Subject: What the governor is talking about today
What the Governor’s Talking about
Today
Tuesday, March 23, 2010
Governor Issues Executive Order, Directive
Enhancing Transparency, Accountability at MEDC
The governor today issued an executive order and an
executive directive to enhance transparency and accountability at the Michigan
Economic Development Corporation (MEDC) and to address the failure that led to
the recent approval by the Michigan Economic Growth Authority (MEGA) of a
fraudulent application for a tax incentive. The governor’s action comes on
the same day the MEDC is implementing changes to its internal procedures and the
MEDC executive committee began its own review of the incident and proposed
responses.
“We are fighting hard for every company investment that
will help us diversify our economy and create jobs for Michigan citizens, and
this incident is wholly inconsistent with the work we’re doing and the integrity
of our process. To ensure that no such errors occur in the future, the
system must be fixed, and with today’s actions, it will be fixed,” the governor
said today. “We owe it to the taxpayers of this state, and to the hundreds
of company executives who have chosen to invest in Michigan, to ensure that we
are upholding the highest standards of any state in the nation when it comes to
our economic development
program.”
Under the governor’s Executive Order 2010-3, the MEGA board will
be reorganized in the following ways:
• The president of the
Michigan Strategic Fund will no longer serve as a voting member of the Michigan
Economic Growth Authority board of directors but will serve as an ex officio,
non-voting member of the board.
• The state budget director will replace the
director of the Michigan Department of Transportation as a voting member of the
MEGA board.
• The state treasurer, a current member of the
MEGA board, will serve as chair.
Governor Granholm also issued Executive Directive
2010-2 to establish:
• A business integrity verification
program, which includes policies that require tax credit applicants to submit a
written business integrity questionnaire and other documentation and submit to a
civil, criminal, or credit background check if a background check is necessary
to verify the business integrity of the business entity
• New duties for the chief compliance officer
within the Michigan Strategic Fund to assist in the enforcement of policies and
procedures to prevent illegal, unethical or improper conduct on the part of
applicants for tax credits; and to recommend other policies and procedures to
protect the interests of the state
• Specific standards of conduct as outlined
by existing state law
Legislation codifying the changes outlined in the
executive order and executive directive is being drafted for approval by the
Michigan
Legislature.
“We
are committed to upholding the highest standards in our work on behalf of
Michigan citizens, and it is clear that changes are necessary to uphold their
trust,” said Greg Main, CEO of the MEDC. “Starting today, we are putting
in place the safeguards that are outlined in the governor’s directive which will
ensure that we are verifying the integrity of every applicant, every application
and doing the due diligence that our work
demands.”
Matthew Cullen, chair of the MEDC executive committee, said,
“While this appears to be an isolated incident, it demands an unprecedented
level of scrutiny by the board that has been appointed to oversee the operation
of the MEDC, and we intend to conduct a thorough, objective review to make sure
that it never happens again.”
The governor has
requested a separate criminal investigation by the Michigan State Police of
Richard Short, the MEGA applicant with a history of fraudulent activities.
The governor also announced that she is appointing her legal
counsel Steven C. Liedel to the MEDC executive committee. Liedel succeeds
the late Dennis Toffolo as a representative of public agencies on the MEDC
executive committee for a term that begins today and expires April 5,
2012.
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