(Scott Walker's WEDC) Agency gave loan to entrepreneur in case with 'earmarks of fraud'
http://www.jsonline.com/news/statepolitics/agency-gave-loan-to-entrepreneur-in-case-with-earmarks-of-fraud-b99542807z1-318218021.html
Madison— The state's jobs agency gave a Wisconsin businessman a $1 million loan from taxpayers in December 2012, nine months after a federal judge wrote in a public order that other deals involving the entrepreneur had "all the earmarks of fraud."
The Wisconsin Economic Development Corp. knew about the federal lawsuit and the fact that businessman Tim Flaherty had been added to it as a defendant months before the agency made its loan. Now that loan to Flaherty and his Oconto County business, North American Finishing LLC, has gone sour, and WEDC had to file its own suit in state court in April to seek the return of the money.
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"We have undocumented and unexplained loans for large sums among parties at less than arms' length; consulting fees or commissions whose character differs based upon who is testifying; mysterious, unusually large payments for 'office space' in a personal residence in a remote location; family trusts; (and) sales of notes at markedly less than face value with no documentation," Griesbach wrote in the order.
WEDC has faced frequent questions about its practices since its creation by Republican Gov. Scott Walker and lawmakers in July 2011. Walker recently signed legislation ending his four-year tenure as WEDC's chairman, a move that may end up distancing Walker from the agency as he pursues a presidential run.