You may have heard a little something lately about a big Scott Walker donor landing a $63M standardized testing contract. From the Journal-Sentinel:
The president and CEO of the Minnesota firm chosen to produce the new Wisconsin Forward Exam is a former Wisconsin Republican lawmaker who last year donated $10,000 to Gov. Scott Walker's re-election campaign. A spokeswoman for Susan Engeleiter of Data Recognition Corp. said the donation occurred months before the state issued its request for proposals and that DRC staff had no discussions with the governor or his aides about a potential contract.
If your pay-to-play spidey-sense is going off right about now, it might be because this contract was awarded by the WI Dept of Administration, the same agency that
moved heaven and earth for another $10,000 Walker donor called Building Committee Inc. But maybe, just maybe, this is all on the level and the well-timed maximum donation was just coincidental. It is just one donation and one contract after all, and the Journal-Sentinel seems to nudge us towards this conclusion:
Engeleiter contributed $10,000 to the Republican governor's 2014 re-election campaign, her largest political contribution in nearly two decades, according to the Wisconsin Democracy Campaign. Before the Walker donation, Engeleiter had contributed $100 to $200 to legislative candidates and $500 to Wisconsin Superintendent of Public Instruction Tony Evers' 2013 campaign.
But the MJS story leaves us severely wanting for context. For instance, back in 2009 Engeleiter's company won a $201M contract with the Commonwealth of Pennsylvania that also featured
some very fortuitously-timed donations, including $6,000 from Engeleiter. And while the story mentions her past as a state legislator, it neglects to mention that she was a member of ALEC before it was cool (see pg. 9 of the
1987 ALEC Leadership Directory).
And we're not even scratching the surface here. Go below the orange thing for a glimpse into an entire family of WIGOP kingmakers…
Susan Engeleiter's father, Arthur W. Shannon, ran a Milwaukee-area flooring business. He was a well-known Republican fundraiser, rising to the ranks of State GOP Finance Chair in the 1970s. He had four children, Michael, Thomas, Dan, and Susan.
Michael S. Shannon is an investor in resorts and "leisure businesses." He and his wife Mary Sue Goodspeed Shannon have donated $120k in "hard money" to Walker's gubernatorial campaigns. Clearly that wasn't enough to put their boy Scotty over the top, so they also kicked in a cool $1 million to the Republican Governors Association in 2014. They have also pitched in $250k to Walker's federal "Our American Revival" PAC so far this year.
Thomas M. Shannon is an investor in several WI businesses (more on that later) and has contributed a more modest $16,500 to Walker's state campaigns. However, he and his wife Sue did show up to Scott Walker's Presidential campaign kickoff event with the federal maximum $5,400 in hand. (Not for nothing, this 7/13 fundraiser would have been during the bidding process for the new state exams.)
Dan Shannon is a Senior Vice President at FIS Global (formerly Metavante, formerly the division of M&I Bank responsible for Wisconsinites referring to ATMs as "Tyme Machines"). He and his wife Lynn have contributed $3,450 to Walker's state campaigns. They also attended Walker's Presidential kickoff gala, contributing $1,000.
Of course this comes back around to WEDC…
With all this campaign cash flying around, you knew there would be some awards coming back the other way from Scott Walker's slush-fund "job-creation" outfit, the Wisconsin Economic Development Corporation (WEDC).
Thomas M. Shannon has a personal ownership stake in at least four companies that have so far received $3.6M from WEDC:
- Aver Informatics Inc 10/05/11 $525,000 Tax Credit
- Okanjo Partners, Inc. 09/01/11 $2,000,000 Tax Credit
- Shamrock Energy Corporation 06/05/13 $150,000 Loan
- Somna Therapeutics, LLC 04/13/12 $1,000,000 Tax Credit
Additionally, all four siblings are founding partners in the BrightStar Wisconsin Foundation. This is a 501(c)(3) that gets its nonprofit status specifically because it "assists" and "reduces the burden" of WEDC. BrightStar's leadership team includes out-going WEDC CEO Reed Hall and former WEDC VP Lisa Johnson.
It's an interesting setup. BrightStar solicits tax-deductible donations from wealthy people and foundations and then they hand that capital to technology start-ups in WI. Despite the nonprofit label and philanthropic language, they do take ownership stakes in the businesses they fund. The hope is that somewhere down the line a few of these start-ups will have massive IPOs, and they'll then be able to re-invest their profit in even more start-ups. I'll leave it to the reader to ponder what happens if their investment success ever outpaces their ability to find new viable start-ups in WI.
BrightStar's investment portfolio has benefited from over $16.5M in WEDC awards thus far:
- Beekeeper labs, Inc. 10/16/14 $1,000,000 Tax Credit
- Emopti, Inc. 03/13/15 $175,000 Tax Credit
- Fishidy, Inc. 07/23/12 $1,000,000 Tax Credit
- Forward Health Group, Inc 06/30/14 $2,000,000 Tax Credit
- Modern Movement, Inc. 03/27/15 $125,000 Tax Credit
- Okanjo Partners, Inc. 09/01/11 $2,000,000 Tax Credit
- Pinpoint Softwares, Inc. 02/01/12 $1,000,000 Tax Credit
- Quietyme, Inc. 07/15/13 $1,000,000 Tax Credit
- SHINE Medical Technologies, Inc. 05/19/14 $2,000,000 Tax Credit
- SHINE Medical Technologies, Inc. 12/12/13 $4,000,000 Loan
- Swallow Solutions, LLC 02/02/12 $135,000 Loan
- The Good Jobs, Inc. 11/07/12 $1,000,000 Tax Credit
- The Good Jobs, Inc. 12/11/14 $70,000 Loan
- WholeTrees, LLC 06/19/12 $1,000,000 Tax Credit
- WholeTrees, LLC 06/11/14 $170,000 Loan
Now that we have a bit of context, what do you think about Susan Engeleiter's shiny new $63M state contract?