Another big Republican handout to corporate power goes south, dragging down with it a whole bunch of "free market" Democrats who were starting to buy into the capitalist myth. Thank you Gov. Tommy Thompson, taxpayers wasted over $8 million so a financial management firm could take that money and expand, all the while creating only 132 jobs. That's right, $8 million created 132 jobs in Wisconsin.
Fast forward from 1999 to the Walker administrations plans to build on that failure by not just pouring $16 million into a doing the same thing, but upping the ante to $400 million to another capital plan investment scheme.
jsonline: A New York-based financial management firm invested only about half of the $16.6 million it got under a Wisconsin program designed to create jobs, taking advantage of loopholes in what some lawmakers now say was a poorly written, badly monitored law.
Rather than channel all of the $16.6 million into growing state companies, as lawmakers had intended, Wilshire Investors LLC invested just $8.6 million - plowing much of that money into companies that either failed or fed the growth of its own parent company, Newtek Business Services Inc., according to state records and federal securities filings.
That left about $8 million of taxpayers' money that Wilshire did not invest, the state records show. Wilshire's parent company isn't saying where the $8 million went. The company declined to answer reporters' questions, instead pointing to its financial statements and to state documents. "We're a public company," said Matthew Ash, Newtek's chief legal officer. "We've complied with the requirements of the law, and that's all we have to say."
Government handouts to business, wealthfare I like to call it, is part of the Republican Party's platform, so change isn't about to happen over a few wasted million.
The situation has come to light as lawmakers debate whether to launch a similar, much larger program as part of an effort to infuse more venture capital into Wisconsin companies with high growth potential. The previous program - which gave $50 million in all to certified capital companies, or CAPCOs, such as Wilshire - came under new scrutiny this year when Gov. Scott Walker pressed for legislation that would have devoted $400 million to a new venture capital plan, with half of the money to be managed by CAPCO.
In the earlier program, the $8.6 million Wilshire invested created just two surviving companies and 132 Wisconsin jobs, according to state records.
at just over 60K per job, this crushed the stimulus average.
ReplyDeleteI added to the story that all this started in 1997, and didn't have anything to do with the stimulus.
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