Scott Walker (copy)

Wisconsin Gov. Scott Walker speaks at the Freedom Summit, Saturday, May 9, 2015, in Greenville, S.C. Several hundred Republican activists are gathered to hear from almost a dozen declared and potential presidential candidates including Walker. (AP Photo/Rainier Ehrhardt)

The Associated Press

Gov. Scott Walker would be removed as chairman of his flagship jobs agency under a Republican proposal before the Wisconsin Legislature's budget committee. 

Republican members of the Joint Finance Committee introduced an 11-page motion on Thursday aimed in part at putting more legislative oversight on the embattled Wisconsin Economic Development Corporation. One of more than 10 provisions related to WEDC would remove the governor from the agency's board of directors and specify that the chairperson would be a public member elected by the board.

"His party has fired him," Sen. Jon Erpenbach, D-Middleton, told reporters. "Republicans are removing him as chairman of the board."

Erpenbach said Walker will still have to answer for WEDC's troubles during his tenure as chairman as he travels the country considering a presidential bid. But he said he thinks with more oversight from the finance committee and with the governor off the board, things will go more smoothly for the agency.

"In the end, I'm shocked. I'm surprised. I'm happy that the Republicans have removed the governor from the board," Erpenbach said. "Can you imagine him in Iowa, getting questions from reporters — why were you fired from your job as chairman of the board?"

But as the committee started its debate, co-chair Sen. Alberta Darling, R-River Falls, pushed back against his statements.

"We did not fire the governor from the WEDC board," Darling said. "The governor asked to be removed from the board ... so the climate on the board would be more in line with making decisions that are in the best interest of the economy, jobs and the future of Wisconsin."

Darling said whenever the governor attended WEDC meetings, it resulted in a "tit-for-tat" between Walker and elected officials and prevented productivity. 

"This is about depoliticizing the state's economic development corporation," said co-chair Rep. John Nygren, R-Marinette.

Erpenbach shot back that if the governor did ask to be removed from the board, "he's running away from the problem."

In his two-year budget, Gov. Scott 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.

Earlier this month, 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.

Since then, bad news has continued to follow WEDC, the quasi-private economic development agency Walker created to replace the state’s commerce department four years ago. Days after pressing pause on the FWDA merger, the governor said he wants to phase out direct loans to businesses.

A Wisconsin State Journal investigation, published Sunday, revealed that Mike Huebsch, Walker's former secretary of Administration, pushed for a $4.3 million WEDC loan for Building Committee Inc. — eventually reduced to $500,000, which was not repaid — even as the company was collapsing. Walker's move to halt loans came hours after the state released records relating to BCI's loan on Friday.

The company's owner, William Minahan, had contributed the maximum $10,000 donation to Walker's 2010 campaign, but Walker's office told the State Journal he hadn't been aware of the contribution.

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The Milwaukee Journal Sentinel reported this week that Walker had been copied on a letter promising the loan, but his attorney said the governor had never received that letter.

In La Crosse last weekend, Walker defended WEDC itself, saying the “broader vision is actually very successful,” according to the Associated Press.

"We will continue to put more Joint Finance control and oversight over the WEDC program, but economic development is obviously something that's important to us, and we will continue to look for ways to make it better," Nygren told reporters before the committee convened. "We do have concerns, obviously, with the audit that has come out." 

Nygren said those concerns will be addressed by the Legislative Audit Committee. He said the model for the agency can work well, if improvements are made.

The Republican motion will scrap plans for the merger, along with a new $55 million regional revolving loan fund. It will also abandon proposed changes to WEDC's open records policy

"This is flagship thing thing for his administration when it comes to job creation and getting the economy rolling," Erpenbach said. "Obviously, WEDC hasn't been working. The Republicans know it, and they are removing the governor from the board and saying to him, essentially, 'Your services are no longer needed.'"

According to federal Quarterly Census of Employment and Wages figures released on Thursday, Wisconsin created 129,131 new jobs during Walker's first term. That's just more than half of the 250,000 jobs he promised in his 2010 campaign.

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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.