The Wisconsin Economic Development Corp., the states top jobs agency, has written off $7.6 million in taxpayer-funded loans in the four years since it was created. The write-offs include 28 different loans. Twenty-five of them were awarded by the former state Department of Commerce, which preceded the WEDC.
One loan in particular came under criticism in the past month. That $500,000 unsecured loan made to now-defunct Building Committee Inc. was pushed for by Gov. Scott Walkers top aides and a lobbyist, according to a report in the Milwaukee Journal Sentinel.
Building Committee was owned by Walker campaign contributor William Minahan. The $500,000 loan, which amounts to about 7% of the total written off by WEDC, was written off last year. WEDC awarded the loan to the company in September 2011 even though the state reportedly had taken the owner to court in 2010 for not paying taxes.
WEDC has had ongoing problems with its lending program, according to reports. In 2012, the agency discovered it wasn't comprehensively tracking more than $12 million in past-due loans, including some that were later written off, the Journal Sentinel reported. In response, officials implemented a series of improvements to build its financial controls and collection efforts.
Walker, a Republican and possible 2016 presidential candidate, recently pointed out that problems with loans have dropped at WEDC compared to its predecessor, the Department of Commerce.
But last month, soon after the release of a critical Legislative Audit Bureau report, Walker announced he wants to end WEDCs $19 million a year in lending and phase out the agencys $74 million outstanding loan portfolio. He also has dropped a proposal to merge WEDC with another state agency that deals with the economy.