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Baldwin asks U.S. Dep’t of Justice to review loans made by Walker’s ‘job creation’ agency

AP and WiG reports

Democratic Sen. Tammy Baldwin is asking the U.S. Department of Justice to review some loans made by Gov. Scott Walker’s failed and scandal-plagued “job creation” agency.

In a letter to U.S. Attorney General Loretta Lynch, Baldwin asks for a review of how three loans by the Wisconsin Economic Development Corporation were handled. The loans have not been repaid.

One of cases involves a $500,000 loan to a Milwaukee company, Building Committee Inc., which is owned by a top donor to Gov. Scott Walker. The Wisconsin State Journal reported earlier this year that a top Walker cabinet member pushed WEDC officials to provide a $4 million loan to the company.

Baldwin also wants DOJ to look into a $1 million loan to Green Box of Green Bay and $2 million loaned to Oneida Seven Generations Corp. Both loans are in default.

Walker created the agency shortly after beginning his first term as governor in 2011, touting it as the state’s flagship job-creating force that would help revitalize Wisconsin’s economy. But the agency has been troubled with mismanagement and cronyism from the beginning.

A state audit in the fall of 2014 found that the agency lacked documentation justifying money paid to cover expenses and grants during its first two years. An audit released in May found that contracts with grant and loan recipients hadn’t complied with state law and the agency hadn’t demanded proof that recipients were creating or retaining jobs.

The agency released documents in June showing that from July 2011 to June 2013, 27 awards worth about $24 million went out without a staff review. One of those awards was the $500,000 unsecured loan made to Building Committee, owned by Walker donor William Minahan. Walker appointees pushed the agency to give Minahan even more money — even after the agency learned that Minahan had pledged agency funds to pay for a lease on a Maserati sports car. The company defaulted on the loan from the state.

The agency also handed out $1.2 million in grants and loans to Green Box NA Green Bay LLC after the company said it could turn dirty plastic forks and ketchup-stained napkins into jobs.

But it appears that the agency didn’t look deeply enough into the company; founder Ron Van Den Heuvel owed millions in legal judgments to banks, business partners, state tax officials and even a jeweler. As recently as February, the agency considered giving Green Box additional incentives.

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