Wisconsin Democratic lawmakers called on federal investigators Monday to launch a probe into Republican Gov. Scott Walker's job creation agency after The Wisconsin State Journal reported the organization made a questionable loan five years ago to a company owned by one of his top donors.
The call came as the Supreme Court decided on Monday not to bar an ongoing probe into possibly illegal ties between Walker’s 2012 campaign and conservative advocacy groups.
Assembly Minority Leader Peter Barca and Sen. Julie Lassa, who sit on the board of the agency, the Wisconsin Economic Development Corp. (WEDC), told reporters at a news conference that they are outraged by the revelations in the Journal's story. The report raises serious questions about whether the agency and Walker's administration did an improper political favor for the donor, they said.
"That just raises such suspicion," Barca said.
Walker, a likely 2016 presidential candidate, is the chairman of the WEDC. His spokeswoman, Laurel Patrick, said in a statement that the Democrats are playing political games. She said that Walker never met with the company's owner, William Minahan, and wasn't aware of any part of the company's loan process.
She said Walker also wasn't aware Minahan had contributed to his gubernatorial campaign. "WEDC does not make decisions based on politics," she said.
A spokeswoman for John Vaudreuil, the U.S. attorney in Madison, said she couldn't confirm or deny whether an investigation has begun.
Walker is already the subject of a probe on the possible unlawful coordination of fundraising between his 2012 recall campaign and conservative special interest groups. The Supreme Court on Monday rejected a bid by a conservative group, the Wisconsin Club for Growth, to stop the investigation.
Walker created the WEDC as a private-public partnership to replace the state Commerce Department shortly after he began his first term as governor in 2011. State audits have revealed mismanagement and a failure to track past-due loans. The agency has seen extensive turnover in its leadership.
The Journal reported on Sunday that the WEDC gave Minahan's Building Committee Inc., a now-defunct Milwaukee construction company, an unsecured, taxpayer-funded $500,000 loan in 2011 to outfit bank and credit union buildings for improved energy efficiency. The company hasn't repaid the loan. The WEDC sued the company last year and won a judgment against it.
Minahan gave Walker's gubernatorial campaign the maximum individual $10,000 donation on Election Day in 2010, the newspaper said.
Building Committee Inc. hired two lobbyists and “poured tens of thousands of dollars into the campaigns of key Democrats and Republicans on the state and national levels” in the pursuit of funding for a “proposed project to retrofit bank and credit union buildings for energy efficiency,” according to the Journal.
The paper reported that the WEDC wasn't able to locate the underwriting documents justifying the loan. On his 2011 loan application, Minahan checked "no" when asked if the company or any of its officers have been sued in the previous five years, even though online court records show three lawsuits.
On Friday, Walker called for legislators to restructure the agency by eliminating the loan program.
Barca and Lassa on Monday accused the governor of making that move to blunt the Journal story's impact. Patrick denied that the request had anything to do with the story and said Walker made the decision after reviewing this month's audit and talking with legislative leaders.
A telephone number for Building Committee Inc. has been disconnected.
Walker has based part of his presidential pitch on turning Wisconsin's economy around. The latest numbers from the Bureau of Labor Statistics show Wisconsin ranked 40th in private-sector job creation for the year ending last September.
The state's unemployment rate of 4.6 percent in March is the lowest since before the recession, according to the state Department of Workforce Development, although those numbers fluctuate and are based on a survey of a fraction of Wisconsin employers.
Al Jazeera and wire services