Wisconsin Governor-Elect Scott Walker, elected with the ardent support of Wisconsin’s CEOs and Tea Partiers, incessantly claims that he is “on the side of taxpayers.”
Yet one of the first moves he is planning would deprive taxpayers of key information about the Commerce Department’s use of tax dollars from taxpayer oversight. Walker is citing the model of Indiana and its “public-private partnership.”
But the Indiana Economic Development Corporation’s conduct in a 2008 tax-subsidy deal for a Honda plant in Greensburg, Ind., illustrates the dangers of handing tax dollars to an unaccountable corporate-style entity (outlined here and here.) Indiana taxpayers contributed $141 million in subsidies (at both local and state levels) to Honda, yet workers from only a small almost all-white region of the state — described by one expert as “anti-union and pro-Klan” — could apply for jobs at a new Honda plant.
Either unaware or unfazed by the potential troubles a corporate-run state agency could produce, Walker and his staff argue that Wisconsin needs a more “aggressive” approach in recruiting businesses to locate jobs in Wisconsin. A “public-private partnership” exempting the entity from some state laws would allow it to be “more nimble” in recruiting.
Walker gushes with enthusiasm for this strategy:
For us, we’re very interested in looking at a public-private partnership that still has the state having a direct role, supportive role, in promoting economic development, but not necessarily doing that all through a state agency.
Under Walker’s “Be Bold” plan, through which he has promised to create 250,000 jobs, the state’s Department of Commerce would become a public-private” entity much like the one created in Indiana in 2005 by Indiana Gov. Mitch Daniels. (However, Walker’s rejection of $810 million in federal high-speed rail funds already has put him deep in the hole, costing thousands of jobs betore he is even sworn in on January 3.)
The Indiana Economic Development Corporation is run by a board composed mostly of corporate executives. It does not have to abide by state open-records laws.
FAVORS ONE REGION, WHITES, NON-UNION BACKGROUND
But there is a stiff price to the “boldness”: The Indiana EDC illustrates how an entity freed from accountability to the taxpayer can favor one region of the state at the expense of the rest and serve as an instrument of a corporation intenting to effectively exclude almost all African-Americans and Latinos from working at Honda.
Mitch Roob, Indiana commerce secretary and the chief executive officer of the Indiana Economic Development Corp defends the partially-private nature of the IEDC as more flexible than a purely government agency. He claimed to the Milwaukee Journal Sentinel that
his agency is subject to the open records law with some exceptions. Although the body releases overall figures on the jobs created with its tax incentives, it doesn’t release information on the results of those given to individual companies, Roob said…
He said providing that information would give away too much information about companies to their competitors.
However, this rationale is rather implausible. Corporations like Honda commonly make public how many workers they intend to hire and how many units they intend to produce annually, so competitors are aware of such basic information.
The real object of the IEDC practice would appear to be keeping crucial information about hiring away from the public, including legislators, especially in the case of a firm with Honda’s appalling record on hiring minorities.
HONDA HAMMERED FOR ‘HIRING RADIUS’
In 1988, the Reagan administration’s Equal Employment Opportunity Commission, not known for aggressive enforcement of civil rights, made headlines by negotiating a settlement under which Honda had to pay a total of $6 million in back pay to 370 African-American and female job applicants for Honda jobs in Ohio.
Just as in present-day Indiana, the central issue was a hiring radius that included rural, nearly all-white areas but avoided the city of Columbus. In Indiana, Honda’s “hiring radius” plan restricted jobs at the Greensburg plant to those residing in 20 of Indiana’s 79 counties.
Of those 20 counties, 19 are a combined 96 percent white. The 20th – which includes Indianapolis – is 24 percent African-American.
Critics see the state subsidizing a segregated workforce, permitting Honda to use the “hiring radius” policy as a thin pretext for eliminating blacks and union sympathizers from the pool of applicants. “This hiring radius is the worst form of discrimination,” thunders State Representative Dennis Tyler. His home city of Muncie has lost thousands of manufacturing jobs, many of them once held by African-American workers.
This pattern of recruiting an almost all-white workforces is pervasive and particularly evident in Indiana, says retired University of Indiana labor studies professor Ruth Needleman. “The fact is that African-Americans do not live in rural Indiana, but the Klan does. So in general when they go to such locations to avoid people with union experience, they are avoiding blacks.”
“The data on unions is generally that blacks are more likely to join a union if they are able, and so blacks, Latinos and women are less antiunion than rural white workers,” she says.
NO INFO FROM IEDC OR HONDA – EVEN TO LEGISLATORS
The Indiana Economic Development Commission declined to provide me any figures on the hiring completed at the Honda plant in Greensburg. A Honda spokesperson told me only, “I will not be able to elaborate further for you.”
Legislators elected by the state’s taxpayers have also been unable to obtain any figures on the results of $50 million in state funding, Rep. Tyler said.
If Wisconsin legislators were truly “on the side of taxpayers” and Wisconsin’s tradition of open government, Walker’s proposal would be quickly trashed. But with his disciplined crew of fellow Republicans holding a 19 – 14 edge in the State Senate and 59 – 41 in the Assembly, there’s a good chance that corporate power will once again trounce the rights of taxpayers to know how their money is being used.