The Michigan Economic Development Corporation hands out taxpayer money and other favors with the stated goal of creating jobs. But over the years, it has often felt like a punchline. The corporation is under intense scrutiny after state investigators raided its Lansing offices in June and seized records tied to a $20 million legislative grant funneled through former MEDC board member Fay Beydoun, a donor to Gov. Gretchen Whitmer’s gubernatorial campaign.
Taxpayers paid for a $4,500 coffeemaker, an $11,000 first-class airplane ticket, and Beydoun’s own $550,000 salary to lead an organization that didn’t even exist when the state made its grant, according to reports from The Detroit News.
As that scandal unfolds, a walk down memory lane will show the many times the MEDC famously overpromised and dramatically underdelivered. From failed film subsidies to inadvertent deals with a con artist, here are 10 moments that left taxpayers scratching their heads.
#10. Switch promised to transform Grand Rapids. It hired 26 people. A state official once claimed the Las Vegas data center company Switch would revolutionize the region. In the end, it created just 26 jobs. Source
#9. Turning an auto plant into…nothing Multiple companies were offered subsidies to transform an old Wixom plant into a hub of green innovation. They didn’t. Source
#8. Michigan’s $500 million Hollywood fantasy Michigan spent half a billion taxpayer dollars trying to become a film hub. It produced about 700 short-term jobs that quickly disappeared. Source
#7. The company that was supposed to lead America’s comeback…filed for bankruptcy A123 Systems was heralded by President Obama and Michigan leaders as a recovery leader. Then it went bust. Source1 | Source2
#6. Green dreams, nightmare results One green energy firm received up to $120 million in subsidies and promised 70 jobs, then delivered just three jobs over three years before closing in Kinross, MI. That’s $40 million per job. Source
#5. A “billion-dollar jolt” that barely flickered Billed as a game changer for the economy, a highly touted billion-dollar development delivered only 3% of the jobs promised. Source
#4. $670 million for…zero jobs Through its SOAR program, the development corporation has dished out more than half a billion dollars in subsidies over a three-year period, but it has not yet reported the creation of a single job. Source
#3. The $23 million flop State officials offered $23 million in tax credits to a flashy Livonia e-business development that was supposed to create hundreds of jobs. It collapsed without delivering a thing. Source
#2. Lights, camera…corruption In a bid to become the next Hollywood, Michigan offered $10 million in tax credits to Hangar42 in Walker, MI. The deal collapsed when the buyer couldn’t properly document the alleged investment, and he was ultimately charged with attempted felony false pretenses. Oops. Source
… and the most embarrassing moment for the MEDC is:
# 1. MI governor shares stage with a con man to whom she promised millions MEDC once approved tax credits for a man later revealed to be a con artist. Richard Allen Short was offered millions in incentives, and he also scored a photo op with former Michigan Gov. Jennifer Granholm — before heading to prison. Source
And just for fun…
Bonus: Michigan Pays to Critique Capitalism Michael Moore’s anti-capitalist film “Capitalism: A Love Story” received a Michigan film subsidy. That’s right — taxpayers funded a takedown of the very system that paid for it. Source
Whether it’s misallocating billions of taxpayer dollars or overpromising and underdelivering, the MEDC’s track record shows that favoritism falls flat.
Maybe it’s time for Michigan to end corporate welfare and put taxpayer money back into the pockets of taxpayers.
