by Scott McClallen
Gov. Gretchen Whitmer’s administration paid former CEO of the Michigan Economic Development Corp. (MEDC) Jeff Mason $128,500 –26 weeks of pay – to “retire” last year.
The Detroit News reported Mason’s deal was among eight other employees separated from MEDC, bringing the total cost of payouts to $308,623 over the last four years. Those agreements included non-disparagement clauses limiting ex-employees from diminishing the MEDC’s reputation.
However, agency employees said the deals weren’t funded by taxpayer money.
“Corporate employee salaries, and any potential severances, are funded almost exclusively by revenues that are allocated to the MEDC through tribal gaming compacts,” MEDC spokesperson Kathleen Achtenberg told The Center Square in an email.
The group’s executive committee is appointed by the governor and uses legislature-appropriated money through the Michigan Strategic Fund.
The MEDC pools that tribal gaming money with taxpayer money to give grants to private entities. For example, while Michigan was facing between a $1 billion to $2 billion budget deficit, the MEDC gave away over $5 million to private businesses, including Kroger.
“MEDC itself is not a state agency, nor is it a private corporation,” its website describes. “MEDC is a unique, autonomous, yet quasi-governmental agency within the Department of Labor and Economic Opportunity.”
The MEDC had about $323 million in revenue in fiscal year 2020. Of that, $137 million was received from the state of Michigan. Another $114 million was listed as “federal revenues.” The rest was from tribal gaming revenues and miscellaneous other sources.
The discovery of additional hefty severance payouts follows the exposure of Whitmer’s administration paying nearly $253,000 in three taxpayer-funded severance packages, two of which included confidentiality agreements.
The use of taxpayer money to pay employees who voluntarily resign sparked calls for subpoenas, reform of how taxpayer money is spent on severance packages, and the expansion of the Freedom of Information Act to include legislators and the governor’s office.
Former Michigan Department of Health and Human Services Director Robert Gordon received a $155,506 taxpayer-funded severance package after he abruptly resigned within 24 hours of loosening COVID-19 restrictions on restaurants after a “three-week” pause turned into a 75-day shutdown of indoor dining.
Sen. Jeff Irwin, D-Ann Arbor, tweeted Thursday that Gordon’s departure involved a policy disagreement with Whitmer.
“Yet we all know that Gov Whitmer moved to reopen more quickly and that Gordon wanted more caution,” Irwin tweeted. “The reasons for his departure are open and obvious. She wanted to reopen restaurants so Gordon got a severance instead of a job.”
Tony Daunt, executive director of the Michigan Freedom Fund, called for Whitmer to explain why her administration has used so many severance packages that include confidentiality agreements.
“If Governor Whitmer is issuing sweeping, unilateral public health orders that contradict the guidance given to her by her own health care team, voters deserve to know. They deserve to know today, and they deserve to know why,” Daunt said in a statement.
“If Senator Irwin, other members of the Democratic caucus, or others in the Whitmer administration have information about decisions by the Governor to contradict health guidance during the crisis, or more information about the massive taxpayer funded hush money payments she’s used to guarantee the silence of those she’s fired, now’s the time to speak up. Now’s the time to put the health and well-being of the state above party. Now’s the time to come clean.”
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
Photo “Jeff Mason” by Michigan Economic Development Corporation.