FROM THE PUBLISHER
WEDC shouldn’t be a political football WisDems reaction to audit of WEDC an immature act of political posturing
Sean Fitzgerald New North B2B Publisher 4 l NEW NORTH B2B l JANUARY 2013
Fifty years from now, Wisconsin history books will tell the story of the Wisconsin Economic Development Corp. as a vital, successful agency that helped bring about the Dairy State’s status as a global innovation leader. Like so many other business success stories, this one, too, had a tale of a rocky beginning in which lessons were learned, adjustments were made, and the entity overcame and trudged forward without ever looking back. It’s a tale that mirrors those of Apple computers, FedEx and a number of other organizations considered to be successful today. At least this is how we hope history will perceive WEDC. The mid-December release of an independent audit of the 18-month-old quasipublic economic development organization identified a handful of shortcomings in its internal accounting practices. But the audit report hardly stooped as low as the Democratic Party of Wisconsin and its leaders who outright described the WEDC’s management practices as scandalous and corrupt. It’s a shameful act of immaturity on the part of WisDems, not only reflecting a lack of comprehension on how to read and interpret a financial audit, but further anchors the state party’s migration toward an extreme anti-business agenda. It’s an unfortunate evolution in philosophy that I know disturbs a number of left-leaning politicians who recognize the value of an enhanced business climate and the inherent risks associated with achieving improvement. WEDC is in its second fiscal year of operation, and like any entrepreneur worth their salt will tell you, there’s often a good deal of finding one’s way during that first year in business. It’s hardly an excuse for the bookkeeping deficiencies highlighted in the WEDC audit, and interim CEO Reed Hall isn’t looking for a crutch for the organization to rest its burdens upon. Instead, the audit provides a roadmap for improvement, and Reed and his management team have already made some of the changes recommended by independent auditor Schenck, S.C. of Appleton. But it’ll take the support of the state legislature to commit to funding computer systems, staff training, and positions for loan officers to help right the ship. WEDC in itself shouldn’t be a political football. While the CEO serves at the discretion of the governor, the agency is established to be a non-partisan agency – like every other
state department – serving the entire state to ensure businesses have the necessary resources to create and retain high-paying jobs here in Wisconsin. Unfortunately, WisDems and even some general news media outlets across the state have distorted the organization as “a pet project” of Gov. Scott Walker, when the fact is that Walker really did nothing more than get the organization going after a commission supported by former Gov. Jim Doyle recommended an organization structured like WEDC as the most productive and effective for the state. The former Department of Commerce model previously in place for decades lacked the teeth and connection to private industry to provide as meaningful economic development services in Wisconsin as WEDC is able. A second distortion of facts is found in calling WEDC “a $19 million failure,” which misrepresents both the status of the loans out to employers across the state as well as the total value of what a financial institution might otherwise report as potential problem loans, delinquent loans or nonperforming loans. At $15 million, more than 75 percent of the outstanding loans from WEDC as of June 30 were forgivable loans, meaning the loans will essentially be considered grants that won’t need to be repaid if the recipient meets certain criteria, often including the creation and retention of jobs. Mercury Marine is an example of a local firm that received a forgivable loan as part of the package crafted in 2009 to help it maintain its manufacturing operations in Fond du Lac. The state Democratic Party seemingly wants WEDC to fail – for nothing more than political reasons – so that it can pin the blame on Walker and use that bidding chip as political currency during the 2014 gubernatorial campaign. It’s unfortunate because a failure of WEDC and wishful thinking toward further economic stress in the state means the loss of jobs to Wisconsin residents, a lose-lose scenario for Democrats and Republicans, for business owners and employees, and for government workers and taxpayers. As this next session of Wisconsin’s Legislature takes up business in the coming weeks, real leadership from both sides of the aisle will be those elected officials who can stand up to their state party, call out their party brass for acting immature and selfish, and ultimately to do what’s right for Wisconsin. www.newnorthb2b.com