Senate Panel Opens Hearings Into MEDC Tax Credits

LANSING—The Senate Commerce and Tourism Committee today convened its first hearing on the Michigan Economic Development Corporation’s process of granting tax credits after the administration recently awarded a $9.1 million business tax credit to a known felon, who was subsequently rearrested for having violated parole.

“It is clear that mistakes were made and that the MEDC is making changes that will ensure these errors don’t happen again,” said state Sen. Mike Nofs, R-Battle Creek, who serves as vice chair of the committee. “We need to avoid a knee jerk reaction, as so often happens in Lansing. We must get the facts in this case and find out what went wrong so that the necessary reforms can be made.”

Richard Short, chairman of Renewable and Sustainable Companies LLC (RASCO), a so-called green energy company based out of Short’s mobile home near Flint, was convicted in 2002 of embezzling money. Short was on parole when he received the $9.1 million tax credit from the state, which the company claimed it planned to use for renewable energy to provide power and other services to the developing world.

Nofs, a career law enforcement officer familiar with background checks and investigations, said it is difficult to understand how Mr. Short’s application slipped through the MEDC’s fingers.

“It is amazing that no background or reference checking was done,” said Nofs. “Whether it is $9 or $9 million, taxpayers should expect that due diligence is being done when their money is handed out for tax credits. Thankfully no money was actually paid out in this case, but it is troubling that the application made it as far as it did.

“It is my expectation that through these hearings and impending changes to the process, increased transparency and accountability will help prevent future mistakes from occurring.”