LARSON BI-WEEKLY REPORT, November 1, 2012

November 1, 2012


Dear Friend,

This week, my colleagues and I fought to bring greater accountability and transparency to the Wisconsin Economic Development Corporation.  Continue reading for more information.

Sincerely,                                                                                      

Chris Larson
State Senator, District 7
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Increasing Accountability, Transparency in WEDC
In a public hearing on October 17, the Joint Legislative Audit Committee, of which I am a member, brought to light some major concerns with the Wisconsin Economic Development Corporation (WEDC). This past week my colleagues and I submitted a letter to Reed Hall, the interim Secretary and CEO of WEDC, that shares the concerns expressed by the committee and seeks immediate corrective action by WEDC. Continue reading for more information about WEDC and what was discussed in the letter submitted to them.

Click here or on the media player below to view the public hearing conducted by the Joint Legislative Audit Committee on October 17.
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Audit Report
Click here to view a copy of the audit on Wisconsin's Economic Development Programs.
WEDC is currently tasked with administering many of the state’s economic development programs, including grants, loans, bonding authorization, and tax incentives. Although it has been given great authority over our tax dollars, it lacks the necessary accountability and transparency measures that should accompany such obligation. 

As an elected official, I share the responsibility for ensuring taxpayer dollars are properly safeguarded and wisely invested. Below is a list of just some of the problems that occurred within WEDC recently as a result of defective policies and lax procedures employed by the public-private entity:

• June – During the bidding process for a statewide computer system, the Wisconsin Department of Administration found out that WEDC pre-empted the process by making a “soft offer” for tax credits to a business. Upon discovery, the Department of Administration had to suspend the bidding process and WEDC had to rescind the tax credit offer as it violated what should be a fair and competitive process.
• July – The Milwaukee Journal Sentinel reported that WEDC was projected to spend $14 million more than it was allotted, creating a deficit in the agency.
• August – The U.S. Department of Housing and Urban Development criticized WEDC for not following federal laws and state policies when it gave out $9.6 million in grants. The situation intensified as WEDC’s board and the public were not told about the condemning letter causing one of the board members to threaten resignation.
• September – After the Governor appointed his political aide Ryan Murray, a Republican political operative with no private sector or economic development experience, as Deputy Secretary and COO, WEDC’s CEO and Secretary Paul Jadin announced his resignation.
• October – The media reported, following a Joint Legislative Audit Committee hearing, that WEDC had lost track of $69.3 million in loans, at least $9 million of which were overdue. Because of the hasty transformation from the Department of Commerce to WEDC, no one was assigned to track this huge loan portfolio.

Currently, WEDC is being audited by the Legislative Audit Bureau and an external auditor retained by WEDC, Schenk. It was in preparing documents for the external auditor that the $69.3 million in non-tracked loans was discovered. At a recent WEDC board meeting, the COO said he expected these two audits would uncover additional problems at the agency.

MORE - Where Did All the Money Go?
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