Three Democrats announced new legislation at a news conference Thursday to punish corporations that commit fraud when receiving assistance from the Wisconsin Economic Development Corporation.
The new legislation would first make a federal crime out of committing fraud on WEDC applications, with penalties up to 25 years in prison, $100,000 in fines and a ban on requesting a loan from WEDC for seven years, Sen. Dave Hansen, D-Green Bay, said at the conference.
A second bill, which Hansen said is still in the works, would create a hotline for constituents to call to report fraud or waste specifically associated with WEDC.
“Fraud is fraud,” Hansen said at the conference. “The state should investigate and punish those who commit fraud against the taxpayers.”
Dennis Dresang, professor emeritus of University of Wisconsin’s La Follette School of Public Affairs, said WEDC became a point of “scandal” because corporations would lie on their applications and either be bankrupt or ineligible for economic assistance in some other way.
Rep. Katrina Shankland, D-Stevens Point, said constituents have demanded action against WEDC, the state’s economic development agency that provides start-up loans to corporations, which is why Democrats have chosen to target it now. She said Republicans have been using the current extraordinary session — which meets outside the scheduled legislative session — to discuss money in politics instead of how to create jobs.
Wisconsin is on track to double its layoff total since 2014, Shankland said.
Rep. Chris Taylor, D-Madison, echoed that Wisconsin’s job growth is climbing at half the rate of the rest of the nation.
“[Republicans] care more about their own jobs than creating jobs,” Taylor said.
WEDC faced scrutiny recently with the news of the Madison Oscar Mayer plant’s permanent closure.
Democrats said WEDC acted irresponsibly to the warning signs of the plant’s closure, such as the announcement of the Kraft Heinz merger in June, Wisconsin Public Radio reported.
But Republicans disagree. Gov. Scott Walker said there was nothing the state could have done to stop Kraft from closing its Oscar Meyer plant, saying the company had been looking into the idea for a decade, WPR reported.
As of Thursday, Assembly Majority Leader Rep. Robin Vos, R-Rochester, said he would be receptive to dismantling WEDC, according to The Journal Times.
“Legitimate issues have been brought up,” Vos told The Journal Times. “We have taken steps to fix many of those, but I’m not saying it’s perfect and I’m not saying that there are not things that we could additionally do.”
Vos’ openness to change could be a sign that the Democrats’ new legislation might get some positive reception from the other side of the aisle.
But Dresang said Vos’ comments weren’t specific, and they were probably just to set himself apart from Walker.
Vos is setting himself up to run for the next gubernatorial term, Dresang explained.
He said it is still unlikely for Republicans to side with the legislation.
“A lot of this is more symbolic than substantive since it’s not likely that it’s going to get approved,” Dresang said.