08 April 2014


Original Story: Detroit News.com

Detroit — Gov. Rick Snyder was called out by a Democratic official Monday at a breakfast forum over allegations of nepotism involving the governor’s cousin’s office furniture company.

“How can you justify cutting education and raising (taxes on the) senior and middle class, but at the same time doubling office furniture spending with a company owned by your cousin?” Michigan Democratic Party Chairman Lon Johnson asked at the Michigan Chronicle’s Pancakes and Politics breakfast gathering.

The question — surrounding the Republican governor’s cousin, George Snyder, and his company DBI Business Interiors — drew oohs from the crowd of nearly 400 people.

Snyder rebuffed Johnson by saying he wouldn’t be baited by “old-school politics” and “people looking to fight.”

“His company has been doing office furniture with state of Michigan business for decades,” Snyder said. “He has a contract ... with the state of Michigan. Do you know when that deal was done? Before I took office. So there’s nothing to this at all. It’s basically people trying to occupy time and space and make this a story, so we’ll spend so less time working on jobs. And I won’t play that game.”

The crowd applauded at Snyder’s response.

Bobby Schostak, chairman of the Michigan Republican Party, followed Johnson’s question by sniping: “How about we get to something a bit more substantive” before asking Snyder about job creation.

Johnson is claiming that George Snyder’s contract with the state was doubled from $19 million to $41 million on Rick Snyder’s watch. The contract actually is with Holland-based Haworth Inc., which hires George Snyder’s DBI to install furniture. The amount of money from the Haworth contracts paid to DBI is not known.

Last month, the Michigan Democratic Party — citing a batch of newly unearthed emails from 2011 — also raised new questions about the governor’s secretive nonprofit group, the New Energy to Reinvent and Diversify (NERD) Fund.

“Republican Gov. Snyder is still dodging the $41 million question — why he doubled his cousin's new furniture contract, all while cutting education and placing unfair new taxes on our seniors and middle-class families,” said Johnson said in a statement after the forum. “This governor's use of the secret NERD Fund to ensure special treatment for his cousin and for campaign donors gives new meaning to the phrase 'friends and family first.' That's why this governor and his NERD Fund need to be investigated immediately.”

The state Department of Technology, Management and Budget has said the state is spending more on new furniture because it is consolidating state office space and getting out of leased buildings and trying to fill in state-owned buildings. The department is opting for new furniture, rather than moving around and refurbishing the old — something DBI does, too.

The DTMB also notes it did not spend the full $19 million or $41 million, which are spending caps in the contract.

Earlier, Snyder on Monday discussed a post-bankruptcy Detroit and his expectations for the city after emergency manager oversight ends, comparing it to New York City after its financial crisis in the 1980s.

Snyder said he envisions the bankruptcy will be “largely closed” upon Emergency Manager Kevyn Orr’s targeted exit in October with some “post-transition agreement” and a board to oversee the city’s finances.

“The illustration I would give you is New York City,” Snyder said. “New York City didn’t go bankrupt, but they had a huge financial crisis and in order to make sure they were able to borrow and able to continue on a path they actually set up a board to provide some good oversight financial matters to make sure good financial practices were being done.

“But I don’t think anyone in the city knew they were there because the main thing is as long as the city was running well, the board didn’t have much to do.”

Snyder called the collaboration between Mayor Mike Duggan and Orr one of the “great success stories” around the country, noting it hasn’t been a “normal environment” for a mayor.

When addressing education, Snyder downplayed a rumor that if re-elected, he would appoint Duggan as CEO of Detroit Public Schools.

“I’m not going to speculate on something,” Snyder said. “That’s a hypothetical that’s out there.”

Snyder also declined to give Orr a grade when asked to do so during the question-and-answer portion of the discussion, but said he thought Orr was doing a “very good job” on settling the anxiety over the city’s historic bankruptcy.

“We gave a timetable when we said we would like to get that resolved,” Snyder said. “We are probably within a couple weeks of that original timetable. ... Stuff is getting done, folks. We are cleaning up 50 years of mess.”

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