Frederica Freyberg:

Now fact checking a new ad from Governor Scott Walker’s campaign. The ad criticizes Democratic rival, Mary Burke, for a $12.5 million loan her commerce department made in 2006, a loan that has led to no jobs. For details on that loan to the pharmaceutical company Abbott, and a fact check on the Walker campaign ad, we turn to Dave Umhoefer, a reporter at the Milwaukee Journal Sentinel and PolitiFact Wisconsin. Dave, thanks for being here.

Dave Umhoefer:

Thank you.

Frederica Freyberg:

What we want to do first off is take a look at that ad from the Walker campaign.

Announcer:

As Jim Doyle’s commerce secretary Mary Burke spent $12 million to buy a vacant lot for a company that said it had no plans to create jobs in Wisconsin. In fact, the same company had already laid off over 800 workers when Burke closed the deal. Mary Burke says she will work to create jobs and spend our tax money wisely. But her record as Jim Doyle’s commerce secretary tells a different story.

Frederica Freyberg:

We’re going to get to a lot of the reporting you did on this in PolitiFact in just a second, but I want to first point out that Mary Burke’s campaign had this to say to you in your PolitiFact coverage in reaction to this ad. She says, Everyone from local officials to the local chamber of commerce to Walker’s own administration agrees that this was and is a good deal from an economic development standpoint. The grant contains strong protections for taxpayers if job creation goals were not met or infrastructure was not developed for economic development. My question to you on that, Dave, is did your reporting discover how exactly the grant contains strong protections for taxpayers?

Dave Umhoefer:

Well, there aren’t the traditional protections. The company, Abbott Labs, in Illinois, was not required to create a certain number of jobs to benefit from the loan. There was another way they did it and that was the loan actually went to a third party first, the Kenosha Area Business Alliance was involved, and they were sort of on the hook for– in the village of Pleasant Prairie– were on the hook for the job creation.

Frederica Freyberg:

So there was the strong protections. But so the federal block grant of $12.5 billion was for this parcel of land that Abbott wanted for possible expansion. Where did the idea of 2,400 jobs come from?

Dave Umhoefer:

Well, you know, that was something that the Doyle administration put out, that number. They said 2,400 to 12,000 jobs. I think that Abbott in Illinois did purchase some land in Kenosha County as a hedge against future expansion. And if they were going to create this large campus there, the idea was that it could create that many jobs.

Frederica Freyberg:

Now, the Walker ad states that the company had no plans to create jobs. Did you find that to be true?

Dave Umhoefer:

You know, when we first looked at the ad we thought well, how could that possibly be? Why would the state do that? But, you know, the company was really coy. They didn’t show up at the press conference when the loan was announced, their spokes people would say very little except that, you know, we may expand in Wisconsin someday. We don’t have any plans to do so right now. And then this additional information, we found out, was from the HUD agency which actually provided the loan. And they went back and looked seven years later and still found very little evidence that there was any kind of concrete plan to actually move jobs to Wisconsin.

Frederica Freyberg:

So would that explain, then, why the feds want that $12.5 million back?

Dave Umhoefer:

Right. You know, there's supposed to be a public benefit when block grant money is spent. And you know, they waited seven years, it has been eight years now, and it just hasn’t materialized. Not surprising that the Walker campaign would pick a deal to focus on that didn’t work out, and the HUD agrees that it didn’t work out.

Frederica Freyberg:

Again, they had ten years to create these jobs. What is your sense as to whether or not they'll make any of that happen?

Dave Umhoefer:

It doesn’t sound likely now. It is still a possibility. Abbott– The company's changed, and things have changed a lot since the loan was given. Kenosha County officials seem to be holding out some hope, but it seems rather slim.

Frederica Freyberg:

As you just said in your previous comment, it's no surprise that the Walker campaign would kind of jump on this one. I suppose that there is some expectation that the Burke campaign will now take a look at the WEDIC books.

Dave Umhoefer:

Right. Obviously, Mary Burke was at the commerce department when she worked for Jim Doyle. The successor agency is WEDIC. As we've reported, and everybody else has reported, there's been many problems there in their job creation efforts. I would be pretty surprised if we didn’t see some ads– It’s a tough topic to explain to voters, but it has been in the news a lot, and I’m sure she'll probably think about striking back that way.

Frederica Freyberg:

I want to just go back to this particular ad for a moment and ask, again, your final rating on this ad.

Dave Umhoefer:

We gave it a Mostly True. We knocked it down from True a little bit because we felt that the language could have led some people to believe, you know, that Abbott had no interest at all in Wisconsin. But there was a lot of truth in the ad language. They stuck pretty closely to what the company itself said at the time. So we came down at Mostly True.

Frederica Freyberg:

All right. Dave Umhoefer, thanks very much.