“Are you going to follow the recommendations in the audit?” I asked the Board Chair of the Wisconsin Economic Development Corporation (WEDC). He crossed his arms, sat back and smiled at me.
A smile that, to me, said I was annoying him.
The clearest path to better outcomes at Governor Walker’s flagship jobs creation agency is to follow the recommendations of the nonpartisan Legislative Audit Bureau (LAB).
However, during a recent and very long public hearing investigating the troubled agency, I repeatedly heard obfuscation, deception and disdain for the law.
But an increasing number of Democrats and even a few conservatives have proposed making major changes to WEDC, either by overhauling it or by eliminating all or most of the agency. In July, Republican lawmakers already reduced the funding for WEDC as part of the current state budget.
You see, not only will the city be giving land valued at $4.25M to Dollar General for free, but the property taxes on the new incremental value DG is supposed to pay “to repay the municipality’s costs” WILL BE REFUNDED to them for the first ten years. That also means DG’s TIF district will not produce a $1.5M surplus near the end of the 10 year term. The deal essentially terminates the stakeholders responsibility for funding TIF District infrastructure and relegates the TIF application to a simple legal platform for local tools of the oligarchy to exempt Dollar General from its property tax obligations.
Let’s see if these projects ever get off the ground. I’ll remind you that Eaton Corp announced plans for a sizable expansion with WEDC tax credits in Spring 2014 (just as Scott Walker’s re-election campaign was ramping up) only to outsource large amounts of Wisconsin jobs twice in the last 18 months. Funny how these things never seem to work itself out the way the initial headlines claim, isn’t it?
WEDC was part of another “future jobs announcement” this week regarding a new warehouse for Dollar General in Janesville, which features another $5.5 million in potential WEDC write-offs, along with local tax breaks and land gifts from the Janesville area. And the timing of these announcements are very interesting, because last Wednesday, WEDC was the subject of a legislative hearing related to another blistering audit by the Legislative Audit Bureau. And take a look at what came out in that hearing, where both Republicans and (especially) Democrats were angered by WEDC’s continued inability to follow state laws on tracking loans, grants and job-making progress, combined with the loss of taxpayer dollars from previously failed projects and questionable loans.
But it was negotiations with all levels of government bureaucrats from state to county to city employees providing capital value redistributive incentive packages that ultimately drew Dollar General to Janesville.
A condition imperative to all of these corporate welfare deals: The development would not be occurring without government providing those “incentives.” Collectivism has now become self-fulfilling.
Gov. Scott Walker on Thursday appointed banking executive and frequent GOP donor Mark Hogan to lead the state’s troubled job-creation agency…..
M&I Bank faced its own problems several years ago with bad loans and a crashing stock price and ended up being absorbed by BMO Harris of Canada in 2011.
M&I loan losses during the real estate bust — concentrated heavily in Arizona and Florida — totaled $4.8 billion across its portfolio from Dec. 31, 2007, through December 2010, according to a Milwaukee Journal Sentinel review.
Hogan has given $24,125 to Walker’s campaigns for governor since 2009, state records show.
He gave another $10,000 this year to the super PAC backing Walker’s presidential run. His son, Patrick, has worked for Walker’s office and campaign.
Walker spokeswoman Laurel Patrick said the contributions and Hogan’s son’s work for the campaign played no role in Hogan’s appointment.
Walker’s jobs agency is better understood as a model of what not to do. The persistent struggles of his perpetually mismanaged, publicly funded business development facilitator highlight just how inept government-designed agencies can be at spending taxpayer money to create jobs, and the perils of a politically driven, get-something-done approach to economic growth. And, in combination with his flawed arguments for the stadium deal, they offer a stark reminder of the sort of dismal results that can occur when politically connected corporate interests team up with politicians under the banner of happy economic boosterism: Businesses benefit, and so do politicians—but only at taxpayers’ expense. Despite Walker’s campaign-trail claims to be a champion for the little guy, what he’s inadvertently shown in Wisconsin is how the special interests win.
The best timing for Hall would have been to remain retired in the first place, but better late than never to depart. The former Department of Commerce was a mess; the WEDC has been even worse….
“Former top managers and employees say interference from Gov. Scott Walker’s administration was a problem.”
Madison — The state’s top jobs agency has settled its $360,000 lawsuit with a shuttered Tomahawk metal company for $125,000, state officials said.
The Department of Commerce made a $375,000 to the company now known as Tomahawk Metal Products LLC in June 2011 even though the firm was behind in rent and taxes to the city and was facing federal fines for alleged health and safety violations, the website Wisconsin Watch reported this week.
Days after the loan was made, the Department of Commerce was replaced by the Wisconsin Economic Development Corp., which brought the lawsuit against Tomahawk after it defaulted on the loan.
WEDC spokesman Mark Maley said that state officials were aware of the health and safety violations but that the project held the potential for creating jobs in a Northern Wisconsin area with high unemployment.
Moreover, the agency’s expense account turned out to be full of nuggets: WEDC had bought six season tickets to University of Wisconsin football games for the governor’s office. They expensed booze for meetings with WEDC contractors, train tickets in China and meals in India for the agency director’s family, and iTunes gift cards for agency staff.
Why iTunes cards? Well, what good is a new iPhone without one?
WEDC footed the bill for 46 of its employees to break existing cell phone contracts so it could buy them $210 phones. The agency even kicked for a $35 activation fee.
‘We have one customer, and our job is to make him look good. . . . Huebsch is the prince, Walker is the king.’
“Ever adaptive, WEDC gradually abandoned the claim that it was directly “creating” jobs and in favor of a more flexible term: that it was “impacting” jobs. The import of that linguistic choice became more clear following revelations that some companies given awards by WEDC had outsourced jobs abroad. While WEDC claimed in 2012 and 2013…
Well, the list of recipients of WEDC grants and its generous taxpayer-funded forgivable loans is populated with Walker campaign donors. Five awards worth $10.5 million went to cheese manufacturers who gave $104,000 to Walker’s campaigns. Diane Hendricks, a billionaire involved in construction who gave $500,000 to Walker’s 2012 recall campaign, won a $2 million tax credit. Another smaller, $500,000 loan was given to different construction firm, also owned by a Walker donor, who met with Walker’s chief of staff and the man Walker eventually put in charge of WEDC, Mike Huebsch. Huebsch was pushing for a $4.3 million package for the donor, William Minahan, even though his company was on the verge of collapse. The $500,000 loan was extended instead – and without review.These are just a few examples from a very long list….
“Madison — Officials at Wisconsin’s top jobs agency sought federal tax incentives for a failing Milwaukee business for a year after being told that the owner was seeking the money to pay off business debts such as the leases on luxury cars. Officials at the Wisconsin Economic Development Corp. worked to get that federal help…
“We are kept in the dark about so many things that are going on and only told when there is an investigative report or a legislative audit,” Barca said. “It’s clear to me that we are unable to proceed and get to the bottom of problems and protect the taxpayers if (Hall) were to continue as the CEO of WEDC.”
“In its first 15 months, a jobs agency created by Wisconsin Gov. Scott Walker gave businesses 26 awards worth $124.3 million in all without a formal review of the deals by underwriters. The Wisconsin Economic Development Corp. is reporting to its board on the awards made between July 2011 and June 2013 after reports that…