Wisconsin Just Gave Foxconn $2.85 Billion — and Protection From Its Court System — to Build a TV Factory

Wisconsin governor Scott Walker. Photo: Mark Reinstein/Getty Images

On Monday, Wisconsin governor Scott Walker signed a law that will transfer $2.85 billion from his state’s taxpayers to a Taiwanese tech company. The law also allows said company to forgo an assessment of how its plans will impact the state’s environment, and to flout laws meant to protect Wisconsin’s wetlands and waterways. Finally, the legislation stipulates that, should environmentalists, local businesses, or Wisconsin residents sue this company, for any reason, any trial-court rulings against it will be automatically suspended, until a higher court weighs in — should the higher court rule also against it, the company will be able to take its case to the state’s (conservative-dominated) Supreme Court in an expedited fashion.

In exchange for these privileges, the company — infamous Apple-supplier Foxconn — will build a flat-screen television factory in Wisconsin that will employ 3,000 people in the immediate term, and up to 13,000 in the long term. A recent study concluded that this amount of job creation would generate enough economic activity to offset $2.85 billion in subsidies in about 25 years — assuming that the next quarter-century produces no technological or economic changes that adversely impact Foxconn or its operations in Racine County, Wisconsin.

This plan to give a foreign company a sum of money more than three-and-a-half times larger than the state’s annual education budget — along with the power to destroy wetlands and strong-arm local residents in their own court system — has been celebrated by President Trump, House Speaker Paul Ryan (of Wisconsin), and the Wisconsin GOP as a triumph for “nationalist” economic populism.

But some nonpartisan legal experts aren’t so sure. Specifically, a memo from the Wisconsin Legislative Council — a nonpartisan entity that provides legal analysis for the state’s legislature — suggests that several provisions of the law may be unconstitutional. As the Milwaukee Journal Sentinel reports:

The law signed by Walker on Monday changes how environmental challenges and other potential legal cases over the factory would be handled, including automatically suspending any lower court orders until a higher court has weighed in.

The eight-page analysis highlights this provision among the areas of concern, saying the decision on whether to suspend rulings could be seen as a core power of the court system.

“A court could hold that the provision is unconstitutional if it finds that this provision violates the judiciary’s independence in the fulfillment of its constitutional responsibilities,” the memo reads.

… Spokesmen for both Walker and GOP Attorney General Brad Schimel said they had no concerns about whether the law is constitutional … Walker spokesman Tom Evenson said the provisions offer protections that the plant and state incentives will create the promised opportunities for workers. “We believe this is a constitutional measure which will provide prompt resolution of disputes and prevent frivolous lawsuits from stonewalling thousands of good-paying jobs,” Evenson said.

The memo avoids making any firm prediction of whether the courts will uphold the constitutionality of the law, but merely highlights plausibly unconstitutional provisions. This will provide the deal’s critics with potent new lines of legal attack — which could, in turn, further increase the cost of the Foxconn project to Wisconsin taxpayers, who will be forced to finance the Walker government’s legal defense.

Wisconsin Gave Foxconn Preferential Treatment in Its Courts