Fiscal conservative Scott Walker’s bona fides in economics on display.

State job-creation agency never assigned staff to monitor loan repayments

For more than a year, the state’s flagship jobs agency lost track of millions of dollars in past due loans for a simple reason: The new agency never designated staff or created a department to keep tabs on repayment of its portfolio of hundreds of taxpayer-funded loans totaling $69 million.

After that disclosure, Gov. Scott Walker quickly announced that a senior executive at the Wisconsin Economic Development Corp. had resigned Friday. He also named a new interim leader of the troubled agency, where staff are now scrambling to ensure repayment of nearly $9 million in outstanding loans, including $4 million to the company of a politically well-connected timber and paper investor.

Walker said Reed Hall, the longtime executive director and general counsel of the Marshfield Clinic, one of the largest private medical clinics in the country, would serve for two to three months as WEDC’s chief executive officer while a permanent replacement is hired.

Ryan Murray, the new chief operating officer of WEDC, Friday disclosed the lack of a loan collections department at a meeting of the quasi-public agency’s board, saying that from June 2011 until last week senior staff “had no idea” what the status was of the taxpayer-funded loans.

“You’ve hit on exactly the crux of the problem for the last year and a half,” Murray said in response to a board member’s question about the overlooked repayment unit. “When we created the WEDC from the Department of Commerce, it was a function that was simply not transferred over.”