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Troubles mount for Gov. Scott Walker's jobs agency

May 8, 2013
 

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MADISON — The troubles for Gov. Scott Walker’s chief economic development agency continued to mount Tuesday, with the news that its newly hired spokesman quit amid reports he owed $36,000 in back taxes.

Democratic lawmakers, meanwhile, renewed calls for immediate reforms they said would ensure the quasi-governmental Wisconsin Economic Development Corp. operates lawfully. They also demanded that a hearing on the agency’s budget scheduled for Thursday be postponed.

Walker and the Republican-controlled Legislature created the agency in 2011 to help the governor meet his campaign promise to create 250,000 private sector jobs, but it has been beset by high profile missteps.

A nonpartisan audit released last week found WEDC did not consistently follow the law or its own policies during its first year, failed to adequately track the loans it was responsible for and provided tax breaks to companies that did not qualify.

Close on the heels of the audit came news Tuesday that WEDC’s newly hired spokesman brought in to improve the struggling agency’s image resigned after WKOW-TV in Madison discovered he owed $36,047 in back taxes.

Democrats said Tuesday their patience was wearing thin.

“I am outraged,” said Sen. Julie Lassa at a news conference attended by nearly every Democratic member of the Legislature. Lassa and Assembly Democratic Minority Leader Peter Barca serve on the WEDC board.

Democrats introduced a resolution in the Assembly on Tuesday calling for the creation of a bipartisan committee to come up with ways to ensure WEDC follows state law in implementing the programs it oversees. The lawmakers said they are also working on several bills to improve the agency.

“This is really their last chance to get things right,” Lassa said, calling WEDC’s performance “an intolerable violation of public trust.”

Republicans who control the Assembly rejected the Democratic resolution as an attempt to score political points rather than meaningfully address issues with WEDC. Democrats railed against WEDC on the floor of the Assembly, saying the agency was an out-of-control embarrassment.

Republican Assembly Speaker Robin Vos said the WEDC board was already working on issues raised in the audit and he believed progress was being made. Vos said local economic development officials in Racine County have told him they believe WEDC is operating well.

Republicans joined with Democrats after the audit came out to call for WEDC to improve or face reorganization. The agency administers $520 million worth of grant, loan and tax credit programs. It awarded $80 million in its first year.

Walker has steadfastly defended the agency. He serves as chairman of the WEDC board and appointed Reed Hall as the agency’s director in January.

Both Walker and Hall said many of the issues raised by the audit were already known and either in the process of being addressed or had been fixed. However, Walker said he wanted to review the audit “piece by piece” with the board during an emergency meeting on Wednesday. Separate legislative committees were scheduled to meet a day later to discuss Walker’s request to increase WEDC’s funding over the next two years and to review the audit.

Democrats renewed their call to delay any consideration of WEDC’s budget given the ongoing questions raised by the audit. The Joint Finance Committee was scheduled to vote on WEDC’s budget Thursday. Co-chair Sen. Alberta Darling said the committee was discussing the possibility of delaying that meeting, even though Vos said he hoped it would proceed as planned.

Vos said any votes taken this week could always be revisited later.

Walker and WEDC were silent on the WKOW report Tuesday about WEDC’s spokesman John Gillespie.

Walker’s spokesman Tom Evenson referred questions about the resignation to WEDC. Tom Thieding, another spokesman at the agency, declined to comment. A phone number for Gillespie was not listed.

Vos said Gillespie’s situation was “embarrassing.”

In addition to owing the roughly $36,000 in back taxes, the television station also reported that the state Department of Workforce Development filed a warrant in Outagamie County Circuit Court seeking $7,770 in unemployment insurance compensation benefits Gillespie received.

Gillespie’s resignation comes after WEDC’s third chief financial officer in less than two years resigned last month after less than 24 hours on the job.

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