State Will Have To Pay Back Federal Government For Failed 2006 Business Grant

The state will have to repay the federal government $12.5 million for an economic development grant that was approved by Democratic gubernatorial candidate Mary Burke when she was secretary of commerce.

A recent TV ad launched by Gov. Scott Walker’s campaign focused on the 2006 grant, which was given to the Kenosha Area Business Alliance to purchase land to try to lure Abbott Laboratories to Wisconsin. Abbott never came.

As soon as Walker’s ad came out, he and Burke traded shots over whether the deal included a way for the state to get its money back if jobs never materialized.

Burke said it did: “We also put in provisions that if it didn’t move forward, that the taxpayers would be protected,” she said.

Walker said it did not: “If they’ve got it, they could provide it, because it’s not in the language we’ve found,” he said.

In fact, documents released by Walker’s Department of Administration show the Abbott deal did require partial repayment to the state by the Kenosha business group if promised jobs did not materialize in 10 years.

The provision, however, ended up being irrelevant because those documents also included a 2013 letter from the U.S. Housing and Urban Development agency telling the state it would have to refund the money to the federal government. HUD cited the lengthy time frame for the grant and the lack of a commitment from Abbott.

Asked about the letter, Walker campaign spokesman Tom Evenson said Burke was offering “sorry excuses for a deal that was bad from the start.”

Burke spokesman Joe Zepecki referenced letters from the governor’s own housing official supporting the deal. Said Zepecki: “Walker and his administration were either lying when they defended this deal to HUD or are lying now to attack Mary Burke.”