Problems have plagued the Wisconsin Economic Development Corporation almost since its inception. Lawmakers continue tinkering with the public-private agency, trying to change it to their liking. Yet WEDC appears to be a permanent part of the political landscape, just as Gov. Scott Walker intended.
WEDC was one of Walker’s first “babies.” He announced its creation when he took office in January 2011.
“We will transform the Department of Commerce into a public-private partnership that will effectively promote commerce throughout Wisconsin,” Walker said.
Walker called for lawmakers to approve WEDC as part of a special legislative session on job creation. They complied quickly, in a bipartisan vote. Yet the public-private agency has not seen such smooth sailing. Audits have shown WEDC lost track of loans or gave them to ineligible companies. The agency has had a revolving door of leaders. And Walker fell well short of his promise to create 250,000 jobs.
“There is a lot of money being spent through this agency to try to create a lot of jobs in Wisconsin, and it has been a complete and utter failure,” says Mike Browne, of the liberal watchdog One Wisconsin Now. It recently published a report blasting WEDC. Yet Browne says there are things the agency can do to improve performance.
“Keeping track of the money that you’re sending out and making sure goals for job creation and retention are attached to funds when they’re disbursed, and that if those funds are not used to create the promised jobs that funds are recovered,” Browne says.
Browne also favors a proposal from Democratic lawmakers. It would prevent WEDC from helping companies that outsource Wisconsin jobs. Meanwhile, Assembly Minority Leader Peter Barca is offering a second Democratic suggestion, which a WEDC committee could vote on Monday. His plan would require the agency to conduct background checks of business owners seeking state money. It has given funds to a few people with questionable criminal and financial records.
“We cannot have the taxpayers be at risk for one more day,” Barca says.
Barca is one of the lawmakers who serves on WEDC’s board, and is a frequent critic of its operations. Yet he defends the agency, in part, saying it’s had some achievements, including helping locate an Amazon warehouse in Kenosha in his district. And Barca sees potential in having a public-private entity replace the former Department of Commerce.
“The idea behind WEDC was to get more private sector input, which I certainly thought would be valuable and still believe is valuable,” Barca says.
Republican Assemblyman Rob Hutton agrees. He also serves on WEDC’s board.
“I think WEDC has a value, and will continue to have a value as we look for how WEDC can be most influential,” Hutton says.
Hutton says the agency has gone through growing pains and continues to evolve.
“I would say that WEDC is here to stay. I think shape and form are up for debate,” Hutton says.
One change Hutton supports is removing legislators from the board. He insists that representatives from business would make a more productive fit. While critics of his proposal insist WEDC needs continuous public oversight, Jim Paetsch also would like to remove the politics. Paetsch is vice president of the Milwaukee-7, a regional economic development initiative.
He says political posturing has heightened the criticism of WEDC’s missteps -- overshadowing positive changes it has made.
“We find that agency to be really a pleasure to work with, and hopefully we’ll get the politics out of this and get back to the business of economic development,” Paetsch says.
Paetsch says he’s found WEDC to be more focused on the customer and on sealing deals than was the old Department of Commerce.
WEDC Vice President, Marketing, Kelly Lietz, responds to Rep. Barca’s calls for background checks:
"It is important to first establish that WEDC already conducts background checks for all awards. WEDC’s board took action over two years ago to require background checks of applicants. In July 2013 the board unanimously approved more than 100 policies to strengthen our operations, including Policy GOV ADM 121, which requires staff reviews to be completed for all awards. As a part of our staff reviews, WEDC reviews state and federal databases of the historical records on a person’s or organization’s financial, legal, contracting, and business activities.
In granting awards, WEDC has a thorough and transparent process that includes a review of the application by our underwriters and other staff experts, and a presentation of that information to a leadership committee for review and approval. Depending on the size and nature of the award, applications are sometimes presented to the bipartisan Board of Directors for approval."
