- Associated Press - Monday, July 20, 2015

OSHKOSH, Wis. (AP) - The leaders of Wisconsin’s beleaguered job creation agency voted Monday to hire a consultant to review its operations and named a new chairman even as they insisted the agency’s problems are in the past. Meanwhile, Gov. Scott Walker said the state should use “every effort” to recover money from any company that misrepresented itself in dealing with the agency.

The Wisconsin Economic Development Corp.’s board approved a $175,000 contract with the Council for Regional Economic Competitiveness, a nonprofit group that serves as economic development planning consultants, during a meeting at Fox Valley Technical College in Oshkosh. The contract calls for the council to review WEDC’s mission, goals and procedures. WEDC Chief Executive Officer Reed Hall wrote in a memo to the board outlining the contract that the deal is necessary “for developing a compelling case that demonstrates WEDC’s commitment to enhancing its effectiveness and its capacity as public stewards.”

The agency has been besieged with problems since Gov. Scott Walker created it in 2011. Its troubles have included not tracking past-due loans, leadership turnover and audits that revealed mismanagement. A state audit last fall found the agency lacked documentation justifying spending on expenses and grants during its first two years.

Another state audit released in May showed WEDC’s problems continued in fiscal year 2014, noting its contracts with grants and loan recipients haven’t complied with state law and the state hadn’t demanded proof that recipients are actually creating or retaining jobs. Last month the agency released documents showing 27 awards worth around $124 million went out to 24 companies without staff reviews between July 2011 and June 2013. One award was a $500,000 unsecured loan for a company owned by Walker donor William Minahan that hasn’t been paid back despite a court order. On his 2011 loan application, Minahan checked “no” when asked whether the company or any of its officers had been sued in the last five years even though online court records showed three lawsuits.

Sen. Julie Lassa of Stevens Point and Rep. Peter Barca of Kenosha, two Democratic legislators who serve on WEDC’s board, have called for a federal investigation and for Hall to resign.

Walker, who is seeking the Republican presidential nomination, has removed himself as the WEDC chairman. He attended Monday’s meeting to observe, and was asked by reporters whether the state should do more to look into the Minahan case.

“WEDC, just like the Department of Commerce did before, is aggressively going after anybody, not just this individual,” Walker said. “WEDC going forward is going to try to use every effort they can” in cases that merit recovery, he said.

He also said that WEDC’s problems date back years.

“We will continue to make improvements,” Walker said. “The issues we’re talking about are 4 years old.”

The governor watched from the audience as the board voted unanimously to elevate board member Dan Ariens, president and CEO of Ariens Company, which produces snow blowers and lawn mowers, to the chairmanship. Ariens sounded similar themes as Walker, saying WEDC is on the right track.

“I think staff has acknowledged we made some mistakes very early in the tenure and today it’s a very different organization,” Ariens said.

Later pressed by reporters about what mistakes were made, Ariens declined to list anything specific. He said he welcomes continued public scrutiny.

“It’s our job to turn the court of public opinion,” he said.

Barca and Lassa weren’t satisfied. During their own news conference ahead of the meeting they called for “significant” change within the agency.

They introduced a pair of motions that would stiffen WEDC policies in a number of areas, including requiring award recipients to show jobs were actually created or retained and requiring the agency to report any fraud observed to prosecutors and verify whether potential recipients face pending legal actions.

The board ultimately chose to send the motions back to its awards administration committee. Ariens said the board may revisit the suggestions at a meeting in September.

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