State's Corporate Welfare Arm Says Ex-Attorney General Approved Being Less Transparent

MEDC: AG gave 'informal verbal advice' about not disclosing tax information

Twelve weeks after being asked why it stopped disclosing the names of companies receiving public money, the Michigan Economic Development Corporation — the state's corporate welfare arm — says it did so upon "informal verbal advice" it solicited from the attorney general's office.

In 2009, the MEDC stopped disclosing the names of companies, and began only releasing information aggregated by industry.

A March 18 article published by Michigan Capitol Confidential delved into the issue. That article focused on three questions posed to MEDC Vice President of Communications Michael Shore about the policy change. They were:

1 — Who made the determination?

2 — Did MEDC ask for the ruling?

3 — Has it ever been made public?

Shore did not respond at that time.

In early May, Michigan Capitol Confidential posed the same questions to Shore again for a follow-up article. On May 7, he responded.

Stay Engaged

Receive our weekly emails!

To the question, “Who made the determination?,” Shore said, “We received informal verbal advice from the AG’s office.”

To the question, “Did MEDC ask for the ruling?,” Shore said, “Yes.”

To the question, “Has it ever been made public?,” Shore said, “No, it was verbal.”

Michigan Capitol Confidential is now seeking more information on the “informal verbal advice” and any other pertinent information from the attorney general’s office, which was headed by Republican Mike Cox when the policy was changed.

Until now, there had been no explanation for this particular MEDC step away from transparency. The policy change first came to light in early 2009 and in May of that year, the Mackinac Center for Public Policy asked the agency why company-by-company information on tax credits was no longer publicly available. MEDC said the information would no longer be disclosed because it was considered confidential tax information.

At the time and over the following years, the agency did not explain how it came to this interpretation or whose legal opinion it represented. The issue and its implications for transparency has been the subject of other Michigan Capitol Confidential articles.

Legislative inquiries about MEDC’s policy change arose in February of this year during a House Tax Policy hearing, when it was revealed that past deals by the MEDC have left the state with $9.38 billion in tax-credit liabilities. Those tax credits, which often are paid in the form of checks from the state to particular firms, were handed out in the years after the agency changed its policy.

In his testimony to the committee, Jack McHugh, the senior legislative analyst with the Mackinac Center, pointed out that the MEDC had either regularly violated the law back when it used to disclose how much money it gave to each business, or it was now wrongly treating the information as confidential. The focus of the hearing ultimately drifted to other topics, however.


See also:

State's Corporate Welfare Agency Tone Deaf to Requests for Transparency

There is No Good Reason the MEDC Should Exist

Beer website Provides More Information About Taxpayer Investment Than the State

MEDC Feeling the Heat for Corporate Welfare Deals Coming Home to Roost

Related Articles:

Legislators Who Promote Transparency Should Start by Disclosing Corporate Welfare Deals

Secretive Bidder Wins Pure Michigan Contract Over Transparent One

The State Claims ‘Pure Michigan’ is Worth Tens of Millions. It Isn’t.

This Just In … Longwoods Out

Tourism Promotion Study Criticism Absurd, Ironic

Mackinac Center and Virginia Tech Professor Dr. Marc Edwards Sue Wayne State Over Flint Water Documents

Stay Engaged

Simply enter your email below to receive our weekly email:


Detroit Prep is a top-rated and economically and racially diverse charter school in the city. It's growth means it needs to move out from a church basement and into a new location. Nearby is a former Detroit Public Schools building, sitting empty for years. But, worried about competition, the public school district refused to sell. For years, district and local government officials in Detroit had worked to block public charter schools. They pushed legislation at the Michigan Capitol to hinder them, refused to sell to them, transferred surplus buildings from the district to the city government and imposed deed restrictions on property sales to private developers. All of it was aimed to hinder or even prevent charter school choice outside the confines of the Detroit school district.

Related Sites