Hefty Kuglitsch Emails 1

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Spencer, MattFrom: thomasrhe~Sent: Sunday, May 15, 2011 10:20 PMTo: Rep.Kapenga; Rep.KuglitsctlSubject: Statement on AB 129 and SB 94Attachments: Statement on AS 129 and SB 94 Thomas R. Hefty May 16th.pdfGreetings, ! regret that I will be unable to attend tomorrow's hearin!Jon AS 129 and SS 94. Attached ismy statement in opposition to the bill. As Waukesha County Republicans, I hope that you will recognizethat this bill is contrary to free market principles. It will also disadvantage Wisconsin based insurers,including United Heartland headquartered in New Berlin.And on a very practical level, independent studies have shown the CAPCO incentives to be ineffective atjob creation. Both Iowa and Minnesota have rejected similar proposals.! hope that the committee chairs will distribute copies of my statement to the fuil Assembly and Senatecommittees.Thank you for your attention to this matter. Please feel free to contact me a

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Spencer, MattFrom: thomasrheftySent: Tuesday, May 17, 2011 3:33 PMTo: alii" 11~3.0 II\>'" aJliii)1s~Cc: Rep.Kugiitsch; Rep.Kapenga; Sen.ZippererSubject: CAPCO legislation pending in the state legislatureAttachments: Statement on AB 129 and S6 94 Thomas R. Hefty May 16thpdfGreetings from California. Attached is a statement which I submitted yesterday to the joint Assembly andSenate hearings on the CAPCO legislation. Senator l.azich has withdrawn her support from the bill.The proposed $200 million tax cut is the largest single Wisconsin corporate tax cut in history. Yet it hasreceived little attention and no debate inWaukesha County. The $200 million CAPCO cut compares to atotal cost of $142 million in the January-February special session on jobs.A t least one Waukesha County insurer is disadvantaged by tile bill, United Heartland in New Berlin. Theproposed tax cut goes only to life insurers and toQ1lt-of-statecompanies. These companies wouldreceive an 80% tax credit on their investments. This compares to only a 25% credit given to individualentrepreneurs and angel investors, people who invest in the very same companies as the favoredcorporate investors.Similar legislation has been rejected in Iowa and Minnesota. I hope that the Waukesha County groupscan consider this legislation at an upcoming meeting.Thank you. Tom Hefty

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Spencer, Matt ~_ ... _ .. .__ ._~ ... _. ._-4 .._- .'--.--.-.- .. - . . . . . -.- .. . - .. -..--.~ . . ._ ---- - - - - ...- - - - .- -----~-----~---------

From: Kuglitsch, MikeSent: Thursday, May 19, 2011 2:36 PMTo: 'thomasrheftySubject: RE: CAPCO ScamMr. Hefty'Thank you for input regarding AB-129 the "Wisconsin Jobs Act" and Iwould like to commen ~ you for allyour work on the "Be Bold Wisconsin" study. Iagree with. your recor:nmendatlons In the stud y thatWisconsin is grossly lacking in Venture Capital to invest In WisconSin companies, which lea -cis me toquestion your dismay on this bill.This bil l complements the existing Act 255 Angel inves,~ing program to.develop a cO~lprehet"') sive threepronged approach that addresses the "Valley of Death found In the Financinq Continuum.I authored an amendment to open the Tax Credits to all Insurance compa~ies that ~a!PrelrJium andFranchise taxes. I assume that would allow United Heartland the opportunity to participate l"f they choose.Please let me know your thoughts.Sincerely,Mike Kuglitsch~----'-'-'---'-'-'---"-"--"---------'-'--'-------~ . .---~-.--.------ ..-- - - - - - ..- - - - - - . - - -- - - -- - .. - --From: thornasrheftySent: Tuesday, May 17/2011 3:13 PMTo: Rep.KuglitschCc:lit!k : 2 lUg j I .*1Subject: CAPea ScamGreetings, Thank you for taking the time to research the CAPCO .issue. You are probably ~war8 thatSenator Lazich has withdrawn here support from the CAPCO portion of the legislation. She has alsoasked that her name be dropped as a sponsor of the bill.I would appreciate a response regarding the impact on the one insurance company headqu;artered in yourdistrict---United Heartland in New Berlin.This isthe largest corporate tax cut in Wisconsin history. but it does not include any compafl'l in yourdistrict. In fact, it places United Heartland at a competitive tax disadvantage. lt is puzzling to see aWaukesha County Republican supporting a tax cut for out of state companies--but not a sin-tilar cut forWisconsin companies.I noted that you are speaking next week at a forum on venture capital. Iw ill be back in WiSConsin and Iwill be interested to hear your opinions. Why do you differ from Senator l.azicn on this tax Cut? And whyou do.support a bill which disadvantages a company is your district. Who in your district SUpports this ylegislation?If you research the CAPCO legislation in Iowa, you will discover that the Iowa governor vetOed theCAPCO bill. The rationale for the veto was two fold. First, the CAPCO tax subsidy was too large lthproven cost effective impact on job creation. Second, the CAPCO proponents had misrepresen'e;~h nobill to the Iowa legislature. That same misrepresentati~n has gone on in Wisconsin. Sadly, som'e 900~Republicans have been taken In by the misrepresentations.I do not liv~ in your district, but! have been active in Waukesha County economic development. I seas the chair of the Waukesha County Economlc Development Corporation and as the interill] count rvedexecutive of Waukesha county. I served as CEO of Blue Cross for seventeen years and we found YdUnited Heartland in 1990. e

SThank you for your attention to this matter. I look forward to receiving your response. Tom Hefty_2

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Spencer, MattFrom: thomasrhe~Sent: Sunday, May 22,2011 8:58 AMTo: Rep.Kuglitsch; Rep.KapengaSubject: Fwd: More CAPCO researchGreetings, please read the attached 2009 report on CAPCO's. The conclusion is priceless---Comparedto CAPCO's, the state would be better off holding a raffle and giving the money away to entrepreneurraffle winners. The serious conclusion is the same as the 2010 Minnesota study which found "theWisconsin CAPCO credit had little or no effect, likely displacing venture capital financing that would haveotherwise occurred." In essence, Wisconsin wasted $50 million on the first CAPCO--and now proposesto waste $200 million more.Governor Pawlenty, now the leading Midwestern Republican presidential candidate, did not support theMinnesota CAPCO---it was rejected.The DC CAPCO plan had the same CAPCO managers as the 1998 Wisconsin CAPCO ----and theleading advocate for the 2011 $200 million Wisconsin CAPCO tax cut was one of the D.C. managers..It is not conservative and not consistent with Republican principles to waste tax dollars---nor to pickwinners and losers in Madison.Tom

-----Original Messa e-----From: TomHeftTo: TomHeftySent: Sun, May 22, 2011 7:48 amSubject: Fw: More CAPCO research

Sent: Sunday, May 22, 2011 6:Subject: More CAPCO researchGreetings, Here is yet another critical report on CAPCO's. This one is from 2009 and the hearing on theD:~. audit. The.Washington Post wrote some critical articles on the D.C. CAPCO,. and I hope that theyWid follow up WI,h a story on Wlscor.slrl---the good of the 25% angel credits, and the bad of the 80% creditfor CAPCO's; and the opportunity for a fund of funds.Given Walker's national media attention, this should be a good story--about a $200 million tax cut on afailed CAPCO program at a time when the state is cutting important public programs.The conclusion of this District of Columbia study is similar to the 2010 Minnesota legislative studyMinnesota and Iowa both rejected CAPCO's. .

http://poiicy.rutgers.edu/facultv/rubin/CAPCO%20testimonY.pdf

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Spencer, Matt

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, . " > - .~ - - . _ - _ _ - + _ " / - - - " ,. , ,- -- _ . - - _ _ _ - _ . - , " .~ , " - - ~ , , ~ .- - , - - .From: thomasrheft~ (Sent: Thursday, May 26, 2011 11:33 AM IITo: Rep.Kuglitsch i

ISubject: Thanks "Thank you for the invitation relayed thru your assistant t~ visit Madison to discuss venture capital. Iregret that I can not join you, but I would be happy to talk with you on the telephone or to meet you for acup of coffee.I encouraged your assistant to do a little web research on CAPCO audits in other states. Some of theWisconsin specific CAPCO information was publicly disclosed for the first time at last Tuesday'slegislative hearing. The Wilshire CAPCO had refused to provide any information for the Legislative AuditBureau study in earlier years, but some of the Wilshire information was disclosed to the committee as anAppendix to Professor Nichols testimony. If you research that l ist of companies, you will understand theconcern about the CAPCO model--and about the lobbyists who are promoting the CAPCO bil l.I spent 30 years in the Wisconsin insurance industry, including being an insurance regulator underGovernor Dreyfus. And I was the CEO of Blue Cross Blue Shield, when we moved our United Heartlandsubsidiary to New Berlin. It is a great community.Thanks again. Have a wonderful Memorial Day weekend, Tom

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Spencer, MattFrom: thomasrheft.~ Sent: Wednesday, June 01, 2011 2:28 PMTo: Rep.KuglitschSubject: Venture Capital Bill-Texas rejected GAPCO Bill YesterdayI have not heard from you, so I assume that you have reviewed all of the information provided on theadvantages of a fund of funds prooosal=-and the disadvantages of the CAPCO's. The CAPGO lobbyistsare spreading some mis-information regarding the fund of funds idea, and if you have any morequestions, please feel free to call.It is still disappointing that you signed on a bill which disadvantages an insurance company in NewBerlin. However, the GAPGO lobbyists have a national reputation for spreading misleading information,and unfortunately you were mislead by those lobbyists.The only new information today on CAPCO's comes from Texas. Yesterday, the Texas legislaturerejected the expansion of CAPCO's in that state--a bill similar to what the CAPCO's presented inWisconsin. You can find that news in the Austin Statesman. Instead, the Texas !egislature asked for acomprehensive audit of the CAPCO program, which would be a good idea for Wisconsin.Let me point out what the Texas action means. The state of Minnesota, lead by Governor Pawlenty,rejected CAPCO's in 2010 following a comprehensive study. The state of Florida, lead by another leadingRepublican governor, ended that state's CAPGO program. Now, the state of Texas, lead by RepublicanGovernor Perry, has rejected the CAPCO expansion. These are three leading Republican governors---all rejecting CAPCO's. What does that tell you about the substance of the proposal? .Why would the Assembly Republican legislators jeopardize Governor Walker by pushing forward adiscredited idea? Not only are they jeopardizing Governor Walker, they are jeopardizin'g the RepublicanSenators facing tough recall elections.Please let me know if you need any more information. Thanks again for reaching out tome for moreinformation. Tom Hefty_

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Spencer, MattFrom: thomasrheft~~ ""Scnt: Sunday, June 05, 2011 7:37 AMTo: Rep.Kuglitsch; Rep.KapengaSubject: CAPCO ProgramItwas good to read in the Journal Sentinel that the $200 million CAPCO program is d ea d. Ninety (90%)of the money went to out of state insurance companies--putting Wisconsin insurers and Wisconsin jobs ata disadvantage. 'But there is an opportunity to save additional funds. $10 million of the original $50 million is missing.And $16 million of the original $50 million was not invested according to the state requirements.Recovering the $26 million would be a good start towards funding effective economic developmentprograms.Itwould be good to see Waukesha County Republicans taking the lead in recovering the taxpayermoney.Tom Hefty

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