The Recall Effort Gets The Attention, But Scott Walker May Be Facing A Criminal Investigation Too

Wisconsin Governor Scott Walker is in the middle of a contentious recall fight, which has made headlines around the country.

But one story that hasn’t gotten as much attention is the ongoing criminal investigation involving a number of Scott Walker’s former staff members. The investigation is centered on Scott Walker’s time as Milwaukee’s county executive. So far, a half dozen of Walker’s former staffers have been charged with various crimes related to the mishandling of funds.

Walker has mostly remained above the fray. But Friday, Walker announced that he’s started a legal defense fund.

A spokesman for Walker told the Milwaukee Journal Sentinel that the governor has been told “he is not a target of this investigation.”

But the paper’s watchdog columnist, Daniel Bice, reports that there are very clear restrictions on when elected officials are allowed to create legal defense funds.

From Bice’s column:

“The only way you can set that up is if you are under investigation or being prosecuted,” said Michael Maistelman, an election lawyer who is representing former Walker aide Tim Russell in the John Doe investigation. “One can only draw the conclusion that either one of those two things is happening.”

The prosecutor in the case is, not surprisingly, not commenting. But Bice says investigators have been looking into possible election law violations for 22 months. One former Walker staffer has already pleaded guilty. Another one was due in court today on embezzlement charges, but couldn’t make it because of an illness.

Walker is expected to meet with investigators later this month.

Midwest Memo: Right To Work Has Support In Ohio, Frontier Cuts In Milwaukee And An Industrial Giant Presses On

Right to Support A poll by Quinnipiac University finds strong support for creating a Right to Work law in Ohio.

Frontier cuts Frontier Airlines is cutting 450 jobs in the Milwaukee area. The Milwaukee Journal Sentinel reports just two years ago, the carrier promised to double its workforce in the city.

Demolition details Ohio is setting aside $75 million from its foreclosure settlement money to demolish abandoned homes. Meanwhile, the Detroit Free Press says the City of Detroit has $20 million in funds to demolish homes, but the money isn’t being used.

Research hub snubbed A planned nuclear research facility at Michigan State University may have to find a new source of funding. Partner station Michigan Radio reports the project is only getting half the funding officials expected from President Obama’s proposed budget.

A giant returns After a $100 million repair job, Alcoa’s 50,000 ton forging press in Cleveland is ready to get back to work, according to the Cleveland Plain Dealer.

Don’t look out the window, Mr. President President Obama will be in Milwaukee Wednesday for a speech at the Master Lock factory. But the Milwaukee Journal Sentinel says what the president will see just outside the busy factory is an “industrial graveyard.”

Midwest Memo: Groupon Gets Mixed Reviews, GM Stymies Saab, Harley-Davidson Begins Wisconsin Layoffs

Three stories making news across the Midwest today:

1. Groupon gets mixed reviews. Three investment banks that sold Groupon’s initial public offering in November have mixed views of the company’s stock. Credit Suisse analysts rated the stock “neutral” in research reports released today. Morgan Stanley advised its clients to wait to buy shares of the Chicago-based company until the stock price fell, according to our partner station, WBEZ. Only Goldman Sachs rated the stock a “buy.” Banks that lead an IPO traditionally  deliver favorable ratings. Shares were sold to the public at $20 each in the IPO, and traded at $22.20 this morning.

2. Saab files for bankruptcy. Concerned that its technology could land in the hands of Chinese competitors, General Motors blocked a sale of Saab, which subsequently filed for bankruptcy. Experts tell the Detroit Free Press that the 60-year-old company will likely be sold off in parts. Saab CEO Victor Muller purchased the company from GM in 2010 intent on restoring it. But GM still owned some technology licenses for the car, and feared that reorganizing the company through Chinese and Russian financing could mean the technology would be used by competitors. Saab filed the bankruptcy in southwestern Sweden.

3. Harley-Davison layoffs begin. Harley-Davidson Inc. has started sending layoff notices to hourly workers in its Milwaukee-area manufacturing facilities as part of its plan to reduce its headcount by 26 percent, according to the Chicago Tribune. The company plans to lay off approximately 250 of its 950 union workers, and then will hire 150 to 250 temporary employees to handle seasonal production increases. The company expects to save $50 million per year. The move comes as part of CEO Keith Wandell’s push to make the company and its workforce more flexible while courting a wider set of buyers.

Midwest Memo: Lansing-Area UAW Members Voting On Strike Authorization, Illinois Lawmakers Regroup, Milwaukee Businesses Sharing Office Space

Three stories making news across the Midwest today:

1. Lansing-area Local 602 could authorize strike. Members of UAW Local 602 are voting today and tomorrow on whether to authorize a strike. The union, which represents approximately 3,430 employees at the General Motors assembly plant in Delta Township, Michigan, has failed to reach an agreement on a local contract with plant management. According to the Lansing State Journal, a strike authorization gives union leaders the authority to call a strike, but does not necessarily mean one is imminent. Changing Gears profiled Local 602, one of the three locals that defeated the GM-UAW contract, in September.

2. Illinois lawmakers regroup. Lawmakers will give a second effort to keeping CME Group and Sears in Illinois. After rejecting two bills that would have provided the Chicago-based companies with $250 million in tax incentives last week, they announced the House would hold a special session Monday in hopes of trying again. House members have now raised the prospect of splitting the bill into several pieces of legislation and holding multiple votes, our partner station WBEZ reported. The two companies have threatened to relocate elsewhere in the Midwest if a deal isn’t done by the end of the year. Illinois Gov. Pat Quinn said Ohio offered Sears $400 million in incentives to relocate to Columbus.

3. Milwaukee capitalizes on workspace-sharing trend. A Milwaukee developer is bringing a  West Coast trend of small businesses sharing office space to the Midwest. Soon, William Waldren will open the Hudson Business Lounge, where 180 small-business owners have already signed up to share work space, according to the Milwaukee Journal Sentinel. “There’s definitely been a pickup in people wanting to do this,” said James Carlson, who runs Bucketworks, another Milwaukee-based shared workspace building. Hudson offers various levels, starting at $55 per month for part-time access to group work tables to a $795 per month package that includes private office space. Across the U.S., 450 to 500 co-working sites exist, according to the newspaper, but most cater to tech people. Walden wants to broaden the appeal to other businesses.

 

Midwest Memo: Chicago Mayor Unveils Microlending Plan, Auto Dealerships Renovate, Indiana Finds Extra $320 Million

Three stories making news across the Midwest today:

1. Chicago unveils microlending program. Chicago Mayor Rahm Emanuel unveiled a plan Tuesday to create a new organization that helps the city’s small businesses. The Chicago Microlending Institute would train potential lenders on advising and giving loans to people starting small businesses, and would be funded by a $1 million loan pool funded by the city. Our partner station WBEZ says the proposed institute would be run by ACCION Chicago, an area small business lender. Emanuel said small businesses sometimes struggle to get loans from traditional institutions. “That’s the hardest first step,” Emanuel tells WBEZ. “That’s the hardest loan. You don’t have a proven model. You don’t have a proven record.”

2. Auto dealerships undergo facelifts. Three auto dealerships in the Milwaukee area are joining a growing national trend of expanding or renovating their facilities. Jim Tolkan, president of the Automobile Dealers Association of Mega Milwaukee, tells the Milwaukee Journal Sentinel that auto manufacturers are requiring dealerships to remodel in order to meet “a look that is easily recognizable regardless of where you are in the country.” Others are unconvinced that dealers will recoup expensive outlays. “That is the unknown question,” Tolkan tells the newspaper. The National Automobile Dealers Association is expected to issue a report on the subject later this year.

3. Whoops! Indiana finds leftover $320 million. Indiana officials discovered Tuesday the state had $320 million more than anticipated in its main account. Gov. Mitch Daniels said the windfall came as a result of a multi-year programming error that was only recently caught by a stunned employee. Democrats aren’t necessarily buying the explanation after watching Republicans cut public education funding by $300 million at the end of 2009, according to the Indianapolis Star. “This wasn’t just an accounting error,” Senate Minority Leader Vi Simpson told the newspaper. “Children got hurt by this, families have suffered.”

Midwest Memo: Michigan Mining Company Lays Off 600, Chinese Students Wisconsin Bound, Iconic Cleveland Building Sold

Three stories making news across the Midwest today:

1. Mining company lays off 600 workers. A mining company in Michigan’s Upper Peninsula will temporarily shut down part of its operations and lay off approximately 600 employees. Cliffs Natural Resources, which operates the Empire Mine in Marquette County, said production is expected to drop from 4.6 million tons in 2011 to 2.7 million tons in 2012, according to the Marquette Mining Journal. The drop comes because steel producer ArcelorMittal will take a blast furnace down for maintenance in the second quarter. A company spokesperson said the layoffs will last “several months” until the furnace goes online again.

2. Historic Cleveland property has new owner. One of Cleveland’s historic downtown landmarks was purchased today by a Canadian hotel and resort company during a foreclosure auction. Skyline International Development Inc. was the sole bidder for the Arcade, and purchased it for $7.7 million – the minimum bid, according to The Plain Dealer. The current site was renovated a decade ago for $60 million, but went into foreclosure in April 2009 when its Chicago-based owner defaulted on a $33.3 million mortgage. An attorney for the new owners said this is Skyline’s first U.S. real estate holding, but did not comment on the firm’s plans for the Arcade. With the property selling for the minimum, its creditors, including Bank of America, the city of Cleveland and Cuyahoga County, will not recoup any of their investments.

3. Chinese students Milwaukee bound. Hundreds of Chinese students could attend the University of Wisconsin-Milwaukee in coming years thanks to a recruiting agreement the school’s chancellor signed today in Beijing. An agreement with a Chinese education network will boost the university’s international profile and help lure Chinese companies to Milwaukee, according to the Milwaukee Journal Sentinel. It would also boost the school’s out-of-state tuition coffers. China is the city’s third-largest trading partner, according to the newspaper. The agreement runs for five years. “You could think of myriad ways these students could connect to help Milwaukee employers in China,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

Midwest Memo: Detroit Mayor Dave Bing Defiant, Milwaukee Courts Chinese Investment, U.K. Investigates Groupon

Three stories making news across the Midwest today:

1. Bing defiant over looming Detroit takeover. A state takeover of Detroit and its ruinous financial situation has seemed imminent for weeks, if not months. On Thursday, Michigan Gov. Rick Snyder told Mayor Dave Bing he would initiate a 30-day review of the city’s finances, a precursor to the appointment of an emergency manager. Bing then gathered the city council and other leaders and declared his opposition. “We are Detroit,” he told the Detroit Free Press. “Detroit needs to be run by Detroiters.” Free Press columnist Rochelle Riley wonders whether the unified front is too little, too late. She asks, “Why does it always take a crisis?” before city leaders finally work together.

2. Milwaukee mayor China bound. Milwaukee Mayor Tom Barrett leaves Sunday for his second trade mission to China. He’ll spend a week visiting Beijing and the growing port of Ningbo, which already has an informal sister-city relationship with Milwaukee, according to the Milwaukee Journal Sentinel. Barrett tells the newspaper he’ll pitch the city’s strengths in manufacturing and industries related to water, food and beverages in hopes of luring more jobs and investment. He’ll also talk to Ningbo police commanders about purchasing Harley-Davidson motorcycles for officers. The Metropolitan Milwaukee Association of Commerce’s China Council will pay for the trip. In a related item, Chinese officials tell the Associated Press they want to convert some of the country’s U.S. government debt into investment in renovating American roads and subways.

3. U.K. investigates Groupon practices. Chicago-based Groupon Inc. is being investigated by Britain’s Office of Fair Trading over concerns about unfair promotions and exaggerated savings, Bloomberg reports today. The investigation commenced in July and expanded after receiving a complaint. “Given Groupon’s track record, we have serious concerns about its ability to adhere to the advertising code,” the U.K.’s Advertising Standards Authority said in a statement. In a written response, Groupon said it is “constantly evolving business process” and cooperating with the probe.

Midwest Memo: Michigan’s Unemployment Rate Drops, Indianapolis Plant Stops Using Coal, Hearing Held On Milwaukee Streetcar

Three stories making news across the Midwest today:

1. Michigan’s unemployment rate drops. Michigan’s unemployment rate fell a half-point to 10.6 percent in October from 11.1 percent in September, according to numbers released Wednesday from the Michigan Department of Technology, Management and Budget. It was the second straight month the state’s rate declined. The decline came “due primarily to a reduction in the number of unemployed individuals actively seeking employment,” Rick Waclawek, director of the Bureau of Labor Market Information & Strategic Initiatives, said in a statement. Nationally, unemployment claims fell to a seven-month low Wednesday, according to our partner station WBEZ. The four-week average fell to 396,750, the first time the average has been below 400,000 in seven months.

2. Indy Plant Eschews Coal For Natural Gas. A plant that generates steam for heating some of Indianapolis’ biggest downtown institutions will convert its coal-burning boilers to natural gas. Citizens Energy Group CEO Carey Lykins tells the Indianapolis Star the project will “mean cleaner air for downtown Indianapolis and provide significant savings for our customers compared to continued use of coal.” The conversion could be completed as early as 2014 and save the company $5 million in annual operating costs. The Perry K plant heats many downtown businesses and institutions, including Lucas Oil Stadium and the Indiana University-Purdue University Indianapolis campus.

3. Milwaukee Streetcar Support Swells. Supporters of a Milwaukee Streetcar project outnumbered its detractors by a 2-to-1 margin at a public hearing held Wednesday night on the planned streetcar line’s environmental impact. Supporters said the streetcar project will improve city transportation and stimulate economic development along the line. Opponents believe the cost is one the city cannot afford. City alderman have already voted to approve the project and move ahead with engineering, according to the Milwaukee Journal Sentinel, but have withheld final approval “until more details are fleshed out.”

Midwest Memo: UAW Ratifies Ford Contract, Great Lakes Shipping Report, Milwaukee Unveils Lakefront Proposal

Three stories making news across the Midwest today:

1. Ford deal official. In a final tally, the United Auto Workers announced today that 63 percent of production workers and 65 percent of skilled-trade workers voted in favor of ratifying a four-year contract with Ford. “I believe UAW Ford workers understood the importance of each and every vote,” UAW Vice President Jimmy Settles said in a written statement. Earlier this month, UAW workers approved a new contract with General Motors by similar margins. Chrysler is the only Big Three automaker without a new contract, although voting began Tuesday on a tentative agreement.

2. Great Lakes crucial to economy. Cargo shipping throughout the Great Lakes supports 227,000 jobs and channels billions into the U.S. and Canadian economies, according to a report released Tuesday. “This report bears out what we’ve long known – that the Great Lakes-St. Lawrence Seaway is crucial to the U.S. economy,” U.S. Transportation Secretary Ray LaHood told WBEZ, our partner station. In July, Changing Gears reporter Kate Davidson examined the economic impact of Great Lakes shipping – and found a dredging backlog threatened to cripple the regional shipping industry.

3. Milwaukee lakefront plan unveiled. An “ambitious” plan to redevelop Milwaukee’s lakefront was unveiled Tuesday at a public hearing,calling for better pedestrian access to waterfront attractions and room for several blocks of development. The plan, submitted by Milwaukee County’s Long-Range Lakefront Planning Committee, endorsed tearing down freeway ramps, terracing O’Donnell Park and bulldozing the Downtown Transit Center, according to the Milwaukee Journal Sentinel. “Let’s take downtown and take it to the lake and vice versa,” Parks Director Sue Black said of the pedestrian portion of the plan.

‘Occupy’ Protests Gain Traction Throughout Midwest

Four weeks ago, a small group of demonstrators began protesting the grim state of the U.S. economy in New York City with little fanfare.

Now, a growing movement based on the Occupy Wall Street protests has spread throughout the country, including demonstrations in several Midwest cities.

Separate groups protesting the role of big banks in the U.S. foreclosure crisis marched Monday and Tuesday through Chicago, meeting at the Art Institute of Chicago, where the Mortgage Bankers Association was holding its annual conference.

“People are mad as hell at these financial organizations that wrecked the economy, that caused this whole mess,” Catherine Murrell, a spokeswoman for Stand Up Chicago, a coalition of approximately 20 Chicago community organizations, told the Chicago Sun-Times. “They broke the economy. They played with it like it was a toy.”

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