In July of 2004, Sprawl-Busters reported that Wisconsin’s Attorney General Peg Lautenschlager had filed a complaint in Dodge County Circuit Court against a private development company, the Beaver Dam Area Development Corporation, which had been considering a huge, Wal-Mart distribution center for Beaver Dam, Wisconsin. The AG charged that this “quasi-governmental corporation” violated the state’s open meetings and records laws. The AG was responding to a complaint filed by Ed Garvey, an attorney in Madison, on behalf of a citizen’s group in Beaver Dam that opposes the distribution facility. The Wal-Mart proposal is for a 1.2 million-square-foot distribution center on 400 acres north of the city. Wal-Mart was given $6.18 million in corporate welfare to build their facility, as arranged by the development group. The incentive deal was worked out by the development board, which includes the Mayor of the city, and the City Council — all in sessions that were closed to the public. The public did not learn about the Wal-Mart welfare deal until five months after it was concluded in private. When the citizen’s group learned of the deal, they filed an open records lawsuit against the city and the development group. In June, the citizens won their case, and the development group turned over about 1,000 pages of documents. But work on the distribution center continued, and construction is now underway. A second lawsuit was filed against the city, to try and block the land annexation that must first take place in order for the distribution center to be constructed. The Milwaukee Journal Sentinel reports this week that a judge rejected Attorney General Peg Lautenschlager’s argument that the Beaver Dam Area Development Corp., which coordinates the city’s economic growth, is a quasi governmental body subject to the freedom of information laws. But now the state’s Department of Justice is appealing the judge’s ruling. “Hopefully, the appeal will give us some binding case law” to help regulate such economic development groups, a spokesman for the Justice Department said. Local economic development groups in Wisconsin often negotiate agreements with developers without taxpayers’ involvement. In Beaver Dam, a secret memorandum of agreement with Wal-Mart was not revealed until it was approved without discussion by the city’s Common Council. The Beaver Dam Area Development Corp. held secret negotiations with Wal-Mart and city officials for nearly a year. The citizens group filed an open records lawsuit against the city and
the development group, and won in 2004. But Wal-Mart continued building. The Wisconsin Freedom of Information Council says that allowing these public development groups that use public funds to operate in secret gives developers preferential treatment
over the rights of the public to know about what deals the government is making with public dollars. “At some point, public officials ought to focus beyond what they can get away with and focus on what’s right,” the group said. The Circuit Judge in Marquette County ruled that the development group operates independently from the city.
Public welfare for Wal-Mart in this deal ended up being around $4.8 million. Wal-Mart is using this welfare to build its distribution center, which will supply Wal-Mart stores in Wisconsin and surrounding states, which stores,in turn, will compete with local merchants who got no subsidy for their distribution system. In this way, public funds are being used to tilt the competitive marketplace against the smaller players. Wal-Mart had more than $10 billion in profits last year, yet continues to convince local officials, and these development groups, that they cannot build their own distribution centers without significant corporate welfare. Public taxes are used to prop up the profits of Wal-Mart. For earlier stories on this topic, search by “corporate welfare.” Even if the AG wins her lawsuit, the Wal-Mart distribution center will be up and running.