Three Cheers for Michigan House Democrats

Questioning MEDC transparency is the right thing to do

House Democrats in Lansing recently called on the Michigan Economic Development Corp. to be more transparent and accountable in a press release, saying the organization is "notoriously secretive."

The latest salvo against the MEDC was inspired, at least in part, by the organization’s use of state money to buy an advertisement under the “Pure Michigan” label that featured Michigan’s new right-to-work legislation.

This is not the first time Democrats in Lansing have complained about the lack of transparency at Michigan’s department of corporate welfare.

In 1999, then-state Sen. Alma Wheeler Smith complained of trying to obtain information from the MEDC. “I don’t think the Legislature should have to FOIA a department or agency to find out how money is spent,” she told Gongwer News Service 14 years ago this month. 

In 2000, Democrat Joseph Rivet actually argued the MEDC should lose its funding over its secretive behavior: “Every time we try to hold these guys at the MEDC accountable to taxpayers, they claim to be a private agency outside the realm of scrutiny.”

The great news here is that House Democrats have Republican colleagues in Lansing who also are troubled by the MEDC's lack of transparency and accountability. State Rep. Bob Genetski, R-Saugatuck, State Rep. Mike Shirkey, R-Clarklake, and State Rep. Tom McMillin, R-Rochester Hills, have all taken issue with the MEDC's lack of transparency.

In a November 2012 Michigan Capitol Confidential article titled, “MEDC Questioned About Its Transparency” Rep. Shirkey reported that he introduced amendments to make the agency more transparent, but that the MEDC lobby “watered down” the reforms.

Moreover, they are not the only Republicans to complain about MEDC transparency, or in recent years. Sen. Jack Brandenburg, R-Harrison Township, and Republican former State Senator Nancy Cassis have introduced several pieces of legislation to open up the secretive department.

Mackinac Center analysts have led this charge. In 2005 this author detailed just one set of problems with MEDC secretiveness attempting to obtain the simplest information from the recalcitrant agency. It can be found in Appendix B of the study “MEGA: A Retrospective Assessment.”

We followed up that treatment with a 2009 Policy Brief with a long list of complaints against the department titled MEGA, the MEDC and the Loss of Sunshine.

Remarkably, the latest attention being paid to MEDC openness — or lack thereof — follows hard on the heels of yet more criticism of the agency by the Auditor General of Michigan. The Auditor General recently found that the MEDC was taking credit for 12,000 jobs created by a program that cannot be verified. The Auditor General also criticized state development officials in 1993 for overstating jobs claims in a job-training program and again in 2003 over its claim of job creation.*

Maybe the MEDC does have something to hide.

Mackinac Center scholars have recommended the wholesale elimination of the MEDC. It is unnecessary, inefficient and maybe even harmful to state economic growth. At a minimum it should be more transparent. A bi-partisan collection of lawmakers in Lansing needs to open the MEDC up wide and let in the disinfecting rays of sunshine. They can’t do it soon enough.

*Note: For details and sources on these stories please see page 40 of the Mackinac Center study “The Michigan Economic Development Corporation: A Review and Analysis.”