Milwaukee Biz Blog

Should a justice on the Wisconsin Supreme Court recuse himself or herself from cases involving litigants who donated $1,000 or more to the judge's election campaign?

The court has the authority to amend the state judicial code without having to run it past the state legislature.

Justices on the court are pondering dueling petitions on the issue of recusal.

The first petition was filed by the League of Women Voters of Wisconsin Education Fund, with full support from the Wisconsin Democracy Campaign and Common Cause in Wisconsin.

In a joint statement, the three organizations called for recusals when litigants contribute $1,000 or more to a justice's campaign "or tried to influence a campaign through mass communications," i.e. bogus television "issue ads" that always end with a phrase such as, "Tell Justice So-and-So to (fill in the blank for whatever cause)."

"Campaign gifts certainly don't automatically undermine a judge's neutrality. But the increasing campaign donations we have seen in recent years do severely erode public trust, even when a judge may be acting fairly," the organizations said. "The new recusal rules would restore public trust that campaign contributions will not influence a judge's decisions and give notice to special interests that there is no benefit to turning court elections into a financial arms race - not when the judge they help elect will not be allowed to hear their case. Together these reforms will restore public confidence in Wisconsin's progressive tradition of election of judges and justices."

Au contraire, says the Wisconsin Realtors Association, which has filed a petition urging the court to resist mandating judicial recusals based on campaign contributions.

The Realtors are asking that the code be revised to state, "A judge shall not be required to recuse himself or herself in a proceeding based solely on any endorsement or the judge's campaign committee's receipt of a lawful campaign contribution, including a campaign contribution from an individual or entity involved in the proceeding."

In other words, the Realtors want to still be able to play after they pay.

So, which side will prevail?

A recent U.S. Supreme Court ruling (Caperton v. Massey) affirmed the notion that a judge should recuse himself or herself when a litigant has donated substantial campaign funds. In 2004, a West Virginia coal executive working for Massey Energy Company spent $3 million to elect a state Supreme Court justice while appealing a $50 million jury award against his company. In 2007, that justice rejected a motion to recuse himself, and joined two colleagues as the court overturned the jury award in a 3-2 decision.

If the Wisconsin Supreme Court takes its cues from the U.S. Supreme Court, there could be a whole lot of recusing going on. According to a study by the Wisconsin Democracy Campaign requested by BizTimes Milwaukee, Wisconsin justices have received the following numbers of individual campaign donations of $1,000 or more: Shirley Abrahamson, 341; Annette Ziegler, 95; Mike Gableman, 71; Pat Roggesack, 42; Patrick Crooks, 38; and Ann Walsh Bradley, 37. Only Justice David Prosser Jr. has not received any individual donations of $1,000 or more.

However, the campaigns of all of the Wisconsin justices have received donations of $1,000 or more from political action committees (PACs).

Often in politics, appearance becomes reality. The recent elections of justices were overloaded with special interests, as the Wisconsin Manufacturers & Commerce put conservatives Ziegler and Gableman on the bench, and progressive forces kept Abrahamson in office.

If the Supreme Court enacts the restrictions for checks of $1,000 or more, here's a prediction: We'll see a spike of checks for $999 donated to judicial candidates.

Steve Jagler is executive editor of BizTimes Milwaukee.

To Tweet or not to Tweet? That is the question. Perhaps more generally, the question every business must ask itself right now is whether or not it wants to engage the company and/or its people in social media.

As the cover story of this week's BizTimes Milwaukee documents, many southeastern Wisconsin businesses are delving into social media networks such as Twitter, LinkedIn and Facebook.

Some are finding ways to actually make money out of their social media connections. Others are building their networks and planting seeds for future relationships and – hopefully – new business.

Like many of the issues we cover, BizTimes Media LLC also has been grappling with the same questions that our readers are pondering. With regard to social media, we made the strategic decision a month or so back to just do it.

I've instructed our people not to obsess over it. It's just another emerging tool, and for now, we just need to be in the game.

I do not consider myself a technogeek. Nor am I a technophobe. Maybe just a slow adopter would be the right description.

Fortunately for me, we have a staff of Gen Y folks who are fearless when it comes to technology. So, they just decided to take us where we need to go.

Reporters Alysha Schertz and Eric Decker, managing editor Andrew Weiland, as well as Vanessa Serkowski and Shelly Tabor in our productin department, got us up and and running on Twitter, LinkedIn, Facebook and You Tube. Our editorial content is being streamed, and our editorial staff is Tweeting.

Alysha even taught Andrew how to create something called a Tweetdeck.

The next thing I knew, our staff was bringing in local social media experts such as Al Krueger, Ryan Thompson, Sara Meaney and Wayne Breitbarth to help guide us in this new medium and generate a buzz for the upcoming BizTech Conference & Expo. They did this on their own.

The smartest thing I have done in recent memory is to empower these young people. They are showing this old dog some new tricks, and our company is going to be better off for it.

The latest innovation came when I just decided to let Alysha jump into webcasting video interviews. It was something I had contemplated for the past year. Alysha just flat out got it done and then told me how she did it. You can find her videos in her BizTimes Bubbler bulletins (www.biztimes.com/bubbler). Now, she's teaching herself how to edit the video content.

If your company has some bright, young, ambitious people on your staff, I highly recommend you consider unleashing them to drag your company into the world of social media. Their creativity may astound you and open your eyes to new possibilities. It could stoke your entire company.

My biggest fear about social media is that it would just add more tedious tasks to my already crazy schedule. So far, that hasn't happened.

We'll see where it all goes. Who knows? A year from now, Twitter could be a trivia question, a stepping stone along the way to the next great application. But at least you'll be on the path of wherever it takes us, and you may be ahead of your competition.

Steve Jagler is executive editor of BizTimes Milwaukee. To link to the BizTimes Milwaukee Twitter feeds, click here.

One of the great things about American presidential elections is that candidates get together and debate the issues. Thus, each side gets to hear what the candidate is saying. And undecided voters then determine who wins.

The trouble is, after the election, the two partisan sides retreat back into their bunkers, and they don't even hear what the other side is saying, much less consider the other side's points of view on the issues.

I have friends on both of the extreme ends of these dueling political realities. Increasingly, each of them wants their news and information to be spoon-fed by sources that see the world exactly like they see it. Neither of them wants objective analysis of the issues. It's not that they can't handle the truth. It's that they don't want the truth.

I know many businesspeople who are conservative. All day long. They start off their morning reading The Wall Street Journal. They drive to work listening to a local conservative radio talk show. They are loyal "dittoheads" of Rush Limbaugh in the afternoon. They catch another local radio talk show host on the drive home.

And once home, they turn on Fox News, where Sean Hannity informs them that President Barack Obama is an evil socialist. They buy into the grassy knoll notion that all "mainstream media outlets" have a liberal bias.

On the other end of the spectrum, I have extremely liberal friends. They wake up listening to National Public Radio. They monitor Air America radio online, where they also read the op-ed pages of The New York Times or The Washington Post. A couple times a day, they check the Daily Kos and The Huffington Post web sites.

They drive home and turn on MSNBC.

Too many people on both ends of the spectrum have decided to close their eyes and cover their ears to anything that contradicts their notions of the political universe.

We have all too often retreated to partisan trenches that blind us from any critical analysis of this very complex point in American history.

The conservative extremists say - and they're validated by local Limbaugh wannabes - that Obama is destroying the very capitalistic system that is at the core of the American experience. They believe Obama wants to remake America in the image of Western Europe. They are frightened by the notion of a federal stimulus plan. They cannot for the life of them understand how Obama won the election in the first place, much less how nearly three-fourths of the American people still approve of the job he is doing today.

The liberal extremists say Obama is cleaning up the historically unprecedented messes he inherited, at home and abroad. They say that the American government has increasingly swung at the behest of large corporations since the election of Ronald Reagan in 1980, and the erosion of regulatory oversight led to the excesses and the self-destruction of the nation's banking system today. They say it's long past time to rein in those excesses. They also are relishing the notion of a president who says America does not torture people.

The liberals say former President George Bush drove this country straight into the ditch. The conservatives say Obama then covered it gasoline and lit a match.

Here's a clarion call. If your major source of news and political insight is Keith Olbermann, Arianna Huffington, Bill O'Reilly or Glenn Beck, you are not pursuing the truth, which cannot be condensed into pithy, neatly compartmentalized little soundbytes by people with preconceived agendas.

Obama is not "The One," the omnipotent Jedi knight who has the answers to all questions. He also is not an evil man who is out to destroy all that is right about America.

As long as we remain entrenched in our respective caves, er, camps, where the messages we hear are pre-filtered to our liking, we will never be able to critically assess the complex challenges that are before us.
With so much at stake, it is time for an adult discussion with honest discourse to rule the day.

Steve Jagler is executive editor of BizTimes Milwaukee.

Milwaukee business leaders will have an outstanding opportunity to learn from one of the most dynamic business leaders of our time when Marilyn Carlson Nelson kicks off the fifth annual BizTech Conference & Expo on Wednesday, April 29.

I mean, how often do you get a chance to hear a keynote speech from someone deemed by Forbes magazine as one of "The World's 100 Most Powerful Women?"

Marilyn will headline the CEO Strategies Breakfast at the Expo, which will be held at Wisconsin State Fair Park.

You may not know Marilyn by name, but chances are you've stayed in one of her hotels, eaten in one of her restaurants or booked a trip through one of her travel agencies. She is the chairman and former chief executive officer of Carlson, one of the largest privately held companies in the United States. Carlson is the parent corporation of Radisson Hotels, Country Inn & Suites, Regent Hotels, Carlson Wagonlit Travel and TGI Friday's restaurants.

With headquarters in Minneapolis, Carlson-owned and franchised operations employ about 160,000 people in more than 150 countries.

As the cover story of this week's BizTimes Milwaukee documents, Marilyn recently finished writing her first book, "How We Lead Matters: Reflections on a Life of Leadership" (McGraw-Hill), which debuted at No. 1 on the 800-CEO-Read list of best-selling business books.

At the Expo, Marilyn will share her insights about leadership. She says effective corporate leadership is always important, but it is even more critical during a recession.

A special invitation to see her goes out to southeastern Wisconsin's female executives - both company owners and those climbing the corporate ladder. Marilyn transformed her company's leadership team, 40 percent of whom are now women.

Marilyn's book recounts moments in her career and her life, including the early stages of her career, when she was instructed to sign her name as "M. Carlson" to disguise the fact that she was a woman. When she became CEO of Carlson, she built the firm from a $22 billion company into a global force of nearly $40 billion, with locations and employees throughout the world.

The foreward in Marilyn's book is written by David Gergen, professor of public service director at the Harvard University Kennedy School's Center for Public Leadership and a political commentator on CNN.
"Anyone who has had the privilege of hearing Marilyn's speeches knows that she often inserts a personal story … stories you aren't used to hearing from a CEO," Gergen wrote. "But the unifying, underlying message in all her speeches is: How we lead matters."

Bill George, the former CEO of Medtronic, wrote, "When she took over Carlson … Marilyn inherited a demoralized organization suffering from decades of top-down rule She immediately set about changing things, expressing empathy for her employees and compassion for her customers. The result: a remarkable turnaround with record levels of growth and new heights in employee and customer satisfaction."

Well, we all could stand to learn some more about how she did that. Each attendee of the CEO Strategies Breakfast will receive a copy of Marilyn's book. She also will sign copies of the book and talk to readers at the BizTimes Milwaukee booth at the Expo, which is the largest business-to-business trade show in the state. Additional information about the CEO Strategies Breakfast is available at www.biztimes.com/ceo_strategies.

Steve Jagler is executive editor of BizTimes Milwaukee.

The drama surrounding the power struggle between the Milwaukee County Board and County Executive Scott Walker over federal economic stimulus funds is showing no signs of conclusion just yet.

The board voted on Tuesday, 16-2, to override Walker's veto of a county policy to apply for federal funds from the American Recovery and Reinvestment Act.

Hours after the board overrode his veto, Walker released a list of $130 million in stimulus projects applied for or received by his department heads. Walker said his initiatives were begun prior to the county board's resolution on stimulus funds and reflect those projects that meet his criteria to protect the county taxpayers:

• No matching funds required by Milwaukee County.
• No long-term federally mandated financial commitments required.
• Expenditure of requested funds will not obligate Milwaukee County to new operating or maintenance expenses.

In a Milwaukee Biz Blog last week, Walker repeated his stance that he would not apply for federal stimulus funds that required a local match of funds: "At the start of the year, I laid out clear criteria for any application for federal 'stimulus' funds: No matching funds required by Milwaukee County. Most federal grants require a 20 percent (or greater) match from the local government. 'Free money' sounds nice until you read the fine print and realize local taxpayers could be required to provide a match, which they cannot afford. For example, if our county receives $50 million for infrastructure projects under this formula, local taxpayers will have to come up with an extra $10 million. And if we borrow to cover the $10 million, the cost goes up by $920,000 per year. This hardly sounds like 'free money' to me."

However, in a story in today's Milwaukee Journal Sentinel, Walker said his ban on seeking stimulus projects that required matching dollars was not absolute.

"I didn't say 'never' on match," Walker said.

In addition to the flap over the issue of matching funds, there are the matters of legal recourse and who  ultimately will be calling the county's shots for the stimulus applications going forward.

"Scott Walker's anti-stimulus agenda took a serious hit (Tuesday) when the county board took the reins of leadership away from him and assumed control of the county's stimulus efforts," said Joe Wineke, chair of the Democratic Party of Wisconsin, who accused Walker of flip-flopping on the issue of matching funds.

Walker has already threatened to sue the county board if it uses federal money from the Recovery Act to create new jobs and projects for Milwaukee County's residents, according to Wineke. Wineke also said Walker has banned county staff from working with the state Office of Recovery and Reinvestment on any efforts to create jobs to Milwaukee County through the act.

However, Fran McLaughlin, director of communications for Walker, sent BizTimes Milwaukee the following e-mail this morning:
"Steve - A correction is needed to the story posted yesterday on stimulus dollars. The DPW quote is inaccurate in stating that the county executive has threatened to sue the county board. The county executive has never threatened to sue the county board.
"This likely stems from an article Steve Schultze of the Milwaukee Journal Sentinel wrote: 'If the state approves money he didn't ask for, Walker said, he'll reject it. If the County Board puts up a fight, he'll consider legal action to prevent the money from being spent, he said.'
"The county executive responded to that reporter's inquiry about what he would do if board issued a resolution to accept stimulus money not meeting his criteria. He said he would have to look at the legality of it and find out what his legal options would be regarding a resolution and veto. This is not threatening legal action. It is common to seek the opinion of the Corporation Counsel on how to proceed in situations that have not come up before in the county."

Walker, a Republican, is raising funds to challenge Democratic Wisconsin Gov. Jim Doyle in 2010.

"As he prepares a run for governor, it's clear the Scott Walker is trying to differentiate himself from Jim Doyle, and from other Republicans," said Democratic County Board Supervisor John Weishan. "Unfortunately, his position on stimulus funds are a detriment to the citizens and taxpayers of Milwaukee County. In fact, Scott Walker's own list of stimulus projects are inconsistent with his three-point criteria. Most of the projects he has submitted thus far are highway-related and will require future maintenance costs. You can't build anything without expecting it to deteriorate and require some level of maintenance."

Here is the list of stimulus projects for which Walker said his department heads have applied or will apply: Child Support Enforcement ARRA Funds $1,050,732; DAS Build America Bonds TBD; Housing Neighborhood Stabilization Program $4,700,000; Housing CDBG Funds (additional) $465,341; Housing HUD - Homelessness prevention & rapid rehousing $712,755; Transit replacement of buses, fare boxes and voice annunciator system $25,675,100; Highways WisDOT Economic Recovery - Local Bridge and Road Program $97,010,000; and Public Museum Multiple $1,037,000.

Steve Jagler is executive editor of BizTimes Milwaukee.

Last year, I was among the first to say the economic sky was falling, and I took some grief for it at the time when others said the fundamentals of the economy were fine.

Now, I'm going to take another flyer, one that may or may not make it look like I know what I am talking about: I think the worst of this recession may be behind us, and I think an economic recovery will begin soon.

You may ask yourself, how can this be? I mean, the U.S. economy experienced its most violent contraction in a generation during the fourth quarter, with real gross domestic product (GDP) plunging at 6.3 percent, according to the U.S. Commerce Department

Going back to last year, the first sign of economic angst on my radar was the fact that houses in my neighborhood, which once were selling as soon as they were put on the market, were no longer being sold.

Then the housing market collapsed outright. Three houses in the neighborhood were foreclosed upon. However, in recent weeks, two of those foreclosed homes now have new owners, and the third is suddenly seeing a lot of traffic of prospective buyers.

That anecdotal observation aside, some fresh economic data this week may also be telling us that we may be on the cusp of a rebound:

• National sales of new homes rebounded 4.7 percent in February, according to the Commerce Department, after hitting a record low in January. Sales of new homes rose to 337,000 in February.
• Applications filed to refinance an existing mortgage rose an unadjusted 41.5 percent last week from the week before, after an announcement by the Federal Reserve Board caused fixed-rate mortgage rates to fall, according to the latest Mortgage Bankers Association (MBA) survey.
• Mortgage applications filed to purchase a home were up a seasonally adjusted 4.2 percent from the week before, the MBA said.
• The stock market is showing signs of life. The Dow Jones Industrial Average is on pace to post its third consecutive week of solid gains.
• The demand for machinery and other capital goods rose in February, driving orders for durable goods up 3.4 percent. The monthly rise was the first in six months.
• Production of automobiles in Detroit actually increased 24 percent in February from the previous month. Consequently, General Motors Corp. told the feds it will not need the latest round of bailout cash infusions. GM is finally getting a handle on its legacy costs, with 7,500 union workers agreeing to accept buyouts.
• On the technology front, the Nasdaq Composite Index soared so high this week that it erased all of its losses for the first three months of the year.

I am not alone in believing the start of economic recovery is just around the corner.

"With regard to the economy, we believe there are faint signs of light at the end of the tunnel," said Paul Kasriel, director of economic research for Chicago-based Northern Trust Corp., which has an office in downtown Milwaukee. Kasriel is the recipient of the Lawrence R. Klein Award for Blue Chip Forecasting Accuracy. "In sum, although the economy remains mired in a severe recession, we have seen nothing of late to dissuade us from our forecast of recovery getting underway in the fourth quarter of this year. In fact, what we have seen of late increases our confidence in the forecast."

Bruce Bittles, chief investment strategist for Robert W. Baird & Co. Inc., wrote in his "Market Commentary" bulletin Thursday that he is standing by his prediction that the economy will begin turning around by the end of the summer.

"Supporting our view for improving conditions in the economy later this summer has been the impressive performance by the stock market over the past two weeks. Since its intra-day low of 666 on March 6, the S&P 500 has rallied more than 23 percent. The Dow Industrials are now on pace to post a monthly gain for the first time since August 2008, and the S&P 500 is on pace for its first 5-percent monthly gain since 2003," Bittles said.

Bittles says spring is in the air, in more ways than one.

"Just as the seasons turn as we count the calendar months, the darkest days of this economic winter may now be yielding to an emerging spring - a time of uncertain weather (data), but also a time for cultivating if there is to be any hope of harvesting," Bittles said.

Sara Walker, senior vice president and investment officer at Associated Wealth Management in Milwaukee, is not ready pop any champagne corks just yet, but she is hopeful, nonetheless.

"'Flat is the new up' could be the best way to describe recent economic reports and the stock market's reaction to them. After being in the depths of despair just 12 trading days ago, the financial world is looking quite a bit sunnier," Walker said. "The main reason for a more encouraging outlook is that some very recent news is less bad than it has been! Investors look forward, and recent news reports indicate a glimmer of light on the horizon. Our outlook is for this recession to continue until late 2009, but with improvement each quarter over the prior quarter because of improved confidence."

The job market is a lagging indicator that won't bounce back until the stock market, the banking system and the housing sector are stabilized, economist Michael Knetter, dean of the University of Wisconsin School of Business, told us at the Northern Trust Economic Breakfast in January.

To be sure, we know more layoffs are coming. Thousands of them, no doubt. The path to recovery won't be a straight arrow.

We will know that a recovery has arrived when the BizTimes Daily starts reporting more stories about companies hiring new employees than stories about companies laying off employees.

For now, all we can do is exhale and hope we're on the right path.

Steve Jagler is executive editor of BizTimes Milwaukee.

Although Gov. Jim Doyle was greeted with polite, albeit subdued, applause at the Milwaukee 7 Council Meeting Thursday, the tension in the room at the Manpower Inc. headquarters was palpable.

Doyle was attempting to reconcile the details of his proposed state budget with southeastern Wisconsin's business community.

Actually, the M7 leadership has agreed to endorse much of Doyle's plan, including:

• A biotech machinery and equipment property and sales tax exemption.
• An increase in the amount of angel investor tax credits to $25 million annually.
• The creation of a new tax credit of 10 percent of full-time payroll costs for businesses relocating to Wisconsin.
• The creation of an income tax credit for businesses that increase their research and development spending to more than 125 percent of their prior three-year average.
• The creation of a capital gains exemption for up to $10 million in gains reinvested into a new business venture.
• The creation of a Wisconsin Venture Fund to connect businesses and entrepreneurs to capital and seed funding.
• An authorization for the creation of a Regional Transit Authority to levy up to .5-percent sales tax to create a dedicated funding source for regional transit (paving the way for the Kenosha Racine Milwaukee passenger train).
• Spending $517 million to accelerate the reconstruction of the Interstate 94 north-south corridor between Milwaukee and the Illinois state line.
• Spending $2.4 million to add a railcar and increase capacity on Amtrak's Milwaukee-to-Chicago Hiawatha service.
• The authorization for the University of Wisconsin Board of Regents to create a University of Wisconsin-Milwaukee School of Public Health and a UWM School of Freshwater Science.
• The transfer of $63 million from the state's transportation fund to the general fund for pupil transportation costs.

The business leaders also listened attentively as Doyle, fresh from a trip to Spain, explained how high-speed rail that would connect Chicago through Milwaukee and Madison and eventually the Twin Cities could be an economic catalyst for the entire region. Such connections will be crucial to the United States competing with other countries that are investing in high-speed rail service, Doyle said.

However, the M7 brass is not buying all of what Doyle came to sell them Thursday. The M7 leadership is opposed to Doyle's plan to increase taxes from "throwback sales," or sales shipped from a taxable state to a non-taxable state from the existing rate of 50 percent to 100 percent.

Michael Grebe, chair of the M7 Regional Policy Subcommittee and new chairman of the Greater Milwaukee Committee, said the M7 is studying several other provisions in the Doyle budget and is likely soon to officially oppose them. Among those planks in Grebe's crosshairs:

• The extension of prevailing wage requirements to all private projects receiving any public funds.
• The enactment of combined reporting, which would require Wisconsin-based businesses to pay taxes on their combined revenues, even from out-of-state ventures, rather than just those revenues generated in Wisconsin.
• The elimination of the state income and franchise tax deduction for qualified domestic production activities.
• An increase in capital gains taxes.
• An increase in income taxes for individuals making more than $225,000 and couples making more than $300,000.

The combined reporting provision probably draws the most ire from the M7 folks, who are wondering why Wisconsin would do anything to discourage businesses from putting their headquarters here.

The combined reporting provision would have a severe impact on a business such as Marshall & Ilsley Corp., which has many banks in Arizona and Florida.

Doyle said the combined reporting provision, which was first proposed by Republican Gov. Tommy Thompson years ago, would affect only 13 percent of Wisconsin's businesses. However, the Metropolitan Milwaukee Association of Commerce leadership believes those businesses are among the "drivers" that bring net gains of dollars to Wisconsin's economy.

In balance, Doyle's budget is "anti-business," Grebe said after hearing the governor speak Thursday.
"The tax increases overwhelmingly are more negative than positive," Grebe said.

Doyle acknowledged that Wisconsin, like nearly every other state, faces some "tough choices" in its budget. The choices would be far worse without federal support from President Barack Obama's American Recovery and Reinvestment Act, Doyle said.

The state is cutting its budget by $2.2 billion and reducing the state government workforce by 10 percent, Doyle said. Despite the recession, the state must continue to provide adequate funding for four key priorities, Doyle said: education, health care, public safety and economic development.

To soften the blow, Doyle announced the state will kick in $500,000 to the M7 cause.

"We have to get people back to work," Doyle said.

Steve Jagler is executive editor of BizTimes Milwaukee.

If you would have told me two years ago that Marshall & Ilsley Corp. would one day be losing more than $2 billion, mostly because of bad real estate investments, I would have chuckled and then politely asked you, "Man, what have you been smoking?"

But fast forward to this week. The Milwaukee-based parent company Monday reported a revised 2008 fourth quarter net loss of $1.9 billion, or $7.25 per share. The revision was driven entirely by a non-cash goodwill impairment charge. The corporation had initially reported a 2008 fourth quarter net loss of $404 million, or $1.55 per share.

M&I also reported a revised net loss of $2.1 billion, or $7.92 per share, for the full fiscal year of 2008.

"The goodwill impairment charge was driven by the decline in M&I's stock price and the deteriorating economy," said Greg Smith, senior vice president and chief financial officer of M&I.

To put this in perspective, M&I has long been notorious for having one of the most conservative, buttoned-down, non-adventurous corporate cultures in the Wisconsin banking industry.

In recent years, the bank was seeing a growing number of its elderly (and affluent) clients moving to warmer climates in retirement. Those customers wanted to continue doing banking with their hometown bank, but their winter hometowns were moving south.

M&I made the strategic decision to expand to where their clients are going. The bank opened up branches in Arizona and Florida and gave loans to people buying real estate there.

At the time, the M&I expansion to the south seemed to make perfect sense. Real estate was generating double-digit returns.

In hindsight, we now know that Arizona and Florida are two of the worst-hit real estate bubble markets, and the collapse of those markets and the foreclosures that ensued inflicted a horrible pounding on M&I's bottom line.

Robert W. Baird & Co. Inc. analyst David George, who covers M&I's stock, noted in his most recent research note that he foresees additional real estate-generated pain for M&I.

"Historically, the company has had one of the better credit track records in the industry. In a normalized environment, M&I consistently posted superior credit quality trends relative to most regional banks. In recent quarters, however, non-performing loans have risen materially, due primarily to weakness in the company's commercial real estate (CRE) portfolio, with weakness in some of the company's newer markets such as Arizona and Florida," George wrote. "We expect continued degradation in credit trends to weigh on the valuation of the stock and could drive further additions to the company's loan loss reserve. To the extent the economy continues to deteriorate at a deeper and prolonged state, MI could experience higher losses in C&I and consumer lending."

If M&I is headed for continued tough times, its management team is not flinching.

A check of the insider training board reveals that M&I insiders have been buying up the company's stock in recent weeks.

M&I chief executive officer Mark Furlong bought 36,000 shares at $3.12 per share, for a total investment of $112,316.40 on Feb. 20. Smith bought 5,000 shares at $3.43 per share, for a total value of $17,149.50, on the same day.

Other recent M&I insider stock purchases from directors or officers have included: Ted Kellner, $218,595 in stock; John Shiely, $67,577; Randall Erickson, $6,220; Jonathan Chait, $4,138; and John Daniels Jr., $3,770.

In theory, the fact that M&I insiders are buying the company's stock, rather than bailing from it, is a sign that the company's leadership team believes it will rebound from this wretched economy.

Steve Jagler is executive editor of BizTimes Milwaukee.

We received a lot of feedback from readers last week when we covered the news that Associated Banc-Corp planned to send a group of its employees on a trip to Puerto Rico and TCF Financial Corp. had already sent a group of its employees on a trip to Mexico.
As you may recall, the trips were intended to reward some of the banks' top performers.
The public outrage about the banks was fueled by the fact that Associated had received $525 million and TCF had received $361.2 million in assistance from the federal Troubled Asset Relief Program (TARP).
Many people questioned how the banks could, on one hand, receive taxpayer assistance, and on the other hand, send their employees on lavish trips.
The outcry became so intense that Associated chief executive officer Paul Beideman later decided to cancel his company's trips.
However, not everyone was outraged by the banks' behavior. In fact, one financial expert in downtown Milwaukee called to scold me for media coverage of the trips. I found his viewpoint fascinating. So, I asked him to write his comments and e-mail them to me for consideration.
My friend does business with the banks in town. To protect his interests, I need to keep his identity secret. I don't know if I agree with him, but I do feel it is instructive to allow him to explain his contrarian point of view, because it adds some context to the complex issue that has not been otherwise provided. His remarks follow:

The mortgage crisis was caused by the banks. The credit crisis was caused by the banks.  We were forced to bailout the banks.
These are easy things to say and they've been repeated often enough to have become believable. For the media, it makes a strong, simple story - perfect. For politicians, it makes a strong, simple sound bite - again, perfect.
Unfortunately, America has been misled. In truth, the mortgage crisis was caused by some banks. The credit crisis was caused by some banks. We were forced to bailout some banks.
Ironically, many of the worst offenders were not really banks at all. They were investment banks - think large, sophisticated stock brokerages. They are very different from your local bank, but it's easier just to call them all banks, even if it is inaccurate.
Even when you lump true banks and investment banks together, the number of problem companies is very small. The vast majority of banks in this country remain quite sound.  The real travesty is that even the best banks have been swept up in this campaign of misinformation. Our most evident local example is Associated Bank.
Associated has not faced the severe loan problems experienced by even some very good banks. It has been profitable throughout the current downturn and its capital ratios are exceptionally high. Disappointingly, they made one big misstep. When the government showed up at their door and said, "We're here to help." they didn't slam the door shut.
During the fourth quarter of 2008, after Congress passed the TARP, banks, investment banks and others were allowed to apply for an investment by the government. The government intended these investments to increase capital levels, boost national confidence in banks and increase lending. The best, most sound banks in the country were encouraged to apply.
Why did the government want to GIVE capital to even good banks? That's the key question. The answer is "The government DIDN'T GIVE money to ANY bank." Just as you or I might do, the government made an investment in these banks. These investments are in the form of preferred stock, which, in substance, is somewhat similar to a loan. Anytime you read or hear that a company was "given" TARP money (or any other assistance for that matter), know that you are being misled.
The other word that gets thrown around recklessly is BAILOUT. Associated Bank and most other banks that accepted the government's investments didn't need the money.  They were encouraged to apply for the money for the reasons mentioned above. Many of these banks believed they could bolster customer confidence by accepting the capital, whether they needed the capital or not. It was viewed as a relatively inexpensive way to look strong.
Boy did that backfire. Suddenly, people were talking about these banks being "bailed out." Despite the compelling stories and juicy sound bites, nothing could be further from the truth. A bailout suggests that a company was saved from demise. That certainly wasn't anywhere near the truth in the case of Associated - likewise for many other fine banks across the country. These companies are being falsely vilified.
To make matters worse, any spending by these companies is now coming under tremendous scrutiny. These companies must be allowed to make their own decisions based on business realities. If we tie the hands of the companies that accepted government investments, we will weaken them. Contrary to current thought, these are companies run by smart people. They are already responsible to shareholders. We certainly don't need or want them to be responsible to the media or politicians.
Associated received a government investment of $525 million. The interest rate the bank will pay for this investment is 5.00 percent for the first five years, rising to 9.00 percent after that. Thus, over five years, Associated will pay the government $131 million of interest.
Meanwhile, the government's most recent five-year Treasury note auction was at a rate of 1.82 percent, costing $48 million on $525 million over five years. I know you're already doing the math in your head - yes, the government will make a PROFIT of $83 million on the money it invested in Associated. Who's bailing out whom?
I say let's "give" these quality banks lots more money. Where else does the government actually EARN a return on investment? We should thank these fine institutions for lowering the federal deficit.

If it seems like something - or more precisely someone - has been missing in Milwaukee lately, I know exactly whom it is.

Sister Joel Read, former president of Alverno College, suffered a stroke on Christmas Eve, one day after she had undergone successful heart bypass surgery. She has been hospitalized ever since.

Contacted by phone Monday, Sister Joel told me, "My whole left side is no good."

For those of you who know Sister Joel, take comfort in knowing she is speaking as eloquently and with as much purpose as ever.

I count the fact that my life's path crossed Sister Joel's path as one of my life's true blessings. We became friends as we worked together on the committee that formed the College Readiness 21 Program for the Wisconsin Foundation for Independent Colleges.

Sister Joel, a nationally renowned educator, wears many hats in this town. She's co-chair of the Greater Milwaukee Committee's Education Committee, where the folks at the GMC will freely tell you she's the moral compass in the room. The lady does not know how to mince her words, and she does not hide her lantern under a blanket. You know precisely what Sister Joel is thinking about any topic you are discussing with her.

In fact, Northwestern Mutual Life Insurance Co. chief executive Ed Zore, outgoing GMC chairman, jokingly acknowledged Monday that Sister Joel had recently "rapped (his) knuckles" about an education issue of some sort.

Zore then read aloud a message from Sister Joel to members at the GMC's annual meeting. I asked Sister Joel for permission to share that letter with our readers, many of whom will no doubt be interested in her progress.

"Sure go ahead. I need all the prayers I can get. The wider my prayer chain, the better off I will be," came the reply.

So, here is the message Sister Joel sent to the GMC members:
"I would like you to know that your cards, visits and thoughtful gifts really brightened those early days for me and encouraged me on the long journey that I am on to regain my independence. I would also like you to know that I am making progress on this journey. Each day, the left side, which the stroke rendered unusable, has begun to show signs of returning to life. Please do not stop praying for me. I have only just begun. Thanks a million for your support."

Get well soon, my friend. Milwaukee needs you!

Steve Jagler is executive editor BizTimes Milwaukee. For additional information, Sister Joel Read wrote a Milwaukee Biz Blog last year, making the point that we all have a stake in the fate of the children at Milwaukee Public Schools. If you have any thoughts you would like to be passed along to Sister Joel, send an e-mail to steve.jagler@biztimes.com.