Thursday, September 27, 2012

"In Corporate Fitzwalkerstan"

There is an old adage that goes, "Truth is stranger than fiction."

In Fitzwalkerstan, that could be the state motto.

Let me explain.

On Wednesday, Scott Walker took time from his usual begging for money for his legal defense fund and nervously watching the Kelly Rindfleisch trial to do his favorite thing: Grandstanding for the media.

The topic du jour was the unveiling of a marketing initiative to promote the business friendly climate he has created and why businesses should locate and/or expand in Fitzwalkerstan:
The Wisconsin Economic Development Corporation (WEDC) today unveiled its marketing initiative to brand Wisconsin's business climate and promote the benefits of starting, expanding or locating a business in Wisconsin.

An integrated marketing campaign introducing the "In Wisconsin" brand will be launched next week in key business-focused media, featuring five world-class Wisconsin companies that have set standards in their industries through innovation and leadership.

"Over the past year we've enhanced Wisconsin's business climate with regulatory changes and powerful incentives for businesses to grow their operations and expand their workforce," said Gov. Scott Walker, who announced the initiative today at a WEDC press conference in Madison. "As a result, Wisconsin has already improved its image as a business-friendly state, as evidenced by recent state business climate rankings by Chief Executive Magazine and CNBC. The In Wisconsin marketing initiative takes the next step by actively promoting the state's benefits to business leaders, both those already here and those considering a relocation or expansion in Wisconsin."

The "In Wisconsin" brand promotes the state's pioneering spirit and heritage of innovation.
Yeah, right.

One would be accurate to describe this as a textbook example of Walker's usual hypocrisy and outright lying, especially when one considers the fact that the head of WEDC, Paul Jadin, is bailing on the group to go out to the private sector.

The hypocrisy reaches nearly toxic levels when one factors in that Walker's failure is so utterly complete and of such epic proportions that he has scrubbed all references of his promise of creating 250,000 jobs from his campaign website.

Ah, but as the gentle reader already knows, when it comes to all things Walker, there's more. There's always more.

Walker had added an amazing amount of chutzpah to his hypocrisy with this particular example of showboating.

Just hours earlier, we learned that the Feds had slammed into WEDC for illegal behaviors and violating their very own policy:
In a strongly worded Aug. 12 letter to Department of Administration Secretary Mike Huebsch, federal officials said two state agencies failed to follow federal law and their own policies in issuing economic development grants.

Among the findings:

  • The state gave out aid worth $20,000 per job created to Kapco, a company with a plant in Polk County — twice as much as its own policies allow./LI.
  • Officials failed to check the financial soundness of two companies receiving $1.4 million in federal grants.

  • Eleven out of 20 loans using Community Development Block Grant funds awarded since Jan. 1, 2011, are "forgivable," despite the fact that the state's own policy calls for allowing businesses to get no-payback loans only in "extraordinary circumstances."

  • Questions remain about an $8.6 million chunk of CDBG funds withdrawn under unusual circumstances late last year.
The HUD monitoring report, obtained by the State Journal, covers activities stretching back to 2007.
And then there is this:
HUD said some of the problems resulted from the "hasty" transfer of duties from the former Department of Commerce to the new economic development entity without a formal written agreement. The monitoring apparently was triggered by an announcement in February by Walker that four communities had received $9.6 million in CDBG funding. "At the time these awards were made," HUD said, "WEDC had no legal authority under the CDBG program to award or administer the CDBG funds." The federal agency ordered Wisconsin to hire a high-level administrator for monitoring, oversight and compliance, saying DOA currently lacks "adequate staff or experience to adequately oversee ... the new activities that are being undertaken by the WEDC." Among the most serious findings are that the state failed to perform required underwriting — the process of determining the financial soundness of a company — before giving $390,000 to Gilman USA LLC, a machining company in Grafton, and $1 million to Morgan Aircraft in Sheboygan. The aircraft company's website said it is developing a vertical lift technology that "combines the operational advantages of a helicopter with the range and speed of a fixed-wing aircraft." In the case of Gilman, "WEDC staff indicated that the underwriting process was skipped in order to accommodate the business' timeline," HUD said. "In the case of Morgan Aircraft, WEDC staff indicates that an updated underwriting was performed, but not placed in the file. HUD staff requested a copy ... but it has not been provided."
In other words, Walker was handing out taxpayer money willy nilly to these various companies through WEDC, even though WEDC wasn't even a state agency and without having even done the most rudimentary investigation to make sure the companies provided a suitable and stable company. Adding to this mess is the fact that Walker knew all along that WEDC wasn't a legitimate agency to be handling this money. He had been advised as much by the Feds in a previous letter and through a conference call with them. The real kicker is that Walker willfully kept this information from the WEDC board, which he chairs:
Walker, who chairs the economic development board, defended the decision not to inform the board of the matter, saying the federal government "routinely" corresponds with the state. "It's one where the Department of Administration is still waiting to hear back from HUD in terms of whether the things they're proposing are acceptable to them," he said. "And if those are things that need approval from the board certainly we'll have a special meeting of the board." The Republican governor made the comments Wednesday when asked about it during a news conference announcing WEDC's new branding program for the state. Walker said discussions with HUD are in the "early stages," even though they have gone on since at least May. In addition to Walker, the board consists of four lawmakers and eight businesspeople. Vice Chairman Dan Ariens and other board members from the private sector did not return calls Wednesday.
Mike Ivey reports that Walker has had issued with HUD money for a long time and that the Feds have been warning Walker about these issues for over a year. Actually, Walker's problems with HUD funding goes back even further, even before Walker became governor. When Walker was Milwaukee County Executive, he had put Tim Russell (remember that name?) in charge of the county's housing division. The result of this corrupt couple was that the taxpayers of Milwaukee County facing the possibility of having to pay back more than a half a million dollars. Fortunately, with no thanks to Walker, the county got off light:
Milwaukee County has repaid the federal government $229,000 for a portion of Community Development Block Grant money that was improperly spent as part of an overhaul required by the U.S. Department of Housing and Urban Development. The amount probably represents a small fraction of spending in the past decade that HUD says violated federal rules. But HUD is only enforcing the rule starting with 2011 allocations. The payback was ordered because the local programs primarily served City of Milwaukee residents or the county couldn't find documentation showing how the money was spent, according to county and HUD officials.
Now, I haven't had the time to research all of this, but I can't help but wonder how many of these companies are also campaign donors to Walker. I wouldn't be at all surprised that one would see what the real driving force behind the WEDC truly is as well as what Walker means when he says Fitzwalkerstan is business friendly.


  1. This is the most curious item, for me.

    "Questions remain about an $8.6 million chunk of CDBG funds withdrawn under unusual circumstances late last year."

    There is something that is left out of that sentence. What unusual circumstances were there? Where did the 8.6 million go?

  2. When contemplating the actions of Scott Walker it is best to start by imagining the worst thing he could do with the money, because you know he has already thought of it. It's the way the criminal mind works.

    Therefore I suggest that the $8.6M was probably used to reward donors to Walker's Recall survival fund. This would explain the rush to get the money pump working before the end of 2011, even if it was in violation of HUD regulations.

  3. This morning's Journel-Sentinel published a story ("Development board wasn't told of criticism by HUD") that says that Walker--as chairman of the WEDC Board--purposely did not inform the Board (isn't that part of his duties?) that HUD had informed Walker that it had illegally spent nearly $10 million U.S. taxpayer dollars without the legal authority to do so. This could create another court trial for Walker!
    I can just see Walker thinking "Laws?!... We don't need to follow no stinking laws."
    Fact is, YES YOU DO, when you're receiving U.S. taxpayer monies from HUD, a federal agency.
    King Walker has met his match, and will bring his downfall.
    He rejects all sorts of government money to create jobs via building trains and train transportation (inner-city Milwaukee poverty-stricken people, many without driver's licences, depend on public transportation to get to the jobs out in the suburbs in places like Walkersha), yet takes HUD money now that his flagship job creation program WEDC has been a complete, dismal failure for creating real, family-supporting jobs. And he has the audacity to ignore the strings attached with the money he's getting from HUD.
    Let's put this guy in jail where he belongs!

    1. Could this be part of the FBI involvement with the John Doe?????

    2. No. This happened after the FBI got involved.

  4. Haven't we had vertical lift technology for years?
    Harrier Jet being one of the first. Why do they need 1 million to develop it again?

    1. Anyone thinking that they can get in on the ground floor of a new airplane manufacturing business, save time, just put the money in a pile and burn it.

      Someones probably got friends in high places with this one.

    2. Here's an aerospace about a plane with roll-down windows that you can board "Dukes of Hazzard"-style?

      WEDC? Bain? Where's my bag of loot?

  5. Anyone who has followed the ReTHUGlican MO of Walker and his Corporatist backers recognized the stench emanating from the WEDC even before it was officially formed.