Facing string of bad publicity, WEDC Board meets in Waukesha

The WEDC Board is meeting today in Waukesha amid a steady stream of negative publicity for the economic development agency.

Gov. Scott Walker is attending the meeting to discuss the results of an audit that found problems with transparency and accountability. Yesterday came news a new agency spokesman had to resign because of tax problems.

WEDC CEO Reed Hall on Tuesday blamed recent negative publicity surrounding the WEDC on its newness and on a “string of bad luck.”

“When Commerce handed the book of business over to WEDC, there was no complete policy manual – this is how you do it – we’ve been writing those policies vigorously in recent months,” he said.

Hall blamed outdated computer systems for much of the problems and said the WEDC will be borrowing computer systems used in the banking industry.

“When we get this new computer system, all of our lives are going to be a lot easier,” he said. “Right now our computer system is about 20 years old. It’s cumbersome and not always reliable. It’s one of the reasons that we were not able to report as timely as we wanted to last year.”

He said most of the problems with the WEDC occurred during the Department of Commerce days. “We’re just cleaning that up, but now it’s current news,” said Hall.

“We hired a new vice president of credit risk administration, and I like this gentleman a lot. He’s a banker,” said Hall, referring to Menomonie native Jake Kuester, who Hall said previously worked at U.S. Bank and at a credit union.

“He’s going to turn the organization into more of a bank-appearing company. We need to look more like a bank. If you’re going to be loaning money, you’ve got to follow the obligations of the person that you make the loan to.”

WEDC is scheduled to come up before the Legislature’s budget committee tomorrow.

Assembly Speaker Robin Vos has acknowledged problems at WEDC, but argued it’s still better than the old Commerce Department it replaced.

Vos said he’s open to making additional changes to the embattled jobs agency.

“I am more than willing to include those in the budget,” Vos, R-Rochester, said during a press conference, adding that taking up such changes in separate legislation could also be a possibility.

But Democrats say they’ll roll out several bills over the “next few weeks” to reform the agency.

“The failures at WEDC demand an urgent bipartisan response from the Legislature and the governor,” said Sen. Julie Lassa, D-Stevens Point. “I believe we cannot afford more months of chaos and failure in our economic development programs.”

While Lassa and Democrats didn’t specify what the reforms would entail, she made clear that the WEDC Board of Directors needs to have more control over the organization and receive more information from WEDC leadership. She also said that other members of the board shared the same frustration and would make those concerns clear during tomorrow’s board meeting in Waukesha.

“Board members are quite upset. They do not like to see what has been happening at WEDC and to hear this from the audit report,” Lassa said.

Asked to address the criticism over communication with the board, Hall said, “There’s always room for improvements and we will make improvements. If the board wants more communication on matters and what we’re doing beyond the weekly report, we’ll be pleased to do that. We value the input of the board and look forward to continuing to work with the board.”

— By Kay Nolan and WisBusiness staff