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After stumbles, CEO Hall says WEDC on the right track

Wisconsin Economic Development Corp. CEO Reed Hall says the public-private corporation is still trying to find the proper balance of compliance and job creation strategies, but believes the organization is finally on the right track to meet its obligations.

Hall, in an interview with WisPolitics.com, said the Legislative Audit Bureau report on WEDC treated the entity as "another agency" and indicated it is "working through that." But he doesn't believe the compliance efforts had hampered job creation efforts.

"I've been asked the question, do I know of any jobs that have been lost because of all the hours that have been devoted to the audits," Hall said. "No, I don't. So, in that sense I don't think there's any jobs lost. We've devoted a lot of resources, time and attention, hundreds of hours, to the compliance program, but overall, I think that's very healthy for us."

That statement comes as WEDC's job impact goal for FY 2014 is set at just more than 20,000 -- a large drop from the original 50,000 jobs goal. Hall says that's a conservative estimate and points to the unaudited WEDC estimate on its job impact for FY 2013 or more than 32,000 jobs either created or retained. While Hall says about 7,000 of those jobs came as a result of a rather rare deal with Kohl's Corp., he cites the number as proof that WEDC can likely exceed the 20,000 estimate.

"We're seeing a lot of things in the economy that are picking up, and I think there'll be more jobs created," Hall said. "And these are the jobs that we impact, there's a lot of job creation that happens in Wisconsin without us touching those jobs."

Hall also said that while he's confident that WEDC is constantly tracking required progress reports from companies receiving WEDC assistance, he can't provide a number for how many companies are now meeting their requirements.

The Legislative Audit Bureau report showed that out of a randomly selected sample of companies, only 45 percent had submitted their contractually required progress reports. The reports are meant to show how the organization is using the award amount and meeting contract obligations.

Hall said that compliance staff are following up systematically with companies to ensure they're submitting the required reports. However, he could not say whether the agency achieved 100 percent compliance from its awardees. Hall said that unless a company is slipping into bankruptcy, there's no good reason for not turning in those reports. But Hall was also vague on what the penalties or ramifications would be if a company is found to be in breach of contract.

"We haven't terminated any of our loans because they haven't filed the reports," Hall said. "To my knowledge, everyone eventually files their reports."

Hall also backed the board proposal to give the WEDC Board of Directors final hiring and firing power over the CEO, CFO or COO of the organization.

His only reservation is to make sure the CEO is still considered a cabinet appointee, so that person can continue communicating with other cabinet secretaries on issues of economic development.

"Today I had a call from a congressman's office in Washington about a company that's working with us, but the biggest stumbling block is a DNR permit," Hall said. "Well, what do I do? I pass on the name of the person that I work with that I think they should call and get that problem solved."

Hall also said covering all employees under state ethics laws has worked well and that he believes they're in "complete compliance" with requirements to submit statements of economic interest.

Hall said the only employees who expressed serious reservations about the requirement were clerical staff who are not involved in day-to-day financial activities.

"The biggest burden was on them," Hall said. "They don't make decisions in that context. But everyone is compliant."

Listen to the interview.

-- By Jason Smathers


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