Dana Nessel’s office probing $2M rocket plan that failed to launch

• Michigan attorney general says it is investigating state grant intended to bring rocket launches to the state
• The $2 million grant was one of dozens approved in the last hours of the administration of Gov. Rick Snyder
• The investigator working on the grant is in the AG’s criminal investigations division

Michigan Attorney General Dana Nessel’s office on Wednesday confirmed it is investigating a $2 million grant that lawmakers approved in 2018 to study bringing commercial rocket launches to the state.

The grant is one of dozens of pet projects that lawmakers approved in the final hours of former Gov. Rick Snyder’s administration.

“I thought it smelled from Day 1,” said Kirk Profit, a former legislator and lobbyist, whose client, air-cargo firm Kalitta Air, declined an offer by the nonprofit that received the grant to participate in the project.

“This is a poster child of those last-minute, lame-duck supplementals,” Profit said, referring to the pork-laden spending bills that lawmakers approve late in legislative terms, often in the dead of night.

Related:

• Michigan spent $2M to be a rocket hub. Critics say it’s produced only hype
• Lansing, we have a problem: Whitmer kills $2.5M rocket plan pushed by Snyder
• Michigan attorney general investigating $25M grant to ex-House speaker’s aide
• Michigan 'pork' includes another $15 million for ex-GOP chair’s company

Profit, who said he warned the offices of Gov. Gretchen Whitmer and Nessel about the grant, said he has been interviewed as recently as this fall by an attorney general criminal investigator.

Gavin Brown, executive director of the nonprofit Michigan Aerospace Manufacturers Association, which got the grant, on Wednesday said that he is unaware of any investigation and has not been contacted by the attorney general’s office.

“We received a $2 million grant to assess the feasibility of low-Earth-orbit space launch sites in Michigan to see if we could use our state’s manufacturing and engineering prowess to tap into the multi-billion-dollar space industry,” Brown said in an email. 

“We completed all the requirements for that grant, including a 1,200-page final report that was submitted to the state.”

Brown had pitched that Michigan would be ideal for launches into near-earth orbit, given its northerly location. The space industry has exploded in recent decades and numerous public and private entities have raced to join the industry, but nothing has come of the idea in Michigan.

Earmarks have proven controversial for years: In the past two years alone, lawmakers have funded nearly $2 billion in spending on everything from parks and museums to union training programs and for-profit companies through a process that has little oversight.

This week, the attorney general’s office confirmed a separate investigation into another earmark grant, a $25 million awarded in 2022 to a nonprofit run by a former aide to Jason Wentworth, the former House Speaker.

Whitmer’s office approved the spaceport grant after initially balking at funding it. 

Lawmakers, including former Macomb County Republican State Sen. Michael MacDonald, pitched the grant, and Brown told Bridge in 2019 that he personally solicited support from Gov. Snyder.

But since the grant was awarded, others have questioned how Brown spent the money. 

Michael Dudzik, a former U.S. Air Force brigadier general and aerospace industry consultant, claimed that Brown did not pay the full cost of a report produced for Brown’s nonprofit. Tax records and other documents filed with the Michigan Economic Development Corp., which oversaw the grant, say little about what was done beyond traveling extensively to space-related conferences across Michigan and the country.

In 2021, Brown was paid $152,270 by the space association, whose main revenue came from the grant. An assistant, John Geisler, was paid $99,643, tax records show.

Dennis Ferraro, an Upper Peninsula resident who rallied the community to fight back against plans to launch rockets from the shores of Lake Superior, told Bridge he has talked with an attorney general investigator.

He said he’s now backing away from efforts to stop the spaceport, confident the proposed launch site near his Marquette County home will not be built.

He said the investigation, along with a recent decision by Powell Township officials to conclude a spaceport was “legally prohibited” by township zoning laws, means the spaceport is dead.

Dudzik told Bridge Michigan Wednesday that he could not comment, saying he was told to direct all questions to the attorney general’s investigator.

In his report, however, Dudzik was skeptical of Brown’s claims that tens of thousands of jobs and billions in investment would come to Michigan if a spaceport was built. 

More than a dozen spaceports in 10 states have received licenses from the FAA in recent years, and most haven’t staged a single launch, Dudzik reported.

Instead, Dudzik’s report concluded that even if there was one launch a week,  “the annual revenue generated … would have the same revenue impact in the State equal to the annual revenue of two additional fast-food chain restaurants.”