LANSING, Mich. (WXYZ) — A long-simmering scandal is coming to a boil in Lansing, leading to raids, a criminal investigation and questions over a connected contributor.
See Ross Jones' full story in the video below
At the center of the outrage is a longtime donor to Gov. Gretchen Whitmer who took in millions of dollars through an earmark put into the state budget. It was supposed to bring international businesses to Michigan, but never did.
Now, lawmakers from both parties are asking what role the governor's office may have played in helping to connect an influential donor with money she’s accused of misspending.
For years, Fay Beydoun has been a fixture in Democratic politics, donating tens of thousands of dollars to Democrats across the state and more than $20,000 to Whitmer’s campaigns. She even hosted a fundraiser for the governor at her home, raising $13,500.
Separately, Whitmer appointed Beydoun to the executive board of the Michigan Economic Development Corporation, or MEDC, the state’s economic growth arm.
For years, Beydoun worked at the influential American Arab Chamber of Commerce in Dearborn. It was there that she and other leaders first discussed pitching the MEDC on providing the chamber with grant money to help spur business investment.
“I had insisted that she begin to look into state funding and other funding,” recalled Ahmed Chebbani, the longtime chairman of the chamber of commerce who attended the meetings with Beydoun and the MEDC.
But despite promising discussions, he says the funding that the chamber sought from the state never came. Then he received a call from Beydoun, he said.
“'Watch out, you’re going to hear some news,'” he recalls Beydoun telling him. “I guess an award was made."
“'Oh, great, is it for us?'” Chebbani asked. “She said, 'No, it’s mine.' And this was actually shocking. "
Beydoun, he said, would be breaking off from the chamber, accepting a $20 million state grant for her own business incubator program. Her new non-profit—Global Link International—was incorporated within days of the state budget being passed.
“I guess betrayal is an easy word to say,” Chebbani said when asked about his reaction.
“I felt like a knife went through me. Never imagined someone whom I had supported as a female director—and she knows that—went out of my way to protect her and encourage her and promote her…obviously I wasn’t expecting that from her,” he said.
Just as shocking, according to Chebbani, was learning how Beydoun would spend some of that money. AsPoster image (5).jpgTens of thousands of dollars were spent on office furniture, and more than $2,000 on a single executive office chair, according to receipts shared with the MEDC.
More than $11,000 went to buy a round-trip plane ticket to Budapest, where Beydoun flew business class.
$40,800 went to lease two fully-furnished apartments. Beydoun reportedly said they could be used for startups lured to the state, and more than a hundred thousand dollars was doled out to consultants and attorneys.
“It was a shock. It was things that were not normally reasonable,” Chebbani said. “I would never, personally, as a chairman, allow a grant to be used for such purposes.”
Most polarizing of all was Beydoun’s salary: $550,000.
In records filed with the state, Beydoun would defend her salary, calling it “in line with compensation” of executives from organizations with similar missions and budgets.
But she did pay back the money for the coffee maker, and reimbursed about half the price for the business class ticket to Budapest. She said she also paid back the money for the fully-furnished apartments,She also stressed her decades of experience as a successful businesswoman and said that while reimbursed some of the questioned expenses related to the grant, she rejects any insinuations of wrongdoing and says that she’s been fully transparent since her work began.
Rep. Jay DeBoyer, who heads the House Oversight Committee currently probing the $20 million grant, said the grant demands plenty of scrutiny.
“You have exactly zero experience, and one of the first things you do is pay yourself a half million dollars?” DeBoyer asked. “That jumps off the page at me.”Poster image (6).jpgThanedar says earmarks benefiting the politically connected are nothing new in Lansing. Often buried in budgets or passed with little information known even to lawmakers, he said new rules to require earmark transparency could make deals like this one harder to come by.
“I think a lot of these things were happening five or ten years ago, they just weren’t being investigated this loudly,” he said.
Contact 7 Investigator Ross Jones at ross.jones@wxyz.com or at (248) 827-9466.