Gov. Rick Snyder (Dale G. Young / The Detroit News)
Lansing — Gov. Rick Snyder’s NERD Fund will be scrapped and replaced with a new more transparent fund, his spokeswoman, Sara Wurfel, confirmed Monday.
“The fund is in the process of being dissolved,” Wurfel said. It can’t be closed until year’s end for tax reasons, but will collect no new money, she said.
Despite full confidence that it was in compliance with state and federal tax and election laws by the board overseeing the fund, it had become an unnecessary distraction, Wurfel said.
Its replacement “will go far above and beyond what the law requires,” she said, including quarterly online disclosure of donors, amounts given and spending details by category.
The NERD Fund created controversy because it was, until recently, paying the $100,000 annual salary of Snyder top adviser and friend Rich Baird, who recruited Detroit Emergency Manager Kevyn Orr and state Budget Director John Nixon.
The Detroit News first reported last week that Baird, a retired PricewaterhouseCoopers executive, had been transferred to the state payroll at a $140,000 salary.
The nonprofit fund, whose name is an acronym for New Energy to Reinvent and Diversify, also has covered Orr’s living and travel expenses.
Critics questioned the lack of disclosure of fund donors. During a deposition on Detroit’s bankruptcy, Snyder said he doesn’t know who they are.
Late Monday afternoon, the directors released as statement saying the board is eliminating the fund at Snyder’s request.
“The fund has been used to advance good government in Michigan while easing the burden on taxpayers,” the statement said, adding board members “are proud of the work that has been achieved with the fund’s resources” and that it “has been administered in full compliance with state and federal laws.”
“These types of funds are not uncommon.” the statement added. “The legality of the fund and the integrity with which it is administered has never been questioned.”
Political adversaries pounced on Monday’s announcement, with Michigan Democratic Party Chairman Lon Johnson saying past fund donors shouldn’t remain secret.
“We know Rick Snyder’s slush fund will no longer be paying for Rich Baird’s salary, Kevyn Orr’s travel and luxury housing and improvements to Rick Snyder’s home — but what we don’t know is far more concerning,” Johnson said.
Michigan AFL-CIO President Karla Swift was equally critical.
“The question still remains, why was it set up in the first place?” Swift said. “Who did it serve and why back away from it now?”
Swift noted NERD Fund directors who helped get Snyder elected in 2010 received political appointments:
■Fund President Charlie Secchia, a Grand Rapids developer, to the Grand Rapids-Kent County Convention/Arena Authority in March 2012.
■Fund Secretary-Treasurer Brad Canale to the Natural Resources Trust Fund in November 2012. He is executive director of advancement at the University of Michigan’s College of Engineering.
■Past fund Vice President David Nicholson to the Wayne State University Board of Governors in February. Nicholson is an executive at PVS Chemicals Inc. in Detroit.
“These are people who are close to Snyder and they’re leading the NERD Fund and yet … Snyder testified under oath that he knows nothing about the contributors,” Swift said. “I just don’t find it believable.”
Mark Schauer, the likely 2014 Democratic candidate for governor, seized the opportunity to criticize the incumbent.
“The appearance of impropriety and conflicts of interest won’t go away until the governor discloses existing NERD Fund donors,” Schauer said. “Michigan taxpayers deserve answers, not more political excuses from Gov. Snyder.”
Remaining fund money will go to expenses for which it was created, such as technology and event outreach, staff meetings and travel, Wurfel said.
The new fund will be “essential to continued reinvention efforts, saving taxpayer dollars and helping ensure responsive, accessible government,” she added.