Here & Now

Samantha Kerkman Reacts to WEDC Report

Zac Schultz:

But first, legislature is cracking down on Wisconsin Economic Development Corporation, withholding money and requiring annual checks to make sure they’re following the law. Last week, we told you about a state audit that found serious problems at WEDC, including a failure to track loans. Yesterday the Joint Finance Committee voted to withhold $55 million from WEDC in the second year of the budget. The money would be released only after the executive director testifies later this year on their progress in following the recommendations laid out in the audit report. WEDC would also have to undergo an annual audit, and all employees would be subjected to state ethics law and file an annual statement of economic interest. The Joint Finance votes doesn’t make these requirements law, but does insert the rules in the budget. Unless they’re removed by the legislature or vetoed by the governor, they’ll become law when the budget passes. Representative Samantha Kerkman is the co-chair of the Joint Audit Committee and joins us by phone from Kenosha. Thanks for joining us, Representative.

Samantha Kerkman:

Thanks for having me on.

Zac Schultz:

Now, do you believe the changes passed by the Joint Finance yesterday are enough?

Samantha Kerkman:

I believe it’s a start. And yesterday we also had our audit hearing on the recommendations in the audit, and I believe it’s a roadmap to getting to a better place. And I actually– You know, over the years we’ve done several audits of our economic development programs and now WEDC. This has been a pattern of behavior consistent over the last few years. And so now it’s really putting even stronger oversight over this new agency to make sure they’re following state statutes, bringing us transparency, communication and uniformity amongst the programs that they oversee to help bring businesses here and retain jobs here in Wisconsin.

Zac Schultz:

Well, employees at WEDC are handling millions of dollars in taxpayer money. Why weren’t they subjected to state ethics laws from the very beginning?

Samantha Kerkman:

I think as we reformed WEDC we were trying to figure out and give them flexibility in some areas. And as the audit pointed out, I think they needed more accountability from the legislature. They didn’t set up the policies in a quick enough time, and so I now think the legislature’s, you know, going back and saying now you need to have this accountability measure placed on you.

Zac Schultz:

Now, Governor Walker is the chairman of the board of directors for WEDC. Is he ultimately responsible for these problems or is he not associated enough with the day-to-day activities?

Samantha Kerkman:

I think all of us, the legislature needs to be looking at the oversight of WEDC, and they haven’t been so forthcoming with the communications. Some of the reports have not come through on a timely basis. We also have the WEDC board, which is new. Under the Department of Commerce there was no board to oversee the department. I want to make sure that there’s communication between WEDC, the board and then the legislature to make sure there's accountability, transparency and uniformity.

Zac Schultz:

Well, there are Democrats that are asking for legislative changes to WEDC to create over oversight from that board of directors, including giving them more authority to direct what goes on day to day. Do you support that?

Samantha Kerkman:

I would. I looked at the Board of Regents and the recent issues that have happened in the UW System. The Board of Regents actually has some of those authorities. So again, I’m not opposed to giving this private– You know, and there are public members on this board, more authority to control when they find problems in a particular area, that they can act quickly. I think we as the legislature need that accountability measure in place, because we’re not there every day. We’re not, you know, overseeing WEDC every day. We need to have those accountability measures in place so we feel comfortable with their performance, and what they’re doing and the contacts they’re making with businesses in Wisconsin, out of Wisconsin, and internationally.

Zac Schultz:

Now, the state agency responsible for supporting business growth should be nonpartisan, but so far it’s been apparent the success or failure of WEDC has been directly tied to Governor Walker and the Republicans that created the program. Will that make it difficult to address future problems without letting politics get in the way?

Samantha Kerkman:

I don’t think it’s a partisan issue myself. I’ve been very critical since the audit has come out. Even the previous audit in 2012 I was very, very critical of the Department of Commerce. So my record is making sure that we are the stewards of the taxpayer dollars and making sure it’s used appropriately. That is my job. I, you know, I’m still very concerned about WEDC and their direction, and I will be monitoring and communicating with, you know, CEO Hall and other, you know, other contacts in the department, in the agency, to make sure that my questions are getting answered. I had several yesterday at the hearing, and I want to make sure that they follow through and actually are following state statutes, they’re being consistent when they give loans or tax credits to particular businesses. We got a lot more detail yesterday from the audit, and it didn’t alleviate all my questions. It actually, in some cases made me have more questions to ask them, and we will be following up. The Audit Committee is due a report in July and then another one in October in addition to the additional requirements the Joint Finance Committee put in yesterday. So I think there are going to be those accountability communication measures that I think the legislators are asking for.

Zac Schultz:

All right. We will stay on top of it, as will you. Thank you very much for joining us, Representative Kerkman.

Samantha Kerkman:

Thanks for having me on.