Question 1): Lansing has been abuzz about the $20 million Michigan Economic Development Corporation grant awarded to former MEDC board member Fay Beydoun in 2022. Attorney General Dana Nessel’s office has been investigating Beydoun, a Governor Gretchen Whitmer donor, for embezzlement, to the point of raiding the MEDC for records.
Yipes! Is this the end of the cozy “troika” of Whitmer, Secretary of State Jocelyn Benson, and Nessel? Once portrayed together as three “Charlie’s Angels,” are they now “Reservoir Dogs?”
Is this a big scandal or a nothingburger? And what’s the Legislature going to do about it?
The governor has stated that she’s “deeply troubled” but evidently not enough to stop MEDC from fighting the records grab in court. Still, MEDC has cancelled the grant, although getting back the money is problematic. Legislators have gotten into the act, but have been told by the governor’s office that they have no authority to demand repayment. Constitutionally, they’re informed, they can’t claw back money appropriated in a past fiscal year.
Leading us to an interesting question: Does or does not the Legislature have the right to second-guess budget moves by the Governor? Can the Legislature demand the Governor spend or not spend money, or even claw back cash for a particular cause?
Answer 1): Heck yes, it can! Constitutionally, the Legislature has the power of the purse. Budget bills originate in House and Senate. When the governor presents her budget, it’s a mere proposal. Surgery — or butchery — from the state House and Senate commence immediately. But what about the argument that a grant was passed in 2022, so tough luck, folks?
Former state Rep. Chuck Moss (R-Birmingham) is an attorney, former Detroit News columnist as well as, in 2011-12, the chairman of the House Appropriations Committee.
Moss observes that the Michigan Constitution, in Article IV, Sec 23, states this:
“The general appropriation bills for the succeeding fiscal period covering items set forth in the budget shall be passed or rejected in either house of the legislature before that house passes any appropriation bill for items not in the budget except bills supplementing appropriations for the current fiscal year’s operation.”
Tough to follow? Moss clarifies the language for us:
— The pertinent point is: “except bills supplementing appropriations for the current fiscal year’s operation.”
— That means taking away, aka ‘negative supplemental appropriations’ as well as giving. This happens all the time in the Legislature.
— It’s the Legislature, not the Executive (governor), that has the power of the purse. If Whitmer wants to “Big Gretch” a fist down to avoid scrutiny of this issue, legislators can simply cut appropriations — and they could start with salaries in the governor’s Office.
Of course, that will never happen, because majority Democrats in the state Senate will protect their party’s governor.
But what if public outrage mounts, and taxpayers demand their money back? Whitmer would surely veto any such move by the Legislature in support of the taxpayers. Then it would become a question of legislative prerogative: Will lawmakers in both chambers, regardless of party, stand up for their heretofore sapless branch of government? Would majority Senate Democrats dare to force an override vote (surely the Republicans would)? Will they take up in debate why Whitmer wants so badly to protect the grant?
Needless to say, every representative and senator should vote on the record, but don’t hold you breath.
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The idea that Whitmer, Nessel and Benson are united has never been completely true, and becomes steadily less so as they have different ambitions and agendas. One has to wish that the average legislator had half the familiarity with the state constitution that Bill Ballenger does.
The comments here are usually largely from Republicans, and while the MEDC grant and Whitmer’s role deserves heavy scrutiny, they may wish to restrain their glee lest Dems post video of former Senate Majority Leader Rick Johnson mumbling “I am a corrupt politician” before being dragged off to jail, or we are treated to a reminder of the escapades of that eminent Christian, Lee Chatfield
Corruption permeates both the Dems and the GOP.
It should never be an issue when criminal investigations are concerned. There need to be fair and unbiased investigations and prosecutions of suspected wrongdoers.
The fact that my history and background is being a Republican loyalist does not want to make me go any easier on GOP members who commit breaches of public duty.
There seem to be conflict of interest issues involving Ms. Beydoun and the grant process:
(A) she held a committee seat on the MEDC;
(B) she was a donor to Gov. Whitmer’s campaign committee and other prominent Democrats;
(C) MEDC chief Quentin Messer allegedly described her as a “friend” when the first questions began to emerge regarding possible misfeasance regarding disposition of grant funds to Global Link.
I sure hope so
Nice article, Bill.
The governor is “deeply troubled”, so deeply troubled that she is moved to virtual inactivity. Now, does anyone expect the AG will hold folks accountable? Film at 11.
The legislature can, should, and must reign in the MEDC. This they can do as Mr. Moss correctly points out. At some point in time, legislators regardless of their party affiliation, need to realize they are representatives of the people they’ve been elected to represent, and not blindly support or oppose the governor simply due to party labels. Imagine, an entire legislature that could be highlighted in the sequel to “Profiles in Courage”.
The legislation to reign in MEDC should require legislative approval for all monies the MEDC requests for their grants/incentives/bribes to businesses or however you wish to describe it. The salaries and other attendant costs to run MEDC should be appropriated up front, but the monies used as described above, needs to be approved by our elected representatives. If the business entities seeking this money are afraid of this sort of open discussion, maybe they shouldn’t get the money. If the grants are rationalized for job creation, then the number of jobs should be included in the discussion and the approval of the grants. The business reneges, then claw the money back and have the AG sue them. And as this would be before a Michigan jury, the people will have the final say. This way there is actual oversight. A novel thought. It would require legislators to actually legislate instead of deferring their constitutional responsibilities to the governor and others in the executive branch. This may require delaying their hunting trips or summer vacations, but if they want to channel their inner Ethel Terrell, they don’t belong in the legislature. Now, this has been bipartisan in nature. Maybe the anesthetic of open legislative hearings just might be the disinfectant we need. Not just for MEDC, but also for the legislature, the governor and the AG.
You are absolutely right that a civil lawsuit by the State Of Michigan against Fay Beydoun and her organization Global Link would be very easy if an investigation concluded that funds were misapplied in violation of contract documents.
A $4,500.00 coffeemaker may be hard to explain away.
But who will investigate.
The less said about the leadership of the State Police the better.
Dana’s office? Well, its work would probably make several episodes of Charlie LeDuff’s No BS Newshour episodes write themselves. Best for the legislature to appropriate only staffing money and require MEDC to come before the legislature and justify the grants they want to issue. After all, it is our money, not theirs.
I do not think you necessarily need MSP involved.
I there has been some breach of the terms of a funding agreement, the Michigan Department of Attorney General could file a civil action to seek relief from a court.
The investigation has to be done by some police agency. The MSP is so poorly led (and I am being kind here) and I am not sure they could do a better than the AG. I do not believe civil action is the right thing, more of a criminal investigation for fraud, bribery or some other financial crime, if there was a crime instead of incompetence.
An oversight review by the House will generate some highlights but will lead to….nothing.
I think the legislative solution is the only one. Budget the staffing for MEDC and then have each subsequent grant they want individually appropriated. Then we find out how much $$$ they get, how many jobs they are promising and can claw back some of the $$$ if they live up to their end of the bargain. Make it a contract that is enforceable! If the corporate entity thinks that is too onerous for them, methinks they weren’t going to deliver on the jobs they promised anyway. If they want the peoples’ money, let’s have transparency.
Michigan Auditor General Doug Ringler can examine MEDC’s activities and grantees in what his office calls “performance audits” and make referrals to AG Dana Nessel based upon adverse material findings.
Royal says
(Edit)This is the kind of issue the Republicans (and real Dem compromise ideologues) could shine wrt doing the right thing. But, Bill, you’re right, I won’t hold my breath. Don’t wanna die today.
Leanne says
(Edit)There is an inherent conflict of interest in having Michigan Attorney general Dana Nessel investigate Fay Beydoun.
As a fellow Democratic party insider Nessel has every motivation to protect Beydoun while create the public impression a fair and unbiased “investigation” is occurring.
Remember when she charged the then-Macomb County Prosecutor Eric Smith and his top lieutenants for misappropriation of some $600,000 in forfeiture funds? She cut a plea deal that gave Smith a ONE DAY jail term. Smith served about year in prison after the U.S. Department of Justice obtained a federal court conviction in an unrelated matter of misuse of campaign funds by Smith.
Nessel’s own staff investigated Hamtramck Democrat City Councilman Mohammed Hassan for vote fraud – then closed the investigation without filing charges. After public pressure was applied, Nessel referred the matter to the Prosecuting Attorneys Coordinating Council – who re-assigned the matter to the Monroe County Prosecutor – and criminal charges against Hassan were filed last week.
State Senator Aric Nesbitt has urged that the U.S. Department of Justice initiate an investigation into the Fay Beydoun matter. This is likely the best turn of events to avoid any appearance of conflict of interest by Nessel’s office.
Nesbitt has also pointed out that there is substantial e-mail traffic tying Gretchen Whitmer to the transactions in question involving the disposition funding of Beydoun.
Dana Nessel and her office needs to stay as far away as possible with respect to any investigation of Fay Beydoun.
Councilman Mohammed Hassan had been under investigation for possible misconduct in Hmatramck elections going back years.
One incident over ten years ago involved candidates reporting to the Wayne County Board of Canvassers that Hassan was attempting to sell absentee ballots.
In 2020, the Michigan Department of Attorney General issued a warning to him regarding his role the processing of absentee ballots.
Nothing ever came of these well-publicized incidents – and it was only the Monroe County Prosecutor recently who ever authorized criminal charges against him.
Hassan now faces up to five years in prion if convicted.
There has been a reluctance of Democratic law enforcement officials to investigate political corruption involving the Bangladeshi-American community, who have given Democrats intensive support in the last two decades in Michigan elections, particularly in Wayne County.
Dana Nessel, a former assistant prosecutor in Wayne County under Kym Worthy, received crucial support in her 2018 quest for the Democratic Party nomination and in the general election against Tom Leonard to propel her into her seat as Attorney General.
The Bangladeshi-American Political Action Committee endorsed Nessel in her 2018 run for AG and had earlier endorsed Kym Worthy in her runs for Wayne County Prosecutor. The BAPAC support at the 2018 Michigan Democratic Party nominating convention of Nessel was important in her upset of Patrick Miles, who had been the clear favorite at that convention as he had garnered numerous key labor union endorsements.
Worthy has refused to engage in election fraud investigations as a matter of policy. She specifically refused to get involved in the Hamtramck investigation and Nessel’s office took the lead – then got cold feet and allowed the case to be re-assigned to another agency.
Politics played a role in the criminal investigation and eventual prosecution of Hassan. Democrats did not want to alienate a valuable constituent base.
Having the federal DOJ investigate the Beydoun matter gives me no comfort. The DOJ has been hopelessly politicized by Mt. Trump- going after completely innocent folks like Comey and Brennan while covering up the many crimes of Trump and his minions (like the rape of the 14-year old girl in Epsteiin’s home).
Michigan Public Radio says the Michigan Economic Development Corporation is a proud corporate sponsor.
Exactly how does this promote economic development in Michigan? Is this permitted by the legal structure of a Michigan P3, which is essentially a government agency?
The thieves at DTE and Consumers are both prominently represented on MEDC’s Executive Committee. Hemlock Semiconductor is the only manufacturer represented on the MEDC Executive Committee. The rest of the MEDC Executive Committee is a typical array of government leeches.
Can Auditor General Ringler examine MEDC’s Books and activities? Has he? How much is being stolen?
Politics, unchecked power and lack of oversight ,opens the gateway to corruption !
Wherever there’s money, there are crooks. The more money, the more crooks. BTW, President Trump is doing what I voted for. A former USAID official and four or five contractors recently pleaded guilty of stealing a half-billion dollars of taxpayers dollars. More coming.
10x25mm says
(Edit)Michigan’s contribution to the Federal Reserve, Governor Lisa DeNell Cook, has been caught out for mortgage fraud. President Trump has requested her resignation.
Michigan seems to have a genteel corruption problem, which includes our female politicians.
Sen. Rosemary Bayer endorsed Sean Carlson, an Oakland County deputy executive, as her replacement. Carlson is the former executive director of the Michigan Defense Center, one tentacle of the MEDC hydra.
The new state senate maps might make some of these races more than a wee bit interesting. The 13th looks a whole lot different after the 6th circuit got a hold of it. Unable to copy and paste it for you, but the new court approved 13th is all in Oakland County. The 8th is Livonia, Farmington City & Hills, the Northvilles and a hunk of Novi (new home for Dayna Polehanki?). The new 5th is the Plymouth City & Township, Canton Twp., Inkster, Garden City and most of Westland. 2026 might be interesting.
MEDC CEO Quentin Messer just hired law firm Dykema Gossett to represent him. Dykema Gossett will be paid to represent Mr. Messer by MEDC. Mr. Messer is seeking to shield some of his cell phone records from the investigation into the Fay Beydoun grant.
I must admit this confuses me. As a state agency, shouldn’t the AG’s office represent Mr. Messer? It would not be that unusual as I understand the AG’s office has done this sort of thing in the past.
If MEDC is somehow exempt from having the AG defend them in court, maybe it’s time to thoroughly restructure the entire MEDC.
There exists a conflict of interest requiring the State of Michigan to hire outside counsel to defend Mr. Messer since the Michigan Department of Attorney General is probing the transactions for possible criminal culpability of Beydoun and state officials.
If you recall the criminal investigation of Wayne County Circuit Court Judge Mary Waterstone for misconduct in office, the felony charge against her was dismissed since the Attorney General initially represented her in the investigation of a matter where a prosecutor was accused of having permitted perjured testimony in a drug case presided over by Waterstone- but it was later discovered that Judge Waterstone was – at least arguably – aware the testimony was false and did not correct the record or notify defense counsel. The Department of Attorney General cannot defend a state official it may later have to charge criminally.
Typically, the Michigan Department of Attorney General provides legal counsel representation for all state officials – Frank J. Kelley insisted all attorneys working for the state be under his department.
The MEDC mess involving Fay Beydoun in currently reeling in several big names besides Governor Whitmer.
As another commenter has suggested, the investigation is now zeroing in on Quentin Messer, the head honcho over at MEDC.
The lack of proper oversight is a factor that has contributed to problems at MEDC – and Beydoun’s Global Link is just one of those messes that could have been avoided if proper controls had been put into place.
Fay Beydoun has historically been a heavy Democratic Party donor to the point where this MEDC situation smells of a de facto “pay-to-play” scenario.