LANSING, Mich. (Michigan News Source) – The Michigan Economic Development Corporation (MEDC) is the state of Michigan’s corporate subsidy arm.
It is also something the Michigan Republican Party is trying to put out of business, saying it vastly underdelivers on its promises.
Job creation? Not really.
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For years, the MEDC has published press releases promoting the businesses it subsidizes and usually includes an announcement of how many jobs the project will create. And for years, research has shown that few of the jobs the MEDC announces in its press releases actually come to fruition.
The Mackinac Center for Public Policy’s James Hohman, an economic analyst, reviewed all the MEDC’s subsidized job deals that were reported in the Detroit Free Press from 2000 to 2020. Hohman’s analysis found 91% of the jobs that had been reported in the Detroit Free Press over those 20 years did not materialize. There were 123,060 jobs announced but only 10,889 jobs actually created.
The problem is that politicians use the job claims during press conferences and there is seldom any follow-up by the media.
“A proven record of failure.”
In November, the Michigan House Republicans detailed its issues with the MEDC, including its poor track record of creating jobs.
“The MEDC has a proven record of failure,” said State Rep. Steve Carra (R-Three Rivers) in a press release. “It’s time to give up on this flawed idea that government bureaucrats can pick winners better than the free market. Instead of providing corporate subsidies to a few politically well-connected companies and raising taxes on everyone else to pay for it, we should lower taxes for everyone and create a business-friendly environment by cutting unnecessary regulations.”
Under investigation.
In addition, the MEDC is being investigated by Michigan Attorney General Dana Nessel’s office. The AG executed search warrants in June at the MEDC office and a residence involving a long-term investigation into the misuse of MEDC funds.
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The AG is investigating a $20 million MEDC grant under Gov. Gretchen Whitmer that also involves MEDC CEO Quentin Messer and Democrat donor Fay Beydoun.
The MEDC awarded the $20 million grant to a nonprofit. However, Beydoun’s nonprofit Global Link International did not exist when the $20 million was appropriated, according to Michigan Forward.
Beydoun allegedly spent the money on questionable items, such as a $4,500 coffee maker and an annual salary of $500,000. After it was reported, Beydoun repaid the unspent portion of the grant.
