Republicans: Evers’ $172M COVID fund opens complex legal gray area

(The Center Square) – A hearing over interest earned on COVID-19 federal relief money left lawmakers thinking three things could happen – a veto, a court fight with Wisconsin Gov. Tony Evers or an impeachment trial.

A bill alleging Wisconsin Gov. Tony Evers has illegally kept $172 million in interest earned from unspent COVID relief funds recently had its first hearing.

Senate Bill 280, co-authored by Sen. Eric Wimberger, R-Oconto, and Rep. Robert Wittke, R-Caledonia, says the money must be deposited into Wisconsin’s general fund, citing state law.

“[Wisconsin Statute] 20.906 indicates that in that circumstance, when there’s revenue being generated of any kind, that it ought to be deposited into the treasury,” Wimberger testified. “That money has not been deposited into the treasury.”

The accrued interest was first discovered at $68 million in a 2023 audit by the Legislative Audit Bureau.

An updated number from the bureau, reported to the co-chairs of the Joint Legislative Audit Committee, indicates the funds have accrued almost $172 million in interest and the DOA still holds the interest earnings.

“This bill might seem redundant in that it’s telling the governor to obey the state law, but apparently that’s needed,” Wimberger said. “We need to tell the governor to obey state law.”

However, both Republican and Democratic legislators acknowledged the bill opens a complex, unprecedented legal gray area, raising numerous legal questions about whether the interest is a federal or state fund.

Although Wimberger claimed the DOA mistakenly classified the interest earnings as federal funds, Sen. Mark Spreitzer, D-Beloit, argued the DOA may have indeed viewed it that way and may not have thought that state law applied.

“Essentially, my understanding of DOA’s legal argument is that in a more typical circumstance where we get funds from the federal government, we wouldn’t be depositing that interest in the general fund but we would generally be required to give it back to the federal government,” Spreitzer said.

“But, in this case for this particular COVID relief program, the federal government said you may keep that interest, and therefore, they are viewing that as additional federal money given to the state…that the administration believes they can use in the same way as the principal fund,” Spreitzer said.

Spreitzer said he could not speak directly on behalf of the DOA, as no spokesperson from the DOA had come to testify at the hearing.

Wimberger responded to Spreitzer, stating the DOA never considered the interest earnings to be federal funds in the first place because it did not follow federal law of designating and returning the money by certain due dates.

“That money was never designated by Dec. 31 or returned by March 31, so you can conclude that it’s not actually federal money,” Wimberger said. “That $170 million is sitting there without any designation or purpose. They have no possession or authority over it, so by their deeds of not designating the money and not returning it because it’s not been designated, you can logically conclude DOA doesn’t even believe they’re federal funds.”

Wimberger argued the problem is that Wisconsin and the federal government are operating under two separate legal systems when it comes to the interest earnings.

“The federal government is treating them as state funds, but the state of Wisconsin is currently treating them as federal funds,” Wimberger said. “Therefore the federal government is coming for them, and the state government isn’t abiding by state law. So we have the two different systems applying two different sets of law.”

Wimberger said the DOA’s decision to ignore the Dec. 31 and March 31 deadlines implies motive to use the funds however they wish.

Spreitzer said Evers will simply veto the bill anyways and spend the funds as he chooses until someone sues to settle the matter in court, concluding that the issue will inevitably need to be resolved through court, not legislation.

Wittke and Wimberger later affirmed litigation could be a future option, but also hinted at an impeachment effort.

Sen. Julian Bradley, R-New Berlin, criticized the DOA for not coming to testify.

“I asked the chairman if anybody from DOA was here because this directly impacts them,” Bradley said. “I thought it would be nice to hear from them so they could defend their position and answer some questions as to why they should control the purse strings instead of the legislature.”

Neither the governor’s office nor the office of the DOA secretary responded for comment on this story at the time of publication.