give away another $55 million and to be exempt from certain open records requirements was nixed by the Legislature's Joint Finance Committee last month, and now we have a good idea why Scotty wanted to pull off that scheme- to hide further shenanigans like this from becoming public.

The fact that Gov Walker was the creator of WEDC's unaccountable system of operations and chaired the WEDC Board as all of these awards were handed out means the corruption and cronyism point right to Scotty. And it also points to the need to have an independent FEDERAL investigation of this slush fund, with a full release of all papers involved from this organization, and firings and charges brought against all personnel who approved of this funneling of taxpayer dollars into Walker donors and cronies. And to have WEDC shut down and replaced with an agency similar to the former Department of Commerce, staffed by civil servants who might have priorities other than serving as an outgrowth of Scott Walker's campaign fundraising committee. Nothing less than that is acceptable, and it's well past time the national media turn up its microscope on this scandal.


  1. "Forward Wisconsin Development Authority" - establishes the colony of formerlyWisconsin

  2. Yeah, that was another attempt of Scotty's to expand the scope of the WEDC slush fund, but the JFC tossed that out of the budget at the same time they removed the $55 million Grant program

    1., WEDC stays and all mention in proposed budget of FWDA goes away?

  3. Yep. WHEDA stays as the Housing dept it is, and WEDC is merely limited to the corporate slush fund it is instead of getting bigger.

    But WEDC still exists as of now, and that has to end as well

  4. ...with indictment of former chair? That slush is toxic to democracy. Walker's complicit in what may ultimately involve election campaign laws and fiduciary malfeasance. Thanks, Jake -- thank you for telling truth about WEDC.