Officeholders and nonprofit corporations: A toxic mix

Michigan's citizens are tired of the divisive political culture in Lansing. Midnight deals, closed doors meetings, lobbyists, and special interest influence have stood in the way of long-term solutions. As Governor, I will ensure that government is open, fair, and accountable to the citizens by making Michigan a national leader in transparency and ethics.

– governorelectricksnyder.com, "Vision," Nov 2, 2010

Unfortunately, the lofty vision of Governor-elect Rick Snyder didn’t last long.

Just five weeks after he took office he had his very own 501(c)(4) social-welfare corporation: New Energy to Reinvent and Diversify – the NERD Fund. In its first two years of operation, the NERD Fund raised $1,686,000 and ran unaccountable government activities out of the Governor’s office. The NERD Fund is not required by law to disclose its donors to the public, and it hasn’t.

Recently the Governor announced that the NERD Fund would be dissolved because it has become a “distraction.” We’re told that its functions will be assumed by a new entity that will disclose donors. As to the $1.7 million the NERD Fund reported it raised in 2011 and 2012, and whatever it has collected in 2013: It appears that the citizens of Michigan won’t ever be allowed to know who wrote those checks.

What’s wrong with that? Set aside the Governor’s relentless positivism for the moment. Think about the donors. Do you suppose they are anything but rational economic actors? Do you suppose that it never occurred to them that they had the opportunity to be undisclosed special supporters for an official who can propose a $50 billion budget, veto a law, reinvent regulation, appoint judges, authorize no-bid contracts, supersede local governments and generally administer state government?

I know that secrecy, reciprocity and personal gain are fundamental business expectations. They are lousy public ethics. We’ve gotten carried away with the bromide about running government like a business. We should aspire to have state government consistent with Governor-elect Snyder’s vision: “…a national leader in transparency and ethics.”

The Governor didn’t start this state’s culture of officeholders’ nonprofits. The legislative caucuses have had nonprofits for several years, and so have a number of individual officeholders of both parties. What’s disappointing is the fact that the Governor missed an opportunity to be a different kind of politician and lead a change of culture.

When his advisors who proposed the NERD Fund said, “We didn’t start it, and everybody’s doing it,” he should have told them that that’s an insufficient reason to drag politics into the shadows.

On several occasions acquaintances around Lansing have told me about fundraising invitations with one set of instructions for checks to the officeholder’s campaign committee and another set of instructions to make corporate checks payable to the officeholder’s 501(c)(4). The culture is spreading. The social welfare purposes are dubious.

Consider the 501(c)(4) corporation called Fund for Michigan’s Future. Its resident agent is Kim MacMaster, the wife of State Rep. Greg MacMaster. A month after Rep. MacMaster announced his candidacy for the senate seat being vacated by Sen. Howard Walker, Fund for Michigan’s Future began airing ads on northern Michigan talk radio stations touting Mr. MacMaster’s philosophy of doing the right thing and, in his voice, thanking voters for “letting me be your trusted voice in northern Michigan.”

I leave it for Rep. MacMaster’s constituents to discern the social welfare benefit of those ads. Could it be the opportunity to support Mr. MacMaster with a corporate check that isn’t subject to any contribution limit or any public accountability?

There are plenty of examples of the problems associated with public officials and nonprofits. The Kilpatrick Civic Fund became a vehicle for a criminal enterprise. The NERD Fund has undermined public trust in how the financial restructuring of Detroit is unfolding.

We need a new culture for public officials and nonprofits in this state. Officeholders shouldn’t feel that an account to accept undisclosed personal or corporate checks is essential to holding office. More importantly, the citizens of this state have a right and a responsibility to know who is giving money to accounts under officeholders’ control. That is our inoculation against corrupt practices.

The statistical truth is that Michigan has become swamped in dark money. We all are disgraced by that. We deserve more open and transparent politics and public officials.