Skip to main content

Snotty's got some 'splainin' to do...

Two Wisconsin state agencies have failed to follow federal law and their own policies in issuing economic development grants, the U.S. government said...
The juicy is over the squiggle...

Some details from Wednesday's Wisconsin State Journal:

In a strongly worded Aug. 12 letter to Department of Administration Secretary Mike Huebsch, federal officials said two state agencies failed to follow federal law and their own policies in issuing economic development grants.

Among the findings:

-- The state gave out aid worth $20,000 per job created to Kapco, a company with a plant in Polk County —twice as much as its own policies allow.

-- Officials failed to check the financial soundness of two companies receiving $1.4 million in federal grants.

-- Eleven out of 20 loans using Community Development Block Grant funds awarded since Jan. 1, 2011, are "forgivable," despite the fact that the state's own policy calls for allowing businesses to get no-payback loans only in "extraordinary circumstances."

-- Questions remain about an $8.6 million chunk of CDBG funds withdrawn under unusual circumstances late last year.

The criticisms target both the Department of Administration, which oversees the CDBG economic development program, and the public-private Wisconsin Economic Development Corporation created by Gov. Scott Walker that runs it.

HUD said some of the problems resulted from the "hasty" transfer of duties from the former Department of Commerce to the new economic development entity without a formal written agreement. The monitoring apparently was triggered by an announcement in February by Walker that four communities had received $9.6 million in CDBG funding.

9:03 AM PT: Via Giles Goat Boy in the comments...  Paul Jadin, CEO of the Wisconsin Economic Development Corporation resigned last week:

A spokesman for the Wisconsin Economic Development Corporation said Governor Scott Walker would announce an interim replacement for Jadin Thursday afternoon – along with the formation of a search panel to find a new permanent leader.


In a statement, Jadin said he was proud of what’s been done to, “rebuild Wisconsin’s approach to economic development.”

Jadin’s resignation came two months after Walker made his former deputy chief of staff the agency’s Number 2 official, amid a controversy over tax breaks offered to a firm if it won a state contract. The offer was later rescinded, and the bids for the contract were tossed out.

11:19 AM PT: GeoffT in the comments points to an August post by Badger Democracy referencing a May 17, 2012 letter from HUD to the DOA:

HUD review of the WEDC ”Administrative Agreement” executed by DOA exposes a negligence in the statutory authorization of WEDC to act as a state agency. It also underscores growing concern over lack of accountability and oversight of WEDC.

DOA has been aware for this issue for over one year.


It is apparent that WEDC is a hastily contrived, singular vision agency put together with no consideration for statewide public impact. While it may serve the corporate development elite in the state, it is keeping the general public (which fund its existence) in the dark as to its activities and investments.

The HUD letter raises serious concern as to whether WEDC should continue to be funded by Wisconsin taxpayers.

11:42 AM PT: Wow...  This just gets worse and worse for Walker and Huebsch:

A HUD director detailed the concerns of mishandled public funds in an Aug. 16 letter and GOP Gov. Scott Walker's administration secretary, Mike Huebsch, responded to them in a Sept. 12 letter. The economic development corporation's board met eight days later, on Sept. 20, but the issue was not broached, according to Sen. Julie Lassa (D-Stevens Point), who sits on the board.

"It's inexcusable that this letter was not shared with the WEDC Board at its meeting last week even though the administration received it in August," Lassa said in a statement. "The legislators on the WEDC Board are supposed to be providing oversight of taxpayer dollars, but we can't play that role if important information like this is withheld from us. I expect WEDC and DOA to provide a full explanation of these charges, what they're doing to remedy the situation, and why the board of directors was not informed of HUD's allegations."

Originally posted to PvtJarHead on Wed Sep 26, 2012 at 08:08 AM PDT.

Also republished by Badger State Progressive, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and Progressive Hippie.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site