WEDC board member also has a loan from WEDC

Core Values

INTEGRITY. We will hold ourselves to the highest ethical standards.
HONESTY. We will tell the truth without qualification.
ACCOUNTABILITY. We will honor our commitments to ourselves, our partners, and our investors.
RESULTS-FOCUS. We will add value in every action.
CUSTOMER-CENTRIC. We will put the needs of the customer first.
from WEDC’s homepage

As I watched an archived 3 1/2 hour “emergency” WEDC board meeting held in Waukesha Wednesday, I heard board member Paul Radspinner say that his own business pays WEDC $8,000 per month.

It is at the 2 hour 14 min. 50 sec. mark of the recording found HERE.

In 2008. the Department of Commerce gave Radspinner’s company Flugen a $250,000 Technology Venture Fund loan. Then in 2011 the government agency known as “Department of Commerce” became “WEDC” – an amalgam of public and private. Radspinner was appointed to the board in June of 2011.

Radspinner divulged information about his own company’s debt payments as he tried to explain why it is that companies might need to have 90 days to not make a payment to WEDC. (Companies that don’t make timely payments within 30 days of due dates are technically “delinquent”.)

flugen

He was trying to discuss how the agency can improve.

WEDC still has no policy to handle delinquent debt two years into its tenure. That was revealed in a recent L.A.B. audit of WEDC.

Radspinner also expressed concern during the meeting about liability board members have for loans that WEDC gives out. He asked a WEDC attorney about it and she replied that in the case of the “enterprise zone” loans [there were $61 million of those from 2011 – 2012 per the L.A.B. audit] that WEDC board members do share liability and that the liability terms are expressed in WEDC’s bylaws. She tried to reassure Radspinner by saying that WEDC could share program policies, their checklist, and routing slips with the board so that the board members would be more comfortable with “delegating” contract review to WEDC.

As I heard this exchange, and it registered with me that WEDC’s business people have no intention of involving the board in contract review, I also realized that the WEDC board members could easily be manipulated by WEDC.

By that I mean that if they are technically held liable for loans that they never get to authorize for companies that they may or may not be familiar with and under accounting that is lax or absent, then they must ALWAYS go along to get along with the other side. Without anything nearing functional accounting that can be audited, it is one board member’s word against the others – or against the director’s or the vice presidents’s or.. the list goes on. That’s not an environment where the board members are safe to offer a check on this agency’s power.

In the case of Radspinner, what if his loan WAS being tracked but now it’s suddenly not showing all of those $8,000 payments he said he made because he spoke up about something. Or maybe his loan could get suddenly wiped from the books completely if he does somebody a VERY nice favor.

This is clearly speculation.

But if there’s any place where speculation is appropriate – wouldn’t it be where there is no accounting to even set the baseline for what’s real and what’s fake? WEDC hides mistakes from its own board [or at least that is the appearance of things]. We learned this when the board itself didn’t learn about a February 2012 letter HUD sent to WEDC until August.*

The shoddy spendthrift administration of Walker’s showpiece agency is not only arrogant in its defiance of Walker’s promise of ‘transparent” and “brown bag” government. WEDC opens the door to criminal activity with huge sums of taxpayer money.

This goes beyond our state’s partisan bickering these last two years and it’s beyond your outrage over the $1,789 in Badger football tickets somebody bought on a WEDC credit card.

When an agency loses 11% of its half billion dollar budget,
when it doesn’t track loans from July 2011 to October 2012,
when it only has 45% of the paperwork it’s supposed to have by law from July 11 – December 2012,
when it swaps out CEOs three times in 2 years,
when it has no concern for conflict of interest,
when there’s no oversight for minimum wages for workers as laid out in its own contracts and as required by statute,
when it is a jobs agency and the Legislative Audit Bureau can’t even verify how many jobs it made —

they are beyond audits. WEDC should be shut down.
WEDC’s directors should also be criminally charged and investigated.

List of WEDC board members.
Top staff of WEDC

*That 2012 letter told WEDC that it did not have the legal authority to handle CDBG monies.

6757871357_f3f060a40c

Footnote:
The audio cut out during this videorecorded meeting repeatedly.
– At the 60 minute mark.
– Also at the 1 hour and 36 min. mark when it stays off until the 1 hour and 58 minute mark,
And there are several other brief cut-outs of the audio.
I watched the 3.5 hour meeting until the 2 hour and 17 minute mark before writing this and I’ll complete the remainder tonight.

Note: There were two other meetings that addressed WEDC today:
*a Joint L.A.B. mtg.
*Joint Finance Committee had WEDC on its agenda for today’s meeting as well

Photo credit:
cash image appears courtesy of 401(K)2013 of flickr. Creative commons use license.

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12 thoughts on “WEDC board member also has a loan from WEDC

  1. Write more, thats all I have to say. Literally, it seems
    as though you relied on the video to make your point.

    You clearly know what youre talking about, why throw away
    your intelligence on just posting videos to your weblog
    when you could be giving us something enlightening to read?

    • Thanks for the dismissive note. I think if you read the post, you know that it is about more than a video. Annnd have you watched ‘the video’? I welcome you to do so. I think you’ll find it about as exciting as watching paint dry. That’s a public government meeting, location of which changed suddenly (maybe there was a 24 hour notice of the change). If that meeting had occurred in Madison, as it was originally slated to be, I would have gone to it.

  2. Correct me if my math is in error, but @ $8000/mo the principle amount of $250,000 (taken in 2008) would be paid off in approximately 2years and 7 months or sometime in 2010 or 2011. And FluGen is still repaying this loan?
    Also, in view of his statement that companies might need 90 days not to make payments) I’m wondering if FluGen sends its bills out for collection after 90 days (do unto others as ye would have them do unto you)

  3. Dear BC,

    I appreciate your diligence and attention to detail. The primary reason your hypotheticals wouldn’t happen with regard to my company’s loan is because FluGen is audited annually as a C corp in line with SEC regulations. “Disappearing” loans don’t follow GAAP standards. Secondly, you and all of the public should find great comfort in the fact that the LAB reported as it did. While most if not all of the ineptitude occurred under the previous leadership, the WEDC must and will regain the public trust.

    Paul V. Radspinner

    • Hi Paul,

      Is WEDC, like Flugen, audited annually in line with SEC standards using GAAP? If so, are those audits available to the public?

    • From the taxpayer’s perspective, most would consider “Disappeared loan” to be one in which WEDC experiences a principal loss on the loan. Something which WEDC apparently excels at when compared to the private sector.

      Perhaps commenter Paul V. Radspinner would offer an opinion as to whether his company’s accountant would be able to utilize GAAP to recognize a forgiven, written off, or amended loan. Those are the terms used in the Legislative Audit Bureau WEDC audit to describe loans which are not paid back in a timely fashion. Hypothetically speaking of course.

    • As a taxpayer, I could care less about FluGen’s reporting requirements. Those are for investors, of which, WEDC forced WI taxpayers to be a part of. With a history that demonstrates a lack of due diligence, something that breaks the fiduciary duty an investment firm has for its clients, it is WEDC’s reporting requirements that are of a concern to the state.

      Given the history of WEDC’s lack of care with our money and now what appears to be a lack of separation between the operation of the corporation and the board running it, you have a long hard path to gain anyone’s trust back.

      Open the books.

      Pay your loan back due to the conflict of interest and obtain your financing the way the rest of us do it in the private sector – without the help of our pocketed government officials.

    • Apparently the commenter posting as Paul V. Radspinner does just fine whacking at his (or her) strawmen but isn’t willing to actually engage in any substantive discussion on the topics raised. It only took 2 hours for his (or her) first response (first ever comment under that nom de plume at Blue Cheddar apparently). Surprisingly (actually not really), now that posters actually responded, it turns out to have been a driveby comment that was left by whoever posted as Paul V. Radspinner.

      I might find great comfort in hearing that the IRS CID and FBI were investigating the WEDC situation, but see little chance of that actually happening. How WEDC compares to other episodes such as Enron’s famous financial innovations, and the zero down mortgage financing and CDO business, I am not yet sure.

    • Bumping Paul V. Radspinner’s google alert. Hello there Paul or Paul’s bot.

      FluGen audit, GAAP, Securities and Exchange Commission, audit, financial scandal, ineptitude, more “free market” wankers running wild, doing it until the judge tells them they can not.

      FluGen, WEDC, scandal,reform, ignoring questions, search engine optimization, possible sock puppetry, more WEDC green shoots?, possible criminal indictments for the WEDC board?, subpoena all the emails, evidence destruction is always possible, send the perps to PMITAFP.

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