Governor Scott Walker is defending the Wisconsin Economic Development Corporation. The WEDC got a stern warning last month from federal regulators about the way it distributes loans and grants to private companies.
The August 12th letter from the federal Department of Housing and Urban developments questioned the authority the WEDC used in doling out more than 9 million dollars in Community Block grants to four communities. The agency said the transfer of authority form the old department of Commerce to the new development corporation was too hasty. Democratic State senator Chris Larson of Milwaukee sits on the joint audit committee which will hold a hearing on the WEDC next month. He says he's unhappy the legislature wasn't informed of the letter until this week.
"If we're not this finding out it shows a severe lack of transparency on the part of this administration," he says. "That can be a big problem. It shows that there is a need for greater scrutiny of how the administration is distributing funds and definitely warrants the audit that we're gonna be pursuing here."
But Governor Walker says it's too early to be scolding the WEDC for hiding information.
"You're still in the early stages of hearing back from HUD," he says. "It'll probably some more back and forth between the department of administration as to whether or not the things they're suggesting could be done can even be done, or if they want further modifications and at that pint if there are policy changes involved with that certainly that would be something we'd discuss."
The outgoing director of the WEDC Paul Jadin called the warning from the federal agency a welcome clarification of how funds should flow and be accounted for from the federal government through the department of Administration to the Wisconsin Economic development Corporation.