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Audit finds Scott Walker’s job creation agency repeatedly broke law

Thu, 02 May 2013 15:45:00 +0000

Gov. Scott Walker's job creation agency has been plagued by repeated law-breaking and mismanagement, according to an audit released by the state's non-partisan Legislative Audit Bureau.

In a report that was almost 100 pages, the Bureau sharply criticized the Wisconsin Economic Development Corp., created in 2011 by Walker and the state legislature, and called for much more oversight.

From the Associated Press:

The audit faulted WEDC for not having sufficient policies to administer its $520 million worth of grant, loan and tax credit programs effectively, including some policies required by law. It awarded $80 million in its first year.

The agency did not consistently follow the law or existing policies when making awards, and had no policies for determining how to handle delinquent loan amounts, the audit said.

It lacked invoices or other contractually required documentation showing authorized costs for seven of 29 grants reviewed, the audit said. Four contracts gave $906,000 total in tax credits for job creation and employee training that had already occurred, the audit said. Twelve of 14 recipients of grant and loan contracts worth at least $100,000 did not submit verified financial statements as required by law, the audit found.

"This audit dates back to 2011 and largely reflects information that WEDC has known for some time," a Walker spokesman said in a statement. "This new agency has taken proactive and positive measures to address its issues, and Governor Walker is confident in the direction of WEDC as an agency that aims to promote job creation and economic growth for Wisconsin."

Safety inspections in U.S. supply chains a “facade”

Tue, 23 Apr 2013 14:14:00 +0000

A new 60-page report from the AFL-CIO condemns corporate-funded auditing programs, which are intended to assess working conditions along the supply chains of major American companies. According to the scathing review, auditors enable corporations to run factories in places like Pakistan, Indonesia, China and Latin America with poor, unsafe working conditions, while paying low wages. The audits, says the report, are a "facade" that provide "public relations cover for producers whose disregard for health and safety has cost hundreds of lives."

Via the report, titled "Responsibility Outsourced":

The failure of governments to protect workers’ rights in the global economy has left a yawning gap of regulation and helped spawn an $80 billion industry in corporate social responsibility (CSR) and social auditing. yet the experience of the last two decades of “privatized regulation” of global supply chains has eerie parallels with the financial self-regulation that failed so spectacularly in 2007 and plunged the world into deep and lasting recession...

Many of the best-established CSR brands, such as the Fair Labor Association and Social Accountability International, are funded by big corporations and sometimes even by government subsidy. This report shows how the overwhelming influence of the company bottom line has dominated the agendas of the FLA, SAI and similar groups, while the workers who are supposed to benefit from CSR have been marginalized or altogether ignored.

The fact that a garment factory in Pakistan could get SAI certification based on some phone calls and some meetings outside Pakistan, and yet be so dangerous that a September 2012 fire killed nearly 300 workers, should have led to a complete overhaul of the CSR industry. But there is no sign the root and branch reform needed will actually happen. All the indications are that it is business as usual for CSR.

Taxpayers denied access to “return-free filing”

Mon, 15 Apr 2013 22:49:00 +0000

Last month, we detailed how Intuit, the maker of TurboTax, has fought a proposal that could make filing taxes easier and cheaper for millions of Americans.

As we noted, tax activist Grover Norquist and other conservatives have also opposed the proposal, called “return-free filing,” which would give many taxpayers the option to receive a pre-filled return that they could simply review, sign and send back, all for free. Return-free filing has been endorsed by many experts and adopted by several European countries.

As it turns out, Norquist has also recently weighed in on the side of the tax prep industry on another issue.

A House bill introduced earlier this year would bar the IRS from offering taxpayers software that would compete with programs like TurboTax. In March, Norquist and others wrote a letter to members of Congress that urged them to support the bill — what they called a “pro-taxpayer, anti-IRS power grab legislation.”

At issue is how Americans file their taxes and whether electronic filing can be offered directly through the IRS.

The bill is called the Free File Program Act, co-sponsored by Rep. Peter Roskam, R-Ill. and Rep. Ron Kind, D-Wisc. It declares that the IRS, with a few narrow exceptions, “may not establish, develop, sponsor, acquire, or make available” electronic filing service or tax software.

Roskam declined to comment. Spokespeople for Kind and Norquist did not immediately respond.

The bill would also make permanent the Free File program, a public-private partnership between the IRS and the tax software industry created in 2002 to offer some taxpayers free electronic filing.

The industry group behind the program boasts that almost all taxpayers can use software like TurboTax or more primitive electronic forms for free. But access to the more sophisticated software is limited by income. Only about 3.5 million taxpayers used Free File last year, according to a Treasury Department tally through the end of April.

The pact governing the partnership, which counts Intuit as a member, includes a sweet deal for the industry: In return for the companies offering free software to some, the IRS agreed not to develop its own free, online tax prep services. The current deal expires next year.

After ProPublica published a story on how Intuit, the maker of TurboTax, has successfully fought "return-free filing," we asked readers how they did their federal income taxes, and how much they paid to prepare them.

Of the 596 responses, 44% of readers said they used TurboTax, with a median preparation fee of $50. Only 2% of respondents said they used FreeFileFillableForms.com, the free e-file service provided by the IRS. According to the treasury, 410,000 filers used Free Fillable Forms last year.

Intuit lobbied on an earlier version of Roskam’s bill that was introduced in 2011.

The company has spent over $11.5 million on lobbying on a range of issues in the past five years. That money buys high-profile help: Intuit’s lobbyists on the tax prep issue include former Sen. Tim Hutchinson, a Republican from Arkansas; former Rep. Pete Hoekstra, a Republican from Michigan and former Rep. Albert Wynn, a Democrat from Maryland. All three now work for the D.C. office of law firm Dickstein Shapiro. Neither the former lawmakers nor the law firm immediately responded to requests for comment. Intuit also did not respond to requests for comment.

Intuit has given money to the sponsors of the bill. Roskam has received $12,500 from Intuit’s political action committee and company executives in the last two election cycles. Kind has gotten $12,400.

Sen. Mark Pryor, D-Ark., introduced a companion bill in the Senate. Pryor received $3,000 from Intuit’s PAC in the last election cycle.

Another recent bill would actually institute a version of return-free filing, allowing many taxpayers to avoid paying for any prep.

On Friday, Rep. Bill Foster, D-Ill., introduced the bill to create a voluntary system under which an IRS website would offer individual taxpayers forms that are automatically populated with data from employers and other sources.

“Our tax code is complicated enough, we shouldn’t be asking taxpayers to submit information the IRS already has,” Foster said in a press release.

“Taxpayers spend an estimated 6.1 billion hours a year complying with the tax code and an average of over $200 on tax preparation fees,” according to the release. (More on those figures can be found in a 2012 report by the Taxpayer Advocate Service, an independent organization within the IRS.)

The bill is called the Autofill Act, and last week marks the second time Foster has introduced the legislation. A spokeswoman said Foster got interested in the issue after he became frustrated with the “redundant paperwork” needed to file his own taxes and discovered California had a state version of return-free filing. She said he will now be working to collect cosponsors and the bill is likely to be referred to the Ways and Means Committee.

This doesn’t mean an anxiety-free tax season is coming soon: similar bills introduced in the past haven’t gone anywhere.

Apple audit finds child workers in China

Fri, 25 Jan 2013 17:13:00 +0000

Apple has vowed to route out children from its vast workforce after an audit in China revealed one of the company's component makers employed over 70 underage workers. The tech giant increased its audits by 72 percent in 2012 following numerous scandals emerging over working conditions in its Chinese factories, including a spate of suicides in manufacturer Foxconn factories in 2010.

"While child labor reflected a small percentage of the workforce, Apple is investigating its smaller suppliers – which typically supply parts to larger suppliers and hence face less scrutiny – to bring them into compliance," Reuters reported. Apple's senior vice-president of operations, Jeff Williams, said that the company was increasing efforts to look "deep in the supply chain" to check for child workers. "When we do find it, we ensure that the underage workers are taken care of, the suppliers are dealt with," he said.