Progressive Thinking

Wisconsin GOP’s Big Dirty Secret Reveals Hypocrisy of Walker Attack Ads on Burke's Jobs Plan.

SAUKVILLE - Most people don’t know that our state Republican legislators and governors have been plagiarizing legislation signed into law since 1973 when ALEC was founded. ALEC (American Legislative Exchange Council) was formed to be a secretive Republican bill mill. Its purpose is to radically remake states’ policies in favor of the interests of big national and global corporations, who in turn donate lavishly to ALEC and to our legislators in a pay-to-play enterprise. Have you ever noticed how our state is going backwards on rights for the individual--civil rights, voting rights, women’s rights, rights to public education, worker’s rights and the dismantling of unions and the opposition to increasing the minimum wage, consumer’s rights, the public’s right to essential services and health care (federal aid for Medicaid expansion), etc. Did you notice how all the progress made in the 20th century for the people is now being eliminated simultaneously in the states controlled by Republicans? That is the work of ALEC and the Republican legislators and governors in our nation who plagiarize from ALEC model bills and pass them into law to the advantage of big corporations.

ALEC’s donors include David Koch, who inherited oil industry wealth from his father, Charles, who was a co-founder of the John Birch Society of which David is a member. Foreign special interests, including TransCanada, London and Belgium big liquor and gun corporations (Winchester), Bayer, etc., are also members of ALEC and influence U.S. Republican legislation.

Some of our Republican state legislators are prolific plagiarizers of ALEC legislation, including Jeff Stone (voter I.D./suppression), Glenn Grothman (voucher schools, refusing federal money for Medicaid expansion), and Alberta Darling’s bills are practically all produced by ALEC (bills against telecommunication regulations, collective bargaining, insurance industry reform, and bills for tort reform giving advantages to corporations, for voter I.D./suppression, the privatization of schools, predatory lending, etc.). Scott Walker was also a member of ALEC as a legislator, and as Republican Governor, he signs Republican legislation produced by ALEC into law.

ALEC is being exposed, finally, and many corporations are leaving ALEC. Google’s motto is “Don’t Be Evil,” and after ALEC recently maintained its denial of global warming in its policy issues, the Chairman of Google said publicly about ALEC: “They’re just literally lying.” Google, Facebook, Microsoft, and YELP are cutting ties with ALEC, along with Amazon, Coca-Cola, General Motors, Bank of America, Proctor & Gamble, and 80 other corporations.

Mary Burke’s job plan is a combination of the best job plans in the nation that would bring the citizens of Wisconsin out of this job drought. They are her plans—they are not her legislation or laws. She will discuss her plans with the citizens of Wisconsin and the legislature, not ALEC, and after reaching compromise, legislation will be introduced to be passed into law, and democracy will return to Wisconsin.

The most recent audit of the state’s job creation entity, the Wisconsin Economic Development Corporation (WEDC), continues to report problems with management of economic development grants and loans. Coupled with previous audits, the new audit raises questions about WEDC's policies and procedures, whether it is successful in assisting with job creation and ultimately, whether it is a good investment of taxpayer dollars.

MADISON - “I’m really uncomfortable with all these questions,” Linda told me. We were discussing the most recent audit of the state’s job creation agency: Wisconsin Economic Development Corporation (WEDC).

WEDC is a quasi-private entity formed by the governor in 2011 in an attempt to boost job creation. It is run almost entirely with state tax dollars.

A recently released Legislative Audit Bureau (LAB) report adds detail to the agency’s administrative costs and management of economic development grants and loans in Fiscal Years 2011-12 and 2012-13.

The big question, did the agency successfully assist businesses in creating jobs, was not addressed in this audit. A companion audit last year reported there was no verification of claims of tens of thousands of jobs created.

The recent audit detailed administrative expenses and the management of tens of millions in economic development grants and loans. The audit found instances of missing or poor documentation in aspects of operation, including non-payroll expenses, merit awards, and the tracking of grants and loans. Poor accounting practices have plagued WEDC since its creation.

The earlier audit found WEDC didn’t have basic managerial processes in place, nor a clear budget or consistent accounting practices. Even in the September 2014 agency response to the recent audit, WEDC officials acknowledged written accounting procedures had not been developed. They plan to develop a formal accounting procedure manual in 2015.

The 2013 audit found WEDC did not oversee delinquent loans, reporting “In October of 2012, WEDC officials told the governing board they became aware one week earlier that WEDC had never monitored repayment of loans, including those that were past due.”

The recent audit reported that WEDC presented a limited methodology on calculating loan delinquencies. The limitation obscured the fact that nearly 9% of the total outstanding loan balance was delinquent.

I observed the delinquency rate at commercial banks on commercial and industrial loans was between .8 and 2.5% during the same period according to the Board of Governors of the Federal Reserve System. WEDC officials are quick to point out they are not a bank and make riskier loans than banks.

In their September 2014 response to the LAB audit WEDC continued to obfuscate the truth. In what appears to be an attempt to mislead, the letter lists several management outcomes and details “significant progress made” in six categories, even though the audit didn’t evaluate and in most cases never discussed these items.

In one item, WEDC officials claimed a “major reduction” in delinquent loans. But the audit found many loans were written off, forgiven or restructured to delay a payment – hardly “significant progress”.

Is the agency adequately monitoring loans and grants awarded to businesses and referring to a collection agency those loans that are delinquent? Most assuredly in the first two years, the answer was ‘no’.

Did WEDC use taxpayer money to assist businesses in the creation of verifiable jobs? We can’t answer this question. Although we know from the first audit that not a single job was verified in the first year of WEDC’s existence.

Is WEDC a wise investment of taxpayer dollars? We still don’t know. However, there is plenty of evidence to say in its first two years, the agency was a mess.

The biggest swath of the electorate – by far – is not the Republican loyalists or the Democratic faithful. Nor is it centrist or moderate. It is politically homeless. The two parties must either adapt or perish.

MADISON - Americans clearly are sour on politics. According the latest Gallup public opinion polling, the number one problem in the U.S. is “dissatisfaction with government, Congress and politicians” along with “poor leadership, corruption and abuse of power.”

New Associated Press polling shows slightly more than a quarter of Americans say they trust Republicans to manage the government, while just under a quarter trust the Democrats. The biggest bloc of citizens say they don’t trust either major party. And the AP survey showed that public confidence in the government’s ability to make progress on the important problems and issues facing the country continues to slip, with 74% now saying they have little or no confidence, down from 70% who said the same last December.

Both parties are failing our country, leaving most Americans feeling betrayed and politically homeless. But the citizenry’s response to these circumstances leaves the most to be desired.

We’ve all been conditioned to believe we have only three options. Behind door number one is whatever the two major parties offer up. A few partisans on either side are more or less satisfied with what’s behind this door, but most Americans aren’t. Most feel they are forced to hold their noses and choose between the lesser of evils. Most look for another door.

Behind door number two is an occasional third-party or independent candidate. But whether it’s Ross Perot one time or Ralph Nader another, this door leads to a dead end. The U.S. is not a parliamentary democracy. Ours is a two-party system. Supporting a third party invariably ends in disappointment.

That leaves door number three. Behind it is resignation. Sadly, a great many of us are choosing this route, throwing up our hands in disgust and hightailing it for the sidelines. This withdrawal from civic life is now endemic to American politics.

Three doors. No happy ending to be found behind any of them.

That’s the bad news. The good news is that there is a fourth door. We’ve been trained not to recognize it or even acknowledge its existence, much less open it. But it is there all the same. It hasn’t been opened in our lifetimes, but when it was found and opened by past generations, what it led to was transformational and landscape altering.

Door number four is what I call a first-party movement. Third-party movements operate on the political fringes, to the left of the Democrats and to the right of the Republicans. Put another way, they seek to clip the wings of the major parties. First-party insurgencies go for the heart. They compete for the affections of the entire electorate.

The goal of third-party movements is to have three or more parties. The goal of first-party organizing is to have at least one that is worth a damn. At least one that truly owes its allegiance to the people.

Conditions are growing ripe for an extensive renovation of the nation’s political landscape. The telltale signs of an impending political implosion are visible. The percentage of Americans who refuse to identify with either major parties is at its highest level in three-quarters of a century. The biggest swath of the electorate – by far – is not the Republican loyalists or the Democratic faithful. Nor is it centrist or moderate. It is politically homeless.

If door number four is opened, the two parties will either adapt or perish. The odds that at least one of the parties will cease to exist in its current form are getting shorter by the day.

We have it in our power to put citizens back in the driver’s seat of our government. The two major parties are repellent. We have it in our power to build a political household that people actually want to live in. It can be done. Our great-grandparents and great-great-grandparents did it. On more than one occasion they opened door number four and freed themselves from the same kinds of traps that ensnare us again today.

We don’t have to make history. We only have to repeat it.

A statewide expansion of the voucher program as touted by the Governor and majority party legislators could cost over $600 million in state tax dollars.  Money from the same pot as funding for public schools which already have experienced a cut of $1.8 billion over the past four years.

MADISON - “Your information is always thorough, concise and very readable,” Carol wrote to me. “Today I heard that [Governor] Walker said he would lift the cap for vouchers if he wins re-election. What would that do to our public schools? The state budget? I hope you will research this and publicize your opinion.”

Whether to cut back or expand state-funded subsidies for students attending private schools is a hot topic of debate. Passage of the most recent state budget started a process many see as the beginning of a statewide, unlimited opportunity for students to attend private schools with state tax dollars – or an unlimited drain on public school funding – depending on one’s perspective.

With passage of the last state budget, children attending private schools could use tax dollars through the form of a ‘voucher’. This state-funded subsidy is $7,210 per year for a primary and middle school student attending a private school and $7,856 for a high school student attending a private school. (Many public schools receive far less per pupil state funding.)

The budget was written so state-funded vouchers were paid first and had an unlimited drawn down on public school funds. I likened this – in my farmer vernacular – to a bucket full of water with a garden hose attached to the bottom with a valve to slow the flow.

The valve, of course, is the limit on the number of vouchers.

The rules, established by the 2013-15 state budget, limited the program to 500 students in the last school year and 1,000 students statewide this school year. These numbers do not include the Milwaukee and Racine voucher students.

Removing the cap – as suggested by the Governor, the Speaker of the Assembly and many candidates – would get rid of the valve altogether.

The justification for this dramatic change in school funding is rhetoric implying the failure of public schools and the superiority of a private education. But after 24 years of experimentation in Milwaukee, research shows no significant achievement benefits for students attending tax-funded private schools over public education.

In western Wisconsin public schools have a stellar record of achievement – despite dwindling resources.

This spring the Eau Claire Leader-Telegram reported local public schools scored above the average on statewide testing in math and reading while most Eau Claire private voucher students “bow[ed] out of state tests.” Statewide “private school voucher pupils fared poorly compared to those in public schools,” the paper’s headline read.

So how much would unlimited statewide expansion of vouchers cost Wisconsin taxpayers? In the 2013-14 school year there were approximately 120,000 private school students. Of these students, 92,400 students pay privately for tuition. State taxpayers fund 27,400 private school voucher students.

The nonpartisan Legislative Fiscal Bureau estimates an average per student voucher cost of $7,333. Subsidizing just the current private school students at this rate would cost taxpayers $677 million. This assumes no public school students go to private schools and no income limits are set for student’s families.

Statewide expansion could, presumably, affect all 900,000 students not currently in the state subsidized voucher program. But recent experience shows 75% of statewide voucher students already attended private school.

Public schools that lost students to private schools lost state aid. School districts that don’t have students attending state subsidized private schools also lose state aid. Often, districts must go to property taxpayers to make up lost aid.

There is no way to know how many private school parents would choose a voucher or how many public or charter school parents would send their children to state subsidized private school.

Public schools already suffered a cumulative $1.1 billion loss in general aid over the past four years. These cuts came at a time of increased overall state spending. In the last four years the budget grew by $4.5 billion. Revenue is dwindling now because of a series of tax cuts – putting public education at risk for a new round of cuts.

It’s foolishness to think Wisconsin can afford unlimited taxpayer subsidized vouchers, keep our high quality local schools and lower taxes. Actions have consequences. Cuts to local schools hurt students and raise property taxes.

Governor Walker, through WEDC, is in a position to pick and choose who gets grants and subsidies to corporations that are headed by major political donors that support him. Good Government Advocates say, in light of conflicts of interest, emergency action needed to protect public job creation dollars from the legal bribery of campaign financing.

STATEWIDE -  Citizen Action of Wisconsin and the Wisconsin Democracy Campaign held a press conference at the Capitol earlier this week calling on Governor Scott Walker to step down as the Chair of the Board of the Wisconsin Economic Development Corporation (WEDC). A full audio recording of a media call held after the press conference is available.

Citizen Action and the Wisconsin Democracy Campaign believe that the flawed structure of WEDC creates an unacceptable risk of legalized bribery. The high stakes election this fall, and the massive amounts of money being raised and spent, elevate this risk dramatically. Governor Walker is expected to raise a record amount of money for his reelection, with substantial sums coming from CEOs and corporate executives with a direct financial interest in the decisions made by WEDC.

“It is ethically impossible for a Governor to impartially preside over decisions to provide  millions of dollars in corporate subsidies and also receive hundreds of thousands of dollars in campaign donations from corporate executives,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “This is a flawed structure. It would be an impossible situation for any governor, not just this Governor. The best way to safeguard the public’s precious job creation dollars, and prevent any appearance of legal bribery during this hotly contested election, is for Walker to step aside as the Board Chair of WEDC.”

"Governor Walker, through WEDC, is in a position to pick and choose in providing grants and subsidies to corporations that are headed by major political donors that support him,” said Mike McCabe, Executive Director of Wisconsin Democracy Campaign.. “This flagrant conflict of interest is intolerable."

“The gross conflicts of interest created by the unhappy combination of WEDC’s structure and the deregulation of our campaign finance system also creates difficult issues for ethical business leaders,” Kraig continued.  “Given Walker’s direct and personal role in handing out economic development subsidies, who could blame corporate leaders for believing it necessary to make campaign donations to the Governor if they want to receive grants, loans, and tax credits from WEDC? If this outrageous conflict of interest is allowed to continue, it will destroy what is left of the public’s faith in the integrity of Wisconsin government.”