GOP proposes removing lawmakers from WEDC board

Two Republican legislators introduced a bill Friday that would remove all lawmakers from the board that oversees Gov. Scott Walker’s job creation agency, saying members from the private sector can do a better job on economic development.

Four lawmakers — Sen. Rick Gudex, a Fond du Lac Republican; Rep. Rob Hutton, a Brookfield Republican; Sen. Julie Lassa, a Stevens Point Democrat; and Assembly Minority Leader Peter Barca, a Kenosha Democrat, currently sit on the 12-member board. The other eight members are from the private sector.

Lassa and Barca have been vocal critics of WEDC, which has been plagued by allegations of botched underwriting, ineffectiveness and favoritism. The Democrats have stepped up their complaints in recent weeks, trying to chip away at Walker as he campaigns for the 2016 Republican presidential nomination.

Gudex and Hutton introduced a bill that would remove all four legislators from the board and replace them with people from the private sector. In a memo seeking co-sponsors the two lawmakers wrote that representatives from the private sector can provide better firsthand experience in economic development initiatives. They insisted the Legislature would retain oversight of the agency through its economic development committees and biennial state audits.

“We believe this change will bring additionally needed expertise to the board, while at the same time fostering more open discussion and engagement,” they wrote.

A Barca spokeswoman had no immediate comment. Lassa issued a statement blasting Gudex and Hutton, saying their plan to improve WEDC is to remove the only board members accountable to the public.

“This is just one more attempt by the Republicans to draw a veil of secrecy over state government,” Lassa said. “First Governor Walker tries to wash his hands of WEDC, and now Sen. Gudex and Rep. Hutton want to walk away too. But neither the Governor nor majority party legislators can absolve themselves of WEDC’s problems by looking the other way.”

Walker included provisions in his state budget proposal in February to remove himself as the WEDC board chairman as well as all lawmakers from the board. Republicans on the Legislature’s budget committee approved removing the governor from the chairmanship but retained the four legislative spots on the board.

The bill’s prospects are unclear. Gudex and Hutton have given their colleagues until Aug. 14 to sign on to the measure and legislators aren’t due to return to Madison from their summer recess until mid-September. Spokeswomen for Assembly Speaker Robin Vos, R-Rochester, and Senate Majority Leader Scott Fitzgerald, R-Juneau, didn’t immediately return messages late Friday afternoon.

Walker created WEDC shortly after beginning his first term as governor in 2011, touting it as the state’s flagship job engine. But the agency has been besieged with problems from the beginning. Its troubles have included not tracking past-due loans, leadership turnover and audits revealing mismanagement.

A state audit last fall found the agency lacked documentation justifying spending on expenses and grants during its first two years. Another audit released in May found that contracts with grant and loan recipients haven’t complied with state law and the state hasn’t demanded proof that recipients are creating or retaining jobs.

Documents WEDC released in June showed 27 awards worth about $24 million went out without staff reviews between July 2011 and June 2013. One award was a $50,000 unsecured loan for a company owned by Walker donor William Minahan that hasn’t been paid back despite a court order.

Walker has said WEDC’s problems date back years. Asked before a July 20 board meeting whether the state should do more to look into the Minahan case, he said the state should make every effort to recover money from any company that misrepresented itself to WEDC.