News Story

Mackinac Center awarded $77K for reporting that MEA improperly took COVID-19 relief money

MEA and MESSA improperly took $12.5 million in COVID relief money through Paycheck Protection Program

In January 2022, the Mackinac Center Legal Foundation sued the Michigan Education Association and its insurance affiliate, the Michigan Education Special Services Association. The foundation sued under the federal False Claims Act after both union entities improperly sought and were granted $12.5 million in COVID-19 relief money through the Paycheck Protection Program.

Fourteen months later, the case was settled in the Mackinac Center’s favor. The MEA and its affiliate must pay $200,000 in reimbursements and fines.

The two union organizations will also pay the Mackinac Center $77,000 for its role in uncovering the wrongdoing.

The U.S. Department of Justice took over the case from the Mackinac Center.

Mackinac Center for Public Policy

The Paycheck Protection Program was never intended for 501(c)(5) nonprofits like the MEA or 501(c)(9) nonprofits like MESSA.

But both organizations sought and received money anyway. In April 2020, the MEA and MESSA both applied for PPP funding. The MEA received $6.4 million while MESSA received $6.1 million, for a total of $12.5 million.

In December 2020, the two say, they returned the funds.

The Mackinac Center filed its action because when the MEA and MESSA took the funds, that denied other businesses the money they needed after being shut down by government order.

“By doing this, we wanted to make sure that all that stuff was taken care of, instead of taking them at their word,” said Patrick Wright, director of the Mackinac Center Legal Foundation.

In a statement, the MEA called a lawsuit it settled frivolous, adding that it was expensive.

“MEA did not engage in any wrongdoing, which is notable compared to news coverage about bad actors who used PPP loans to enrich themselves,” read the MEA statement.

Joseph G. Lehman, president of the Mackinac Center, hailed the settlement.

“The Mackinac Center repeatedly defended Michigan citizens from government overreach during the COVID-19 pandemic, and now we’ve helped protect federal taxpayers from union misconduct,” Lehman said in a statement.

Lehman added: “The award and fees will be used to advance school choice and educate Michigan teachers about their right to opt out of union membership and dues.”

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.

News Story

‘All options are on the table,’ including burying power lines, Michigan utility regulator says

MPSC chief Dan Scripps says Michigan’s grid is not performing at the level the public deserves

Dan Scripps, chair of the Michigan Public Service Commission, which regulates state utility companies, said Monday in an interview on WWJ-AM that “all options have to be on the table” after two recent mass power outages in Michigan.

Millions of people in Michigan lost power, between the ice storm of late February and the thundersnow of early March. 

“The most frustrating thing for us is, this isn't new issue,” Scripps said. “We have not had the system or the levels of reliability in the system that customers expect and deserve.”

Listen for yourself: Dan Scripps interview with WWJ-AM

Scripps said that while some strides had been made in reliability, “events in the last two weeks really underscore how much more work there is to do. Clearly the system isn’t performing at the level that people expect and deserve.”

Scripps said the commission is in the midst of an audit of DTE Energy and Consumers Energy, Michigan’s top energy companies, to see what can be done to improve reliability. Scripps mentioned, without prompting, the idea of putting power lines underground.

“After the 2021 storms, we held a series of technical conferences to consider a range of issues including undergrounding of these of these wires,” Scripps said in the interview. “I would expect that we'll see more of that going forward and trying to identify where that's the best solution versus where something else might deliver more bang for the buck.”

Jason Hayes, director of environmental policy at the Mackinac Center, said state regulators share in the blame for Michigan’s persistent power outages.

“Mr. Scripps and the Michigan Public Service Commission are complicit in these power outages because they have approved both the rates and long-term plans that the utilities have proposed,” Hayes told CapCon.

“If the MPSC and the utilities would cease their dangerous and expensive rush to meet net-zero and decarbonization targets and refocus on their primary responsibilities of supplying Michigan residents with low-cost, reliable utility services, Michigan residents could go back to trusting that their lights will come on when they turn on the switch,” Hayes added.

DTE spends $190 million annually trimming trees. Placing power lines underground has been viewed as too expensive.

State lawmakers, such as Sen. Stephanie Chang, D-Detroit, who have called for DTE to go to Lansing to testify, have spoken openly of the need to bury more power lines underground. Scripps’ remarks indicate that regulators are on board.

“All options have to be on the table,” Scripps said. “We’re not in a position right now where we’re meeting the needs and expectations of customers and we’ve got to get better.”

Tuesday morning at 10 a.m., the Michigan Public Service Commission will host a pre-hearing on DTE’s Feb. 2023 rate request.

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.