Winning Issue #24473648 - WEDC

By Jeff Simpson

Republicans are desperate for anything they can dig up on Mary Burke.  Well the ones that did not endorse her yesterday that is.  

The latest attack is based on this story from 2007.

Shortly before announcing her resignation as Wisconsin's secretary of commerce, Mary Burke issued a harsh criticism of her agency.

The Commerce Department, which ought to be among the state's most influential economic players, has sat on the sidelines while other states vie to recruit new businesses, she said.
"We are not out there selling the state and attracting the companies," Burke said late last month, echoing private-sector criticism.

Her Nov. 1 departure, announced last week, gives Gov. Jim Doyle the opportunity to name a replacement with enough dynamism and private-sector savvy to thrust Wisconsin into the fiercely competitive game of business attraction. It also means that business leaders and executives from around the state will closely scrutinize the nominee's credentials.

"We haven't been there when we need to be," said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

While I wonder what Mr. Sheehy has to say about WEDC, that is for another blog.   Here Mary Burke wants a bigger budget to help lure more companies to Wisconsin.  The budget she wants increased?

 The nonprofit Forward Wisconsin agency, which does marketing but not industrial attraction, has a budget of $600,000, with half that amount supplied by the state and the rest from non-taxpayer donors. In his current budget proposal, Doyle wants to add $590,000 for business attraction.

Ms. Burke felt that spending only $600,000(1/2 of which was not taxpayer money) was not enough to accomplish her goals of attracting businesses.   

Now let's compare/contrast.   

We know that when Scott Walker became Governor, he ended the Commerce department and he replaced it with Wisconsin Economic Development Corp. (WEDC) a private?public partnership that he personally chaired.    

How has that fared? 

Fast-forward to Gov. Scott Walker's Wisconsin, where the Wisconsin Economic Development Corporation (WEDC), staffed by the governor's cronies, has misplaced millions in tax dollars, blew off auditing compliance rules, and went on a spending spree for iTunes gift cards, football tickets and booze. And the consequences are nil.

 So the committee that Scott Walker personally chairs, treated Wisconsin taxpayer money and their position as the committee that brings business to Wisconsin as a big frat party.

How did Scott Walker address such egregious abuse of taxpayer money and position?

 Wisconsin Gov. Scott Walker proposes increasing the Wisconsin Economic Development Corp.’s marketing budget to $7.15 million by the fiscal year starting July 1, 2014, from the current $2 million.

 Yes I am quite sure this is a conversation that Mary Burke would love to have!  

 

Can You Spot What's Missing?

The Appleton Post Crescent met with Reed Hall, the Secretary and CEO of the corrupt WEDC in order to give him a chance to do some damage control for the failing agency.  Here is their introductory passage to the Q & A session. See if you can spot what is missing:

In baseball terms, Reed Hall is a long reliever. Like a team that falls behind by a lot of runs very quickly, the Wisconsin Economic Development Corporation ran into trouble very quickly in its two-year existence.

Intended to replace the state Department of Commerce as a more nimble, more productive economic development generator, the public-private WEDC became a mess of untracked loans, insufficient accountability and, according to a scathing state audit, didn’t follow state law.

Though it inherited some of the problems from Commerce, it created plenty of its own, leading to numerous negative news reports and criticism from the Legislature and the public.

As the issues surfaced, Gov. Scott Walker appointed Hall, a 64-year-old retired Marshfield Clinic executive, to take over as the WEDC’s secretary and CEO on an interim basis. The job became permanent in January and, now, Hall is trying to put the agency on the right track.

In an interview Thursday on Newsmakers, Post-Crescent Media’s online issues show, Hall talked about the changes that have already been made and how he intends the WEDC to operate. Here’s an edited transcript of the interview.

Did you spot it?

If you answered that they ignored the fact that Scott Walker is the Chairman of this corrupt agency, you are correct.

And as I have pointed out before, the one thing that the corporate media, the Republicans and even the Democrats fail to acknowledge is that this scheme was designed to fail and the only way to correct the problems with WEDC is to end it.

The First Step Is Admitting You Have A Problem

Everyone knows that Wisconsin's economy is tanking and that Scott Walker can't create a job to save his soul (if he hadn't already sold it to the Kochs). The facts are irrefutable:

From [Lisa] Johnson’s wheelhouse in the new economy, the rankings aren’t any better. Wisconsin came in 31st among 50 states in the latest New Economy Index from the Information Technology and Innovation Foundation, a nonpartisan group in Washington, D.C. The state scored poorly in crucial areas like the number of fast-growing companies and entrepreneurial activity, 39th and 47th, respectively.

According to the paper, Ms. Johnson is "vice president of entrepreneurship and innovation with the quasi-government Wisconsin Economic Development Corp." You know, the people that helped wreck our economy and came up with that less than brilliant slogan of "In Wisconsin."

So what does Ms. Johnson have to say about the job they've done so far? Well, this:

“The study came out and we’re 47th,” Johnson says. “We suck. We’re bad. Do we keep talking about it or do we take action?”

Well, as they say in the 12 step programs, the first step is to admit you have a problem.

But she goes on:

Taking action requires money, and that requires the blessing of the Legislature.

Uh oh. I've got a bad feeling about this. But maybe she means giving the money back to the workers of the state in order to create the demand that businesses need to keep in operation and to expand. Right? Maybe?

Johnson sat down recently with The Capital Times to talk about why investing in entrepreneurs, rather than convincing companies to relocate to Wisconsin, is key to job growth, why many startups will fail and why that’s OK.

The time for talking and studying the job numbers is over. As she’s fond of saying, it’s time to “just get it done.”

Oh crap.

Well, that's no more helpful than the alcoholic admitting he has a drinking problem at 2 am while sitting pie-eyed in the bar. They haven't learned anything and will go back to the same self-destructive behaviors the next day.

Sigh.

Yeah, we're "In Wisconsin" alright.  We're in it deep too.

WEDC: Walker's Economy-Destroying Cronies

Since it's creation, the Wisconsin Economic Development Corporation has been an utter disaster and a joke, much like the rest of Walker's initiatives. That's not really much of a surprise since the concept has been a failure where ever it's been tried.

Sadly, Scott Walker is unable to learn from his own mistakes, much less the mistakes made by others, and so went headlong into creating this mess.

Some examples from just the past year include:

• In February, Walker used WEDC to announce a land giveaway scheme to try to lure businesses to Fitzwalkerstan. How's that working out? So far we have less businesses and less jobs.
• In July, Walker and WEDC got caught trying to do some bid rigging with a company called Skyward. When caught, Walker said: "As soon as our office learned of it, we put a stop to it." Yeah, that's the same thing he said about Walkergate.
• Just a month ago, as WEDC was touting their new slogan of "In Fitzwalkerstan"*, they were also getting slammed by the Feds for illegally handing out grants. To make things even worse, Walker was caught trying to cover up the problem from the board itself.

As one might imagine, given Walker's pattern of behavior, things went from bad to worse in relatively short order.

It's now come out that WEDC has lost track of some $69 million in loans, with $9 million of them being overdue. The reason they lapsed on following these loans was because no one was hired to do so!

And just like Walker, WEDC made things worse by covering up this problem while in front of an audit committee hearing:

The loans were not mentioned by WEDC officials at a lengthy audit committee hearing Thursday on transparency and accountability in the agency. Sen. Kathleen Vinehout (D-Alma) said that she would consider bringing those officials back before the committee and that she was certain that a Legislative Audit Bureau report due next spring would delve into the issue.

"It's infuriating," Vinehout said.

In a futile effort to try to get things to blow over, Walker announced that he would appoint someone from the private sector to head up this agency until another private agency went head-hunting for a new director.

Laughably, Walker contended that these moves were being made to remove politics from the position and make it more accountable.

Yet the interim director that Walker appointed is Reed Hall, a member of Wisconsin Manufacturers and Commerce (WMC). WMC, an member of ALEC, spent tens of millions of dollars, if not hundreds of millions of dollars, over the last few years to bring us the likes of Walker, David Prosser, the Fitzgerald Boyz, and Mike Gableman, just to name a few.

And now we're supposed to believe that politics were removed from the system? If anything, they now have an even stronger hold on it.

Walker also promised that he would make "dramatic moves" to improve the performance of the agency.

I can't imagine anyone who is foolish and inane enough to think that anything short of the abolishment of the program will improve it. Well, except for those like Owen Robinson, who is goofy enough to unquestioningly believe whatever AFP says:

Clearly this agency has been poorly run. The concept is good, but the management has been terrible. I’m happy to see that Walker is taking it seriously. What this agency needs is a real businessman to run it.

Folks, it ain't gonna get better until we take the state back, starting in two weeks. What are you doing to get the vote out?

*I wonder how much they spent for that less than brilliant slogan and even worse logo.  The only place these fools should be "in" is in prison.

"In Corporate Fitzwalkerstan"

There is an old adage that goes, "Truth is stranger than fiction."

In Fitzwalkerstan, that could be the state motto.

Let me explain.

On Wednesday, Scott Walker took time from his usual begging for money for his legal defense fund and nervously watching the Kelly Rindfleisch trial to do his favorite thing: Grandstanding for the media.

The topic du jour was the unveiling of a marketing initiative to promote the business friendly climate he has created and why businesses should locate and/or expand in Fitzwalkerstan:

The Wisconsin Economic Development Corporation (WEDC) today unveiled its marketing initiative to brand Wisconsin's business climate and promote the benefits of starting, expanding or locating a business in Wisconsin.

An integrated marketing campaign introducing the "In Wisconsin" brand will be launched next week in key business-focused media, featuring five world-class Wisconsin companies that have set standards in their industries through innovation and leadership.

"Over the past year we've enhanced Wisconsin's business climate with regulatory changes and powerful incentives for businesses to grow their operations and expand their workforce," said Gov. Scott Walker, who announced the initiative today at a WEDC press conference in Madison. "As a result, Wisconsin has already improved its image as a business-friendly state, as evidenced by recent state business climate rankings by Chief Executive Magazine and CNBC. The In Wisconsin marketing initiative takes the next step by actively promoting the state's benefits to business leaders, both those already here and those considering a relocation or expansion in Wisconsin."

The "In Wisconsin" brand promotes the state's pioneering spirit and heritage of innovation.

Yeah, right.

One would be accurate to describe this as a textbook example of Walker's usual hypocrisy and outright lying, especially when one considers the fact that the head of WEDC, Paul Jadin, is bailing on the group to go out to the private sector.

The hypocrisy reaches nearly toxic levels when one factors in that Walker's failure is so utterly complete and of such epic proportions that he has scrubbed all references of his promise of creating 250,000 jobs from his campaign website.

Ah, but as the gentle reader already knows, when it comes to all things Walker, there's more. There's always more.

Walker had added an amazing amount of chutzpah to his hypocrisy with this particular example of showboating.

Just hours earlier, we learned that the Feds had slammed into WEDC for illegal behaviors and violating their very own policy:

In a strongly worded Aug. 12 letter to Department of Administration Secretary Mike Huebsch, federal officials said two state agencies failed to follow federal law and their own policies in issuing economic development grants.

Among the findings:

• The state gave out aid worth $20,000 per job created to Kapco, a company with a plant in Polk County — twice as much as its own policies allow./LI.
  
• Officials failed to check the financial soundness of two companies receiving $1.4 million in federal grants.


• Eleven out of 20 loans using Community Development Block Grant funds awarded since Jan. 1, 2011, are "forgivable," despite the fact that the state's own policy calls for allowing businesses to get no-payback loans only in "extraordinary circumstances."


• Questions remain about an $8.6 million chunk of CDBG funds withdrawn under unusual circumstances late last year.

The HUD monitoring report, obtained by the State Journal, covers activities stretching back to 2007.

And then there is this:

HUD said some of the problems resulted from the "hasty" transfer of duties from the former Department of Commerce to the new economic development entity without a formal written agreement. The monitoring apparently was triggered by an announcement in February by Walker that four communities had received $9.6 million in CDBG funding. "At the time these awards were made," HUD said, "WEDC had no legal authority under the CDBG program to award or administer the CDBG funds." The federal agency ordered Wisconsin to hire a high-level administrator for monitoring, oversight and compliance, saying DOA currently lacks "adequate staff or experience to adequately oversee ... the new activities that are being undertaken by the WEDC." Among the most serious findings are that the state failed to perform required underwriting — the process of determining the financial soundness of a company — before giving $390,000 to Gilman USA LLC, a machining company in Grafton, and $1 million to Morgan Aircraft in Sheboygan. The aircraft company's website said it is developing a vertical lift technology that "combines the operational advantages of a helicopter with the range and speed of a fixed-wing aircraft." In the case of Gilman, "WEDC staff indicated that the underwriting process was skipped in order to accommodate the business' timeline," HUD said. "In the case of Morgan Aircraft, WEDC staff indicates that an updated underwriting was performed, but not placed in the file. HUD staff requested a copy ... but it has not been provided."

In other words, Walker was handing out taxpayer money willy nilly to these various companies through WEDC, even though WEDC wasn't even a state agency and without having even done the most rudimentary investigation to make sure the companies provided a suitable and stable company. Adding to this mess is the fact that Walker knew all along that WEDC wasn't a legitimate agency to be handling this money. He had been advised as much by the Feds in a previous letter and through a conference call with them. The real kicker is that Walker willfully kept this information from the WEDC board, which he chairs:

Walker, who chairs the economic development board, defended the decision not to inform the board of the matter, saying the federal government "routinely" corresponds with the state. "It's one where the Department of Administration is still waiting to hear back from HUD in terms of whether the things they're proposing are acceptable to them," he said. "And if those are things that need approval from the board certainly we'll have a special meeting of the board." The Republican governor made the comments Wednesday when asked about it during a news conference announcing WEDC's new branding program for the state. Walker said discussions with HUD are in the "early stages," even though they have gone on since at least May. In addition to Walker, the board consists of four lawmakers and eight businesspeople. Vice Chairman Dan Ariens and other board members from the private sector did not return calls Wednesday.

Mike Ivey reports that Walker has had issued with HUD money for a long time and that the Feds have been warning Walker about these issues for over a year. Actually, Walker's problems with HUD funding goes back even further, even before Walker became governor. When Walker was Milwaukee County Executive, he had put Tim Russell (remember that name?) in charge of the county's housing division. The result of this corrupt couple was that the taxpayers of Milwaukee County facing the possibility of having to pay back more than a half a million dollars. Fortunately, with no thanks to Walker, the county got off light:

Milwaukee County has repaid the federal government $229,000 for a portion of Community Development Block Grant money that was improperly spent as part of an overhaul required by the U.S. Department of Housing and Urban Development. The amount probably represents a small fraction of spending in the past decade that HUD says violated federal rules. But HUD is only enforcing the rule starting with 2011 allocations. The payback was ordered because the local programs primarily served City of Milwaukee residents or the county couldn't find documentation showing how the money was spent, according to county and HUD officials.

Now, I haven't had the time to research all of this, but I can't help but wonder how many of these companies are also campaign donors to Walker. I wouldn't be at all surprised that one would see what the real driving force behind the WEDC truly is as well as what Walker means when he says Fitzwalkerstan is business friendly.