From campaign slogans to Twitter handles. From television ads to governing philosophy.
Michigan Gov. Rick Snyder has carefully cultivated an image as “One Tough Nerd” — the rational politician above partisanship who uses data, facts and colorful charts to push his statewide agenda.
But who knew nerds could be so secretive?
Snyder’s NERD Fund is being broadly criticized again this week following his testimony under oath claiming that he did not know who donated to the fund. The deposition was part of the City of Detroit’s ongoing bankruptcy proceedings.
The New Energy to Reinvent and Diversify Fund, a nonprofit established shortly after the governor took office, has been controversial since its inception. Critics claim the organization could function as a sinister mechanism to accept untold “campaign donations” under a cloud of secrecy.
Funds like NERD are common across the state and nation. Its stated goal, to defer some cost of governance to willing private-sector participants, is broadly appealing in an era of increasing budget constraints and cost-cutting measures.
Currently, for example, NERD pays Detroit Emergency Manager Kevyn Orr’s $4,200 monthly condominium bill as well as some travel expenses — money otherwise owed to him by the city under Public Act 436, Michigan’s new emergency manager law.
So what’s so controversial about NERD then, really?
For starters, unlike most nonprofits controlled by public officials, NERD funders can donate anonymously — a clear violation of governmental integrity, transparency and accountability. Special interests, major corporations and wealthy private donors are free to give unlimited sums to a nonprofit controlled by the top-elected official in the state of Michigan without any public disclosure.
Generating the greatest skepticism, for example, is Richard Baird’s six-figure salary paid for by NERD. Baird is one of Snyder’s top aides, with the almost playfully antagonistic job title “Transformation Manager,” but where the money really comes from is not public knowledge. And the governor’s office isn’t telling.
Compounding matters, transparency and accountability have already been a primary critique of Snyder in his first term. In fact, Mark Schauer, gubernatorial candidate and frontrunner for the Democratic nomination in 2014, has already lambasted the “secretive NERD Fund” as a medium through which “special interests” can operate outside the public gaze.
Frustratingly, the solution to Snyder’s public-relations problem is as rational, fact-driven, and nerd-like as it is manifest.
Like similar nonprofits, embedded in NERD’s mission should be a voluntary commitment to sunshine on par with public-sector regulations. Instead of vague IRS filings, like the $522,866 2011 expenditure for “the promotion of civic action and social welfare by promoting the common good and general welfare of the residents of, and visitors to, the state of Michigan,” let’s spell out detailed contributions and impact. Instead of anonymous donations, let’s foster an environment promoting public inclusion.
If Snyder is reluctant to reveal funders that have already made donations under the assumption of anonymity, then fine. But, as a gesture of good faith, he should revamp NERD immediately, which would simultaneously foster an environment of transparency and cut off allegations of cronyism, wrongdoing and secrecy heading into an election year.
At the same time, unabashed criticisms of the efficacy of NERD, despite the obvious shortcomings in implementation, are unfounded.
When used correctly, nonprofits like NERD can be an effective, cost-saving and cutting-edge tool of governance as part of a broader trend in local and state government toward public-private partnerships. Such partnerships seemingly defray taxpayer costs and unburden unwieldy government bureaucracies. Locally, for example, the Detroit Economic Growth Corporation is a private nonprofit organization whose board is appointed by the mayor of Detroit and confirmed by Detroit City Council. DEGC executes contracts for the city and shares staff with public development agencies such as the Downtown Development Authority.
But the benefits of public-private partnerships, with NERD serving as an example, are only meaningful given that proper mechanisms of compliance, transparency and public accountability remain intact.
Given the clear outcomes of better governance, healthier political discourse and improved reelection chances, “One Tough Nerd” should be more concerned with being “One Transparent Governor.”
Alexander Hermann can be reached at aherm@umich.edu.