December 18, 2012
 
 
Sen. Larson Demands Changes in Floundering WEDC  
 
Madison – Today, incoming Senate Democratic Leader Chris Larson (D–Milwaukee) expressed concern over a recent audit on WEDC released by Schenck SC. The audit confirmed what Democratic legislators have said from the beginning–insufficient accountability and transparency measures lead to fraud, waste and abuse.  
 
“The hastily-created WEDC was handed $85 million in taxpayer dollars but never given a rule book. This mistake has cost taxpayers dearly and caused the agency to perform irresponsibly,” said Sen. Larson. “For two years, calls for common sense accountability and transparency measures were ignored by those in charge. Void of checks and balances to properly safeguard our limited resources, WEDC operates in the shadows.”
 
This public-private agency has had persistent problems since its inception in 2011. These include circumventing Wisconsin’s fair and competitive bidding process and ignoring federal and state laws when giving out grants. The final straw was losing track of $50 million in loans, including about $12 million already overdue.
 
According to the audit, WEDC also failed to double-check credit card purchases and accounting journals of staff. Such a basic business practice is necessary to prevent internal fraud, including embezzlement. Additionally, the agency did not track the tens of millions in taxpayer dollars it gave to businesses. This shoddy accounting contributed to WEDC failing to follow-up on delinquent loans.
 
“WEDC’s culture of secrecy left taxpayers in the dark on their investment in this agency. Wisconsin’s taxpayers can’t afford to continue footing the bill to cover the mistakes made by WEDC,” said Sen. Larson. “We need interim CEO and Secretary Reed Hall and WEDC Board Chairman Scott Walker to create immediate change within the agency. Wisconsin is still struggling economically and failing to create promised jobs. It’s unacceptable to allow WEDC to continue to play fast and loose with our tax dollars as a time when Wisconsin continues to lag behind the rest of the country in job growth.”