Legislative Audit Bureau says staff review on questionable loan not done (copy)

Gov. Scott Walker's job creation agency failed to review a loan to a company that has since defaulted.

SCOTT ANDERSON — Racine Journal Times archives

In the wake of news that Gov. Scott Walker's flagship economic development agency has given away more than two dozen awards without proper review, Democratic legislators are once again calling for an investigation of the Wisconsin Economic Development Corporation.

The agency released an internal review on Friday reporting 27 awards totaling $124.4 million that were made with no formal staff review, between July 2011 and June 2013. Included in those awards was an unsecured $500,000 loan to the since-dissolved Building Committee Inc., which was not repaid — even as the company was collapsing.

The loan was given after BCI owner William Minahan donated the maximum $10,000 to Walker's campaign.

Walker called for the loan program to be phased out shortly after the state released records related to BCI's loan in May.

"It’s concerning that Gov. Walker and Republican legislative leaders remain silent as this scandal continues to worsen," state Sen. Jennifer Shilling, D-La Crosse, said in a statement. "The latest round of records prove that dozens of loans were rushed through the approval process by top administration officials without proper oversight. I’ve seen lemonade stands with better financial safeguards in place. We should be holding Gov. Walker’s WEDC to higher standards."

State Sen. Dave Hansen, D-Green Bay, called for disbanding the agency entirely and replacing it with "a more open and transparent model that is truly accountable to the taxpayers."

"By any measure, WEDC is a failure that taxpayers cannot afford to support," Hansen said in a statement. "With Wisconsin’s economy still continuing to lag our neighbors and the nation, there is nothing left to do but shut the doors on WEDC and close the book on what has become a very expensive lesson in how not to create jobs."

In his two-year budget, Walker called for a merger between WEDC and the Wisconsin Housing and Economic Development Authority, to be known as the Forward Wisconsin Development Authority. Under that plan, Walker called for removing all elected officials from the board, including himself.

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In May, Walker scrapped the merger plan, calling for all proposed agency mergers to be removed from the budget. He also asked lawmakers not to move forward with separate legislation proposing the same thing.

Though the governor's request came hours after a searing audit found the agency hadn't followed state law or tracked job creation, he cited concerns from legislators, stakeholders and the WEDC and WHEDA boards in his request to halt the merger.

Republicans on the Joint Finance Committee passed a motion last month that would keep lawmakers on the board, but remove Walker. Democrats said Walker was being "fired," but Republicans said it was a matter of depoliticizing the agency.

The motion, which passed on a party-line vote, scrapped plans for the merger, along with a new $55 million regional revolving loan fund. It would also abandon proposed changes to WEDC's open records policy.

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Jessie Opoien covers state government and politics for the Capital Times. She joined the Cap Times in 2013 and has also covered Madison life, race relations, culture and music. She has also covered education and politics for the Oshkosh Northwestern.