Time to 86 MEDC?
MEDC is the acronym for Michigan Economic Development Corporation, and “86” is restaurant slang meaning to “get rid of something.” Years ago, the hapless TV secret agent Maxwell Smart was Agent 86. Wikipedia says MEDC is “a public-private partnership agency and economic development corporation in the U.S. state of Michigan.” Operating under the slogan “Pure Michigan,” MEDC attempts to encourage the tourism potential of the state and foster business relocations to Michigan.” It may be Michigan, but Pure it ain’t.
The recent scandal, involving former MEDC Board member Faye Bedoun and a $20 million grant that allegedly went astray, poses hard questions about oversight from CEO Quentin Messer, and the Legislature and Gov. Gretchen Whitmer who rubber-stamped the grant in the budget. Add this to longstanding concerns about MEDC and you’ve got a recipe for budget hawks.
Created in 1993 under then-Gov. John Engler as the Michigan Jobs Commission, MEDC hails from the era of aggressively competitive state recruitment of business. We wanted to diversify from auto dependence, so we joined the nationwide bidding game for firms to come locate here. From the start, the key questions were ‘why must we subsidize business to locate in Michigan, especially by paying dollars taxed from existing businesses? Shouldn’t we eliminate the disincentives that deter investment in the first place?”
But dropping MEDC was seen as unilateral disarmament in the recruitment wars. So MEDC remained, derided as “Corporate Welfare” by more Libertarian types, as a big boondoggle by others. Only one of every 11 jobs promised by Michigan politicians and public officials actually gets created, according to the Mackinac Center for Public Policy. Former Governor Jennifer Granholm’s “Green Reset” was an expansive fizzle. An arm of the MEDC, trying to lure large out-of-state corporations to locate in Mundy Township, Genesee County, is responsible for buying and tearing down hundreds of perfectly fine homes there (in the midst of a purported housing crisis, no less), using money from established Michigan businesses. They have nothing to show for it, and it’s very possible they never will.
Honest Boondogglery is one thing, but a great big pile of money waiting to be ladled out with minimal oversight can attract predators, especially ones with inside connections. The Beydoun alleged scandal is a perfect example. Is MEDC really just a slush fund for politicos to hand out pork to fads or favored friends, that doesn’t really provide jobs? If so, why not write “86” and line it off the menu permanently? Support for that idea is the ultimate proof of the hoariest of cliches — “politics makes strange bedfellows.” It’s that rare issue where the Democratic progressive Left (think Rep. Dylan Wegela) meets and shakes hands with conservatives and the Hard Right (think Rep. Steve Carra).
Former Detroit Mayor Mike Duggan, the independent candidate for governor this year, has said Michigan can’t afford NOT to have something like the MEDC, but the way the corporation is structured is all wrong. If elected governor, he says he would do a big overhaul. He might start by renaming it. The title MEDC s toxic.
All the other gubernatorial aspirants in both major political parties have been either silent on the subject, equivocal, mealy-mouthed, or have failed to get any “reform MEDC” message out in a way that makes sense.
We’ve got a big election coming up, and let’s see where all the wanna-be governors line up on what should be a critical issue. The electorate should demand nothing less.
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Aric Nesbitt and Mike Cox have both unequivocally said they would end the MEDC, full stop. Tom Leonard would also end MEDC, but replace it with a business concierge service.
Nice article, Bill. I have written before on this topic in earlier TBRs, and my opinion has not changed.
I last wrote about it on August 24, 2025 (when Mr. Crehan chided me for interrupting my response for dinner). MEDC’s structure was flawed from the very beginning. Then again, it was designed to be flawed. In that regard, it’s a complete success. As I wrote then, “MEDC WAS DESIGNED AS A WORK AROUND CIVIL SERVICE. GOVERNOR ENGLER WANTED TO FIND A WAY TO USE TAXPAYER MONEY TO “ATTRACT BUSINESS” WHILE SIMULTANEOUSLY PAYING FOLKS RUNNING THE AGENCY WHO SHOULD BE IN THE CIVIL SERVICE AT CORPORATE-LEVEL COMPENSATION, AND JUST AS IMPORTANTLY, AVOID PUBLIC SCRUTINY.” Basically, how can we find a work around to avoid civil service pay restraints, rules and public scrutiny. Mr. McLellan and others came up with this, and we continue to pay the price.*
Can it be fixed? Maybe. The real question is whether there is the political will to do so. Judging by what has gone on in this legislative session, it is highly unlikely considering the games being played between the Governor, Majority Leader Brinks of the Senate and Speaker Hall, all of whom seem to confuse activity with accomplishment. But in the interest of public service, here I go:
MEDC BECOMES A REAL, ACTUAL, HONEST-TO-GOODNESS AND REAL STATE DEPARTMENT OR TYPE ONE AGENCY. This means there is a Director named by the governor. THE OTHER STAFF FALL UNDER THE JURISDICTION OF CIVIL SERVICE. As a State Agency, the workers would most likely fall in the Business and Administration unit and not be unionized (to keep the right wing happy). This means that the staff is paid under the Equitable Classification Plan (ECP). No more ungodly salaries for what has become minimal production.
FUND ONLY THE MEDC STAFF IN THE ANNUAL BUDGET: The legislature would only fund the staff, office supplies and the like. Lansing and Detroit have plenty of state owned and rented space. Put them in a government office building. Save the people some money.
MEDC GRANTS FOR SPECIFIC PROJECTS WOULD REQUIRE LEGISLATIVE APPROVAL FOR EACH AND EVERY GRANT. Any grants MEDC wants to give out would require separate, individual appropriation(s) from the legislature. This would entail hearings and testimony, hopefully under oath. Then we find out how much money the business entities want and how many jobs they promise to get that money. This would require legislation and the grants can then be tailored so that if the promised jobs do not appear, money is clawed back and a penalty imposed on the company or corporate entity that is the grant recipient. The grant becomes an enforceable contract. This is what oversight and transparency look like. This is what accountability looks like. For the executive and legislative branches. After all, it’s the people’s money. If a private entity wants some of the people’s money, the promises they make to us to get the money are written down and enforceable. If businesses find this unacceptable or intolerable, they probably inflated the number of jobs they were going to create. And if the employees of MEDC don’t their job, they are subject to the civil service rules, just like the other state employees. Gee, what a novel concept.
This is not an exhaustive list, but it can be a starting point for any candidate who wishes to try and fix, reform or modify the MEDC. Nothing I’ve written is copyrighted, so feel free to use it.
And if Mr. Crehan is reading this issue of the TBR, I wrote this before dinner.
*For more on my responses then, please refer to the August 24, 2025 issue of TBR where I go into more detail.