August 22, 2014

WEDC under fire from lawmakers

Democratic state lawmakers are raising concerns about ongoing problems at the Wisconsin Economic Development Corporation. The agency has been under fire for the past several months, after a series of high profile mistakes have brought scrutiny from lawmakers and even the federal government

Most recently, WEDC officials say they failed to track the repayment of taxpayer-funded loans made to businesses for over year, resulting in more than $8 million in payments now being overdue. State Senator Julie Lassa (D-Stevens Point) says it’s another sign the agency was too hastily created and leaves the impression that WEDC is “in chaos.”

AUDIO: Sen. Lassa (:16)

The agency was established early last year by Governor Walker and Republicans to replace the Department of Commerce. Lassa, who sits on the WEDC board, says she and fellow Democrats raised concerns about a lack of transparency at the time the bill creating the agency was being debated. She says those protests fell on deaf ears, and now some of what they talked about is coming true.

It’s not the first time WEDC has been accused of missing important details during its short life. Federal officials recently accused the agency of improperly spending $10 million in block grant funding. A state audit also found a lack of transparency about subsidies given to businesses and agency leaders were criticized earlier this year for offering tax credits to a business if it was able to secure a state contract.

The loan issue was revealed Wednesday afternoon, just hours after outgoing CEO Paul Jadin appeared before a legislative audit committee without mentioning the mistake. Lassa says the agency and the governor knew about the problem a week ago, but waited until now to inform the board. She says that’s one of many issues that needs to be changed during the next Legislative session to provide more oversight of the agency.

Governor Scott Walker on Thursday said it was unacceptable that the agency lost track of the loans for so long. Walker says he will push for a “series of bold changes” to the program and management of WEDC, so it can focus on creating jobs and protecting taxpayers.

AUDIO: Gov. Walker (:11)

Democrats have also raised concerns about the naming of Chief Operating Officer Ryan Murray, a former legislative staffer and aide to Governor Walker, as head of the agency while a search for Jadin’s permanent replacement is conducted. Lassa and state Representative Peter Barca (D-Kenosha) have both said they are worried about his lack of private sector experience in heading an agency that’s supposed to foster job creation.

WEDC’s board meets later today, in what is expected to be a contentious hearing on Murray’s placement and recent missteps by the agency.