Sunday, February 12, 2012

News From Sconnie Nation

Behold, the glories of the Scott Walker administration:
A state-subsidized investment program yielded huge returns for three out-of-state financial firms and their partners while netting just 202 new jobs for Wisconsin, at a cost of more than $247,000 per job, a Journal Sentinel analysis has found.

The investment firms, called CAPCOs, were far more successful at making money for their owners and partners than they were at launching start-ups and creating jobs. They paid millions to cover their owners' taxes on profits. They didn't share any of those investment profits with the state. And they didn't have to, because the program was poorly drafted and had minimal state oversight, the Journal Sentinel found.

Despite the program's poor performance, state elected officials have been lobbied to revive CAPCO investing on a much larger scale. The firms spent $250,000 last year lobbying in Madison - and a group of Assembly Republicans, with support from Speaker Jeff Fitzgerald (R-Horicon), has been reluctant to leave them out of a proposed state program to fund new companies.

In the last week, as the Journal Sentinel was preparing its story, the CAPCOs, or certified capital companies, officially withdrew from lobbying.

Long before that point , legislation to subsidize venture capital investing had stalled. The last plan from the Assembly lawmakers proposed tripling the amount of state money the CAPCOs manage, from $50 million in the original program to $150 million.

To make their case for expanding the investment in CAPCOs, the firms and their supporters touted the success of the earlier effort, which ran from 1999 through 2008, based on a calculation by the state that it created 944 new jobs.

But the newspaper could identify just 710 new jobs - about 25% fewer than the state number, which was based on reports from the investment firms.

And while the estimate gave CAPCOs credit for all employees of companies they invested in, they provided 12.6% of the funding for the job-creating businesses, which raised the vast majority of their funding from private investors.

If each firm were given credit for new jobs according to its share of investment in the companies, as the newspaper did in its analysis, the number of jobs created by the state's $50 million investment drops to 202. That's a cost of $247,525 per job - more than 12 times the $20,000 per job the National Venture Capital Association says venture firms spent in Wisconsin from 1970 to 2010.


Copia Technology Services LLC received $2.5 million in CAPCO money, and its state filings show it never produced a single job. Wilshire, the CAPCO that invested in the company, listed it as "not currently active" in a report filed in January 2006 with state commerce officials.

Copia was described by state regulators in an earlier report as a "franchisor of Coldwell Banker brand."

At Coldwell Banker's headquarters in New Jersey, officials searched for days for information on the company at the request of the Journal Sentinel, finally sending this statement: "We have no records of Copia Technology Services being licensed to use (or sublicense) the Coldwell Banker name or trademarks."

In 2002, Copia merged with CB Real Net, which was 49% owned by a Barbados firm called Triomphe Partners and 51% owned by an El Paso, Texas, company called Smj-V Interest Inc., state records show. The merged company kept Copia's name, Wilshire told state regulators .

A second company, Global Business Advisers of Wisconsin, LLC, received $2.2 million and shut down without producing a single job.

Ash, who represents Wilshire, declined to discuss Copia or Global Business Advisers.

"I have no current knowledge of that," Ash said. "The public filings speak for themselves."

The state documents listed David Beck, a former Wisconsin banker, under its information about Copia. Reached in Colorado where he now lives, Beck would not explain his role with Copia or why Coldwell Banker could find no record of the company.

"Nope," Beck said. "I really don't have any comment."
Also, State Spend Millions For 202 New Jobs (JSonline)
Sauk County farmer Vernon Hershberger is back in court Monday, accused of crimes stemming from the sale of raw milk and other unpasteurized dairy products that people are clamoring to get.

He has become the poster child for a controversy that's pitted farmers against state government and has boiled over to other states where raw milk sales are illegal or restricted.

The Wisconsin Department of Agriculture, Trade and Consumer Protection has been trying to stop Hershberger from selling unpasteurized dairy products at his 40-cow farm, but the Loganville farmer has continued to operate his business.

Department of Justice officials have charged him with misdemeanors including operating a dairy farm without a license and running an on-farm retail store without a license.

Hershberger argues that no license exists that would allow him to sell raw milk, and that's why he doesn't have one. Monday, he will be in Sauk County Circuit Court for a pretrial hearing and for what he believes is a fight to save his livelihood and consumers' rights.

"We are pretty worried about it," Hershberger said. "I just think it's real important that local people stand up and tell the government to back off."

State and federal officials say raw milk is unsafe because of the pathogens it may carry from the farm. Some of those bugs include campylobacter, salmonella, listeria, E. coli and others that can sicken or kill.

Pasteurization uses high temperatures to kill pathogens. The government points out that before pasteurization became standard practice, raw milk killed many people.

"Our laws and regulations are designed to avoid that risk," said Steve Ingham, administrator for the agriculture department's food safety division.

Advocates for raw milk say it contains nutrients, enzymes and bacteria that are good for you.

"Things have to be worked out so that people can have a choice of what they want to eat," Hershberger said. "By all these crackdowns the government is having, the choice is being taken away.
State Taking Farmer To Court Over Raw Milk Sales (JSOnline)

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