Corporatism, Michigan Republicans, Rick Snyder — June 18, 2014 at 12:53 pm

The Snyder administration: Awash in corruption and mismanagement


It’s been a tough week for Michigan governor Rick Snyder. During the negotiations over road funding at the end of the last legislative session, our illustrious governor was MIA, choosing instead to head to New York City to consult with bond ratings agencies. His lack of leadership on the home front resulted in his Republican colleagues – who have a majority in the House and a super-majority in the Senate – doing nothing whatsoever about road funding. Not only that, we now learn that his trip to NYC was for naught. Standard & Poor’s Ratings Services downgraded Michigan’s credit outlook anyway:

Standard & Poor’s Ratings Services on Tuesday lowered its credit outlook for the state from “positive” to “stable,” in part because of the Legislature’s $195 million to the so-called “grand bargain” to aid city pensioners.

S&P also cited a “softening in projected fiscal 2014 revenues, expected slow economic growth” and a decline in general fund revenues as reasons for the revised credit outlook. The agency kept the state’s AA-minus bond rating on general obligation debt.

“The state (rainy-day fund) appropriation to the Detroit bankruptcy settlement also raises questions as to potential future state contributions to other distressed localities and school districts, and we will monitor the uniqueness of this event,” S&P analysts wrote.

Fitch Ratings also assigned the state’s debt a “stable” outlook Tuesday, but did not attribute its view of state debt to the Detroit pension rescue package.

On top of this, Gov. Snyder’s failed education experiment on Detroit students, the Education Achievement Authority, is awash in scandal and turmoil. Last week, the Detroit News reported more misuse of funds by the EAA:

The cash-strapped Education Achievement Authority continues to spend tens of thousands of dollars per month on travel, using money that could be spent on computers or hiring teachers, newly released documents show.

In March and April, the EAA spent $52,000 sending school administrators and teachers to conferences in a number of cities, including San Francisco; Atlanta; Los Angeles; New Orleans; Washington, D.C.; Austin, Texas; and Portland, Ore. That’s atop $178,000 charged on credit cards for travel since the authority was formed in 2012 to take over Detroit’s 15 lowest performing schools.

In the wake of this continuing scandal, EAA chief John Covington resigned saying he need to care for his ailing mother and open … you guessed it … an education consulting firm. Commentator Jack Lessenberry put it this way: “Whether they admit it or not, he got fired.”

More mismanagement in the Snyder administration was revealed this week when we learned from Detroit Free Press reporting that a plan to renovate state-owned buildings to accomodate employees working in leased office space has saved the state absolutely nothing and is, in fact, costing us millions of dollars due to cost overruns resulting in a more than doubling of renovation costs:

The plan sounded good on paper.

State government would renovate and reconfigure two large office buildings it owns in Lansing so they can hold more employees, and move more than 1,000 employees there from leased office space, saving taxpayers millions of dollars a year.

The work on Constitution Hall and the Stevens T. Mason Building is well under way, but at a cost of $32.4 million — more than double the original $14.8-million estimate.

But what’s possibly worse is that nearly every employee who’s moved into or will move into Constitution Hall — the building where work is nearly completed — is moving not from a leased building, but from another building owned by the state.

It’s also not clear any leases will be terminated to fill the expanded Mason Building, said Kurt Weiss, a spokesman for the Department of Technology, Management and Budget.

“The lease savings that we thought we were going to get … didn’t materialize,” Weiss told the Free Press on Friday.

So much for our CEO governor “running our state like a business”.

In a piece that has gone relatively unnoticed at the Metro Times, journalist Ryan Felton revealed a second corporate donor to Gov. Snyder’s secret slush fund known as the “NERD Fund”:

This is how hard it can be to find out which companies are donating to politicians in Michigan.

Metro Times has confirmed a second corporate donor who backed Republican Gov. Rick Snyder’s controversial New Energy to Reinvent and Diversify (NERD) Fund.

In 2013, pharmaceutical giant Pfizer Inc. donated $1,000 to the governor’s nonprofit. That voluntary admission was lodged deep in a company document detailing Pfizer’s political contributions last year — and not the records of Snyder’s nonprofit, as it’s not legally required to disclose its donors.

Pfizer’s disclosure makes it only the second publicly revealed donor of the NERD Fund. Last fall, Snyder said he would dissolve the fund just weeks after the Center for Public Integrity reported CVS Caremark Corp. had donated $1,000 in March of 2012. A spokesman for Pfizer says the money was eventually refunded.

“Our records indicate that we received a full refund for our $1,000 contribution as the donation was processed after the Fund had been disbanded,” Sharon Castillo, of Pfizer, tells Metro Times in an email.

The lack of transparency in the NERD Fund is now legendary and Felton’s reporting shows just how secretive Snyder’s funding sources remain.

Finally, a bombshell report from the state Auditor General shows that the state has overpaid $160 million to providers of home care for low-income Michiganders and that the ending of a program that did background checks on homecare providers has resulted in thousands of former felons now working in the homes of these vulnerable citizens:

The State of Michigan improperly paid $160 million in a 29-month period for services provided to vulnerable, low-income adults in a program designed to keep them out of more expensive, long-term care, according to a report released earlier today by the state’s Auditor General.

Among those on the payroll: convicted criminals — including those convicted of crimes ranging from financial fraud to homicide, auditors found. […]

The blistering, 81-page report released earlier today blamed shoddy paperwork for most of the improper payments in the Medicaid Home Help Program, but it also noted a lack of oversight and follow-through when staff could have identified and corrected problems.

The program, funded by state and federal dollars, provides personal care services to more than 66,000 clients with medical needs. Home help providers help with light housekeeping, laundry, toileting, personal care and other activities of daily life. […]

Among the findings:

  • The state’s community health and human services departments failed to obtain sufficient or timely paperwork to ensure $146.4 million in services were adequate and clients were satisfied during a 29-month period ending February 2013. That money represents $49.6 million from the state’s general fund. Every dollar spent in state money leverages about two more in federal funds.
  • At least $3.3 million in services were provided to individuals that did not qualify for them.
  • Workers included 3,786 with felony convictions — including 572 with violent convictions from assault to homicide and 285 for sex crimes. Another 1,148 workers had been convicted of fraud, identity theft and other financial crimes.

All of these revelations in just this one week are part of a very long list that includes other serious problems within the Snyder administration:

And let’s not forget that Michigan, despite Gov. Snyder’s claims of a “comeback” most of us don’t enjoy, has the eighth highest unemployment rate in the country (including Washington, D.C.)

Governor Snyder wants us to believe that he is the kind of manager that can turn our state around. He pitches himself as a competent CEO type who knows how to get things done. But, when you look at this long list of scandals, corruption, mismanagement, and failed leadership, the gap between his claims and the reality that all Michiganders experience — other than Gov. Snyder’s business associates, of course — comes into sharp relief.

The bottom line is that Gov. Snyder favors his corporate benefactors at the expense of everyone else, has eviscerated our public schools, raised taxes on most Michiganders including senior citizens, and has shown virtually no ability to influence members of his Party to make progress on the crucial issues that impact our state. He is hapless; subject to the whims of the millionaires and billionaires who toil endlessly to set public policy and enact laws in our state to their own profitable benefit.

For the sake of our state, it’s time for him to go.

[Snyder caricature by DonkeyHotey from photos by Anne C. Savage for Eclectablog]