Democratic lawmakers in Wisconsin called on federal investigators Monday to launch a probe into Republican Gov. Scott Walker's job creation agency after a newspaper reported the troubled organization made a loan to one of Walker's top donors five years ago.
Assembly Minority Leader Peter Barca and Sen. Julie Lassa, who both sit on the Wisconsin Economic Development Association's board, said at a news conference that they are outraged by the revelations in the Wisconsin State Journal's story. They said the report begs serious questions about whether the agency and Walker's administration did an improper political favor for the donor.
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"That just raises such suspicion," Barca said.
Walker, a likely 2016 presidential candidate, serves as WEDC's chairman. He told The Associated Press on Monday while in New Orleans to speak at a meeting of a powerful school voucher lobbying group that he played no direct role in the loan and Democrats are on a "partisan witch hunt."
His state spokeswoman, Laurel Patrick, said in a statement that the Democrats are playing political games. She said Walker never met with the donor, William Minahan, and wasn't aware of any part of his company's loan process. Walker also wasn't aware Minahan had contributed to his campaign, Patrick said.
A spokeswoman for John Vaudreuil, the U.S. attorney in Madison, said she couldn't confirm or deny whether there was an investigation.
Walker created 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 also has seen extensive turnover in its leadership ranks.
The State Journal reported Sunday that 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 more energy efficiency. The company created no jobs and hasn't paid the loan back, the newspaper reported. 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.
The newspaper reported that 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 had been sued in the last five years even though online court records showed 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 impact of the newspaper report. Patrick, Walker's spokeswoman, denied that the request had anything to do with the story and said he made the decision after reviewing this month's audit and talking with legislative leaders. Walker reiterated that in New Orleans, saying the move came in response to the audit, not the story.
A telephone number for Building Committee Inc. had been disconnected. Other possible listings for Minahan were either incorrect or had been disconnected.
Walker has based part of his presidential pitch on turning Wisconsin's economy around. The latest numbers from the U.S. Bureau of Labor Statistics, show the state ranked 40th in private-sector job creation for the year ended last September.
Wisconsin's monthly unemployment rate of 4.6 percent in March was the lowest level 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.
Associated Press writer Rebecca Santana in New Orleans contributed to this report.