This Just In: Convicted Embezzler's Business Awarded State Tax Subsidy

The Associated Press is reporting that a convicted embezzler currently on parole has been approved for business tax credits under the state's Michigan Economic Growth Authority program. The article also noted that when the deal was announced, the embezzler, Richard A. Short, "shared the stage" with Gov. Jennifer Granholm.

Had the program managers performed even a cursory background check, they certainly would have discovered Short's past: Among other things, he's listed on the State Police "offender tracking system," according to the AP.

Google could have helped in the background check: The Flint Journal mentioned Short in a February 2008 article — readily available on the Internet — about how difficult it is for people convicted of a financial crime to get credit, including credit cards.

According to the article:

The state parole board took away Short's credit card privileges when he was released from prison in 2004 following a two-year stint after he pleaded no contest to embezzling $35,000 from a Muskegon battery manufacturer.

As a parole condition, Short was told he could not have a checking account, a charge account or a credit card.

He later discovered those prohibitions extended to debit cards and every other conceivable electronic financial device.

According to a 2001 AP story in the Ludington Daily News, Short had two prior fraud convictions on his record before serving time for embezzlement. Despite all this, he is apparently eligible to receive up to $9.1 million in MEGA tax credits — and to do public relations work for Gov. Granholm. What's more, these are probably "refundable" credits, meaning outright cash subsidies, making them even more attractive to embezzlers. That this story should break during "Sunshine Week" — a week devoted to calling for more open government — adds to the irony.

As I told The Flint Journal, this is evidence that Michigan economic development programs need vastly more transparency.

MEGA is the same program that the Mackinac Center has twice demonstrated (in 2005 and again in 2009) has not created net new jobs for Michigan.

The Center has also exposed the agency's growing lack of transparency during and after its deals are struck. A more open process might prevent bad deals before they happen. However, the Mackinac Center's primary concerns are tax breaks and subsidies handed out to individuals and firms who are not convicted embezzlers. The program has offered up billions, yet it doesn't help the economy and has become aggressively less transparent over the years.

This may not be the last the public hears of state corporate welfare deals involving questionable supplicants. There is so much money sloshing around the Michigan film incentive subsidies, for instance, that future scandals seem all but inevitable.

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