Holiday Reading

For Third Straight Year, Wisconsin Ranks Last In Business Startup Activity
Data On Wisconsin Economic Development Agency Can't Show If Incentives Create Jobs
State Jobs Agency Data A Mess
State And Local Government Business Incentives: Data Tells A Story
Walker's Commission Bankrolled By Bradley Foundation
TIF Plans In St Louis Are 'Redlining And Block-Busting,' Show-Me Institute Says
Wisconsin Center Expansion Study Won't Include Cost Estimate Or Funding Sources

Walker Enriching Dutiful Cronies

The Wisconsin Economic Development Corporation also known as WEDC is a public-private agency created in 2011 by Wisconsin governor Scott Walker. Governor Scott Walker created the Wisconsin Economic Development Corporation to replace the Wisconsin Department of Commerce. WEDC grants loans that would give assistance to a company's attempts to grow and employ more workers within the state of Wisconsin. [source]

Scott Walker’s WEDC in Full Meltdown

In May 2014, One Wisconsin Now ran the numbers on WEDC loans and found that nearly 60 percent of some $975 million in assistance distributed by WEDC since 2011 went to firms that had contributed to Walker or the Republican Governor’s Association. 

"This new audit confirms that WEDC is the embodiment of the cronyism, corruption and incompetence of the Walker administration,” One Wisconsin Now’s Scot Ross told CMD.

WEDC made 27 awards totaling $124.4 million without proper review

Gov. Scott Walker’s flagship job-creation agency has made at least 27 awards totaling $124.4 million to companies without conducting a formal staff review, the agency reported Friday afternoon. 

The new information comes on the heels of a State Journal report last month that found the Wisconsin Economic Development Corp. awarded an unsecured $500,000 loan to a struggling Milwaukee construction company at the urging of Walker’s top cabinet secretary.

And, from a Wisconsin Legislative Audit Bureau report:

WEDC did not consistently follow statutes or its policies when making financial awards. WEDC did not comply with all statutory requirements related to program oversight. Staff did not consistently comply with policies established by WEDC’s governing board. Additional efforts are needed to help ensure that WEDC administers its state-funded programs effectively.

And, now, WEDC identifies priorities for economic growth. 

Industry clusters, workforce training and a new, competitive grant for organizations assisting start-ups are the biggest winners in what is essentially a flat 2017 budget proposal by the Wisconsin Economic Development Corp. 

WEDC's budget, the first that top executive Mark Hogan has overseen since taking the helm in October, was approved by the agency board's finance committee earlier this month. It will be presented to the full board in July for approval. 

Under the proposal, about half of WEDC's expenditures for services delivered around the state — $18.2 million — would go to businesses and communities for redeveloping contaminated sites, job creation and job and workforce development. Another 20%, or $7.3 million, would go to entrepreneurship and innovation efforts. 

The rest of the spending is divided among advancing key industries (19%, or about $7 million), building export capacity (9%, or $3.5 million) and attracting businesses to the state (3%, or just under $1 million).

I think we can safely say that these clowns, apparatchiks of the Walker regime, have no clue on economic growth. To some degree, I don't really think they care. This is just another way of funneling public dollars to private accomplices. Yet, again, we have Republicans (in this instance, the Scott Walker administration) using the government as a slush fund for their private excursions, paybacks and cronyism.

For Further Reading:
Complete Legislative Audit Bureau Report on WEDC

The Latest Walker Wrongdoings

22-Year Political Veteran Scott Walker Says He Is Not A Career Politician
Walker Scandal: Who Got Convicted and Why
Principals Decry Loss of Funding, Local Control Under Scott Walker
Ex-WEDC Employees Say Politics, Haste Tripped Up Job-Creation Agency
Here's Why Scott Walker's Harley Davidson Love Is Pretty Awkward
The Most Gerrymandered State
Why Scott Walker Is An American Dictator In Waiting
Who Is Scott Walker?

Sunday Reading: Scott Walker Edition

Scott Walker, Republicans Have Distorted Priorities For Wisconsin
Scott Walker's WEDC Full Meltdown
How Scott Walker & His Allies Hijacked The Wisconsin Supreme Court
State Jobs Agency Has Written Off $7.6 Million In Loans
Wisconsin Comes In Last In Kauffman's Entrepreneur Rankings
Scott Walker Is Clueless About His Jails
State Could Ultimately Pay $1 Million In Damages To Capitol Protesters
Scott Walker's Revolt Back Home
Was Act 10 Necessary?
Wisconsin Ranks 35th In U.S. For Job Creation Over Walker's First Term

Wisconsin Reading

Wisconsin Sinks In Job, Wage Growth Rankings
Wisconsin Roads Third-Worst In Nation
Does City Violence Deserve High-Level Meetings Like Arena?
Think Wisconsin Doesn't Rely On Gambling? Think Again
Scott Walker Is The Absolute Worst
What Makes Scott Walker Run?
$4.9 Million In WEDC Loans Delinquent
Wisconsin On Pace For Most Layoff Notifications Of Walker Administration In 2015
Paul Ryan Loves Talking About Poverty, But He Keeps Getting The Basic Facts Wrong
Scott Walker Has A Plan To Crush What's Left Of Labor Unions In America

Scott Walker Roundup

Scott Walker Does About-Face On Outsourcing As Campaign Issue
Scott Walker Aide Archer Lands New State Job With Big Raise
Companies That Outsourced Jobs Donated Primarily To Walker Campaign
WEDC Award Recipients Outsources Wisconsin Jobs To Foreign Countries
Scott Walker Received Money From Companies That Outsource Jobs
Is Walker Guilty - Or The Law Meaningless?
The Unelectable Whiteness Of Scott Walker
Lessons For Other States From Kansas' Massive Tax Cuts
The Failure Of State Economic Development Agencies
Wisconsin and Wyoming Tally Fiscal Cost of Rejecting Health Reform’s Medicaid Expansion

Wisconsin second only to Alabama in cuts to education
Gov. Scott Walker to blame for poor job growth

The Failures of Privatized State Economic Development Agencies

Creating Scandals Instead of Jobs: The Failures of Privatized State Economic Development Agencies

“In 2007 we consolidated Wisconsin’s economic development efforts, including terminating a state-created private economic development entity, Forward Wisconsin, in order to reduce political favoritism and misuse of public funds,” said State Senator Mark Miller. “Unfortunately we reverted to old-style cronyism in 2011 with the creation of the Wisconsin Economic Development Corporation which has been plagued with predictable ethics improprieties and gross mismanagement.”

The report finds that:

• The Wisconsin Economic Development Corporation (WEDC) was accused of spending millions of dollars in funds from the U.S. Department of Housing and Urban Development without legal authority, failed to track past-due loans, and hired an executive who owed the state a large amount of back taxes.

Based on this persistent pattern of abuses, the report concludes that the privatization of economic development agency functions is an inherently corrupting action that states should avoid or repeal. With the “economic war among the states” already dominated by corporate interests and bargaining dynamics made worse by a long-term drop in job-creation deals, taxpayers are best served by experienced public-agency employees who are fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators.

WEDC Not A Good Model For Deploying Scarce Resources

The Journal Sentinel actually had a good idea, Governors Should Swear Off Poaching. Our economy doesn't gain anything by Wisconsin stealing jobs from Illinois - the so-called war among the states. It merely realigns jobs without any growth occurring. 

Yet, once the Journal began drilling down further into their editorial's details, things got way off course.

Walker deserves credit for helping launch the Wisconsin Economic Development Corp., which is a good model for deploying scarce resources even if poor management at the agency resulted in a series of embarrassing mistakes.

Good Jobs First actually published The Risks of Privatizing State Economic Development Agencies in January 2011.

Transferring state business recruitment functions from government agencies to private entities is not the panacea that its proponents suggest. In fact, the track record of those few states that have taken the step is filled with examples of misuse of taxpayer funds, political interference, questionable subsidy awards, and conflicts of interest. Rather than making economic development activities more effective, privatization often is little more than a power grab by governors and powerful business interests...

Most of the seven states that currently make use of economic development PPPs have experienced a variety of performance problems. These include the following:

 Misuse of taxpayer funds (Rhode Island, Florida and Wyoming)

 Excessive executive bonuses (Virginia, Florida, Michigan and Wyoming)

 Questionable subsidy awards by the subset of PPPs that have a role in that process (Michigan and Rhode Island)

 Conflicts of interest in subsidy awards (Florida, Utah and Texas, which makes limited use of PPPs)

 Questionable claims by the PPP about its effectiveness (Wyoming, Florida, Utah and Indiana)

 Resistance to accountability (Florida and Michigan)

Why does the Journal continue to push an idea that has failed everywhere it has been tried? Why do they still defend such a bogus program, even after it has been shown to be an embezzling debacle here in Wisconsin?

Scott Walker Among Worst Governors In America

Group names Scott Walker among the worst governors in America

The Worst Governors In America 

Gov. Scott Walker (R-WI) was elected in 2010 and won a recall election in 2012. He is running for re-election in 2014. His inclusion stems from: (1) using his office to promote donors’ interests; (2) illegally using state troopers to track down his political opponents; (3) an investigation into illegal activity by his aides; (4) diverting money from a nationwide mortgage settlement; (5) an investigation into the state economic development corporation he chairs; (6) dismissing a political appointee for signing the recall petition against him; and (7) advocating for new voter identification restrictions.

Rewarding Failure: The Wisconsin Economic Development Corporation

Wisconsin Economic Development Corporation's CEO, Reed Hall, Gets 50% Raise

An agency embroiled in controversy (where is money being spent, how is it being spent, and what are the results of that spending?) seems unjustified in giving the CEO a 50% raise.

But that's how Scott Walker rolls. Ignore the questions swirling about efficiency, legality, underhandedness, and cronyism at WEDC. Just give the CEO a raise and pretend everything is going as planned. A perfect example of how the (quasi) private sector operates: regardless of results, those at the top are rewarded.

Sounds a lot like Scott Walker's political career. Even though he'e been a train-wreck in every office he has held, he keeps getting rewarded with higher offices.

Starting-Up More Trouble

The cronyism and nefarious activities at the Wisconsin Economic Development Corporation weren't enough. Scott Walker and his Republican henchmen have found another avenue of misappropriation.

The Legislature overwhelmingly voted Tuesday to provide $25 million in taxpayer money to start-up companies..."This is one more way that we move our economy forward," Walker said.  ~ Senate, Assembly OK $25 Million For Start-Up Firms

Venture capital provides just two percent of the capital for new businesses.

More than half of new businesses are gone within five years.

For Further Reading:
Something Ventured, (Virtually) Nothing Gained
A Steaming Pile Of Boldness
Venturing Aimlessly
Venturing Wisconsin's Money

Wisconsin Reading

Milwaukee Population Grows Despite Slip In National Rank

Next Boondoggle From Wisconsin DOT
Ongoing Economic Development Privatization Fiasco In Wisconsin
Proposal Gives Scott Walker Administration More Power To Sell State Property
Scott Walker Rejects Ed Flynn Assertions He's Harming Milwaukee
Walmart, Sam's Club Proposed For Oconomowoc's Pabst Farms Site
Wisconsin Employment Situation In April

Wisconsin Lawmakers Call For Deeper Tax Cut

Embezzlement

Have you been paying attention to Scott Walker's initiative to supposedly spur job growth? Transforming the Wisconsin Department of Commerce into the Wisconsin Economic Development Corporation? Yes, even though Republicans always claim government doesn't know what it's doing and must get out of the way. When Republicans are in office, suddenly an entity of their making is the answer for explosive job creation.

In January 2011 Good Job First released, Public-Private Power Grab: The Risks in Privatizing State Economic Development Agencies (which I wrote about in February 2011).

The idea is far from new but it is not a common or standard practice. Economic development PPPs date back more than 20 years, but only seven states currently allow private entities to control their business recruitment functions: Florida, Indiana, Michigan, Rhode Island, Utah, Virginia and Wyoming. 

Several other states previously employed PPPs but abandoned them because of performance problems. Most of the seven states that currently make use of economic development PPPs have experienced a variety of performance problems. These include the following:

• Misuse of taxpayer funds (Rhode Island, Florida and Wyoming);

• Excessive executive bonuses (Virginia, Florida, Michigan and Wyoming);

• Questionable subsidy awards by the subset of PPPs that have a role in that process (Michigan and Rhode Island);

• Conflicts of interest in subsidy awards (Florida, Utah and Texas, which makes limited use of PPPs);

• Questionable claims by the PPP about its effectiveness (Wyoming, Florida, Utah and Indiana); and

• Resistance to accountability (Florida and Michigan).

I followed up on my initial posting with more critiques, ending with Wisconsin Economic Development: Walker's Untraceable Slush Fund. This is what Republicans do. They use government to enrich themselves and their cronies. They really have no concern for public policy and governing. The government is simply a means to easy-money for their pilfering and pet projects.

And now the verdict is in...

More evidence of corruption and misappropriation:

State Jobs Agency A Rule-Free, Fact-Deficient Piggy Bank

State's Flagship Job Agency Failed To Follow Law, Track Loans, Audit Finds

Report Had Warned Of Problems With WEDC-like Agencies 

Walker's World: Our Dystopian Future

Jobs Agency Gave $56.2 Million In Grants & Loans, Report Says

"The Wisconsin Economic Development Corp. (WEDC) said in its report that the money it invested affected a total of 218 businesses and 23,759 jobs in the state last fiscal year. WEDC made a total of $56.2 million available to businesses through 170 grants and loans, the report found...

But unlike nearly every other quasi-public authority at the state level, the corporation is not required by law to report yearly on its finances. It took nearly a year and a half for the agency's board to see comprehensive audited financial statements."

Got that? Unlike nearly every other quasi-public authority at the state level, the WEDC is not required by law to report yearly on its finances. 

Yes, they're only dealing with millions of public dollars. Why should they have to keep track of anything or explain their decisions and investments? Didn't Scotty talk about transparency a lot during his campaign? Hypocrisy seems to be a prerequisite for the Republican party. I guess that's just the beautiful evil genius of conservative arrogance. They're always railing the most about the things that they are the most guilty of doing. 

Sorry, but when someone establishes an quasi-public (i.e. private) authority and specifically write laws which exempt that organization from having to report on it's finances, one must conclude nefarious spending and accounting are taking place at that entity.

Keep it up, Scotty. Pretty soon it will be you facing the charges rather than just your underlings. 

Not only does Walker wants Illinois' jobs, he also wants their corrupt ways.

From The Department Of I-Told-You-So

Back in February 2011, I warned about the nefarious implications of Scott Walker's plan to turn the public Department of Commerce into the semi-private Wisconsin Economic Development Corporation.

I have been critiquing it ever since. My most recent screed, as of July 2012, Walker's Untraceable Slush Fund, pretty much called it.

As the Journal Sentinel notes, Walker promises dramatic moves to correct loan oversight problems at WEDC.

"The Milwaukee Journal Sentinel reported Wednesday that since its creation in July 2011, the Wisconsin Economic Development Corp. failed to track whether 99 businesses were repaying a total of $8 million in past-due loans - or 16% of the agency's $51 million loan portfolio."

These types of redevelopment initiatives (privatization, tax credits, subsidies, etc.) are actually studied by academics. As cities and states try these different supposed catalysts, social scientists are measuring the results. This is where the "best practices" guides come from. And, where the "things to avoid" recommendations come from. That is, if one is willing to actually read the reports.

Whether public or private investment, certain questions must be addressed and answered with any initiative. Especially when public dollars are at stake, most would ask: What's the return on investment? How many jobs have been created? What's the cost per job created? Were there noticeable income gains in the area due to the initiative? Etc.

Good Jobs First actually published The Risks of Privatizing State Economic Development Agencies in January 2011. But Wisconsin did it nonetheless.

The same was found for film industry tax credits, yet we still do those.

Similarly unimpressive results were discovered for venture capital, nevertheless we are still pursing this mirage.

It's well past time to stop buying this snakeoil.

Update:

Here comes the Journal Sentinel to Scott Walker's rescue; putting the proverbial lipstick on this Walker pig.

WEDC: A good idea, but so far, poorly executed.

This [the WEDC] is another one of these supposed game-changers where the evidence indicates it is not a good idea. But the Journal wants it to be, so it must be. We just need to accept it.

Maybe if the Journal actually did the heavy lifting before getting behind all these harebrained ideas they wouldn't have to spend so much space qualifying, contorting, and making excuses. And, heaven forbid, maybe they'd actually provide some insightful policy analysis, rather than just practicing sycophantic boosterism for Scott Walker.

Wisconsin Economic Development: Walker's Untraceable Slush Fund

What a novel idea...actually holding someone accountable for the things they claim they will do.

"Wisconsin's Legislative Audit Bureau found that stat government agencies have incomplete data on the impact of economic development programs they administer."

"In the 2007-'11 period, state agencies administered 196 economic development programs, according to the report. But state auditors said it was difficult to determine how many jobs actually had resulted from the programs."

Ah, the beauty of nepotism and cronyism. I guess this is what should be expected when private interests dominate public agencies.

The article goes on to note, "Last July, the Commerce Department was abolished and replaced with the partially privatized Wisconsin Economic Development Corp. But a new state law reduced the the information on program results the state agencies must report to the Legislature annually."

Yes, after privatizing a public agency, less information is required. We are using public dollars to fund private ventures, and we are now requiring less information on the results of those investments. How is this an improvement in any way? How can we evaluate what works if we don't monitor what's going on?

"Among information no longer required are quantifiable performance measures directly related to a programs' purpose, including the number of jobs created or retained in each industry and in each municipality in the prior fiscal year. Also, agencies aren't required to report the amount of tax benefits allocated - nor the recipients of them - under the new rules."

Sounds like certain politicians (yes, I'm looking at you Scott Walker) have set up an untraceable quasi-private slush-fund to funnel money to cronies. So much for the era of transparent government and doing  what's in the best interest of the people. So much for wisely spending public dollars.

I hope to see a lot more stories about this. I hope to see journalists questioning the Walker administration about this. It may not be corrupt, but everything on the surface seems to indicate this whole apparatus is nothing but an undetectable payback machine for well-connected political supporters.

How can Scott Walker plan to know which development policies are working if records aren't kept on the costs and the rewards (or losses)? How can we make meaningful decisions and adjustments if benchmarking isn't done? It almost seems ludicrous that such seemingly corrupt and unmeasurable practices are now codified into state operations.

For Further Reading:
Evaluation of Online Economic Development Subsidy Information
Evaluation of State Economic Development Subsidy Disclosure
Money Back Guarantees For Taxpayers
Money For Something
The Risk of Privatizing State Economic Development Agencies
Targeting Ineffective Economic Development Subsidies