- Associated Press - Wednesday, December 23, 2015

MADISON, Wis. (AP) - Two lawmakers are seeking support for a bipartisan effort that would make it a felony to defraud the Wisconsin Economic Development Corp.

The bill by Republican Rep. Samantha Kerkman, of Salem, and Democratic Sen. Dave Hansen, of Green Bay, follows reports that the job creation agency granted taxpayer loans to at least two companies that made false statements on their applications.

The Wisconsin State Journal reported Wednesday (https://bit.ly/1QX8zGx ) that under the bill, defrauding the agency would be punishable by up to 10 years in prison, a $50,000 fine, or both. The bill prohibits making false statements on applications for WEDC grants, loans, tax breaks or other benefits. It would make people who commit such fraud ineligible for WEDC benefits for seven years.

Current law prohibits fraud, but doesn’t include provisions specific to WEDC.

Kerkman said the bill isn’t retroactive, but would send a message to future loan applicants.

“It sets a baseline so you know, if you defraud a particular program, there are consequences,” Kerkman said.

The problem came to light in May after a Wisconsin State Journal investigation revealed the agency gave a questionable $500,000 taxpayer loan to a struggling company owned by a top campaign contributor to Gov. Scott Walker.

William Minahan, owner of Building Committee Inc., had checked “no” when asked if the company or any of its officers had been sued in the past five years. But electronic court records showed three such lawsuits.

Minahan had originally asked for more than $4 million, and had the help of former Administration Secretary Mike Huebsch, a top Walker official. But WEDC officials only approved a $500,000 loan in 2011. It wasn’t repaid, and the agency went to court.

Minahan gave Walker’s 2010 Republican gubernatorial campaign a last-minute $10,000 donation - the maximum allowed by an individual donor.

In another case, a Green Bay businessman has been investigated for allegedly defrauding WEDC of more than $1 million. Search warrants showed Ron Van Den Heuvel was suspected of misrepresenting his business, Green Box NA. Van Den Heuvel has denied those allegations.

Kerkman and Hansen said in a memo that their bill’s proposed criminal penalties are similar to those that exist for defrauding public assistance, food stamp and medical assistance programs.

“Taxpayers should be confident that both their tax dollars and their interests are being protected and that economic development assistance fraudsters face stiff penalties,” the lawmakers said.

Walker has said he’s open to tougher penalties on companies that try to defraud WEDC.

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Information from: Wisconsin State Journal, https://www.madison.com/wsj


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