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Walker administration rebuked by HUD

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Walker administration rebuked by HUD

Postby Lily » Wed Sep 26, 2012 10:23 am

From JSOnline:

"The HUD letter points to numerous problems resulting from what it called the "hasty" transfer of duties from the former Department of Commerce to the new quasi-private Wisconsin Economic Development Corp (WEDC)."

"Wisconsin apparently drew HUD's attention with a February announcement by Walker that four communities had received $9.6 million in Community Development Block Grant funding."

"At the time these awards were made WEDC had no legal authority under the CDBG program to award or administer the CDBG funds," HUD said in a monitoring report obtained by the State Journal."

and

"Among the most serious findings are that the state failed to perform required underwriting - the process of determining the financial soundness of a company - before giving $390,000 to Gilman USA LLC, a machining company in Grafton, and $1 million to Morgan Aircraft in Sheboygan."

"In the case of Gilman, HUD said that WEDC staff indicated "the underwriting process was skipped in order to accommodate the business' timeline." (Also a Friend of Scott Walker contributor.)

"In the case of Morgan Aircraft, HUD said WEDC staff indicated that underwriting was done but not placed in the file. However, HUD requested a copy but none was provided."

"...(DOA Spokeswoman) Marquis said the agency is also "carefully reviewing" records of the withdrawal of $8.6 million in CDBG funds by a former WEDC controller on Dec. 27 reportedly to pay for projects in 2011."

"HUD said the transfer was made 'without any approval from DOA' by an unnamed controller 'on the last day of employment as the WEDC controller.' "

"Marquis said once the records are compiled, the state will notify HUD so it can review them to ensure the funds were spent properly."

http://tinyurl.com/8kgd65y

Chief Operating Office for WEDC is Ryan Murray who has never worked in economic development, no college degree, but lots of work experience campaigning and office support for Cathy Stepp, Randy Hopper, Scott F & Scott Walker. Walker is on the WEDC board.
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Re: Walker administration rebuked by HUD

Postby other i » Wed Sep 26, 2012 10:33 am

We're open for The Business.
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Re: Walker administration rebuked by HUD

Postby snoqueen » Wed Sep 26, 2012 4:18 pm

I want to know if the companies that got this misappropriated money get to keep it or have to give it back.
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Re: Walker administration rebuked by HUD

Postby Stebben84 » Wed Sep 26, 2012 6:26 pm

I want to know if they created jobs.
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Re: Walker administration rebuked by HUD

Postby snoqueen » Wed Sep 26, 2012 6:34 pm

I want to know how much money was misappropriated for each job created.
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Re: Walker administration rebuked by HUD

Postby Steve Vokers » Wed Sep 26, 2012 6:52 pm

Walker neglected to inform the WEDC board of the problems...

State economic development board not told of federal criticisms

Gov. Scott Walker did not tell the state's economic development board about concerns raised by federal officials that for eight months the state's flagship jobs agency spent nearly $10 million without legal authority.

A director for the U.S. Housing and Urban Development Department detailed the mishandling of public funds in May and August letters to the Republican governor's administration secretary, Mike Huebsch. Huebsch responded in a Sept. 12 letter, but the matter was not broached with the board of the Wisconsin Economic Development Corp. when it met eight days later.

"It's inexcusable that this letter was not shared with the WEDC Board at its meeting last week even though the administration received it in August," said a statement Wednesday from Sen. Julie Lassa (D-Stevens Point), who sits on the board. "The legislators on the WEDC Board are supposed to be providing oversight of taxpayer dollars, but we can't play that role if important information like this is withheld from us."
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Re: Walker administration rebuked by HUD

Postby Lily » Thu Sep 27, 2012 8:05 am

Also from that same article in WSJ:
"The letter, which was first reported on by the Wisconsin State Journal, identified a number of problems with the economic development corporation:

- From the time it was created in July 2011 until March, the economic development corporation administered $9.6 million in federal block grants in violation of federal law because the WEDC didn't have the right agreement in place with the state.
- The state did not perform underwriting analysis for a business that it assisted. In a second case, the economic development corporation provided help in October 2011 to a company based on an underwriting review that was performed four years earlier.
-The state provided a $20,000 per job benefit for a business, even though its own guidelines say the maximum in assistance should be $10,000 per job.
- Eleven of 20 loans to businesses since Jan. 1, 2011, have been forgivable, even though forgivable loans should be given only in "extraordinary circumstances," according to state guidelines.
- The state fiscal controls and accounting practices "are not sufficient to prepare accurate reports to HUD," the letter said.
- In December 2011, the economic development corporation transferred $8.6 million into one of its accounts from the Department of Administration without the approval of DOA. The state is now reviewing whether all the spending was proper.

Paul Jadin, WEDC's chief executive officer, said he had not been informed about the transfer and did not have an answer Wednesday for why he wasn't.

- The state funded projects using federal money instead of tapping into $7 million in local revolving loan funds that could have been used.
- The Department of Administration "does not have adequate capacity to oversee the activities of the WEDC," the letter said."

and...
"Jadin, the CEO, announced last week he would leave WEDC on Nov. 1 to become president of Thrive, a regional economic development corporation based in Madison. He said Wednesday that his exit, as well as the departure of other top officials recently, is not related to the comments from HUD.

The state's economic development agency drew headlines this summer when the state had to suspend and restart bidding on a state contract after it was revealed that WEDC had offered one of the bidders, Skyward of Stevens Point, tax credits if it won the contract."

AND, I'd like to emphasize...

"Gov. Scott Walker did not tell the state's economic development board about concerns raised by federal officials that for eight months the state's flagship jobs agency spent nearly $10 million without legal authority."
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Re: Walker administration rebuked by HUD

Postby Ducatista » Thu Sep 27, 2012 2:11 pm

And now:

State board member threatens to resign over lack of communication

The board member is probably a disgruntled Democratic legislator, right? Nope, job creator. President and CEO of a Madison biotech firm.
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Re: Walker administration rebuked by HUD

Postby Henry Vilas » Sun Sep 30, 2012 2:35 pm

Chris Rickert has his say:

The fiscally conservative, education- and Medicaid-cutting government of Republican Gov. Scott Walker got a stern talking to from the federal government last month for being a little too profligate with federal welfare dollars — millions of which can't be properly accounted for.

Meanwhile, the notoriously liberal government officials of Madison took a tight-fisted approach Monday to city welfare spending — even going so far as to demand procedures for its use and a "written policy" on the city's welfare funding priorities.

Ah, the irony when the welfare in question happens to be corporate welfare. For it's not the widows and orphans in line for government largesse.
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