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Rick Snyder’s new funds can receive unlimited anonymous contributions

Gov. Rick Snyder has set up funds that can receive unlimited contributions from anonymous donors, prompting concerns by non-partisan campaign reform advocates that the anonymity could conceal quid pro quo arrangements between contributors and the governor.

According to documents obtained by the Detroit News and confirmed as authentic by the Snyder administration, the governor now controls three new funds that can accept unlimited donations.

One, called the Governor’s Club, is arranged under Section 527 of the Internal Revenue Code and is slated to cover expenses that Snyder incurs because he is governor. This fund must report contributions and expenses to the IRS.

The second new fund, called the New Energy to Reinvent and Diversify Fund (or NERD Fund), is set up under the 501(c)(4) part of the the tax code. The NERD Fund is classified as a “civic action and social welfare” fund and can be involved in political activities as long as its primary purpose is not to affect the outcome of elections. This fund is not required to publicly disclose who donates or how much they give.

Snyder spokeswoman Sara Wurfel told the News that donations to the NERD fund will cover gubernatorial expenses for which state dollars are no longer available such as travel, office lunches and renovations to the governor’s press auditorium.

A third new fund, the Foundation to Reinvent Michigan, is set up as a charity to pay for upkeep of the governor’s official residences. The governor is not required to disclose the donors to this fund.

“There is no reason to be hiding money other than the donors want to be hidden,” said Rich Robinson, who tracks campaign spending as executive director of the Michigan Campaign Finance Network. “If there is any reciprocity going on this is a way to conceal it.”

While running for governor last year Snyder publicly refused to take money from political action committees as a way to demonstrate his freedom from special interest groups and his spokeswoman Sara Wurfel told the News that the new funds will also refuse PAC donations.

“The whole idea that I’m independent of interest groups because I don’t take contributions from PACs is full of cognitive dissonance,” Robinson said.

That’s because PACs are often founded so that corporations can give to politicians and Snyder’s 501(c)(4) group allows corporations (or other groups) to give directly.

Snyder has already benefited from secret funding, Robinson said. During the campaign the Republican Governor’s Association paid for television advertisements supporting him. The Republican Governor’s Association is a 527 organization but it accepted millions from a Michigan Chamber of Commerce fund that did not disclose its contributors.

“We’ve just seen a $1.8 million dollar tax shift from working people to big business,” said Ray Holman, legislative liason for UAW Local 6000, which represents 22,000 state employees who are being pressed for major concessions by the Snyder administration.

“If we don’t have full disclosure we don’t know who is behind and supporting the politicians; it is really troubling because we’ve seen a huge shift in wealth in Michigan.”

Snyder has also pushed to privatize a broad range of state services without creating a system of oversight for contractors.

Benton Harbor Mayor Pro Tem Marcus Muhammad said he found the news of the Snyder NERD fund disturbing.

“By definition a nerd is someone who has a non-social purpose or mission,” said Muhammad, who was stripped of power under Snyder’s Emergency Manager law which allows appointees to fire elected officials, “It’s quite unfortunate that … the governor’s policies are non-social and go against the very fabric of a democratic society.”

“His secret corporatized fund is only further evidence against his administration,” Muhammad said.

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