The Wisconsin Economic Development Corporation has lost track of $8 million of taxpayer money in loans given to private businesses, according to a WEDC spokesperson.
Tom Thieding, WEDC spokesperson, said 99 private businesses are overdue on repaying loans given out by the agency, which formerly was the state Department of Commerce. Thieding did not identify which companies are overdue on their payments or when they will be paid back.
“We’re contacting companies that have been either behind or default of loan payments and trying to get them back on track,” Thieding said. “If they do not, we’ll be pursuing appropriate legal action to get the loans repaid.”
Two members of the WEDC board – Assembly Minority Leader Peter Barca, D-Kenosha, and Sen. Julie Lassa, D-Stevens Point – expressed displeasure with these unmonitored loans, which account for more than 15 percent of the WEDC’s total loan portfolio of $51 million.
In a statement, Barca said programs like WEDC may contribute to Wisconsin’s low job growth under Walker.
WEDC replaced the state’s Department of Commerce in 2011, a process Lassa said was not planned out enough and has led to various mistakes from the semi-private agency.
The old DOC was too sidetracked by regulatory functions to significantly improve the economy, according to Todd Berry, president of the Wisconsin Taxpayer Alliance. Berry added it is too early to evaluate WEDC’s progress, since it only began in July 2011.
“The genesis of this was feeling the former DOC was not focused enough on economic development,” Berry said. “It was a correct decision and I don’t think that in any way undermines the original thinking behind the creation of the WEDC, but it does point to things that need to be cleaned up and monitored as the agency matures.”
Sen. Lena Taylor, D-Milwaukee, is a member of Wisconsin’s Joint Legislative Audit Committee, which regulates operation and spending of state agencies.
Her spokesperson Eric Peterson said he thinks WEDC provides an opportunity to grow Wisconsin’s economy, but he said it has yet to accomplish this goal due to a lack of responsibility and transparency.
“WEDC can work if we start doing things right and we start agreeing we’re going to show people where we’re spending the money,” Peterson said. “When we try to cut the deal in the back room and keep things quiet, it doesn’t work for public development. It creates a matter of distrust.”
WEDC did not inform the Joint Legislative Audit Committee of the $8 million in untracked loans during the Wednesday meeting between the two groups, according to Thieding.
The WEDC Board of Directors, which Walker chairs, is meeting Friday. At the meeting, Peterson said Walker must show the new agency can be trusted and be accountable.
“The governor really owes it to the people of Wisconsin in this board meeting [Friday] to stand up and show us exactly how this corporation is going to change so it is transparent and accountable for the dollars it gives out,” Peterson said. “These are our tax dollars in these loans.”