Last year, Gov. Scott Walker’s job-creation agency struck a deal with Ashley Furniture Industries Inc. that would have led to a loss of 2,000 jobs.
The Wisconsin Economic Development Corporation, which Walker chaired at the time, offered Ashley a $6-million tax credit in 2014 for agreeing to invest $35 million to expand its headquarters in Arcadia. But, as part of the deal, WEDC accepted the company’s plan to eliminate nearly half its labor force of about 4,000 workers in the state.
Company president Todd Wanek explained that he couldn’t find the kind of skilled workers he needed in the area near the company’s Whitehall plant.
So how could a jobs agency negotiate a deal to kill jobs? It turns out that Wanek and members of his family made donations totaling $20,000 to Walker about two weeks after the deal was struck.
“Pay-to-play certainly comes to my mind and I know I’m not alone,” said Scot Ross, executive director of the progressive group One Wisconsin Now.
According to an investigation conducted by One Wisconsin Now, 60 percent of the companies that received grants from WEDC were Walker contributors.
Better luck down south
Engulfed by bad publicity, Ashley decided to decline the $6-million tax credit and instead looked south.
According to a recent story in Business North Carolina, Ashley plans to create 454 new jobs in that state during the next five years and invest upward of $8.7 million there through the end of 2019, the magazine reported.
Not only did North Carolina get far more jobs than Walker’s team negotiated, but North Carolina appears to have gotten a better overall deal for less money than WEDC was willing to pay. North Carolina offered tax credits of $4.6 million from 2016 through 2027.
According to Business North Carolina, Ashley’s latest deal with the state comes on top of “the initial phase of development where it committed to create 550 jobs and invest $80 million between 2012 and 2015. Ashley exceeded these commitments by creating more than 1,100 jobs.”
Part of the initial phase in North Carolina included job training provided by Ashley to prospective workers.
By comparison, Ashley added 300 employees at its Wisconsin locations in Arcadia and Whitehall through 2014.
“It seems that even after his privatized commerce department agreed to give millions to a company run by his campaign donors, that Scott Walker has failed Wisconsin again,” Ross said. “Rather than create jobs in its home state, the company has decided to cut and run on expanding in Scott Walker’s Wisconsin.”
Since the Ashley Furniture scandal, Walker has stepped down as chair of WEDC, which even Republicans have declared a disaster.
The case raises a broader question about WEDC’s approach: Is Ashley Furniture the kind of employer that Wisconsin should support?
Earlier this year, Ashley was hit with a $1.8-million fine from the U.S. Labor Department’s Occupational Safety and Health Administration for safety violations in Wisconsin. More than 1,000 worker injuries were officially recorded at the Arcadia plant in three and a half years. All of the incidents were serious enough to have been reported by someone other than the injured employee.
“Ashley Furniture has created a culture that values production and profit over worker safety, and employees are paying the price,” U.S. Labor Secretary Thomas Perez said in a strong statement.
In early 2013, the company came to national attention for a discrimination suit. A lesbian worker sued the Ashley Furniture HomeStore of Secaucus, New Jersey, claiming she was grilled about her religious beliefs and then fired. According to court filings, former employee Isabel Perez said she was told that she didn’t fit in with the company’s “culture.”
Perez said the furniture store’s manager “spoke in tongues,” a state of babbling hysteria induced by religious fervor, which Pentecostal Christians believe is the result of possession by the Holy Spirit. Two managers at the store told Perez that God ordered them to let her go.
The same store was sued in 2013 for alleged harassment of two Muslim employees, who said they were repeatedly accused of being terrorists and were tormented with racial slurs.
The two employees were fired after they complained about the verbal abuse.
According to the website Back2Stonewall, the Waneks support the Christian-right organization FamilyLife, an anti-gay group that lobbies against same-sex marriage and LGBT civil rights.
(UPDATE: An Ashley Furniture dealer, not the company itself, was sued for alleged anti-gay job discrimination. Also, the Waneks never supported the anti-gay group Family Life, as the previous version of the story stated.)
Ashley Furniture Industries disputes reports that it plans to outsource jobs after receiving a $6-million tax credit from Gov. Scott Walker’s Wisconsin Economic Development Corp.
The credit caused a stir because it was granted without a reciprocal guarantee from Ashley to keep jobs in the state — and the company even indicated that it planned to reduce jobs in Wisconsin in the near future.
According to a memo that was first reported by the Wisconsin State Journal, in exchange for the tax credit, Ashley Furniture agreed to invest $35 million to expand its Arcadia headquarters and retain 70 percent of its existing 3,848 employee positions in 2014, 60 percent the following year and 50 percent between 2016 and 2018.
But Ashley’s legal counsel Bill Koslo said in a statement that the sliding job guarantee number was not a forecast. Rather, he said, it “just sets the base line of the risk Ashley was willing to accept as a good Samaritan to the City of Arcadia.”
“It is Ashley’s intent to add jobs at all of its locations,” Koslo’s statement added.
Walker and WEDC, his flagship “job creation” agency, came under fire earlier this year for awarding millions of dollars to politically connected companies that then outsourced jobs elsewhere. When that revelation generated negative publicity, the governor said WEDC’s operating rules should be rewritten to ban awards to companies that won’t pledge to keep jobs in the state.
But as chairman of WEDC, Walker joined with nine board members in voting to award Ashley Furniture the $6-million tax credit without such a guarantee.
WEDC has been plagued with bad publicity since it was created by Walker to replace the Wisconsin Department of Commerce. WEDC has suffered from management problems resulting from overt cronyism and the agency lost track of at least $8 million in loans.
According to public records, WEDC has spent $203 million since 2011 but can tie that investment to the creation of only 5,840 jobs.
The reputation of Ashley Furniture also suffered last year due to alleged anti-gay discrimination by one of its licensed dealers, although Ashley Furniture Industries was not involved in the suit.
A Seacaucus, N.J., store licensee was sued in federal court by former employee Isabel Perez for employment discrimination Perez claims she was fired from the store when the local company’s personnel director learned she was a lesbian.
The director allegedly questioned Perez about a Human Rights Campaign equality decal on her car. After learning the meaning of the symbol, the personnel director said God had told her to fire Perez because she did not fit into the company’s culture.
Ronald Wanek, Ashley Furniture’s founder and board chairman, and his wife contributed $10,500 to Walker’s campaign in 2010. The Waneks also contributed to Democrat Jim Doyle when he was governor.
The U.S. Justice Department announced on July 24 that it had reached a settlement agreement with the Arcadia Unified School District in Arcadia, Calif., to resolve an investigation into allegations of discrimination against a transgender student based on the student’s sex.
Under the agreement, approved by the district’s school board on July 23, the district will take steps to ensure that the student, whose gender identity is male, will be treated like other male students while attending school in the district, according to a statement from the White House.
The agreement, joined by the U.S. Education Department Office for Civil Rights, resolves a complaint filed in October 2011. The complaint alleged that the district prohibited the student from accessing facilities consistent with his male gender identity, including restrooms and locker rooms at school, as well as sex-specific overnight accommodations during a school-sponsored trip.
The U.S. investigated the complaint under Title IX of the Education Amendments of 1972 and Title IV of the Civil Rights Act of 1964. Both measures prohibit discrimination against students based on sex.
Under the settlement agreement, the district will:
• Work with a consultant to create a safe, non-discriminatory learning environment for students who are transgender.
• Amend its policies and procedures to reflect that gender-based discrimination, including discrimination based on a student’s gender identity, transgender status and nonconformity with gender stereotypes, is a form of discrimination based on sex.
• Train administrators and faculty on preventing gender-based discrimination and creating a non-discriminatory school environment for transgender students.
“All students, including transgender students, have the right to attend school free from discrimination based on their sex,” stated Jocelyn Samuels, acting assistant Attorney General for the Civil Rights Division at the Justice Department. “We commend the district for taking affirmative steps to ensure that this student and his peers can continue to learn and thrive in a safe and nondiscriminatory environment.”
In recent years, the Justice Department and the Department of Education resolved a number of cases involving gender-based harassment in public schools.
In 2012, the departments entered into a consent decree addressing harassment against students who do not conform to gender stereotypes in the Anoka-Hennepin School District, Minn.
In 2011, the departments entered into an agreement with the Tehachapi Unified School District, Calif., to resolve a similar complaint of harassment against a gay student who did not conform to gender stereotypes.