October 13, 2020 Ethics, Government, Press Releases

Watchdog Calls on Wisconsin Ethics Commission to Investigate Real Estate Tax Credits Granted to Senator Ron Johnson’s Children

FOR IMMEDIATE RELEASE: October 13, 2020

Contact: Michael Clauw, mclauw@campaignforaccountability.org, 202.780.5750

WASHINGTON, D.C. – On Monday, Campaign for Accountability (CfA), a nonprofit watchdog group focused on public accountability, sent a letter to the Wisconsin Ethics Commission requesting an investigation into whether the Wisconsin Economic Development Corporation (WEDC) and the Wisconsin State Historic Preservation Office (SHPO) violated Wisconsin law by giving preferential treatment to the adult children of Senator Ron Johnson (R-WI) in granting them nearly one million dollars in historic tax credits for a family real estate project.

Read the letter.

CfA Executive Director Michelle Kuppersmith said, “The public deserves to know more about why Senator Johnson’s children were allowed to circumvent processes set up for all citizens seeking historic tax credits. Officials not only let the senator’s children cut the line, they knowingly misrepresented the number of jobs the project would create, one of the factors upon which the grant of historic tax credits is predicated.”

In May 2017, Senator Johnson’s three children purchased the Eagles Club of Oshkosh, renamed it The Howard, and shortly thereafter planned to pursue historic tax credits to help subsidize planned renovations. However, just months after the purchase, Wisconsin Governor Scott Walker used a line item budget veto to strike “Wisconsin’s historic preservation tax credit program,” reducing “the per-project cap from $5 million to $500,000” for all project applications approved after July 1, 2018.

The normal process for applying for historic credits requires that applicants submit an application to Wisconsin’s SHPO, which decides whether or not to grant initial approval and pass along to the WEDC. Yet, in an apparent effort to circumvent the rules and speed through the application process, Senator Johnson’s daughter, Carey Sharpe, bypassed these procedures by submitting an application directly to WEDC Regional Manager Jon Bartz, who forwarded it to SHPO Senior Preservation Architect Mark Buechel. Buechel’s response to Bartz explained that it has always been established policy to reject any applications submitted in this manner, noting that he had “specifically told the ownership group they are to send it to the SHPO office and not directly to your office, apparently they did not follow those directions.” Yet, Buechel’s tone in a follow up email was markedly different, acknowledging that Sharpe is Senator Johnson’s daughter, and suggesting that “we should have some level of customer service if we can help them out.”

Additionally, claims made on the application by Sharpe that the project would result in “30 FTEs [full-time equivalents] and mainly part time employees” were, by her own admission, unsubstantiated. After reviewing the application, Bartz emailed Sharpe asking for an explanation of exactly how the project would result in “30 permanent jobs for the area.” Sharpe corrected the record by saying that the project would “certainly not” create 30 full-time jobs, and that she had “just guessed” the number of jobs the project would generate. Nevertheless, a formal Staff Review of the Historic Preservation Tax Credit considering the economic impact of the project stated it was expected to lead to 30 full-time jobs, which it referred to as one of the three “Strengths” of the proposed project.

Ultimately, WEDC awarded the project $944,703 in historic tax credits, less than five months before the reduced historic tax credits cap went into effect.

Ms. Kuppersmith continued, “Senator Johnson has vociferously opposed ‘special tax deals’ and insisted on investigating whether relatives of high-profile politicians inappropriately have received financial benefits. Therefore, we expect Sen. Johnson will support a Wisconsin Ethic Commissions investigation into this matter, and, agree that, if improper benefit is substantiated, the tax credits should be returned to Wisconsin taxpayers.”

Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.