Yes, Granholm's Administration Gave Cash To Failed Electric Car Battery Company
She denied it in a U.S. Senate confirmation hearing
Former Gov. Jennifer Granholm was grilled this week by members of the U.S. Senate Energy Committee about her track record on energy issues in Michigan, and among other things claimed that a newspaper op-ed describing the failure of "green-energy" subsidies she promoted here was inaccurate.
She implied taxpayers did not lose any money in one particular corporate subsidy deal she was asked about, which is not accurate.
Granholm made the claim at a Jan. 27 hearing by the committee on whether to confirm her nomination by President Joseph Biden as the U.S. Secretary of Energy.
The op-ed cited by the former governor was written by Jarrett Skorup, director of marketing and communications for the Mackinac Center for Public Policy. It came up when Republican Sen. John Barrasso asked Granholm about her Michigan track record on energy issues.
Barrasso cited a Dec. 29, 2020 op-ed in USA Today stating that Jennifer Granholm’s record on corporate renewable energy subsidies should frighten Americans.
“It alleges that as governor you directed hundreds of millions of dollars to battery solar other green energy countries that failed to deliver on job creation promises,” Barrasso said at the hearing.
Barrasso cited A123 Systems, a company that had promised 3,000 jobs in Michigan. A123 Systems received authorization to get more than $140 million in state tax credits and subsidies, and then declared bankruptcy. A Chinese firm bought A123 Systems’ intellectual property.
“In short, American taxpayers spent close to $400 million to subsidize a technology transfer to the Chinese,” Barrasso said. “So based on this record, can you provide us something in terms of what confidence we should have if you are confirmed that you will be able to invest U.S. taxpayer dollars wisely.”
Granholm responded by attacking the credibility of the op-ed.
“First, that article is incorrect,” Granholm responded. “In Michigan, we have something called the Michigan Economic Growth Authority that offers tax credits to firms that promise to build, create a certain number of jobs. But if they don’t, they don’t get the funds. So, in Michigan, because the way that tax credit is structured, we don’t pay out if firms don’t deliver.”
Granholm’s administration offered A123 Systems $100 million in battery credits, $25.3 million in general corporate "MEGA " credits, $10 million in grants, a $4 million loan from a “21st Century Jobs Fund,” $300,000 in training grants and additional exemptions from state taxes.
It is not known how many state tax dollars were actually delivered to the company in the form of "refundable" business tax credits for battery production, due to a 2009 government secrecy law Gov. Granholm signed that hides the actual handout amounts from the public. It is known that A123 Systems received state payments in 2012, 2013, 2014 and 2015, based on some state reports.
Due to the same secrecy law taxpayers also do not know how much the company received in refundable MEGA tax credits. It appears A123 received credits for 2010, 2011 and 2012 based on some state reports. In many, if not most cases, such credits involve actual disbursements of cash to well-connected recipients.
The company is known to have received $10 million in the form of a grant from the 21st Century Jobs Fund, and there is a footnote in a required annual report indicating that the state received $2 million in loan repayments from the company as part of its bankruptcy proceedings.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
All That is Not Permitted is Prohibited
Gov. Whitmer’s strict approach makes well-meaning Michiganders into criminals
Gov. Gretchen Whitmer took time at her latest press conference to slay a myth, saying “Things have not been closed for eight months.” It is true, of course, that the economy is not and was not ever fully shut down. But the governor’s attempt to regulate nearly every aspect of our social lives promotes the public perception that this is what happened, because her approach is to prohibit everything except that which she specifically allows.
For instance, the epidemic orders issued by the state health department restrict how many people may gather indoors. It does so by first declaring that indoor gatherings are prohibited. That is about as broad and blunt as it gets. The only indoor gatherings that are allowed are those that the order makes an exception for: gatherings of 10 or fewer representing no more than two different households.
This may not technically shut anything down, but it is an extraordinary restriction when you think about it. It means that a child may not play inside with more than one friend at a time, unless the friends are siblings. It means no double dates at the movies (and no third wheels, either). It means that large families cannot invite more than a few relatives into their own homes.
A similar tack is used for regulating outdoor gatherings. They “are permitted only” for 25 or fewer people from three or fewer households. “Outdoor” is defined “as a space that is not indoors,” which means that these rules apply to your backyard, every neighborhood park, corn fields and every inch of the 4.6 million acres of state land in Michigan. A golfing foursome is illegal unless two of the four live together.
These prohibitions on gatherings apply to just about every interaction that occurs in public, because a “gathering” is defined as “any occurrence, either indoor or outdoor, where two or more persons from more than one household are present in a shared space.” That covers just about every activity you might care to do outside your home.
The only reason businesses are open, people are attending churches, patients are seeing doctors and many schools are meeting in person is because Gov. Whitmer makes specific exemptions for each of these activities — that is, if those involved follow other rules laid out in the order. For example, the order says that “gatherings are prohibited at entertainment facilities and recreational facilities unless” they follow a number of social distancing mandates. This same default prohibition is set for schools, restaurants, child care facilities, barbershops, gyms and more.
These ambitious prohibitions may appear harmless. The state, even with the full force of every county and local government behind it, could never fully enforce these rules. There’s no doubt that people violate these rules regularly. When considering the challenge of enforcing compliance, it’s clear that these strict gathering prohibitions are just for show, because it is impossible for most individuals to precisely adhere to all of them.
But there is a real danger to this approach. It should not be forgotten that anyone who violates these orders is a criminal and subject to imprisonment and fines. In fact, the state health department even used other emergency powers it possesses to increase the fines people must pay for violating these rules from the default fine of $200 to a $1,000 charge for each violation. This means that if you have a friend over and a neighbor stops by to say hello, you risk a $1,000 fine and criminal charges if you invite them in from out of the cold. Is this really necessary?
Behind a podium and a microphone, Gov. Whitmer often tells Michiganders that limiting the effects of COVID-19 is all up to us, that we must all do our part and that our individual actions matter more than what any state order says. She’s not wrong when she says this, but it does suggest that voluntary compliance with state guidance should be the most appropriate approach. But the governor’s actual orders rely on the opposite: All that is not explicitly permitted is prohibited under penalty of law. That’s not trusting people to do the right thing, and it might be the source of the “everything is closed” myth the governor would like to erase.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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