This article originally appeared in The Detroit News August 19, 2025.

Michigan taxpayers deserve to know how the state’s multibillion-dollar economic development enterprise is performing. Recent revelations about the Michigan Economic Development Corp. (MEDC) paint an alarming picture. Attorney General Dana Nessel just suggested that the state pause the corporation’s funding. We should go further. The attorney general is investigating a $20 million grant the MEDC gave to a politically connected businesswoman, Fay Beydoun.

Nessel told WDIV’s Flashpoint that most state earmarks are spent well. “But money going to the MEDC has us deeply concerned,” she said.

Then she dropped the hammer: “Each day we learn new things about this agency that lead me to believe that until there’s better oversight, perhaps they shouldn’t be receiving any state funds at all.”

Those are fighting words in Lansing.

The story starts when Beydoun, a political donor and member of MEDC’s executive committee, secured a $20 million grant for a business accelerator called Global Link International. The Detroit News reported Beydoun used the money for extravagant purchases, including a $4,500 coffeemaker.

The attorney general’s office launched an investigation after the news broke. The development corporation eventually cancelled the Global Link grant, declining to pay the second half of the grant and demanding repayment of some of the funds. Meanwhile, Nessel’s team raided the MEDC on June 18, seizing documents and employee phones. Nessel said the agency had “stonewalled” her investigation. The corporation rushed to court to recover what it says are privileged documents.

The Global Link story reflects broader problems with the state’s economic development approach.

Nessel’s call to freeze funding is the strongest criticism a statewide official has lobbed at the MEDC in recent memory. Former Gov. Rick Snyder called targeted tax incentives “the heroin drip of government” in his first term as governor. Running in 2018, then-candidate Gretchen Whitmer said she would require “100% transparency” from the MEDC.

The MEDC has earned bipartisan criticism from lawmakers. House Speaker Matt Hall, R-Richland Township, says MEDC funds could be used to fix the roads. And Rep. Dylan Wegela, D-Garden City, called corporate welfare appropriations “legislative malpractice.”

The scrutiny is appropriate, given how much the state spends on business subsidies. During its last session, the Legislature approved $4.7 billion to attract companies to Michigan or incentivize them not to leave. As I’ve written, with $4.7 billion the state could buy a $4,500 coffeemaker for every resident of Detroit, Grand Rapids, Flint and Saginaw. Or give a tax cut of more than $1,000 to every household in the state.

The Global Link fiasco isn’t an aberration. Even though the MEDC didn’t authorize the grant (the Legislature did, and the budget was signed by the governor), the corporation also has a long track record of bad business bets. A recent Mackinac Center analysis found that MEDC grantees created only one job for every 11 promised. Even when economic development programs manage to create jobs, the cost is absurdly high. In 2020, Mackinac Center scholars analyzed 2,300 deals spanning several decades. Michigan offered $594,000, on average, for every job created.

“The MEDC’s deals have as much grounding in economics as a horoscope does in astrophysics,” said John Mozena, president of the Center for Economic Accountability, an organization that studies public incentive programs.

The question now, Mozena told me, is whether any long-term reforms can come from the skepticism policymakers have voiced about the MEDC. Good question. Calls for transparency, oversight and guardrails have been ineffective.

Policymakers want to attract companies and jobs to Michigan, and that’s commendable. But every dollar spent on ineffective, overpriced business subsidies is a dollar not spent on schools, roads, public safety or tax relief. The heroin drip isn’t working. It’s time to defund the MEDC. Period.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.