by Bruce Walker
On Thursday, Gov. Gretchen Whitmer named The Right Place president and CEO Randy Thelen to the Michigan Strategic Fund board.
Seven days prior, the Democratic majority of the Senate Appropriations Committee approved a $50 million transfer to the Grand Rapids-based nonprofit The Right Place from the taxpayer-funded Michigan Economic Development Corp.’s Strategic Outreach and Attraction Reserve fund. The money will be used for site preparation for the Gotion Inc. electric vehicle battery manufacturing plant in Mecosta County.
Gotion received $125 million of the reserve fund money for the EV battery plant.
Thelen – not to be confused with his distantly relative Gotion Vice President of North American Manufacturing Chuck Thelen – also served on the Economic Development Corp. in the past, according to his corporate biography.
“Without knowing more details, it does appear to be a conflict of interest and could have the appearance of a quid-pro-quo,” University of Michigan-Flint economics professor Chris Douglas told The Center Square. “It also has the appearance of the crony capitalism that has characterized the usage of the $9 billion state budget surplus, where the surplus has been spent on subsidizing politically connected industries rather than on public goods that benefit everyone, such as roads and bridges.”
Thelen was recommended to the strategic fund board by Senate Majority Leader Winnie Brinks, D-Grand Rapids. An email from The Center Square to Brinks’ office brought a response that there was confusion between two men sharing the same last name.
Thelen is not the only strategic fund board member associated with Gotion in Mecosta County’s Green Charter Township. Bill Pink is president of Ferris State University in Big Rapids, which stands to make significant money from the Gotion deal. Pink also sits on the Executive Committee of the Economic Development Corp. Pink has championed the Gotion project from its inception.
“This kind of conflict of interest is incredibly common in the world of economic development,” John Mozena, president of The Center for Economic Accountability, told The Center Square. “The MEDC and MSF boards are supposed to represent the interests of the people of Michigan, but in reality, they represent the interests of the industries and politicians who benefit from keeping the corporate welfare flowing.”
Mozena noted the chairman of the strategic fund executive committee is the CEO of Detroit-area billionaire businessman Dan Gilbert’s real estate company.
“What’s one more crony being added to the mix?” he asked.
But he doesn’t say what some might perceive as cronyism is limited to one particular party.
“This is just how so-called ‘economic development’ works in Michigan and has for a very long time,” he said.
As an example, he mentioned Doug Rothwell, a former president and CEO of the Economic Development Corp. under Republican Gov. John Engler. Rothwell subsequently ran General Motors’ global real estate operations, before being selected as the first president and CEO of Business Leaders for Michigan, an organization that lobbied for state subsidies on behalf of corporations. Republican Gov. Rick Snyder named Rothwell to the Economic Development Corp. where he played a significant role in directing subsidies to state businesses.
“As I told the MSF Board in February when I testified against the subsidies for Ford/CATL battery plant in Marshall,” Mozena said, “As members of this board, you are supposed to be guarding against politicians and powerful interests capturing the mechanisms of state government for their own benefit, at the expense of taxpayers. You are supposed to be representing the interests of the people of the state of Michigan. But for 30 years, this body and its predecessor have rubber-stamped some of the greatest corporate welfare boondoggles in American history.’”
In a text to The Center Square, Rep. Andrew Beeler, R-Port Huron, also weighed in against Thelen’s appointment. Beeler’s objection includes mention of Gotion’s Chinese ties.
“With this appointment, Governor Whitmer and legislative Democrats are taking economic development further in the wrong direction,” Beeler wrote in the text. “The Michigan Strategic Fund has already been far too willing to award taxpayer dollars to companies tied to the Chinese government and it’s ridiculous for Democrats to add a board member who has been so invested in the misguided Gotion project.”
In a joint email response to The Center Square, former U.S. ambassadors Pete Hoekstra and Joseph J. Cella also stated they take issue with Gotion’s alleged Chinese origins and the 501(c)(3) nonprofit status of The Right Place.
The two wrote, “We will be calling on the state legislature to convene a bipartisan panel and investigate how a 501(c)(3) received $50 million for ‘infrastructure improvements’ from the MSF whose CEO is now on their board,” they said. “We continue to see the worst of practices and woefully lacking due diligence and strict scrutiny.”
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.
Photo “Gretchen Whitmer” by Governor Gretchen Whitmer.