By Ryan Ekvall | Wisconsin Reporter
MADISON — Secretary of State Doug La Follette wants his fellow Democrats to quit bashing the Wisconsin Economic Development Corp.
It appears that La Follette’s plea went unheard, as three senate Democrats on Wednesday called for a criminal investigation into the state’s main business subsidy agency.
“In some cases, the violations of state statute that took place appear to have risen to the level of criminal offenses,” Democrat state Sens. Bob Wirch of Somers, Dave Hansen of Green Bay and Jon Erpenbach of Middleton wrote in a letter to Dane County District Attorney Ismael Ozanne. “We ask that you investigate to the fullest extent this serious violation of transparency and taxpayer trust.”
It was uglier in the newspapers.
Wirch told the Kenosha News that WEDC “appears to be nothing but a slush fund.”
A legislative audit in May revealed in part that the agency violated state statute, failed to independently verify financial statements from businesses receiving loans or grants more than $100,000, and not independently verifying jobs created from grant and loan programs.
WEDC CEO Reed Hall, appearing last month at a Joint Legislative Audit Committee hearing, said he disagreed with some findings in the audit regarding statutory violations. In general, he said, the agency had implemented, or was in the process of implementing, solutions for many of the policy and reporting problems highlighted in the audit.
The Legislature has since moved to make changes to the embattled organization. A bill that passed the audit committee would alter the board of director’s makeup and require more disclosure on actual job numbers and financial awards given from WEDC. The Joint Finance Committee froze state funding for WEDC for fiscal year 2015, pending an audit and report to that committee.
Still, WEDC bashing is somewhat en vogue in the political arena. U.S. Rep. Mark Pocan, D-Madison, for example, reportedly referred to WEDC as the “Wisconsin Economic Disembowelment Corp.” at the Democratic Party convention last Friday.
Hence the La Follette letter Saturday.
“Before any of us gets too caught-up in needless or senseless partisan posturing, I want to stress that economic development and job creation really are and should be approached and conducted on a bipartisan basis,” La Follette said.
Indeed, lawmakers in both parties generally support economic planning and using the state’s vast resources — taxpayer cash, lawmaking and borrowing prowess — as a tool for development and job creation.
Just this week, WEDC awarded Walgreens, the nation’s largest drugstore chain, $2 million in tax credits — $805,000 to create 115 jobs and $1.195 million to make capital investments at a DeForest distribution center, both over a three year period.
“Walgreens has been an important business partner in the DeForest community. This expansion will expand job opportunities, especially for people with disabilities,” said Hall in a statement . “We’re pleased to be able to partner with Walgreens in their expansion of its distribution center.”
This seems to be more what La Follette had in mind.
“I urge members of my party (Democratic) to ‘back-off’ from negative, even threatening comments for press and media consumption, and to adopt a more patient and understanding posture” while the WEDC chief executive tries to get agency back on track, La Follette said in his statement.
La Follette noted Hall’s formidable career as executive director of the Marshfield Clinic, and not a “political hack” as a reason for optimism that WEDC will turn around. And agency spokesman Tom Thieding contends the WEDC’s reputation in the business community already is sterling.
Hall took over as interim-CEO last fall and was made permanent CEO in late January.
Thieding said none of the senators reached out to Hall or WEDC officials before calling for an investigation, which comes almost a month and a half after the audit’s release.
“WEDC is committed to responsibly managing our operations, serving our customers and providing accountability for taxpayer investment by growing businesses in Wisconsin,” Thieding said in response to the senators inquiry. “We welcome every opportunity to work with the Legislature to fulfill our commitment to complete transparency.”
Still, La Follette, for all his support of WEDC leadership, was OK with the potential criminal investigation.
“I’m not a criminal lawyer,” La Follette told Wisconsin Reporter. “There was some stuff going on there early involving financial aspects that were questionable. If those were criminal let’s act on it, but let’s separate the history from the future. If there needs to be an investigation of the past, that’s OK.”
Contact Ryan Ekvall at [email protected]