Records: Firm of ex-aide to Michigan speaker paid $820K within days of grant

• Records show the firm of a former aide to then-House Speaker Jason Wentworth was paid $820K from a $25M grant for a health campus within days of the state awarding it
• The records also show that the state suspended the grant the day after Bridge Michigan first wrote about the grant
• The state inspector general is investigating what officials have called 'red flags' about the grant

LANSING — A former aide of then-House Speaker Jason Wentworth last year paid his for-profit consulting firm more than $820,000 in taxpayer money within days of obtaining a $25 million grant for a Clare health complex, according to new records obtained by Bridge Michigan.

Payment of the grant has since been suspended, but the records — secured this week by Bridge through the Michigan Freedom of Information Act –  pose new questions about the deal as well as Michigan officials’ explanations of it.

State officials had told Bridge Michigan in May that payment for the project led by David Coker and championed by Wentworth, his former boss and a powerful Republican, was suspended in March.

Related:

• ‘Red flags’ surround $25M health campus pushed by ex-Michigan House speaker
• Michigan paid $10M before ‘red flags’ froze ex-House speaker’s pet project
• Timeline: How $25 million deal to ex-House aide raised ‘red flags,’ faltered

In fact, the records show a “stop work order” letter to Coker and his nonprofit, Complete Health Park, was signed at 10:01 a.m. May 4, the day after Bridge Michigan first wrote about the project.

“Your agency should stop all work related to this grant program, effective immediately," Christine Sanches, director of MDHHS' bureau of grants and purchasing, wrote in a letter to Coker and Complete Health Park, the nonprofit he formed in 2022 to handle the grant and the project. 

Bridge sent MDHHS spokesperson Lynn Sutfin a list of questions about the records on Wednesday morning. By 9 p.m., she did not answer them. 

The documents were released this week amid a state inspector general investigation into what Michigan health officials have called “red flags” surrounding the project.

Not only did the state award $25 million to a little-known nonprofit led by a former aide to the lawmaker who secured the grant, Wentworth, but the health complex was to be built on 70 acres bought for $3.5 million from state Rep. Tom Kunse, R-Clare, who succeeded Wentworth in the Legislature.

The project, which was not competitively bid, also involved a business partner who had served time in prison for fraud and who was indicted on new fraud charges the day before the grant was finalized in December.

Coker worked for Wentworth as an aide, but Wentworth said he fired Coker before he became speaker in January 2021; he has declined to say why. 

Records obtained this week by Bridge show a consulting firm owned by Coker, IW Consulting, billed the nonprofit Complete Health for over $800,000, including $200 an hour for 911 hours of work and a 7 percent management fee.

Those invoices were filed on Dec. 5 and Dec. 6, a few days after the Dec. 1 “effective date” of the grant.

The consulting fee was applied to all costs, except the hourly billings, including the land purchase that was finalized in January and $5 million spent on a construction firm.

It’s unclear if anyone besides Coker works for IW Consulting, whose business address is his home in Clare, according to state records.

Coker did not respond to requests for comment from Bridge this week. He previously told Bridge that "no one is being paid above what we should be paid" and “there's not one guy... that's going to be pulling  $500,000 a year off this.” 

Both Coker and Wentworth, who was first elected in 2016 before leaving in 2022 because of term limits, have previously denied any partnership or wrongdoing in regard to the grant.

Kunse also has denied wrongdoing and has since publicly questioned the grant, which was awarded before he took office. Kunse said he and a fellow Republican lawmaker relayed concerns about the project to the state.

Some lawmakers from both sides of the aisle have decried the process that led to the awarding of the grant. 

In the past two years, lawmakers have awarded more than $2 billion in “earmarks” or special grants that often benefit their communities.

Ex-lawmakers, including former Rep. Steve Johnson, R-Wayland, said legislators use the grants to help “friends” — both Republican and Democrats — with little transparency or oversight from state officials. 

Johnson is now a fellow at the Center for Practical Federalism, which advocates for more oversight at the state level.

‘Generational change’?

Coker is a former chair of the Clare County Republican Party and a current elected member of the Clare County Road Commission. He is also now manager of the Clare Area Chamber of Commerce.

In grant paperwork, Cocker envisioned a complex that would include a pool, fitness areas, athletic courts and fields and other buildings for medical offices, including doctors, dentists and chiropractors. One of the first features to be built: a 24-lane bowling alley. 

"Bringing this to Clare County is going to undoubtedly bring generational change in health," Coker told the state in a project summary. "This is the opportunity to improve the lives of communities far beyond Clare County and make health solutions attainable for a significantly underserved area."

But questions emerged almost from the moment the grant was approved by lawmakers.

In May, Sutfin acknowledged that the legislative language of the grant was “very unusual” because grants similar to it typically go through the Michigan Department of Labor and Economic Opportunity. 

Instead, the grant was directed to the health department.

Without clarity on which nonprofit would get the money, Sutfin has said the department asked lawmakers who was involved. 

The project was never bid and Complete Health Park — Coker’s nonprofit — got the contract.

In preliminary documents, Complete Health Park officials indicated the Clare hospital would become a tenant and  “will be an added windfall.”

MyMichigan Medical Center Clare’s regional president, Marita Hattem-Schiffman, contradicted that account to Bridge this spring, saying the hospital does not intend to be a tenant for any future move and would own land wherever it went.

And even before the state and Complete Health agreed on a final contract in December, the documents show that Complete Health signed an agreement in October 2022 to pay FED Corp., a Gladwin construction firm, nearly $20.6 million for the project.

$150K to separate nonprofit

The new documents also show the state paid $150,000 to the Beta Sole Foundation, a Mount Pleasant nonprofit, for “marketing/website” work. 

One of Coker’s daughters received a college scholarship from the Beta Sole Foundation, and Coker initially helped create the nonprofit in 2017, state corporate records show.

The foundation had been run by Anthony Demasi, a friend and business associate of Coker who is listed in grant application as the “project manager” for Complete Health Park.

Demasi was sentenced to 60 months in prison in 2010 for a fraud conviction and is now facing new federal charges of aggravated identity theft on allegations of applying for credit cards in the name of former Beta Sole employees. 

He has pleaded not guilty to those charges, and has said he’s rebuilt his life and business after earlier missteps.

Demasi has told Bridge he was never really project manager of Complete Health, and his role was primarily limited to submitting forms to the state and helping draft the state-required feasibility study.

Demasi sued Coker in Clare County on March 30, claiming he was wrongfully terminated in February after his criminal past and the current charges were first publicized. 

Demasi claimed his separate firm, Goldman Advisors Group, which helped develop the feasibility study for the project, was paid only $37,500 of the $300,000 he said Coker had agreed to pay the firm.

In his initial court complaint, Demasi made no mention of the $150,000 to Beta Sole. 

Coker, through his attorney, has rejected Demasi’s claims.

In an email to Bridge, Demasi told Bridge Wednesday that he is no longer a board member of Beta Sole, and it is running independently of him. He said the nonprofit had employees with marketing and public relations expertise and had provided services to Complete Health Park.