A key board member of Gov. Scott Walker’s economic development agency said Tuesday that failed loans to businesses that weren’t properly reviewed shouldn’t trigger the resignation of the agency’s top official, as Democratic critics have sought.
Raymond Dreger, a board member of the Wisconsin Economic Development Corp. and chairman of the agency’s audit committee, said some of the agency’s biggest problems have been resolved.
“I don’t think there’s any smoking guns here,” Dreger said.
The agency has been rocked in recent weeks by reports that it failed to ensure that businesses it made awards to actually created the jobs they promised, and that it made at least 27 awards totaling $124.4 million to companies without conducting formal financial reviews.
The latter revelation, which came June 19, led top legislative Democrats to call for the resignation of WEDC CEO Reed Hall. It also prompted Walker to publicly defend the agency, which he created after becoming governor in 2011, saying it “didn’t cut corners.”
Dreger, speaking before a Tuesday meeting of the agency’s audit committee, said he doesn’t agree with those, including Assembly Minority Leader Peter Barca, calling for Hall to step down.
A Legislative Audit Bureau audit in May found the agency failed to consistently require businesses to comply with key requirements in exchange for state funding, including documenting jobs it helped create. WEDC denied the assertions.
The scrutiny intensified after a State Journal investigation in May found the agency loaned $500,000 to a company that didn’t create any jobs or repay the loan. The loan was made after Walker’s top Cabinet secretary, Mike Huebsch, intervened on behalf of the company, which was owned by a major donor to Walker’s gubernatorial campaign.
Dreger, speaking Tuesday, noted that and other loans in question were made before Hall became the agency’s CEO in 2013.
“That is history; tomorrow’s a mystery,” Dreger said. “What we’re doing today is different. I’m more concerned with what we’re doing today, what we’re doing tomorrow.”
Barca, D-Kenosha, also a WEDC board member and member of its audit committee, said he was heartened by Tuesday’s audit committee meeting at which it reviewed the audit bureau’s recommendations.
Tuesday’s meeting showed committee members “understood the gravity of some of the problems that have been highlighted” in the audit, Barca said.