How we make the call
Truth Squad assigns five ratings to the political statements we review, in descending levels of accuracy:
|Who:||Michigan Democratic Party|
|What:||News releases claiming Gov. Rick Snyder’s cousin, George Snyder, was given preferential treatment in state furniture contracting procedures.|
|The call:||No Foul|
The state Democratic Party obtained emails showing that George Snyder, owner of DBI Office Interiors in Lansing, expressed worries in April 2011 to a top aide to the governor about legislation that could have harmed his company, which sells office furniture to state government agencies.
Those emails were obtained through the Freedom of Information Act and released by Democratic party officials on March 25.
In an email to top Snyder aide Richard Baird, George Snyder said he was “very upset and nervous” about a 2011 Senate bill (page 70) that would have capped new state office furniture purchases at $1 million. Any amount above that would have required the purchase of used furniture.
Baird in turn sent an email to then-state budget director John Nixon, telling Nixon of George Snyder’s concern and said George Snyder is “Gov. Snyder’s cousin.”
“We are on this,” Nixon replies.
The legislation was subsequently changed to allow new furniture purchases of more than $1 million, but requires the state to first consider whether its inventory of furniture can be reused or refurbished before making such a purchase.
Holland-based Haworth Inc. at the time had a $19.2 million contract as the state’s sole-source provider of office furniture. That contract was boosted to $41 million in September of 2012, according to a contract obtained by the Democratic Party. (Page 6)
DBI Business Interiors is a preferred Haworth dealer and through that relationship has sold millions of dollars of furniture to the state.
In January, DBI and Haworth were awarded a $731,000, no-bid contract to remodel and reconfigure the Michigan Economic Development Corp.’s headquarters in Lansing.
The MEDC, a public-private partnership that receives state funding, said it would be more cost effective to remodel using existing Haworth furniture than to seek a new vendor.
Statements under review:
“Snyder administration officials and the controversial NERD fund intervened in the midst of the state’s 2011 budget crisis to protect the Governor’s cousin and a major financial contributor from what could have been an $18-million loss. Snyder officials were acting to protect a lucrative state contract that was threatened by Senate Republicans who had put a $1 million cap on the purchase of state office furniture.”
Baird at the time was running the New Investment to Reinvent and Diversify Fund from the governor’s office. The controversial NERD fund, which was shut down in 2013, was a nonprofit funded by secret donors. It paid for a variety of government-related costs, including housing and travel costs of Detroit emergency manager Kevyn Orr.
Had the cap on new furniture expenditures been adopted by the Legislature, Haworth and George Snyder stood to lose millions of dollars in future business with the state.
"The $41 million question Republican Gov. Snyder is trying to avoid is why it was so important that the State buy huge amounts of brand new office furniture from his cousin at a time of massive budget cuts to schools, layoffs and new taxes on the middle class," said Lon Johnson, Michigan Democratic Party Chair.
"How does he explain shielding his family member's contracts from cuts and then doubling them to Michigan's seniors and families that had to sacrifice? Snyder owes us an answer, not more trite dismissals."
Rick Snyder took office in January 2011 as the state was emerging from its worst economic slump since the Great Depression of the 1930s. His first budget in fiscal year 2012 included a variety of cuts, including cuts to the foundation allowance to schools. (Page 24.) Total school spending fell, as well, in fiscal year 2012 because of the loss of federal economic stimulus money. Overall school spending has since risen. (Page 3.)
Snyder’s budget, passed by the Legislature, also taxed pension income, in part to offset a revenue loss from a $1.8 billion business tax cut. It also reduced the amount of money low-income families could claim in the state earned income tax credit.
|The call:||No Foul|
The narrative in the Democratic Party’s news release is not in dispute. But did the Snyder administration push for a change in furniture purchasing legislation because the governor’s cousin would have benefited from it?
Gov. Rick Snyder has said the Democrats’ claims are nothing more than election-year politics. According to MLive, the governor’s office also said that state spending on furniture with DBI has fallen slightly since he took office, from $18.5 million in the three years before Snyder took office to $17 million in the three years since the start of 2011.
Nixon said he already knew that George Snyder was the governor’s cousin when Baird mentioned it in an email, according to the Detroit Free Press. He said he believed Baird was trying to flag a potential conflict and assure George Snyder did not get preferential treatment.
But in politics, the perception of impropriety can be as damaging as actual wrongdoing. The state Democratic Party was well within the bounds of fair play, however tough, in bringing these communications between a Snyder relative and some of the governor’s top people the incident to light. It would have been surprising if the party hadn’t done so. George Snyder did his cousin no favors by asking Baird to intervene, and the outcome of his actions certainly raise fair questions about the role family ties played.
Although it probably wasn’t the party’s intent, its digging into the furniture purchase legislation also raises larger questions about the state’s furniture contracting practices.
Had the legislation passed in its original form, it would have guaranteed more business for Kentwood Office Furniture, which had a contract to supply the state with used office furniture.
Grand Rapids-based Kentwood had lobbied lawmakers to pass the bill that would have limited how much the state could spend on new furniture, according to MLive.com.