In the wake of the state granting a targeted tax credit to a convicted embezzler's company, much sound and fury has come from the Michigan Legislature and executive agencies. Unless decision-makers recognize the root problem, however, it will all signify nothing.
The chairman of the Michigan Economic Development Corp., which granted the subsidy, claimed to be "embarrassed" and promised background checks on all future applicants. The Michigan House and the Michigan Senate have launched hearings to investigate how Richard Short, a convicted criminal, received a special tax credit for his company.
This mistake, however, is merely a symptom of a much more serious issue. While Richard Short's company neglected to disclose his criminal status on their application to the MEDC, the MEDC itself has been withholding critical information from the public for years.
The Mackinac Center's Michael LaFaive summarizes the problem:
This obviously underscores our point about more transparency being vital at the MEDC. The institution is so hyper-secretive it may feel insulated enough from outside eyes that it can get away with the most cursory review of proposed economic development projects.
LaFaive's policy brief "MEGA, the MEDC and the Loss of Sunshine" details how Michigan economic development agencies have become consistently less transparent over the past decade. Without basic data, Michigan taxpayers have of knowing whether these expensive programs are truly benefiting the state.
"Such a lack of transparency cannot benefit the public," LaFaive wrote in the policy brief; "it can benefit only those who profit directly from the existence of the program, beginning with MEDC officials themselves."