Whitmer 'troubled' by grant controversy, won't say if her staff was involved in $20 million earmark

Gov. Gretchen Whitmer did not answer directly when asked Thursday whether anyone on her team was involved in securing a controversial $20 million grant for Democratic donor and appointee Fay Beydoun.

But the governor noted her recommended budget for the 2023 fiscal year did not have any direct earmarks. Instead, Whitmer's February 2022 budget proposal contained a $15 million competitive grant program to attract overseas businesses that Beydoun championed, according to documents reviewed by The Detroit News.

The Democratic governor, who signed the budget containing the direct earmark for Beydoun on July 20, 2022, said she was "troubled" and "disappointed" by newspaper coverage of legislative earmarks allocated in recent years.

"I believe that it's important for us to make sure that every dime of taxpayer dollars is not wasted, there's no fraud, that we have real accountability," Whitmer told reporters Thursday after an event in Detroit. "What you don't see in my executive budgets are individual grants. And here's why: Because I believe every dollar should be vetted and it should go through a bidding process."

Whitmer's spokeswoman, Stacey LaRouche, when asked later Thursday to clarify whether anyone on the governor's team was involved in landing the eventual earmark, said The News should speak with former Republican House Speaker Jason Wentworth. Wentworth, R-Farwell, was listed as the sponsor of the grant but has denied doing so.

Whitmer's comments Thursday marked the first time the governor has personally addressed the grant awarded to Beydoun, who was a former Michigan Democratic Party vice chair, a bundler in Whitmer's 2018 campaign and an appointee of Whitmer's to the Michigan Economic Development Corporation executive committee.

Whitmer on Thursday said she expected any individual abusing a direct earmark to be held accountable.

"Any individual grantee who gets money and is not lawful with it or is inappropriate with those dollars should expect to be held accountable," Whitmer said.

Whitmer noted "we saw that" in Attorney General Dana Nessel's embezzlement charges stemming from a $25 million earmark given to a former staffer of Wentworth, David Coker Jr. Whitmer noted both grants under investigation were sponsored by Wentworth.

"To say I'm very disappointed would be really not nearly strong enough language," Whitmer said.

When asked why the MEDC took so long to cancel Beydoun's grant when it had much of the information cited in the cancellation for months, Whitmer would only say she was "glad that they cancelled it."

"I'm glad that they are seeking to recoup the dollars," she added, "and I'm hopeful that the attorney general will help in that effort."

Nessel's office has been investigating how the grant came to be and what it was spent on for more than a year, after The News first reported that Wentworth disputed sponsoring the grant for Global Link International and that Beydoun had spent the grant, in part, on a $4,500 coffeemaker, an $11,000 first-class ticket to Budapest, thousands of dollars in furniture and a $550,000 salary for Beydoun.

The MEDC cancelled the grant in March, arguing some of Beydoun's expenses were "unreasonable" and accusing her of being out of compliance with state and federal nonprofit law. The agency demanded $8.2 million be returned of the $10 million she'd been given so far. As of last week, Beydoun had not paid any of the money back.

On June 18, Nessel's office raided the Beydoun's Farmington Hills home and MEDC headquarters in Lansing and accused the agency in court filings of stonewalling the investigation.

Whitmer's MEDC is now fighting Nessel's office in court over documents seized in the June 18 raid, contending that the records that are protected by attorney-client privilege were improperly taken. A private attorney hired to represent MEDC staff in the investigation was also representing Whitmer's chief of staff, JoAnne Huls.

Records previously obtained by The News and documents filed in court last month showed Beydoun had met with MEDC officials several times between fall 2020 and fall 2021 about the idea of an international business accelerator. She also told Whitmer's chief operating officer, Tricia Foster, in fall 2021 that MEDC leaders had given a "nod of approval" to the Global Link project at the governor's request.

Beyound's lobbying for the Global Link project occurred while she was a Whitmer-appointed member of the MEDC executive committee, the governing panel of the quasi-governmental agency that hires and sets the pay of the chief executive officer, Quentin Messer Jr.

When a similar $15 million competitive grant program was included in the governor's budget recommendation in February 2022, Messer congratulated Beydoun in an email to state officials.

Beydoun had been a "champion" of the issue, Messer wrote in the email obtained by The News.

On the night of June 30, 2022, after a meeting between Whitmer, Wentworth and Senate Majority Leader Mike Shirkey, R-Clarklake, a direct, $20 million earmark for the yet-to-be incorporated Global Link International led by Beydoun was slipped into the budget shortly before the Legislature voted on the bill around 2 a.m. July 1, 2022.

Wentworth has told The News he met with Beydoun about the grant, but had not intended to put the earmark in the budget. He's denied sponsoring the grant, but is listed as the sponsor in State Budget Office documents.

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(Staff Writer Craig Mauger contributed.)