Secret subsidies: Mackinac Center sues Treasury Department over brownfield records

The Michigan Treasury Department is hiding records from the Detroit Free Press about millions of dollars the state paid to a real estate firm as part of a major development in downtown Detroit, and the Mackinac Center Legal Foundation will represent the daily in a lawsuit filed July 22 in the Court of Claims.

The Mackinac Center's lawsuit involves the expansion of the One Campus Martius by Detroit-based Bedrock Management Services LLC.

The project benefits from transformational brownfield plan incentives. The state pays developers with a portion of the taxes generated by their projects — money that would otherwise fund public services like schools and cities.

The Free Press filed a Freedom of Information Act request March 17 seeking key reports used by the state to calculate the value of these payments. These requested documents are critical to understanding how much public money is being used and whether the project is delivering the jobs and investment promised when the incentives were approved.

The department denied the request in full, citing state tax confidentiality laws.

The lawsuit argues that the Michigan Constitution requires disclosure of any records involving the use of public funds, including “financial records, accountings, audit reports and other reports of public moneys.”

The case asserts that this constitutional right overrides the statutory exemptions that the Treasury cited.

“The press has an important watchdog role and a responsibility to the public interest,” said JC Reindl, reporter at The Detroit Free Press. “The records we seek are critical to understanding how taxpayer dollars were used for development projects receiving subsidies and should be a matter of public record.”

Michiganders should know how their money is spent, said Derk Wilcox, senior attorney at the Mackinac Center Legal Foundation.

“The public has a constitutional right to know how its money is being spent,” Wilcox said in a press release. “These are not private tax filings. These are government calculations used to divert taxpayer dollars to private developers — and the public deserves transparency.”