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By James B. Nelson June 20, 2013

Sen. Chris Larson says Wisconsin agency can't account for the creation of a single job

Gov. Scott Walker and the GOP-controlled Legislature created the Wisconsin Economic Development Corp. to lead the way on job creation.

The agency -- a privatized version of the old state Commerce Department -- is nearing the two year mark. And, according to state Senate Minority Leader Chris Larson (D-Milwaukee), there’s not much to show for the effort.

Appearing May 19, 2013 on "Upfront with Mike Gousha,"Larson said the agency was a mismanaged mess.

"What we've done with WEDC is created an agency that has taken the worst of government, the worst of corporate, private enterprise and combined them, where they are spending tens of million of dollars, allocating it to whomever they see fit without legislative oversight," he said.  "And the rare glimpses we get, show there's huge problems over there."

Larson added: "I think the stunning thing about this, Mike, is that they cannot account for creating one single job over their two years of existence."

Not one?

When we asked Larson to elaborate, he referred us to WEDC’s annual reportand a May 2013 Legislative Audit Bureau’s report on the agency.

"The Legislative Audit Bureau pointed out that they cannot count and accurately say that they have created a single job," Larson said, adding that WEDC officials will  "say that they created a whole bunch of jobs"

This path is a familiar one, though the last time we walked it from a different direction.

We rated Half True a statement from state Rep. John Nygren (R-Marinette) who called WEDC a "proven job creator." The audit found record-keeping is lacking, but employers in Nygren’s northeastern Wisconsin district said that they added jobs after receiving tax credits and other assistance from the agency.

Here’s what each report cited by Larson says:

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WEDC report: The report covers the first year of the agency. When it comes to measuring effectiveness, it looks to the future.

"A total of 23,759 jobs in Wisconsin are anticipated to be impacted directly by investments made by WEDC in FY12," the report says. That means the agency expects that number of people will be hired in the future by companies that have received assistance.

In all, WEDC made 287 "awards" worth $500 million to state employers in the first year of operation, the report said.

Legislative Audit Bureau:The bureau’s reportsaid the agency had poor record keeping, sloppy internal practices and gave awards to ineligible businesses and projects. Additionally,  it noted WEDC has experienced severe staffing turnover, including with top leadership.

The audit said record-keeping was so sloppy, they were unable to include a job count in their review: "The report WEDC submitted in November 2012 did not contain all required information, contained some inaccurate information, and did not clearly present information about the number of jobs created and retained as a result of its programs. For these reasons, and in the absence of verified performance information, we did not assess the effectiveness of WEDC’s economic development programs."

But there is a difference in calculating an accurate total number of jobs and -- as Larson claimed -- not being able to account for a single one. What’s more, there are the accounting standards applied in by auditors, and there is the understanding most would be left with after hearing Larson’s remark: That WEDC has nothing to show for its work.

In reviewing the Nygren claim, we looked at several companies in his district that said they added workers after receiving tax credits and other help from WEDC.

Those three companies -- Precision Ice Blasting Corp., Vargo Tool & Die Corp. and Marinette Marine, say they added a total of 1,022 jobs of a promised a total of 1,076 in exchange for $28.46 million in tax credits.Under the agreements, they don’t get the credits unless they can show the jobs were created.

So, it’s clear that WEDC has provided tax credits and helped companies win additional work and hire more people. It’s just not clear what the overall score card actually reads.

Our rating

Larson said the state’s signature jobs agency "cannot account for creating one single job." Larson’s correct in that the agency, or a critical audit, can’t quantify its effectiveness.

But Larson’s statement suggests no businesses have been assisted by WEDC. And there’s plenty of evidence that’s not the case, starting with the employers in northeastern Wisconsin.

Our definition for Mostly False is: "The statement contains an element of truth but ignores critical facts that would give a different impression." That fits here.

Our Sources

Sen. Chis Larson (D-Milwaukee)  appearance, "Upfront with Mike Gousha," May 19, 2013

Reed Hall, CEO, Wisconsin Economic Development Corp. appearance, on "Upfront with Mike Gousha," June 9, 2013

Wisconsin Economic Development Corp.2012 annual report

Legislative Audit Bureau report on Wisconsin Economic Development Corp., May 2013

Interview,Sen. Chris Larson, June 13, 2013

Emails, Gillian Morris, aide, Sen. Chris Larson, June 14 2013

Emails, telephone interview, Tom Thieding, spokesman, Wisconsin Economic Development Corp.

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Sen. Chris Larson says Wisconsin agency can't account for the creation of a single job

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