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New report finds most lawmakers use nonprofits to take undisclosed amounts of money

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Michigan lawmakers are using nonprofit organizations to take undisclosed amounts of money from corporations and aren’t reporting how those funds are being used.

That’s the finding of a new report from the Michigan Campaign Finance Network, a watchdog group that tracks money in state politics.

Craig Mauger, the Executive Director of the Network, joined us to talk about the report.

Ben Thorp: You start the piece off with an anecdote about Senator Mike Nofs, who in 2016 helped create legislation to overhaul Michigan’s energy laws. In 2017, after passing that, a nonprofit that Nofs is connected to took $20,000 and I’m wondering if you can talk about what we know about where that money came from.

Craig Mauger: Yeah, so this $20,000 dollars that was described as “grants or other assistance” came from another nonprofit that was connected to one of the state’s largest energy utilities, DTE Energy.

Thorp: That certainly raises questions about conflicts of interest. Have you spoken to Senator Nofs since about those contributions?

Mauger: Senator Nofs, and I’ll give him a lot of credit, he was one of the few lawmakers that we reached out to that was willing to talk to us about his use of a nonprofit organization. He says he uses the nonprofit to do positive things in his community, like put on events for veterans, or send students to summer camp that need help funding their tuition for summer camp. He said specifically about this contribution no special considerations were given as part of the energy overhaul package and his evidence was the energy overhaul package passed with wide majorities in both the House and Senate. He said “I followed the rules and if people don’t like those rules they should go out and get those rules changed.”

Thorp: Do we know for sure how Senator Nofs was using those funds?

Mauger: We do not know for a wide majority of these accounts where these dollars are going or ending up. If it was a campaign finance organization or a candidate's campaign they would have to disclose and report how they spend every dollar that they take in just about. For these entities if they raise less than $50,000 in a year they don’t really have to say anything about where their money is coming from or how they are spending it. If they raise more than $50,000 in a year they have to file a tax report that indicates a little bit about where the money went. It might say “we spent $80,000 on conferences or meals.” So they are broad categories and within those categories it’s impossible to tell where the money is going. So we’re really left, if the lawmakers are willing to say anything, we’re really left to trust the lawmakers about what they are doing with the money.

Thorp: In your reporting you said you were able to connect a majority of the lawmakers serving in 2018 to organizations like this. Can you talk a little bit about how you did that, how you were able to draw connections between lawmakers and organizations like this?

Mauger: So the way we went about defining the connections is there are a number of corporations who disclose their corporate political giving. There are contributions that the corporations themselves are saying “this is political” and we’re making these contributions at the quote state level in Michigan and other states. So we get these names of these entities that the corporations say are political and we research these entities.

Thorp: So does this mean that corporations are better at accounting for where this money is going than the lawmakers are at accounting for the money coming in?

Mauger: That is a great question. I think corporations, especially international corporations these large corporations are under increasing pressure from shareholders to be open about what they are doing with the money that they are spending on politics one way or another. It’s almost as if the corporations are feeling more pressure to be responsible to their shareholders than our public service lawmakers are feeling and being responsible to the people who are electing them to represent them in the legislature. These corporations don’t have to disclose these political contributions that they are making, they are choosing to do that. These lawmakers don’t have to disclose the money that they are taking in through these accounts and almost all of them are choosing not to be open about where they are getting money for these type of efforts.

Thorp: Thank you so much for taking the time to talk to us.

Mauger: Thank you for the time.

You can read Craig Mauger’s full report here: http://mcfn.org/node/7312/undisclosed-and-untold-most-lawmakers-have-ties-to-accounts-that-can-raise-money-in-secret