A legislative committee questioned representatives from the Wisconsin Economic Development Corporation Wednesday after an audit showed the agency mismanaged funds and did not follow state statute.
WEDC has been a key piece of Gov. Scott Walker’s plan to grow business in Wisconsin, replacing the state’s Department of Commerce, which he called inefficient. But the agency has come under fire for giving out over $100 million without proper oversight and for not consistently following internal policies and state statutes.
Representatives from the Legislative Audit Bureau told the Joint Legislative Audit Committee the agency didn’t follow state statute and didn’t consistently gather data to ensure that businesses it supported were delivering on job creation promises.
But WEDC officials defended the agency, saying it has largely been successful in creating economic growth and that it has improved since a 2013 audit.
“I truly believe WEDC is doing what it was intended to do,” WEDC Board Chairman Dan Ariens said. “I am confident we are poised to become an organization you will be proud to call your economic development engine.”
The agency also announced Wednesday that it will award $5.5 million in tax credits to encourage Dollar General to build a distribution center in Janesville.
Tricia Braun, vice president for Economic and Community Development, said the move would bring in 550 jobs to the region and that it validated the agency’s efforts.
State Rep. John Nygren, R-Marinette, agreed that changes need to be made to WEDC but added that many of the same problems existed within the Department of Commerce.
“We can address the shortcomings of WEDC without throwing out the positives,” Nygren said. “We have to realize some shortcomings existed before WEDC.”
Other members of the committee weren’t persuaded, with some Democrats calling for criminal charges to be considered where WEDC didn’t adhere to state statutes.
“What I heard without you saying it is that WEDC didn’t comply with the law,” State Sen. Kathleen Vinehout, D-Alma, said. “Everyone must follow the law.”
Last week, Walker tapped Mark Hogan, a former BMO Harris executive and Republican donor, to serve as WEDC’s third CEO. Hogan would replace Reed Hall, who has led the agency for the past three years and stepped down last month.
The two democratic representatives on WEDC’s board, State Sen. Julie Lassa, D-Stevens Point, and Assembly Minority Leader Peter Barca, D-Kenosha, testified the leadership change is not enough and that they will introduce a bill in the coming days that would radically overhaul the agency.
