Late Friday night the Milwaukee Journal-Sentinel reported news of another dubious loan (this time for $1.2M) made by Scott Walker's Wisconsin Economic Development Corporation to a Green Bay-area company that was already circling the drain and just happened to be owned by a longtime WIGOP donor:
[Owner Ron] Van Den Heuvel, a longtime donor to Republicans, and Green Box now owe $139,000 in state and federal taxes; delinquent property taxes for a De Pere property; and more than $1.2 million to WEDC for the 2011 loan and a $96,000 grant made in 2012, the lawsuit alleges. Other private creditors are owed millions of dollars more....
[Van Den Heuvel] certified in 2011 and 2012 that neither Green Box nor any of its owners or officers had been involved in lawsuits in the previous five years or had outstanding tax liens.
Online state court records show Van Den Heuvel and companies associated with him have been taken to court repeatedly in the past 10 years, including by the state Department of Revenue for delinquent tax warrants and the Department of Workforce Development in worker's compensation cases.
In 2009, two years before WEDC awarded the initial loan to Green Box, court records show Van Den Heuvel being ordered to pay millions in a legal action brought on by Manchester Mortgage Company LLC. The records show a settlement and dismissal of the case in 2013.
WEDC's staff [underwriting/eligibility] review for the 2011 loan makes no mention of these financial troubles.
If this feels a bit like old news or Déjà vu, that's because the circumstances surrounding the awards to Green Box NA very closely mirror the
WEDC award made to Building Committee, Inc. All it's missing is
a Maserati.
Go read the full MJS article, and come back for more below the orange thing...
Just like Building Committee Inc, Green Box NA pursued further economic development aid from local governments in hopes of using that money to pay off the original WEDC loan:
[Green Box] sought tax-exempt bonds in Wisconsin, Michigan and Georgia, winning preliminary approval from the City of De Pere in April 2014 for $125 million in potential borrowing for a solid-waste disposal and recycling operation, according to WEDC records.
And again just like Building Committee, WEDC kept the local governments in the dark about what it had come to learn the hard way about Green Box's finances:
As part of that 2014 loan restructuring, Green Box disclosed legal troubles to WEDC, three years after the agency's $1.1 million loan to the company. In a recommendation to amend the Green Box loan, WEDC staff noted that the company's stated "exit strategy for repayment of the loan" was to get the tax-exempt bonds through De Pere and other sources....
[De Pere City Attorney Judy] Schmidt-Lehman said that to her knowledge no one from WEDC had contacted the city to tell it about Green Box's business troubles. The city's resolution makes no mention of the bond money being used to pay off the bad loan made by WEDC.
The only real substantial difference between Green Box NA and the Building Committee loan is that
WEDC admitted that there was no underwriting/eligibility review for Building Committee. The implication, then, is that WEDC underwriters
did review the loan to Green Box and just did a remarkably terrible job of it... This, in turn, leads to questions about all the other awards handed out by WEDC that (supposedly) went through their obviously less-than-thorough underwriting/eligibility review process.
The MJS story notes that one of Green Box's other creditors is Marco Araujo. I'm not 100% certain about Araujo's relationship with Green Box, but I think he may be an investor in the company, which would make his $2,200 contribution to Walker's 2010 campaign relevant to this story.
Michiganders may be interested to note that the Gov. Snyder's Michigan Strategic Fund awarded this same company $125M in May 2014 to build a plant in Cheboygan. The Michigan award was announced just weeks after Green Box's bad loan was discussed in open session at a WEDC Board meeting. If you're in Cheboygan, please let us know in the comments whether ground was ever broken for this facility.
As we approach Walker's presidential campaign announcement on Monday and what's sure to be a barnburner of a WEDC Board meeting on July 20, the stories of mismanagement and corruption will continue to roll out with increasing frequency. See this diary for a long list of contenders in the running to be the next shoe to drop.