Miller: No Tax Breaks Without Background Checks

Corporate Responsibility Act protects taxpayers’ money meant to create jobs

LANSING –The House Oversight and Investigations Committee will hold hearings next week on a package of bills to prevent abuses of state dollars like the awarding this week of a $9.1 million economic development incentive to a convicted embezzler and scam artist. The Michigan Corporate Responsibility Act includes mandatory background checks on those applying for state economic development benefits and safeguards to ensure that recipients use the incentives properly.

On Wednesday, it was revealed that the Michigan Economic Growth Authority (MEGA) granted a $9.1 million state tax break to Richard Short, a Flint man who had served prison time for embezzlement and bank loan fraud, for his new company.

The Michigan Corporate Responsibility Act requires a criminal background check on every officer, director, managerial employee or person who holds a 20 percent interest in the company applying before the state can approve the incentive or contract.

“The most important thing is that we learn from what happened here and put safeguards like the Corporate Responsibility Act in place to ensure that this never happens again,” said State Representative Fred Miller (D-Mount Clemens). “Investments that are proven to create jobs for our workers are vital to our economy – however, we must ensure that we are getting what we pay for when it comes to spending our residents’ hard-earned money.”

To ensure that tax dollars produce their intended result of creating jobs for Michigan workers, the plan also requires the Department of Management and Budget to consider whether an applicant would provide goods or services from outside of Michigan or the United States when awarding contracts. Recipients of state contracts also would have to disclose the location of work performed, including that done by subcontractors, and the location of their call or contact center if they have one.


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