Governor Snyder (NERD Non-Profit)

Snyder must provide details of nonprofit

NANCY KAFFER

   Gov. Rick Snyder started the nonprofit New Energy to Reinvent and Diversify Fund shortly after taking office, ostensibly to raise private funds for government innovation.

   Two years after its creation, few details about the fund’s finances have emerged. But the recent revelation that two of Snyder’s advisers in the Capitol have spent time on NERD’s payroll underscores the need for more information. One, “transformation manager” Rich Baird, is part of Snyder’s inner circle and has an office right next to the governor’s. He has heavily influenced some of Snyder’s most controversial policy decisions — but Baird is paid by NERD, not the state.

   As a 501(c)4 nonprofit, NERD isn’t required to report its donors, or give much information about the activities the organization is funding. Reporters have asked NERD to disclose its donor list for years, but neither the fund’s staff nor the governor’s office have complied.

   Top advisers taking paychecks from unnamed donors? What could possibly be wrong with that? For starters, it’s the kind of situation that has landed other Michigan elected officials in hot water, and for good reason — mixing the business of a privately funded nonprofit with the business of an elected official’s office creates the possibility for the kinds of conflicts of interest and agenda-driven policy-making that Snyder vowed to avoid.

   Because NERD is the brainchild of Michigan’s highest-ranking elected official, and because there appear to be unreported connections between the nonprofit and state government, Snyder should come clean — the governor should bring the same transparency to NERD that he expects of others in state and local government.

   NERD is “fundamentally involved in remaking the form and purposes of state government, and the interests who benefit from that financially would certainly have an interest in supporting it financially,” said Rich Robinson, head of the Michigan Campaign Finance Network. “If those kinds of connections exist, they should be visible to the citizens of the state.”

   Rich Baird, Snyder’s “transformation manager,” isn’t on the state payroll but he is heavily involved with crafting administration policy. He’s paid $100,000 a year by NERD. Rick DiBartolomeo, Snyder’s former campaign manager, was NERD’s sole paid employee before he quit to take a job as a senior investments manager for the state.

   Baird is paid through MI Partners LLC, a consulting company with just one client: Snyder. Recently released e-mails show Baird assisted the controversial “skunk works” group, an off-books working group that developed a plan for a dramatic overhaul of public education in the state. The group included charter school operators, software company representatives and a voucher advocate, but no public education experts. So, when the group came up with a plan to lower the cost of public education through a backdoor voucher system, online learning and expanded charters, it was hardly surprising.

   DiBartolomeo was paid $48,366 for 10 hours of weekly work, according to the nonprofit’s tax filings, an arrangement that ended in June 2012, Snyder spokeswoman Sara Wurfel said. DiBartolomeo was also paid by Snyder’s campaign committee through mid-June, according to campaign finance reports filed with the Michigan Secretary of State’s Office. DiBartolomeo was hired as a senior investments manager for the state later that month. His job with the state is civil service, not an appointment, and one for which DiBartolomeo, who spent more than 20 years in finance, seems qualified. DiBartolomeo did not reply to messages left at his state office and a number listed in the IRS documents.

   The apparent revolving door between NERD and state government isn’t the only potential problem.

   In a 2011 IRS filing, just a fraction of the money the NERD fund spent was described with any kind of clarity: $130,638 was spent on a security system and furniture for the state-owned residences Snyder uses. (A more recent accounting of NERD’s income and outgoing expenses isn’t available; those forms were due on May 15, but the nonprofit has received a three-month extension, Wurfel said.)

   The bulk of the year’s expenditures, $522,866, is described in the vaguest possible terms: “For the promotion of civic action and social welfare by promoting the common good and general welfare of the residents of, and visitors to, the state of Michigan.”

   Well, that’s just clear as mud, isn’t it?

   NERD’s tax documents are so vague that the $100,000 annual contract paid to Baird’s MI Partners LLC isn’t documented in the filing.

   The Free Press asked Snyder’s office to clarify NERD’s expenditures and disclose the donor list; Wurfel initially said it might be difficult to obtain access to the documents (although the tax forms say the person in physical possession of NERD’s books is assistant to Snyder’s chief of staff), and didn’t respond to a follow-up e-mail.

   That’s probably the point, Robinson says.

   “Snyder’s got a healthy 527 (political action committee) going, and the only thing this gives him that that doesn’t is anonymity for donors,” he said.

   Legally, there’s nothing wrong with elected officials using nonprofit fund-raising to augment their philosophical or political goals: Everyone from Oakland County Executive L. Brooks Patterson to President Barack Obama has done it.

   While donors can be kept confidential, it’s not required. In fact, a slew of similar nonprofits released donor lists to Free Press reporter Jennifer Dixon in 2012.

   It would be absurd to compare NERD to the Kilpatrick Civic Fund, a nonprofit that former Detroit Mayor Kwame Kilpatrick, who has been convicted of felony corruption charges, used to funnel cash to friends and family.

   But a comparison to a nonprofit operated by Wayne County Executive Robert Ficano isn’t too far off the mark. The Wayne County Business Development Corp. collected dues from an initially undisclosed list of Wayne County businesses, using the proceeds to pay a bonus to Turkia Mullin, Ficano’s economic development director. Unlike Mullin, Baird doesn’t get a government check. But that sharpens the question of whether Baird’s paycheck and his service to the state pose a conflict of interest.

   There’s no reason to believe that Snyder started a nonprofit to accept money from corporate donors hoping to influence the actions of an administration whose sympathies lie with the private sector.

   There’s no proof that anyone on NERD’s payroll is performing work on behalf of the state while collecting a paycheck from corporate donors.

   But that’s the problem: Until Snyder provides detailed information about who’s funding the nonprofit, there’s no proof otherwise.

Gov. Rick Snyder started a nonprofit to raise private funds for government innovation, but he has released few details about it — and now there’s controversy. JARRAD HENDERSON/DETROIT FREE PRESS