Can WEDC Oversee Foxconn Deal?
State jobs agency has failed for seven years. Can it protect taxpayers and watchdog Foxconn?
“Can you find out the nuclear flaw in the Foxconn deal?” a woman asked me. She was referring to words leaked out of secret negotiations between the state and a Taiwanese billionaire.
Lawmakers, who recently voted in favor of the Foxconn deal, did so without seeing any contract. They put faith in a state operation known as Wisconsin Economic Development (WEDC).
Despite being paid for entirely with public funds, the $3 billion contract with Foxconn is not public. Nor do lawmakers who approved the plan know what problems exist in the draft contract. As the saying goes, the devil is in the details. Lawmakers and the public cannot see the details and are asked to trust WEDC negotiating the deal and later overseeing the Foxconn’s compliance.
For years, the nonpartisan Legislative Audit Bureau (LAB) reported concerns about WEDC’s administration and oversight of economic development programs.
In 2013, nearly two years after WEDC was created, auditors could not report on state dollars spent by WEDC because their financial and accounting systems were not adequate. Members of the Joint Legislative Audit Committee learned spending was tracked largely by credit card statements. To remedy this serious problem, legislators passed a new law that included an independent audit of all WEDC financial statements. Financial statement preparation should be basic for any state agency.
At an October 2013 Audit Committee public hearing, WEDC leaders promised they had complied with all the LAB recommendations. However, a year later, auditors reported many problems related to basic operations and the tracking of money. For example, auditors found some spending not recorded in the accounting system and found past due loans that were missing.
By 2015, auditors discovered a larger than necessary cash balance at WEDC. By the end of June 2015, WEDC had accumulated in excess of $85 million as reported in a 2017 audit.
Losing loans and not properly accounting for internal expenses are problems associated with the operation of a troubled agency. But the problems WEDC could encounter in overseeing a large project like Foxconn are related to the independent evaluation of the company’s promises compared to their actual records.
Four years after WEDC was established auditors finally could report that WEDC made ANY effort to obtain information about jobs were actually created. However, further review by auditors showed the attempts made by WEDC only compared a company’s own promises to report and the reports a company itself filed. WEDC made no effort to verify the information submitted.
In its most recent audit, the LAB reported WEDC paid an outside consultant $24,900 to do the work they were required to do since their existence in 2011. Auditors found concerns including that the contractor’s work was limited and did not include grants.
If Wisconsin taxpayers cannot be confident after seven years and the investment of hundreds of millions of state dollars that promised jobs were created, how can we possibly be confident WEDC can negotiate and oversee a $3 billion contract?
No local government would ever agree to spend money without seeing a contract. No banker would agree to loan funds without a contract. No businessperson would ever commit funds without a contract.
Lawmakers bought a pig in a poke – an unknown deal.
WEDC has not earned lawmakers trust, nor that of the public. Lawmakers can and should do more to oversee this project.
State Sen. Kathleen Vinehout, D-Alma, is a member of the Wisconsin state Senate.
More about the Foxconn Facility
- State Senator Janis Ringhand statement on Foxconn earnings report - State Sen. Janis Ringhand - Nov 15th, 2017
- Foxconn Signing Is a Love Fest - Graham Kilmer - Nov 13th, 2017
- Andy Gronik Statement on Gov. Scott Walker’s Re-Election Foxconn Hail Mary - Andy Gronik - Nov 10th, 2017
- Governor Walker, Foxconn Chairman Gou Sign Historic Agreement to Bring $10 Billion World-Class Advanced Manufacturing Campus, 13,000 Jobs to Wisconsin - Gov. Scott Walker - Nov 10th, 2017
- One Wisconsin Now Statements on Gov. Walker Signing Contract to Implement Largest State Giveaway to A Foreign Corporation in U.S. History - One Wisconsin Now - Nov 10th, 2017
- Gov. Walker’s re-election Hail Mary falls short - State Sen. Jennifer Shilling - Nov 10th, 2017
- The Art of a Desperate Deal - Democratic Party of Wisconsin - Nov 10th, 2017
- Walker Accepts $3 Billion Liability, Rejects Accountability - State Sen. Lena Taylor - Nov 10th, 2017
- Murphy’s Law: Walker Retreats From Foxconn Deal - Bruce Murphy - Nov 9th, 2017
- Top Ten Reasons Wisconsin Got Conned - State Sen. Tim Carpenter - Nov 8th, 2017
- Matt Flynn Statement on the Foxconn Contract - Matt Flynn - Nov 8th, 2017
- Back in the News: WEDC Shifts on Foxconn Contract - Bruce Murphy - Nov 8th, 2017
- Democrats Continue to Lead the Fight to Protect Taxpayers on Foxconn - State Rep. Dianne Hesselbein - Nov 7th, 2017
- Rep. Sargent’s Statement on Second Request for Public Review of Foxconn Contract, WEDC Board’s Two-Day Review - State Rep. Melissa Sargent - Nov 7th, 2017
- WEDC — Seeing Contract Today, A Good First Step, Taxpayer Protection Still Top Priority - State Sen. Tim Carpenter - Nov 6th, 2017
- WisDOT applies for federal Infrastructure For Rebuilding America Grant - Wisconsin Department of Transportation - Oct 31st, 2017
- Gov. Scott Walker’s Foxconn Deal Widely Unpopular Amongst Wisconsinites - Andy Gronik - Oct 26th, 2017
- Murphy’s Law: The Secrets of Foxconn - Bruce Murphy - Oct 26th, 2017
- Matt Flynn Makes Statement on the Corrupt Handling of the Foxconn Contract by Walker’s WEDC - Matt Flynn - Oct 25th, 2017
- Walker jobs agency leaves taxpayers in the dark - State Sen. Jennifer Shilling - Oct 25th, 2017
- Op Ed: Can WEDC Oversee Foxconn Deal? - State Sen. Kathleen Vinehout - Oct 25th, 2017
- The WEDC: As Transparent as Trump with his Tax Return - State Rep. Jimmy Anderson - Oct 24th, 2017
- WEDC Audit Poses New Concerns on Foxconn Deal - State Sen. Lena Taylor - Oct 24th, 2017
- Audit of Walker jobs agency intensifies Foxconn concerns - State Sen. Jennifer Shilling - Oct 24th, 2017
- New poll shows Milwaukee area’s divided feelings on Foxconn, views on other topics as Marquette Law School launches expanded public policy program - Marquette University - Oct 24th, 2017
- Walker Administration Keeps Details of Foxconn Deal Secret as Agency Entrusted With Overseeing Deal Subject of Another Critical Review - One Wisconsin Now - Oct 24th, 2017
- Andy Gronik Urges WEDC To Release Foxconn Contract Details Before Vote, Collect Public Feedback - Andy Gronik - Oct 23rd, 2017
- Wisconsin Can’t Afford Another Foxconn “Nuclear Bomb” - Democratic Party of Wisconsin - Oct 20th, 2017
- What are Walker and Foxconn hiding? - Democratic Party of Wisconsin - Oct 17th, 2017
- Foxconn gamble shrouded in secrecy - State Sen. Jennifer Shilling - Oct 16th, 2017
- Court Watch: Foxconn Law Transforms State Courts - Margo Kirchner - Oct 12th, 2017
- Walker and Forty-Fifth President Sweeten Deal for Foxconn - State Sen. Lena Taylor - Sep 28th, 2017
- Walker picks Foxconn over Wisconsin schools and roads - State Sen. Jennifer Shilling - Sep 18th, 2017
- Governor Walker Signs Wisconn Valley Special Session Bill into Law - Gov. Scott Walker - Sep 18th, 2017
- The State of Politics: Mr. Gou – Your Turn - Steven Walters - Sep 18th, 2017
- Governor Walker Applauds Legislature for Approving Wisconn Valley Special Session Bill - Gov. Scott Walker - Sep 14th, 2017
- Governor Walker Releases Statement on Bipartisan Senate Passage of Wisconn Valley Special Session Legislation - Gov. Scott Walker - Sep 12th, 2017
- WEDC’s Poor Jobs Accountability Record Makes Foxconn Deal a Scandal Waiting to Happen - Citizen Action of Wisconsin - Sep 11th, 2017
- Op Ed: Foxconn Deal Suspends Judicial Rules - Wisconsin Democracy Campaign - Sep 11th, 2017
- GOP Puts $3 Billion Foxconn Thumb on Scales of Justice - One Wisconsin Now - Sep 5th, 2017
- Op Ed: Foxconn Multiplier Overstates New Jobs - William L. Holahan and Charles O. Kroncke - Sep 2nd, 2017
- Walker administration misleads on environmental rollbacks for Foxconn - State Rep. Katrina Shankland - Aug 31st, 2017
- Murphy’s Law: Newest Deal Shows Foxconn Flaws - Bruce Murphy - Aug 29th, 2017
- The State of Politics: Would Democratic Governor Kill Foxconn Deal? - Steven Walters - Aug 28th, 2017
- Op Ed: Illinois Loves Our Foxconn Deal - State Sen. Kathleen Vinehout - Aug 26th, 2017
- Biking: Foxconn, Biking and State Roads - Dave Cieslewicz - Aug 25th, 2017
- Op Ed: Foxconn Should Embrace Green Goals - John Torinus - Aug 24th, 2017
- Washington State Representative Offers Warning for Wisconsin on Foxconn - One Wisconsin Now - Aug 24th, 2017
- Murphy’s Law: Paper Peddles Bogus Foxconn Report - Bruce Murphy - Aug 23rd, 2017
- Representative Lisa Subeck Calls on Joint Finance Committee Co-Chairs to Focus on Budget, Prioritize People over Profits - State Rep. Lisa Subeck - Aug 22nd, 2017
- Governor Walker Highlights Opportunities Foxconn Brings for Wisconsin’s Healthcare Industry - Gov. Scott Walker - Aug 22nd, 2017
- The State of Politics: Foxconn Biggest Deal in State History - Steven Walters - Aug 21st, 2017
- Statewide Online Tool Assists Wisconsin Companies Seeking to Do Business with Foxconn - Gov. Scott Walker - Aug 21st, 2017
- The Senate Must be The Grownups in the Room… Again. - State Sen. Tim Carpenter - Aug 21st, 2017
- Op Ed: The Many Broken Promises of Foxconn - State Rep. David Bowen - Aug 20th, 2017
- Rep. Goyke Statement on Foxconn Special Session Bill - State Rep. Evan Goyke - Aug 18th, 2017
- Wisconsin Budget: Foxconn Could Take Till 2058 To Pay Off - Jon Peacock - Aug 18th, 2017
- Governor Walker Releases Statement on Bipartisan Assembly Passage of Wisconn Valley Special Session Legislation - Gov. Scott Walker - Aug 18th, 2017
- Republican Agenda Puts Corporate Welfare Package for Taiwanese Company Ahead of our Public Schools - State Rep. Dianne Hesselbein - Aug 17th, 2017
- Rep. Sinicki Votes No on Foxconn Package - State Rep. Christine Sinicki - Aug 17th, 2017
- Statement from Rep. Barca on the Assembly Passage of Foxconn Bill - State Rep. Peter Barca - Aug 17th, 2017
- Facts on Foxconn Trump Proponents’ Protestations Deal Would Benefit Wisconsin - One Wisconsin Now - Aug 17th, 2017
- Foxconn Debate Cheat Sheet - State Rep. Gordon Hintz - Aug 17th, 2017
- $3 Billion Foxconn Boondoggle Sells Out Wisconsin’s Future to Foreign Corporation - State Rep. Lisa Subeck - Aug 17th, 2017
- Op Ed: How to Get a Better Deal From Foxconn - John Torinus - Aug 17th, 2017
- Data Wonk: Will Foxconn Deal Fight Poverty? - Bruce Thompson - Aug 16th, 2017
- Governor Walker Moderates Foxconn Roundtable Discussion in Green Bay - Gov. Scott Walker - Aug 16th, 2017
- Op Ed: Where Will Foxconn Find Workers? - State Rep. Gordon Hintz - Aug 16th, 2017
- Vukmir: The time is now for Foxconn - Assistant Majority Leader Leah Vukmir - Aug 15th, 2017
- Foxconn tax break could exceed $1 million per job - State Sen. Jennifer Shilling - Aug 14th, 2017
- Paul Ryan Challenger Opposes $3 Billion Corporate Handout to Foxconn - Cathy Myers - Aug 14th, 2017
- The State of Politics: 10 Tough Questions About Foxconn Deal - Steven Walters - Aug 14th, 2017
- Dana Wachs Announces Opposition to Foxconn Package - State Rep. Dana Wachs - Aug 13th, 2017
- Campaign Cash: Did Foxconn Lobby Illegally? - Wisconsin Democracy Campaign - Aug 12th, 2017
- Statement from Rep. Barca Regarding Republican Amendment to Foxconn Bill - State Rep. Peter Barca - Aug 11th, 2017
- Statement: Amendment to Special Session Assembly Bill 1 - Wisconsin Assembly Speaker Robin Vos - Aug 11th, 2017
- Op Ed: Renegotiate the Foxconn Deal - Matt Flynn - Aug 11th, 2017
- Murphy’s Law: Walker’s Desperate Deal With Foxconn - Bruce Murphy - Aug 10th, 2017
- Foxconn Deal Flounders in State Legislature - One Wisconsin Now - Aug 10th, 2017
- If ‘Ifs’ and ‘Buts’ Are Candies and Nuts We’ll Have Foxconn Deal Paid Off in 2043 - One Wisconsin Now - Aug 9th, 2017
- Rep. Shankland: Statement on Foxconn Analysis - State Rep. Katrina Shankland - Aug 8th, 2017
- Foxconn Fiscal Analysis Deeply Troubling for Wisconsin Taxpayers - State Rep. David Crowley - Aug 8th, 2017
- Statement from Rep. Barca on New Fiscal Analysis of Proposed Foxconn Deal - State Rep. Peter Barca - Aug 8th, 2017
- Rep. Hintz Statement on Foxconn Cost to Taxpayers - State Rep. Gordon Hintz - Aug 8th, 2017
- Campaign Cash: Bill Has $10 Million Giveaway to Fiserv - Wisconsin Democracy Campaign - Aug 8th, 2017
- Wisconsin Veterans Chamber of Commerce Calls For Foxconn Project to Include Disabled Veteran Owned Businesses - Wisconsin Veterans Chamber of Commerce - Aug 7th, 2017
- Wisconsin Budget: The High Cost of Foxconn - Jon Peacock - Aug 4th, 2017
- What Does the Foxconn CEO Say About His Employees? - One Wisconsin Now - Aug 4th, 2017
- Foxconn Hearing: Big Promises, Little Details, Lacks Transportation Plan - State Rep. David Crowley - Aug 3rd, 2017
- One Wisconsin Now Testimony on Foxconn Subsidy Legislation - One Wisconsin Now - Aug 3rd, 2017
- No Guarantees to Prevent Wisconsin Tax Dollars From Subsidizing Illinois Jobs in Foxconn Deal - One Wisconsin Now - Aug 2nd, 2017
- Unnecessary to Sacrifice Natural Resources for Foxconn - Wisconsin League of Conservation Voters - Jul 31st, 2017
- Statement from Rep. Barca on Foxconn Developments - State Rep. Peter Barca - Jul 28th, 2017
- The Contrarian: Walker’s Reelection Now A Certainty - George Mitchell - Jul 28th, 2017
- Eyes on Milwaukee: Foxconn Loves Wisconsin, Walker - Jeramey Jannene - Jul 27th, 2017
- Governor Walker, Foxconn Founder and CEO Terry Gou Sign Memorandum of Understanding in Milwaukee - Gov. Scott Walker - Jul 27th, 2017
- REALTORS® Welcome Foxconn - Greater Milwaukee Association of REALTORS® - Jul 27th, 2017
- MATC Statement on Foxconn - Milwaukee Area Technical College - Jul 26th, 2017
- Statement from Rep. Barca on Foxconn Economic Development Announcement - State Rep. Peter Barca - Jul 26th, 2017
- Milwaukee County Executive Chris Abele Statement on Foxconn Announcement - County Executive Chris Abele - Jul 26th, 2017
- Global High-Tech Manufacturer Foxconn Announces $10 Billion Investment, Will Create 13,000 Jobs in New Wisconsin Campus - Gov. Scott Walker - Jul 26th, 2017
- Foxconn Frenzy: Proceed with Caution - State Sen. Chris Larson - Jul 26th, 2017
- Shilling cautious on Foxconn announcement - State Sen. Jennifer Shilling - Jul 26th, 2017
- Op Ed: Loss of Talgo Train Hurts Foxconn Deal - James Rowen - Jul 20th, 2017
- Mayor Barrett Supports Siting Foxconn Facility in Southeastern Wisconsin - Mayor Tom Barrett - Jul 17th, 2017
- On the Air: How Likely Is It Foxconn Will Create 10,000 Jobs? - Urban Milwaukee - Jul 13th, 2017
- Murphy’s Law: Walker Building Yesterday’s Economy - Bruce Murphy - Jul 13th, 2017
- Eyes on Milwaukee: Foxconn Lands in Milwaukee - Jeramey Jannene - Jul 10th, 2017