Michigan Democratic Party, Rick Snyder — September 19, 2014 at 8:29 am

Snyder administration official who resigned over extravagant spending now found to have had a conflict of interest, as well


The scandals just keep piling up

More evidence has emerged that being a business mogul associated with, a relative of, or even hired into the Snyder administration gives you some perks not enjoyed by others. You might, for example, have contracts with the state tossed your way like Snyder’s cousin, George Snyder. You can impact legislation that benefits you and/or your business partners. You can live extremely high on the hog on the public’s dime right up until you get busted for it. That last one accurately describes Scott Woosley, the former head of the Michigan State Housing Development Authority who resigned in disgrace last month after the Michigan Democratic Party uncovered wildly extravagant expenditures by Woosley and his staff that were then signed off on by other Snyder administration officials and reimbursed using taxpayer dollars.

Yesterday, the MDP revealed that, during his first year or more in his position as the Executive Director of MSHDA which distributes U.S. Department of Housing and Urban Development (HUD) grants, Woosley was also receiving HUD funding through Labor-Management Fund Advisors (LMFA), the company for which he was the Managing Director. In fact, LMFA received over $1 million in HUD grant monies and was still receiving those disbursements after Woosley took a leadership position at MSHDA representing a clear conflict of interest. After all, Woosley was responsible for seeing to it that HUD grant funds were being spent properly. In other words, he was responsible for overseeing himself.

In August, Woosley claimed that he had “no business with the state or MSHDA” which clearly had not been the case when he took over as Executive Director.

Michigan Democratic Party Chair Lon Johnson filed a complaint yesterday with HUD Inspector General David A. Montoya, a complaint that documents potential conflict of interest and the misuse of federal funds.

“The Snyder Administration either permitted or turned a blind eye to a major conflict of interest involving the head of his housing agency, whose private real estate company was receiving over a million dollars in tax payer money,” said Johnson. “Federal conflict of interest laws exist to protect taxpayers from exactly the kind of abuse that is rampant in the Snyder administration. When Snyder and his administration ignore rules designed to protect the public, they betray the public trust. People like Scott Woosley that have major conflicts of interest and stand to benefit financially from their appointment should never be placed in charge of a state agency responsible for stewardship of hundreds of millions of public dollars.”

This isn’t just a “kinda sorta” situation where Woosley “kinda sorta” had a conflict of interest. This is actually a very clear example of violating HUD’s rules on this. In a HUD presentation on conflicts of interest, Ellen Dole gives this example:

  • The State Housing Finance Corporation (SHFC) hired ABC Associates to administer a Homebuyer Assistance Program funded with HUD HOME funds.
    – John is the President and partner of ABC Associates and also serves as the Executive Director of SHFC.
  • Is this a conflict of interest under Part 85 [of the Code of Federal Regulations]?
  • Answer: Yes.

A whistleblower at MSHDA also told the MDP that Woosley and his staff were misusing federal funds for their own enjoyment and utilizing the services of state employees improperly. Here’s what they said in a letter they sent to the MDP:

RE: Scott Woosley, Exec Director of MSHDA

To Whom It May Concern:

Please be advised that you need to look very deep and very hard into the expenses associated with Scott Woosley and his cohorts involved in the EB5 and/or Mezzanine Funding at the Michigan State Housing Development Authority and their misuse of state employees who are being paid as state classified civil servants while working on these endeavors.

Travel, alcohol, massages, ballgames, etc are all part of their so-called “work” while entertaining business associates in these fields. Many of these activities, especially the drinking, take place during regular work hours, which is against state policy.

Many staff are involved in the review of the documents they plan to provide to your firm in regards to the FOIA they received. Don’t trust that you’re receiving accurate information regarding those expenses.

Employees are fearful of retribution from those involved in these new funding techniques through the agency should they voice their concerns over apparent abuse.

Scott’s leading fraud partner, Jennifer Bowman, the director of Legislative Affairs and Communications at MSHDA, rules by intimidation and threats. She had made it clear that she will take down anyone in their way, including other division directors, whom she feels she has authority over. Truly a pit bull wearing lipstick.

Regardless if they call it a foundation or fund, they are using state employees and having them engage in activities prohibited under civil service rules. They are allowed to claim expenses that are not allowed and there’s no oversight or audits performed related to those expenses.

Unfortunately I cannot leave my name. I know for a fact that I would not have a job if I were to be exposed as the writer of this letter.

I’m simply one of the good employees who’s totally offended by this type of rogue behavior that gives state employees a black eye and makes all our jobs more difficult.


In the business world from which Snyder and his business colleagues operate, nepotism and cronyism may be acceptable, if not unethical. In government, however, they are ILLEGAL.
And, in the Snyder administration, it looks increasingly like they are overlooked, accepted, and/or even encouraged.

The Snyder campaign will have you believe that this is all just election year politics on the part of the MDP. The reality is that voters need to know what Snyder and his pals are up to so that they can make an informed decision about who they want running our state government. By choosing Rick Snyder, they can expect more of the same and that means more perks and benefits for friends, relatives, and buisiness associates who are permitted to benefit themselves financially and in other ways by exploiting their government positions.

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