WHEDA delays $1 million disbursement to contract winner - WQOW TV: Eau Claire, WI NEWS18 News, Weather, and Sports

WHEDA delays $1 million disbursement to contract winner


MADISON (WKOW) -- Wisconsin Housing and Economic Development Authority officials delayed disbursement of $1 million to a company selected in a state contract process, until the company can verify it followed federal, conflict-of-interest rules.

WHEDA spokesperson Kevin Fischer tells 27 News contract award winner Capital Midwest Fund II will have to show it adheres to U.S. Securities and Exchange Commission rules to protect against "pay-to-play."

As first reported by the Milwaukee Journal Sentinel, fund manager Stephen Einhorn won the contract one month after Einhorn and his wife, Nancy, contributed a total of $25,000 to Governor Walker's campaign to stop his recall. Walker appoints WHEDA's executive director and eight of its twelve member board.

SEC rules adopted in 2010 "prohibit an advisor from providing advisory services for compensation - either directly or through a pooled investment vehicle - for two years, if the adviser or certain of its executives or employees make a political contribution to an elected official who is in a position to influence the selection of the adviser."

Einhorn and three other investment fund managers were selected in December 2011 to handle federal money investments in promising companies in low-income communities in Wisconsin.

A spokesperson for Einhorn did not address his campaign contribution to Walker, but in a statement stressed Einhorn's company practices are designed to conform to SEC pay-to-play rules.

A spokesperson for Governor Walker told the Milwaukee Journal Sentinel politics played no role in WHEDA's selection of Einhorn's company. 

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