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By Dave Umhoefer September 3, 2014

Greater Wisconsin Committee says Walker gave $570 million in job creation money to his cronies

A TV ad by a liberal political group blames lagging job growth on Gov. Scott Walker, charging that millions in precious job-development funds went to his pals and campaign donors.

The ad begins with snippets of TV news reports highlighting Wisconsin’s employment struggles compared with its neighbors, then a narrator does the rest:

"What’s Scott Walker doing wrong? Scott Walker gave Wisconsin job creation money to his cronies … corporate friends who contributed to his campaigns … $570 million of our jobs money to Scott Walker’s friends. That’s how things work in Scott Walker’s Wisconsin."

The ad, which began airing Aug. 20, 2014, is from the Greater Wisconsin Committee, a group funded by labor unions and Democratic ideological groups, according to the Wisconsin Democracy Campaign.

Is the group right to say $570 million went to Walker "cronies?"

The figure comes from a document released in May 2014 by the liberal advocacy group One Wisconsin Now. It was entitled "W is for WEDC: Gov. Scott Walker’s privatized Commerce Department: A case study in corruption, cronyism and incompetence."

Early in his term, Walker replaced the public Commerce Department with the private-public Wisconsin Economic Development Corp. (WEDC). His stated rationale was to narrow the focus to job creation.

In 2013, state auditors found the agency didn't adequately follow up to see if jobs were being created by companies granted incentives; didn't clearly report the jobs numbers it did have; and gave awards to ineligible businesses and projects.

In the wake of that, One Wisconsin Now sought to connect Walker’s gubernatorial campaign donors to the loans, grants, bonds, tax credits or other financial assistance granted or overseen by the WEDC agency, which is chaired by Walker.

The group said it found $570 million in financial incentives to 192 firms whose employees were a source of campaign donations to Walker. It said Walker received more than $1 million between 2009 and 2013 from people associated with the firms, and in some cases their spouses. (The incentives are paid in full over several years, unless goals are not met.)

We ran our own checks on the $570 million figure and talked to One Wisconsin Now, the Greater Wisconsin Committee and the Walker campaign about the ad.

Bottom line: There is a way to get to that number, but it’s a big stretch to characterize it as the Greater Wisconsin Committee did in its ad.

Looking at the contributions

There’s no doubt that people associated with companies that received WEDC help have given to Walker’s campaigns.

One example: In 2011 and 2013, WEDC gave Sargento Foods access to $1.5 million in tax credits to support capital projects. From 2009 to 2013, Sargento company executives and their spouses, and other company employees, gave more than $81,000 to Walker’s campaigns. They gave nothing to Walker’s opponents in that period.

All of that’s nothing new -- Walker’s Democratic predecessor, Jim Doyle, received such donations, as no doubt every governor has. And it is perhaps particularly unsurprising in Walker’s case, given that the Republican’s natural base of support is business.

But the TV ad plays fast and loose in describing all these donors as Walker "cronies," which it defines as "corporate friends."

The use of the word "crony" itself, of course, carries a negative spin. And when the ad cites two media sources to back the language it uses, it misleads on both.

The ad lists WKOW-TV in Madison as the source of the "friends" description in relation to the incentives. But the station’s online story cited in the ad just called them donors.

The ad cites Isthmus, Madison’s free weekly newspaper, for the "cronies" term. The publication did use the phrase, but in a story from July 18, 2013 -- a year before the $570 million number came out.

Equal opportunity givers

More significantly, the research that underlies the $570 million figure counts numerous companies whose employees have also given to Democrats.

Indeed, major candidates from both parties typically receive backing from business -- money flows to the party in power, and its allies. The Greater Wisconsin Committee itself has received money from groups supported by wealthy business interests, according to data from the Democracy Campaign.

Featured Fact-check

Our examination found that 35 companies that received more than $295 million in help from Walker’s WEDC have in the past supported Doyle through employee donations. That includes givers at major firms such as Menards, Ashley Furniture and Kohl’s.

If you knock out just those Doyle-connected firms, the $570 million is already down to about $275 million.

Similar connections can be found for contributions to Milwaukee Mayor Tom Barrett (who faced Walker in 2010 and in the 2012 recall) and other Democrats, including to a much lesser extent Walker’s 2014 opponent Mary Burke.

Even more revealing is the case of biotech firm Promega Corp. of Fitchburg, which got $75 million in bonding authority overseen by WEDC. That put it on the ad's "crony" list.

But the firm’s founder, William Linton, has given nothing to Walker. In  contrast, he gave $6,000 to Doyle, $17,500 to Barrett for his two campaigns against Walker and $1,000 to Burke, late last year.

Promega employees have given overwhelmingly to Democrats and liberals for years, to the tune of more than $30,000. Just two employees gave a total of $600 to Walker, based on our check of the Wisconsin Democracy Campaign’s searchable campaign finance database.

Yet the company makes the list.

More issues

To be sure, donations from workers at some firms have been sizeable.

Donations totalled $5,000 or more to Walker from employees at 45 firms that won $172 million in assistance.

But the analysis used in the ad didn’t distinguish between CEOs making maximum donations and rank-and-file workers whose small donations may have had nothing to do with any desire of the company to stay in Walker’s good graces. Nor did it matter if donors gave right around the time of getting an award, or made a small gift three years earlier.

Eleven firms that received $14 million in help were counted even though their employees gave $100 or less in total.

Was Walker rewarding "friends" when WEDC awarded retail giant Amazon $7 million in tax credits in October 2013? An Amazon software engineer in Ohio did give Walker’s campaign a total of $160 that year in two donations, the only ones identified as from Amazon employees to Walker. That alone put Amazon on the list.

A contribution that size is a drop in the ocean when it comes to Walker’s $56 million, 50-state fundraising take since mid-2009.

We tried an exercise, selecting $1,000 in donations as a minimum "crony" threshold -- surely your close friends at one firm would give that much over 5 years. Companies whose owners and employees cumulatively gave less than $1,000 -- and didn’t give to Doyle -- account for $160 million in aid out of the $570 million.

If you take out that $160 million, the bottom line falls to around $115 million. 275 from above - 160

Plus, we found that $7.5 million in deals were wrongly attributed to the Walker era when they were made under Doyle.

One last note: More than $295 million of the $570 million in WEDC aid cited by the ad came from flood-relief loans for developers as part of the federal  flood-relief program known as Midwest Disaster Area Bonds.

The Walker campaign protests that it’s misleading to include those in the WEDC aid total because local communities, not WEDC, issue the bond funds.

Still, the agency assists developers in some cases, allocates bonding authority and reviews the deals, even bragging that the program helps toward Walker’s goal of 250,000 new private-sector jobs.

Our rating

The liberal Greater Wisconsin Committee PAC claimed that "Scott Walker gave Wisconsin job creation money to his cronies: corporate friends who contributed to his campaigns" and got $570 million in incentives.

The list of companies that won $570 million and gave to Walker is a starting point for trying to spot instances in which a true Walker crony got a sweet deal. But that’s all it is.

Much of that money went to firms whose employees have given to Democrats in the past. Many of the donations were small, and Walker’s jobs agency has a limited role in dealing with firms associated with a big chunk of the $570 million.

The ad makes a red-hot charge that suggests corruption, even putting a dollar figure on it, but can’t deliver the goods.

We rate the claim False.

Our Sources

Greater Wisconsin PAC campaign TV ad Aug. 20, 2014

Email with Rich Judge, Greater Wisconsin Committee, Aug. 21, 2014

Emails with Scot Ross, One Wisconsin Now executive director, Aug. 27, 2014

Emails with Tom Evenson, Walker campaign spokesman, Aug. 21, 2014

Interview with Mark Maley, WEDC spokesman, Aug. 22, 2014

Wisconsin Economic Development Committee, "Program Outcomes: Annual Report on Economic Development," accessed Aug. 22, 2014

One Wisconsin Now, "W is for WEDC: Gov. Scott Walker’s privatized Commerce Department: A case study in corruption, cronyism and incompetence," May 29, 2014

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Greater Wisconsin Committee says Walker gave $570 million in job creation money to his cronies

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