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WEDC takes heat ahead of emergency meeting

Published On: May 07 2013 09:59:18 PM CDT   Updated On: May 08 2013 08:19:32 AM CDT

Democratic lawmakers are calling the state's flagship job creation agency "a financial train wreck" and asked to delay a scheduled vote over the organization's budget.

Democrats offered a resolution to investigate ways to improve the Wisconsin Economic Development Corp., after an audit revealed the agency had broken state law in multiple ways.

"The audit sent a chill through my spine," said Rep. Peter Barca, the Assembly's Democratic leader, who called on Republicans to delay a vote scheduled for Thursday on the WEDC's budget.

Republican Assembly Speaker Robin Vos said on Tuesday that the WEDC had made embarrassing mistakes in the past, including hiring an employee who recently resigned over a tax scandal, but said the agency was now on the right track.

"I certainly think that, at a time where we need to come together to try to create jobs, continual focus on the problems of the past -- which are being corrected -- aren't productive," Vos said.

The Democratic-backed resolution to create a special bipartisan committee to study how to improve the WEDC failed in the Assembly.

A state audit released May 1 showed the WEDC failed to follow state law in awarding grants and loans, did not adequately oversee awards it made and gave money to companies that did not qualify.

Democratic Sen. Julie Lassa and Assembly Democratic leader Rep. Peter Barca, members of the WEDC board, said immediate action needs to be taken to improve the quasi-governmental agency Walker and Republicans created in 2011.

Walker called an emergency meeting of the board for 8 a.m. Wednesday in Waukesha to discuss the audit.

This week, reports showed WEDC spokesman John Gillespie owned about $36,000 in back taxes and was on the state's delinquent taxpayer list.

In a separate case from Outagamie County, the state Department of Workforce Development filed a warrant seeking nearly $8,000 in unemployment insurance compensation benefits he received.

Gillespie has resigned, said Tom Thieding, a WEDC spokesman.

Vos says "there's no doubt that's an embarrassing situation," but he doesn't think consideration of WEDC's budget should be held up as Democrats want.

The audit also showed fewer than half of the companies that received awards had submitted the required progress reports.

Only 18 of 201 companies included in an accountability report on the WEDC website indicated that they had created or retained the number of jobs they had agreed to. The companies received awards between 2010 and 2013.

In many cases, job creation is in progress, Thieding said.

If a company doesn't report, it doesn't receive tax credits and the jobs can't be counted, he said.

The Associated Press contributed to this report.

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