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.

–, "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.

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Martha Toth
Mon, 11/25/2013 - 11:16am
And now the State Senate has voted to enshrine in law the secrecy of these dark money contributions! I have never been or believed in being a single-issue voter, but this may be the turning point for me. Anyone who votes to keep secret from the public who is buying influence with them will NEVER receive my support in any form again. The buying and selling of political representation in secret is undermining our representative democracy in a fundamental, irrevocable, and likely fatal way. When all trust in government is lost, what do they honestly expect will ensue?
Brendan Maturen
Tue, 11/26/2013 - 8:42am
Very well said, Martha. I couldn't agree more. I intend to find out how my Senator voted on this.
Tue, 11/26/2013 - 12:41pm
Martha, Is you only concern about money or is it about secrecy or is it about influence or is it about who is benefiting? Money surely is influencial, but I would offer that there are other means of influence that have significant financial value and yet you don't seem concerned about. There are other issues of blatant secrecy in the political process that have more impact then who is donating to what candidate or cause, I wonder if you care. I hear a great deal from those who are against private money and its influence, I hear little from them about the other means of influence or about those chose to take the temptations, and nothing about those who put the politician in that abuse their public trust. I hear a great deal from those who are oppose to the money and influence and yet oppose those efforts to break the political cycle the facilitates this. A good example of one effort to open things up and to reduce personal infleunce is term limits. Historically it takes time for individuals to setup networks of influence, such as a the donation network or the reporter that is cultivating sources for influence and resiporcity. Term limits disrupts that development of influence, are you supportive of term limits? If not, why not?
John Q.
Tue, 11/26/2013 - 3:52pm
Who are these people you talk about Duane? I love how people like to deflect from the issue at hand with some hypothetical or by questioning the motive of the person opposing the influence of money on elections and politicians. Instead of trying to find an excuse to not support disclosure, how about finding common ground on an issue you agree with others and agree to disagree on those you don't. Or maybe you don't really care but aren't willing to say so publicly?
Tue, 11/26/2013 - 8:43pm
John, Are you asking for names or are asking how other than money can be influenced? Haven't you seen or heard of a politician giving their vote for something other then money and personal principle? If you haven't then I would suggest you never believed there was any such thing as political 'pork'. If you focus on campaigns only, have you ever considered what a poltician might do to get the editorial support of a noted media outlet or the endorement for another politician? We don't need to go into the personal gratification, such as ego and other things that polticians have been known to have statisfied while in office. To simply think that money is the only means of influence or the only corruptor in many group that would be seen as political naiveté. If you have never seen or heard the details of an elected official having their ego stroked or fed you have been fortunate. It can be a very disappointing experience to see the personal principles being cast aside for political recognition. My view is that disclousre is a good thing, my hesitation is the public abuse that the donor must go through. That is even true of those who take a political view opposed by 'political activitists. I guess you haven't seen any of the harassment at people homes, or the physical efforts to intimidate. My frustration with the purists on the campaign finance/private donations is that they are never willing to consider the practical conseqeunces of their belief. It is always a black and white issue. If you want more then everyone simply agreeing with you and want to really change things then you need to first learn how to listen. You have hear what those who have a different point of view are saying and not what you are listening for. You have to decide what you purpose is on this issue, it is simply to control the money or is about the quality of condidates, is it about disclosure or is about controlling who can contribute, is it about political influence or is it about getting you political views in control? My view is that much if not most of campaign money is wasted. It seems that it is only directed at the 'low information' voter and even then it is wasted. Because like you the vast majority of voters only hear what they are listening for so they are unchanged by campaign ads and such. If you more specifics from me answer a couple of questions, what is the purpose you see being achieved with publishing the names of donors? why is publishing their names the only way you can see that being achieved? have you consider any unintended consequences from your approach being implemented? You want to divert disagreement by claiming anything that challenges your view is a hypothetical exercise, the reality is political influence is practiced regulary in the halls of Congress and in Lansing and never a dollar is given to a campaign. You may want that to be hypotheti
Tue, 11/26/2013 - 8:43am
Why does everyone assume that all contributors to the NERD fund expect something in return? How many of us have just given a contribution to an agency without any expectation of return in any form? We just know from past experience that the agency can be trusted to do good things. It is no wonder that so many good people will not be involved in politics. And by good people, I do not mean career politicians who are all bad, but rather, people with past success in their life who are contributing a few years for the betterment of us all. Appreciate the fact the Gov. Rick has balanced the budget, and get off his back.
John Q.
Tue, 11/26/2013 - 3:50pm
Well Rich, I'm sure that not every donor to the Kilpatrick Civic Fund expected something from the Mayor or the City of Detroit. But you're telling us that because some may be well-intentioned or have no expectations that no one does? Who believes in that fantasy world?
John S.
Wed, 11/27/2013 - 10:20am
It's difficult to determine what if anything is "bought" by dark money contributions other than access. It's a fair guess that those who are continually solicited for campaign contributions for these 501(c)(4) corporations resent feeling compelled to write checks to politicians who may or may not deliver anything in return. Sometimes it's an implicit promise that "I'll be there to help make sure that the legislature does nothing to harm you"--that is, protection money. Perhaps that's why they prefer anonymity. Once you are on a list as being a contributor, you are certain to get a lot more telephone calls from still other politician run "charities."
Thu, 11/28/2013 - 3:09pm
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. This happened in the last election cycle for our State Reprehensive. The election was close until a flyer came out with Mike Trebresh a republican on Mt Rushmore with other democrats. (dark money) I sent the following message to the winner of the election Tom Leonard in hopes that he did not approve of it. Tom I do not know you personally but hope that you did not have anything to do with this flyer. It is very disrespectable to Mike Trebesh and includes false information about his character and ability. Please live up to the Ralph M. Freeman Scholarship you were awarded. Copied and pasted from your website. Tom received his Juris Doctorate from Michigan State University College of Law and was his Graduating Class President. Tom also received the Ralph M. Freeman Scholarship which is annually awarded to the student that most exemplifies the Rules of Professional Conduct by treating others with courtesy and respect. Dale Westrick 517-626-2256 Web site I sent him the flyer of Trebesh on Mt Rushmore with democrats about a month before the election.
Richard McLellan
Sun, 12/01/2013 - 4:17pm
Rich, how is it that your organization can seek to influence the public and public officials without disclosing your donors?