LANSING, Mich. (Michigan News Source) – The fox appears to be in the henhouse, or so the saying goes.
The Michigan Economic Development Corporation (MEDC) will administer the state’s safeguards against any negative effects of an AI data center development. That’s a problem since the MEDC is under investigation by Attorney General Dana Nessel.
The electric slide.
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Michigan’s new sales and use tax exemptions for enterprise data centers comes with several environmental and energy-use safeguards. One of those requirements is that data center power costs don’t wind up in residential electric bills. The MEDC will oversee and enforce those rules, with Oracle and OpenAI’s Saline Township data center near Ann Arbor likely serving as the first major test.
The MEDC’s tangled web.
In August, Nessel described the MEDC as a “quasi-public, quasi-private agency that operates outside the rules of normal state government.” Her office has been investigating the MEDC for months regarding how it stewards taxpayer money.
In 2022, Whitmer encouraged the Legislature to allot more than $15 million in grant money through the MEDC to her friend, Fay Beydoun. Then, Beydoun used that grant money to pay herself a $500,000 annual salary, among other things, for her nonprofit. In addition, Beydoun threw a fundraiser for Whitmer and served on the MEDC board.
Whitmer’s megasite mess-up.
Much of Whitmer’s second term has focused on green energy, authorizing the construction of megasites from foreign entities, and traveling with the MEDC worldwide to give money to overseas companies.
After authorizing hundreds of millions of dollars in taxpayer incentives for Chinese-based Gotion to set up in Big Rapids, that plan died after the company failed to hit legal benchmarks to move forward with the project.
Similar projects in Clinton County and Marshall hit the skids. This year also saw a third company pulling out of a proposed megasite project in Genesee County.
SOS Jocelyn Benson’s conflict of interest.
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Democratic Secretary of State Jocelyn Benson is in a bit of a dust-up over the data center as well. Her husband, Ryan Friedrichs, serves as vice president of Related Companies. It’s the parent company of Related Digital, which is building the data center in Saline Township with Oracle.
Benson is running for governor in 2026 since term limits keep Whitmer from seeking office again. She’s in her own legal battles with the Michigan House and the U.S. Department of Justice over her failure to provide documentation, answer subpoenas, and clean up the voter rolls.
