By Kevin Binversie | Wisconsin Reporter

OOPS! In a rush to reorganize, WEDC did not keep track of loan payments.

It hasn’t been the best of months for the Wisconsin Economic Development Corp. of late.

In the rush to reorganize the new agency at lightning speed, job and program responsibilities fell through the cracks. Among the biggest screwups: no staff members were assigned to track loan payments to the state beginning June 2011 — just before the Commerce Department became WEDC.

Now, instead of trying to create jobs in the state, the agency is absorbed with an accountability scandal over the failure to track $8 million in overdue loan payments the department awarded to nearly 100 companies during 2009-10. It also must find a new department head.

Gov. Scott Walker created WEDC in the early days of his governorship as a reorganization of the state’s Commerce Department. WEDC represented a long-held bipartisan effort to modernize the state’s job-creating capabilities. The hope: with the governor as its figurehead, WEDC would work with the private sector to slim down the agency as a whole and remove miles of red tape.

Yet job growth in Wisconsin, like the rest of the country, has been sluggish in recent years.

Uncertainty grips the economy like a vise as businesses question everything from their tax rates to their health-care costs, as well as their regulatory burden. Here in the Badger State, it is safe to say the recall elections and political unrest since 2011 have added to that anxiety.

Walker tasked his former policy director Ryan Murray to serve as chief operations officer of WEDC and audit the entire agency after it was reported last month that WEDC also had mismanaged $10 million in federal economic development grants from the U.S. Department of Housing and Urban Development.

“Ultimate responsibility for the loans fell on our CFOs,” said Tom Thieding, spokesman for WEDC. As a result of the discovery, Mike Kloninski, WEDC’s chief financial officer, resigned on Oct. 18.

“As we complete the review, we believe that we will offer both transparency and accountability to the public at large,” said Thieding. “This is about regaining trust as much as it is about finding out what went wrong.”

While the search for a permanent replacement begins, Walker has tapped Reed Hall, the former CEO and general counsel of the Marshfield Clinic, to run the agency. Walker’s original WEDC head, Paul Jadin, announced in September that he was leaving the agency to work for a Madison-based economic development group.

Was WEDC a bad idea from its inception? Hardly. Former Commerce secretaries who served Republican and Democratic governors say the reorganization was needed. What appears to have happened is that no one was fully minding the store during the changeover.

This sort of thing happens in the private sector all the time. But there, the marketplace may exact revenge. When the same failures occur in state and federal government, heads may roll but the bureaucracy rolls on. Their sheer enormity makes reform almost impossible. Those who benefit from the status quo resist. And the short shelf life of most governors puts long-term reform efforts out of reach.

All of that is beyond the scope of a WEDC cleanup, of course. WEDC has clearer, achievable tasks. It can start by assuring the public that it’s tracking taxpayer dollars. It has promised transparency; it had better deliver.

Veteran political blogger Kevin Binversie is a Wisconsin native. He served in the George W. Bush administration from 2007-2009, worked at the Heritage Foundation and has worked on numerous state Republican campaigns, most recently as research director for Ron Johnson for Senate. Contact him at kevin.binversie@franklincenterhq.org.