Wisconsin Economic Development Corp. (WEDC) scandals could finally be Scott Walker’s Undoing

When Wisconsin Assembly Democratic Leader Peter Barca says “It’s been mismanagement and incompetence at every level” regarding Governor Scott Walker’s pet project Wisconsin Economic Development Corp (WEDC), he’s not kidding.

Walker, when running for governor in 2010, said he had the secret, magic formula for creating 250,000 new private sector jobs by the end of his first term. In his words, he said he will “get government out of the way of employers … who will then help Wisconsin create 250,000 jobs by 2015, and as we create those new jobs, we will be able to add 10,000 new businesses.” State employer records show that 146,795 by the end of his first term, which is a little over half of what he promised.

With policies passed that devastated Wisconsin’s working families, Walker blamed bringing Wisconsin down to the bottom in Midwest in terms of job creation to everyone but himself. He blames the 2011 protestors who were fighting his direct attacks on public sector unions and the working class. He blames the people of Wisconsin for not getting a job while not doing his job while running for President. He blames the unemployed and underemployed. In Walker’s World, he is never to blame for his failures.

As with most things Walker touches, the WEDC scandals have erupted with his staff and other appointees involved in millions of taxpayer dollars missing, pay-to-play payoffs and apparent unaccountability that eludes those who support him. Like other investigations where staffers were indicted, Walker wags his finger and calls any questioning of a scandal a “political witch hunt”. It’s an old retort whenever he ventures over to Fox News for a puff interview massage and perhaps a Happy Ending.

Walker uses the same excuses that he did when he started the WEDC with about 50 employees after ending the Department of Commerce, which had over 300 employees.

Not soon after the WEDC launched, there were untracked loans, cronyism and other failed business practices that showed where it was all headed. By December 2012, it was reported:

WEDC officials on Friday also released updated information on 64 overdue loans, saying that past due amounts total $2.5 million on loans with principal balances totaling $12.2 million as of Nov. 2. That $12.2 million figure is noticeably higher than the $8 million to $9 million estimate of the untracked loans released in October.

Read more: http://host.madison.com/news/local/govt-and-politics/wedc-hires-outside-help-after-losing-track-of-millions-of/article_dc5d27a6-3b38-11e2-b25e-0019bb2963f4.html#ixzz3bqWUEdGr

It’s critical to know just how badly WEDC was being run with Walker’s fingerprints all over it. Consider this Act One of the WEDC Hall of Failures.

Walker and lawmakers last year dissolved the state Department of Commerce and created the WEDC, which they said would be more effective at sparking the economy. Its board consists primarily of business people, but also lawmakers from both parties.

The state’s economic development agency drew headlines this summer when the state had to suspend and restart bidding on a state contract after it was revealed that the WEDC had offered one of the bidders, Skyward of Stevens Point, tax credits if it won the contract.

The agency drew more headlines after federal officials recently raised concerns that for eight months the WEDC spent nearly $10 million without legal authority. WEDC board members criticized Walker appointees to the agency for not informing them of those concerns until after the issue was uncovered by the news media.

A director for the U.S. Housing and Urban Development Department detailed the mishandling of public funds in May and August letters to the governor’s administration secretary, Mike Huebsch. Huebsch responded in a Sept. 12 letter, but the matter was not broached with the WECD board when it met eight days later.

Source: http://www.jsonline.com/news/statepolitics/state-jobs-agency-lost-track-of-8-million-in-overdue-loans-for-a-year-co792f0-174676461.html

There there’s Act Two. Imagine a political contributor giving $10,000 to the Walker campaign and getting a sweetheart $500,000 tax-payer-funded loan deal as conveniently as possible. It’s a classic Pay-To-Play scheme and Walker is trying to get away with it again.

In the months before and after William Minahan secured a $500,000 state loan for his company, Building Committee Inc., there were signs that the 30-year-old company that specialized in designing and building bank and credit union buildings was in financial trouble.

Longtime salesman El Sellers said the state of BCI was “very shaky” during fall 2011 when the Wisconsin Economic Development Corp. awarded it a loan to retrofit bank and credit union buildings for energy efficiency.

“Most of the people there — 90 percent of the employees who were left — were on half-pay, and they had been on half-pay for a long time — almost two years,” Sellers said. “The company credit card would work one day and not the next. Expense checks would stop coming.”

In mid-2011, subcontractors on the site of a new Tulsa Teachers Credit Union building demanded a total of $131,800 for work that BCI had not paid for, according to Jerry Hoopert, chief administrative officer for the credit union.

Read more: http://host.madison.com/news/local/govt-and-politics/company-that-received-state-loan-exhibited-signs-of-financial-trouble/article_6e7013c0-3463-538f-acbe-9f6d987bdf5f.html#ixzz3bqeLW7C3

It’s now time for a criminal investigation into WEDC and Walker’s clear involvement in the scandal-ridden organization. Wisconsin Republican legislators are even beginning to get a little nervous with their fearless leader, who’s busy running for President on Wisconsin taxpayers’ dime. State auditors have confirmed that WEDC failed to conduct a financial review of BCI’s $500,000 state loan, even though they stated they couldn’t locate underwriting documents for the loan. Walker was copied on emails regarding the pay-to-play loan and, as Walker would do, stated he wasn’t aware of any part of the BCI loan nor the political contribution. WEDC’s former chief executive Paul Jadin had sent a loan letter in September 2011 and has stated that Walker was copied on it. So someone is lying.

Assembly Minority Leader Peter Barca, D-Kenosha, said at a news conference at the Capitol that a State Journal investigation of a $500,000 state economic development loan to Building Committee Inc. (BCI) that has never been repaid shows evidence of “possible corruption.”

The State Journal reported its findings in a two-part series that ran Sunday and Monday.

“$500,000 in taxpayer funds were wasted by Gov. Walker and his administration on a loan that never should have been granted to a major campaign contributor,” said Barca, a board member of Wisconsin Economic Development Corp. “As a taxpayer and someone who cares deeply about economic development in this state, as a legislator and a board member, I am outraged.”

Barca and Sen. Julie Lassa, D-Stevens Point, who also serves on the WEDC board, called on U.S. Attorney General Loretta Lynch and U.S. Attorneys John Vaudreuil and James Santelle to launch an investigation into missing documents, whether taxpayer dollars were misused, and whether criminal violations may have taken place at WEDC.

Read more: http://host.madison.com/news/local/govt-and-politics/democrats-call-for-federal-investigation-into-questionable-wedc-loan-deal/article_1a3db7d4-e177-5a3f-93a3-342d2d512064.html#ixzz3bqfaZTzp

The stink on WEDC continues with more scandals developing. One of the players involves Mike Huebsch, who was also responsible for having observers of singers at the Capitol Rotunda arrested, including veterans, children, grandmothers and others.

“I wanted to assist the company to the extent that they qualified given that it had such a strong endorsement from Secretary Huebsch,” Jadin said.

The State Journal investigation found that Huebsch, a former Assembly speaker from West Salem, was advocating for the taxpayer loan to BCI as the now-defunct company was collapsing.

The State Journal also found that:

WEDC awarded the unsecured loan to BCI only after Huebsch and other DOA officials were unable to find funding from state or federal energy programs or the utility-funded Focus on Energy program, according to a May 2011 memo.
WEDC was unable to locate the original underwriting documents justifying the $500,000 loan to BCI. Huebsch’s agency had offered to conduct a “staff review” of the proposed loan for WEDC, but state officials said that review never happened.
On his 2011 WEDC loan application, Minahan checked “no” when asked if BCI or any of its officers had been sued in the previous five years, although electronic court records show three such lawsuits.
After Jadin left the agency, WEDC approved BCI’s request for more time to repay the loan and helped it seek federally subsidized energy bonding even as other creditors filed lawsuits against BCI and Minahan seeking half a million dollars for unpaid bills.
Minahan listed La Crosse-based Michaels Energy and UW-Milwaukee as partners in the proposed project. But the owner of Michaels Energy and the dean of the UW-Milwaukee School of Architecture and Urban Design said their organizations never received any proceeds from the state loan and did little or no work on the project.

Read more: http://host.madison.com/news/local/govt-and-politics/top-scott-walker-aides-pushed-for-questionable-wedc-loan/article_2a29333c-c3dd-50ac-a4b6-c333506530e0.html#ixzz3bqhAxuUH

Walker effectively resigned from the WEDC Board of Directors, or as Sen. Jon Erpenbach, D-Middleton, stated, was fired!

Republican members of the Joint Finance Committee introduced an 11-page motion on Thursday aimed in part at putting more legislative oversight on the embattled Wisconsin Economic Development Corporation. One of more than 10 provisions related to WEDC would remove the governor from the agency’s board of directors and specify that the chairperson would be a public member elected by the board.

“His party has fired him,” Sen. Jon Erpenbach, D-Middleton, told reporters. “Republicans are removing him as chairman of the board.”

Erpenbach said Walker will still have to answer for WEDC’s troubles during his tenure as chairman as he travels the country considering a presidential bid. But he said he thinks with more oversight from the finance committee and with the governor off the board, things will go more smoothly for the agency.

“In the end, I’m shocked. I’m surprised. I’m happy that the Republicans have removed the governor from the board,” Erpenbach said. “Can you imagine him in Iowa, getting questions from reporters — why were you fired from your job as chairman of the board?”

Read more: http://host.madison.com/news/local/govt-and-politics/jon-erpenbach-wisconsin-republicans-have-fired-scott-walker-from-wedc/article_44f44bf1-ca4d-5014-bc70-9882bb700bf6.html#ixzz3bqy8Qxhy

While the beltway media continues to let Walker call it a “political witch hunt”, the WEDC scandals are a Walker template of failure and corruption that taxpayers must pay for. Walker is using the stolen ruse that he has been making a career of with his own Obama Derangement Syndrome by calling those who are calling him out with Walker Derangement Syndrome.

It appears he indeed is the one deranged. In his own words about the first John Doe investigation, “we cannot afford another story like this one”.

Scott Walker excuses