WEDC To Address Recouping Money From Businesses Caught Outsourcing

Source: Laurel White, Wisconsin Public Radion, May 3, 2016

Wisconsin’s jobs agency will meet this summer to discuss efforts to recover money from businesses that have accepted state funds, despite outsourcing jobs.  Wisconsin Economic Development Corp. Secretary and CEO Mark Hogan agreed to discuss the policies at the agency’s July board meeting, according to a letter sent to Sen. Julie Lassa and Assembly Minority Leader Peter Barca on Monday.   Lassa and Barca, who both serve on WEDC’s board, requested the topic of discussion in a letter to Hogan earlier this week. … WEDC made headlines last week, after Madison’s WKOW-TV reported that W.W. Grainger, a Janesville company, outsourced jobs to Panama after collecting $50,000 in job creation tax credits. … The agency, a centerpiece of Gov. Scott Walker’s jobs creation agenda has been plagued by allegations of mismanagement and questions over its efficacy. …

Related:

Outsourcing loses Wisconsin money, jobs, state leaders work to recover losses
Source: Emily Hamer, Badger Herald, May 3, 2016

Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to Mark Hogan, secretary and chief executive officer designee of the Wisconsin Economic Development Corporation. WEDC is the organization that provides businesses with monetary assistance to help stimulate the economy. The two Democrats, who both serve on the WEDC board of directors, requested a report from WEDC on its efforts to recover money that was given to companies that outsourced jobs. … In the letter, Hogan said W.W. Grainger, one of the companies in question, earned $50,000 in tax credits from the Department of Commerce. W.W. Grainger did not maintain the jobs required in order to keep the credit, so WEDC revoked the $50,000, Hogan said. All of the credits will be paid back, he added. …

Wisconsin Democrats seek answers on WEDC outsourcing clawbacks
Source: Jessie Opioen, The Cap Times, May 2, 2016

The two Democratic lawmakers on the board of the state’s jobs agency are asking the Wisconsin Economic Development Corporation to explain what it’s doing to recover state funds from companies that have outsourced jobs. Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to WEDC Secretary and CEO Mark Hogan on Monday requesting a report on the agency’s “clawback” efforts for incentives given to companies that later outsourced positions or violated otherwise violated their agreements. … Their letter comes after a report from WKOW-TV last week that Grainger Industrial Supply had outsourced six jobs to Panama from its Janesville facility after receiving $50,000 in WEDC tax credits. Grainger is the third company reported to have shipped jobs from Wisconsin after receiving state funds from WEDC. The state hasn’t yet recovered any of those funds, although Gov. Scott Walker has called for clawbacks.

“It’s Wrong.” Democrats Propose Bill Against Outsourcing Jobs
Source: Alex Hagan, NBC 26, August 10, 2015

In an effort to keep jobs in Wisconsin, there is new legislation just being introduced to make companies ineligible to receive grants or loans from a state agency for up to five years if they outsource jobs. This bill is in response to reports corporations received state aid through the WEDC  that had laid off Wisconsin workers to outsource jobs. “It doesn’t pay for us to be contributing to companies that take our jobs in Wisconsin and then send them overseas. So the goal here is to say it’s totally wrong,” says Sen. Dave Hansen.

Scott Walker’s jobs agency gave out $124 million without review
Source: Scott Bauer, Associated Press, June 19, 2015

More than two dozen awards worth more than $124 million were made to companies without a formal staff review by the underwriting department of Gov. Scott Walker’s economic development agency, it reported Friday. Documents detailing the awards were made public late Friday afternoon in advance of a Wisconsin Economic Development Corporation board meeting on July 20 to discuss one troubled unsecured loan that went to a failing company owned by a Walker donor. The Republican Walker, who is expected to formally launch a presidential campaign in mid-July, has been hounded by troubles with the quasi-private jobs agency he created shortly after taking office in 2011….

Scott Walker Faulted for Failures of Wisconsin State Agency
Source: Alan Rappeport, New York Times, May 22, 2015

….. Critics from both parties have been suggesting that Mr. Walker’s mismanagement was responsible for the organization’s failure to create as many jobs as it was supposed to and for mishandling funds. A state audit released this month said the agency “did not have sufficient policies, including some that are statutorily required, to administer its programs effectively.” …. Democrats are also seizing on the fact that, under Mr. Walker’s watch in 2011, the development agency lent $500,000 of taxpayer money to Building Committee Inc, which had failed to pay taxes the previous year.

Top Scott Walker aides pushed for questionable $500,000 WEDC loan
Source: Matthew DeFour, Wisconsin State Journal, May 18, 2015

Gov. Scott Walker’s top aides and a powerful lobbyist pressed for a taxpayer-funded loan in 2011 to a financially struggling Milwaukee construction company that lost the state half a million dollars, created no jobs and raised questions about where the money went, a State Journal investigation has found. The extraordinary steps led the Wisconsin Economic Development Corp. in 2011 to award a $500,000 unsecured loan to Building Committee Inc., owned by William Minahan, for a proposed project to retrofit bank and credit union buildings for energy efficiency….

As Scott Walker mulls White House bid, a spotlight on his jobs agency
Source: Andy Sullivan, Reuters, February 16, 2015

When Wisconsin Governor Scott Walker, a potential Republican presidential candidate, traveled on a trade mission to Britain last week, he brought along top officials from his economic development agency to help drum up jobs. It’s a task they have struggled to accomplish at home. The Wisconsin Economic Development Corporation, a public-private body set up by Walker shortly after he took office in January 2011, was supposed to help the state climb out of recession by shedding bureaucratic rules and drawing on private-sector expertise. But the WEDC has fallen short of its own goals by tens of thousands of jobs and failed to keep track of millions of dollars it has handed out. ….

Scott Walker’s Offshoring Flip-flop
Source: Roger Bybee, In These Times, August 20, 2014

Wisconsin Gov. Walker’s convenient crusade against offshoring may prove to be surprisingly good for the state’s working people. … A new report from the liberal research and advocacy group One Wisconsin Now reveals just how hypocritical Walker’s new stance is. One Wisconsin Now points out a number of grants from the Walker-privatized Wisconsin Economic Development Corporation a number of job-creation grants had gone to firms engaged in sending jobs to states other than Wisconsin, and outside of the U.S. itself. (It also notes that 60 percent of that funding from went to businesses that donated to Walker’s 2010 campaign.) … The firms that have announced relocation of jobs or expansions in low-wage nations, especially Mexico and China—possibly portending in many cases a loss of additional Wisconsin jobs in the future—during Walker’s tenure comprise a substantial list: Harley-Davidson, will be moving roughly 500 jobs from Milwaukee to India; General Electric has moved the headquarters of its Medical Equipment Division to Beijing, China from the Milwaukee suburb of Waukesha; Caterpillar laid off more than 300 workers in its South Milwaukee plant while announcing the opening of new manufacturing facilities in Wuxi, China; Thermo-Fisher is moving 1,100 jobs from Two Rivers to Mexico; and Manitowoc Co. plans to cut more than 150 jobs in Wisconsin over the next two years as it shifts production to Monterrey, Mexico. …

Outrage over outsourcing: Has Walker’s job creation agency given money to companies that outsource jobs?
Source: WITI, July 28, 2014

…Walker has harshly criticized Trek for taking taxpayer money and sending jobs overseas. An examination of WEDC records show is own jobs agency may have given money to companies that did the same thing. According to the WEDC’s annual report, Chicago-based printing giant RR Donnelley was given a $140,000 tax credit, saying it planned to make a $316,000 capital investment, but actually invested zero. The company said it would create 75 jobs, but actually only created seven…. In company literature, RR Donnelley describes itself as “a leader in outsource solutions.” …

Latest Finance Report Shows Walker Took Another $167,000 from Businesses That Got WEDC Funds /Walker Has Gotten Almost $1.2 Million from Companies Getting Taxpayer Funds from WEDC, While Wisconsin Ranks Dead Last in the Midwest in Jobs
Source: One Wisconsin Now, Press Release, July 28, 2014

A review of Gov. Scott Walker’s most recent campaign finance report reveals he continues to reap a windfall of campaign donations, nearly $167,000 in just the last six months, from individuals associated with state businesses getting tax breaks, loans and grants through his Wisconsin Economic Development Corporation (WEDC). The latest information comes on the heels of a report from One Wisconsin Now that found Gov. Walker’s WEDC doled out 60 percent of its economic development funds to businesses donating $1 million to Walker’s campaign… A media report on WKOW-TV in Madison also detailed how two companies that received WEDC awards of state tax credits worth up to nearly $20 million subsequently laid off 279 Wisconsin workers and expanded their operations in Mexico and other overseas locations including China, Romania, Malaysia, Thailand, Germany and the United Kingdom. It was also reported that individuals on the boards of the companies are longtime Walker donors and have given the Governor roughly $20,000 in contributions….

UPDATE: WEDC award recipients outsourced Wisconsin jobs to foreign countries
Source: Greg Neumann, WKOW-TV, July 9, 2014 (Updated July 28, 2014)

At least two companies that received financial awards from the Wisconsin Economic Development Corporation (WEDC) later outsourced jobs to foreign countries, with one of those companies receiving a second WEDC award after the fact. A 27 News investigation has uncovered that both the Eaton Corporation and Plexus Corporation received millions of dollars in financial awards from WEDC, only to later lay off workers whose jobs were taken by employees at the companies’ foreign facilities. In 2011, WEDC awarded Eaton Corp. with up to $1 million in tax credits if the company met job creation and retention goals at its manufacturing facility in Menomonee Falls. WEDC officials say the company has received $190,000 in tax credits so far. …

UPDATE: Companies that outsourced jobs donated primarily to Walker campaign
Source: Greg Neumann, WKOW-TV, July 10, 2014 (Updated: July 25, 2014)

Members of the board of directors for two companies that outsourced Wisconsin jobs after accepting financial incentives from the Wisconsin Economic Development Corporation have donated close to $20,000 to Gov. Scott Walker’s campaigns since 2005. Wisconsin campaign finance records show Plexus Corp. board members David Drury and Ralf Boer have each made donations to Walker’s campaign. Boer, an attorney and partner in the Foley and Lardner law firm in Milwaukee, has donated a total of $2,300 to the Walker campaign since 2006. Drury, the CEO of Poblocki Sign Company in Milwaukee, has donated $15,800 to Walker’s campaign since 2005. One board member for the Eaton Corp., Gregory Page, an executive with Cargill in Minnesota, made a single donation of $1,000 to the Governor’s campaign in 2013. …

Only 5,840 ‘actual’ jobs from Walker’s WEDC
Source: Mary Bottari, Capital Times, June 10, 2014

This July marks the three-year anniversary of the Wisconsin Economic Development Corp., Gov. Scott Walker’s flagship economic development agency. WEDC has been mired in allegations of incompetence and skirting the law since 2012, but how has it performed when it comes to its top priority of creating jobs for the people of Wisconsin? Two official state data sets indicate that for every verifiable job Walker’s WEDC managed to create, the state lost more than two to plant closings and layoffs….

W is for WEDC – Gov. Scott Walker’s Privatized Commerce Department: A Case Study in Corruption, Cronyism and Incompetence
Source: Jenni Dye, One Wisconsin Now, May 29, 2014

From the press release:
A report released today by One Wisconsin Now analyzing state funds distributed by the quasi-private Wisconsin Economic Development Corporation (WEDC), created by Gov. Scott Walker, raises serious questions about who is really benefitting. The report found that owners or employees of 30 percent of businesses receiving WEDC assistance contributed to Gov. Walker’s campaign or the Republican Governors Association (RGA). Meanwhile these same businesses received almost 60 percent of WEDC economic development funds – $570 million in total….
Among the key findings of the report, “W is for WEDC”, are:
∙ Gov. Walker received a more than $1 million direct campaign benefit and $1 million to the RGA from WEDC aid recipients, who in turn received nearly 60 percent of economic development dollars – $570 million of the $975 million distributed.
∙ WEDC economic development dollars are not resulting in promised job creation.
∙ WEDC fund recipients include companies engaged in health and safety violations, mass layoffs and conflicts of interest…..

One Wisconsin Now says WEDC money going to Scott Walker donors like Edgewater
Source: Mike Ivey, Capital Times, May 30, 2014

A liberal advocacy group is leveling heavy criticism at the Wisconsin Economic Development Corporation, claiming the quasi-private agency championed by Gov. Scott Walker is delivering financial assistance to campaign donors. The report from One Wisconsin Now maintains that nearly 60 percent of some $975 million in assistance distributed by WEDC went to firms that had contributed to Walker or the Republican Governor’s Association.

UPDATE: Audit reveals WEDC broke state law
Source: Greg Neumann, WKOW, May 1, 2013

The public/private agency Governor Scott Walker created to grow 250,000 new jobs in Wisconsin is in violation of state law. That’s what an audit of the Wisconsin Economic Development Corporation (WEDC) shows. The non-partisan Legislative Audit Bureau released a detailed report of its audit Wednesday. The report shows that from July 2011 to December 2012, WEDC failed to follow a number of state statutes in their financial and job creation reporting, awarded loans and grants to ineligible projects and failed to keep track of spending within the organization itself…. The LAB report states WEDC never kept track of the job creation efforts for a group of companies it awarded money to, which in turn prevented the agency from presenting legislators with accurate information on its job creation efforts last November. Both are required of the agency under state law.

Wisconsin jobs agency failed in tracking taxpayer money, audit finds
Source: Jason Stein, Journal Sentinel, May 1, 2013

A stinging audit has found that the state’s flagship jobs agency last year failed in a number of cases to follow basic standards in state law for ensuring transparent and accountable use of taxpayer money, prompting immediate calls for changes from GOP lawmakers. The audit from the nonpartisan Legislative Audit Bureau found that last year the Wisconsin Economic Development Corp. didn’t verify or require performance information or financial statements from companies receiving financial incentives and awarded nearly $1 million in tax credits to companies for actions taken before they had signed their contracts with the state.

State jobs agency adds 3rd finance chief in 2 years, then loses him in a day
Source: Jason Stein, Journal Sentinel, April 24, 2013

This week the state’s flagship jobs agency brought on its third chief financial officer in less than two years – only to see him resign within 24 hours to take a promotion at his former company. The news comes as the still relatively new Wisconsin Economic Development Corp. is seeking to shift public attention from its own internal difficulties to what it can do to help meet the state’s much larger economic challenges. WEDC has gone six months without a permanent CFO and had turnover among other top executives at a time when it is trying to strengthen its financial controls.

Competent management needed at WEDC
Source: Editorial Board, Journal Sentinel, December 5, 2012

The state’s lead economic development agency needs to clean up its act, but the public-private model remains a good idea.

State economic development corp. under review / The group failed to track loans worth $12 million
Source: Mary Spicuzza and Dee J. Hall, Wisconsin State Journal, December 1, 2012

The state’s top jobs agency said Friday that it hired a financial institution and an accounting company to review its financial practices after it failed to track loans totaling about $12 million. And officials with the Wisconsin Economic Development Corp. said the quasi-public agency’s failure to track millions of dollars in loans wasn’t because of any misconduct they have uncovered, but rather because the agency — which lost more than 80 percent of its staff when it was created from the old Department of Commerce — didn’t allocate the time or personnel needed to keep track of the money it had loaned Wisconsin businesses.

Some borrowers of taxpayer-financed loans now bankrupt
Source: Jason Stein, Journal Sentinel, December 3, 2012

iPads put $60,000 byte on Wisconsin taxpayers
Source: Daniel Bice, Journal Sentinel, Oct. 7, 2011

Wis. gov introduces members of development corp‎
Source: Todd Richmond, Associated Press, May 19, 2011

Proposed privitization of Commerce Dept. get hearing
Source: WFRV News, January 13, 2011

State workers face privatization / Walker plan reorganizes Commerce Department
Source: Jason Stein, Journal Sentinel, January 6, 2011

Madison — Some of the 340 Department of Commerce workers would no longer be state employees under a job creation proposal by Gov. Scott Walker to partly privatize the agency. According to new details made public by Walker Thursday, the proposed Wisconsin Economic Development Corp. would still receive annual audits by nonpartisan state staff – one way to provide oversight of how the agency awards large taxpayer incentives to businesses….

…The Commerce Department is a midsize agency, with about 340 employees and an annual budget of $183 million in state and federal money. Under the bill, workers transferred from the agency to the proposed Economic Development Corp. would not be state workers and might or might not remain part of the state retirement system, depending on a decision by the new agency’s board. Administration Secretary Mike Huebsch would also be given the power to cut jobs at the Commerce Department….

…The closest model for the proposed Wisconsin agency is an Indiana entity that has faced criticism for not releasing some figures on costly subsidies received by individual companies and on the number of jobs they created with them….

…The legislation released Thursday made no obvious references to whether the agency would be subject to open government laws or audits. But Werwie said the Economic Development Corp. would be subject to the open records and audit requirement because already existing state laws would apply to the new body as it is set up in the bill. The legislation said that the salary for the head of the Economic Development Corp. would be determined by the agency’s board. That appeared to remove a current cap on the salary of the state commerce secretary now set at $135,300….

Subsidy transparency a must
Source: Shannon Nelson, Journal Sentinel, January 1, 2011