ICYMI: Wisconsin Examiner: How government aid helped Ron Johnson
“That history has drawn new scrutiny in light of his reasons for voting against signature bills addressing COVID-19 relief, infrastructure development and repair, the microchip industry, health care costs and climate change”
MADISON, Wis. — A new report details how Ron Johnson has been more than happy to use government funds to bolster his personal business and wealth, but has repeatedly voted against legislation that would invest in and support Wisconsin businesses, farmers, and working people.
Wisconsin Examiner: How government aid helped Ron Johnson
Key Points:
- In his two terms in office, Sen. Ron Johnson (R-Wis.) has run hard against government spending. Since his first Senate campaign in 2010, the Oshkosh Republican has described himself as an outsider and business creator who has succeeded without government help.
- Yet in the 1980s, the company that Johnson was running at the time expanded by raising money under a government-sponsored financing program instead of conventional corporate bonds — a program made possible by the federal government as well as the city of Oshkosh that saved the company hundreds of thousands of dollars in interest payments.
- The company also benefited from a direct federal grant from the city of Oshkosh to build a rail spur to serve the new factory it built in the city.
- Johnson’s use of the federal programs for the company he led, Pacur, has been previously reported. But that history has drawn new scrutiny in light of his reasons for voting against signature bills addressing COVID-19 relief, infrastructure development and repair, the microchip industry, health care costs and climate change. Johnson criticized all of them for spending too much money.
- This past spring, Johnson’s vote against replenishing a federal bill that offered the restaurant industry support to overcome losses from the COVID-19 pandemic was one of only eight that kept the legislation from passing the Senate.
- In his first campaign and afterward, Johnson has leaned heavily on his role at Pacur as a core credential, claiming that as the company grew during his tenure as CEO over the previous three decades, it did so without government involvement.
- But from that first race, critics have said that Johnson’s account glosses over the company’s use of financing under a program authorized both by the federal government and the city of Oshkosh for business development.
- In three separate transactions from 1979 through 1985, Pacur or its predecessor company raised a total of $5 million for expansions by selling industrial development revenue bonds.
- Industrial revenue bonds — IRBs for short — are a sort of hybrid between government bonds and the commercial bonds that companies issue to borrow money from investors for capital projects.
- Pacur was originally founded as Wisconsin Industrial Shipping Supply in 1977. In 1979, Oshkosh authorized a $1 million IRB for the company to finance its new buildings in the city. After the company was renamed Pacur, Oshkosh authorized two more IRBs to finance additional expansions: $1.5 million in 1983, and $2.5 million in 1985.
- For Pacur, however, opting for IRBs each time saved the company substantially. “IRBs would be let at about 25% less,” LeRoy says. “That’s a huge difference in your cost of money.”
- The Johnson campaign did not respond to inquiries from the Wisconsin Examiner seeking comment.
- The tax-free bonds cut the federal government out of the tax revenue that conventional corporate bonds produce. “It was basically like a backdoor raid on the federal treasury that state and local governments cooked up,” LeRoy says.
- In addition to the government benefit that Pacur received by taking part in the three industrial bond issues, the company got an even more direct benefit when it built its plastics plant in Oshkosh in 1979: a $75,000 federal grant from the city that paid for a new rail spur to the site where the company built its new factory.
- Johnson cast votes against all four of the major pieces of legislation to pass the Congress in the last two years:
- The American Rescue Plan Act (ARPA), the COVID-19 relief bill enacted in the first two months after Joe Biden took office as president.
- The follow-up Bipartisan Infrastructure Law.
- This summer’s bipartisan CHIPS Act to boost the domestic microprocessor industry.
- The recently enacted climate, health care and tax law that passed with only Democratic votes in August.
- After Democrats in Congress passed and President Joe Biden signed the latter bill, the Inflation Reduction Act, Johnson called them “as detached from economic reality as they are from the truth.”
- The legislation, now law, includes provisions to address climate change, lower the cost of prescription drugs and extend subsidies to make health insurance more affordable.
- Sen. Ron Johnson’s crusade against federal spending previously led him to vote against the 2018 federal farm bill, despite heavy lobbying from agriculture interests in Wisconsin. The Wisconsin Farm Bureau Federation applauded the bipartisan legislation for bolstering crop insurance and conservation programs and supporting export programs, agricultural research and rural development.
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