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Wisconsin Lawmakers To Discuss WEDC Audit

Audit Committee Meeting Comes As WEDC Is Still Finalizing Massive Contract With Foxconn

Wisconsin state Capitol
Justin Kern (CC BY-NC-ND 2.0)

State lawmakers will have a chance to scrutinize the Wisconsin Economic Development Corporation on Tuesday, at a time when the agency known as WEDC is still negotiating its contract with Taiwanese tech giant Foxconn.

The Legislature’s audit committee will meet to discuss a report from earlier this year that found WEDC still was not properly tracking job creation. It was the latest in a string of critical audits of the agency.

When the audit was released in May, Sen. Robert Cowles, R-Green Bay, the co-chair of the audit committee, said it would leave a cloud over WEDC until the problems were fixed.

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Cowles later cited uncertainties with WEDC as one of the reasons he cast the lone Republican “no” vote against Wisconsin’s Foxconn deal in the state Senate.

“To leave things up to the contract and not have a chance to look at that — that’s a big leap of faith,” Cowles said in an interview moments after voting against the Foxconn deal Sept. 12.

Once the Legislature approved the Foxconn deal, the WEDC board was tentatively scheduled to finalize the state’s contract by Sept. 30. But that deadline came and went.

The WEDC board met to discuss the Foxconn contract last week, but delayed a vote again to fix an unspecified issue. While WEDC did not elaborate on the change, board member Tim Carpenter, a Democratic state senator from Milwaukee, told the Wisconsin State Journal it amounted to a “nuclear bomb.”

Comments from President Trump last week cast some uncertainty over the Foxconn project during a press conference on tax reform.

“They’re going to build a fantastic plant. I think it’s going to be in the state of Wisconsin,” Trump said. “And hopefully it’s going to be there.”

WEDC is now expected to approve the contract when it meets again in November.

The agency may not offer much insight into the specifics of the Foxconn deal during Tuesday’s audit committee meeting. The Foxconn deal, like other WEDC contracts, is negotiated privately.

But lawmakers will have a chance to discuss how the agency is tracking job creation, which is a critical piece of the contract it’s negotiating with Foxconn.

The May audit found WEDC did not require grant and loan recipients to submit detailed information on how many jobs they add or retain, or what those jobs pay.

The audit also found WEDC failed to collect detailed information from grant recipients about their current employees, information that would have provided a baseline to measure future employment growth at a business.

Auditors also found WEDC did not annually verify the jobs-related information it was given.

The broad strokes of Wisconsin’s Foxconn deal would award the company up to $1.5 billion in state tax credits based on the number of jobs it creates.

Because Wisconsin’s manufacturing and agriculture tax credit will likely zero out Foxconn’s Wisconsin tax burden, the state may end up cutting the company annual checks to pay for the jobs it adds.

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