The governor’s economic development agency has repeatedly failed to protect public money.
But getting rid of its leader, Reed Hall, who wasn’t around when the worst mistakes were made, would be rash and exacerbate high turnover in the organization.
State leaders should keep Hall at the helm of the Wisconsin Economic Development Corp. and continue to pressure his agency for better results, with regular and independent audits of its programs and finances.
The organization also needs more insulation from partisan meddling and cronyism. Gov. Scott Walker wisely proposed removing the politicians — including himself and four lawmakers — from WEDC’s board. The Legislature’s budget committee agreed to take the governor off the board, but not the lawmakers. That’s a mistake.
Yet the Legislature’s push for more oversight is apt. State leaders have put restrictions on agency money, and the governor called off a misguided merger that would have diluted WEDC’s focus. The governor also wants to scrap WEDC’s direct loan program and rely on safer incentives, such as tax credits that benefit a recipient only after the business has met its promises to hire workers or buy equipment.
The Legislature plans more changes to WEDC this fall.
Created four years ago after Walker was elected governor, WEDC was a welcome change from the old state Commerce Department. WEDC’s duties were narrowed to economic development. It no longer had to be distracted by odd and unrelated duties such as inspecting carnival rides, certifying plumbers and tracking underground fuel tanks.
But WEDC stumbled badly after the governor rushed it into place, trying to fulfill his lofty and ultimately broken campaign promise to create 250,000 jobs.
WEDC lost track of millions of dollars in loans to businesses. It didn’t follow — or have — careful financial policies. It suffered turnover and personnel spats. Audits continue to suggest ways it must improve.
Last month, a State Journal investigation found that the governor’s top cabinet secretary and a powerful lobbyist pressed for a taxpayer-funded loan in 2011 to a financially struggling Milwaukee construction company that lost the state half a million dollars, created no jobs and raised questions about where the money went.
Documents subsequently released by WEDC showed it made at least 27 awards totaling $124.4 million to companies without formal reviews by underwriters.
Democrats called for Hall to resign this week. But the former executive director of Marshfield Clinic didn’t join WEDC until November 2012 — after those 27 deals were made. So he shouldn’t be the fall guy for trouble he couldn’t control. WEDC’s procedures and safeguards have improved significantly during his tenure.
Nor should the state abandon its mission to encourage private-sector job growth. Nearly every other state provides business incentives.
WEDC’s performance was poor. But its purpose — and leader — remain sound.