Nonprofit boosting Consumers Energy's candidates spent $12.9M

Craig Mauger
The Detroit News

Lansing — A nonprofit group that sponsored a television ad blitz promoting the preferred candidates of Michigan's largest electric and natural gas utility spent $12.9 million during the 2018 election year.

Citizens for Energizing Michigan's Economy, which has been funded by Consumers Energy, released its annual tax filing for 2018 at the request of The Detroit News on Monday. The filing was due to the Internal Revenue Service on Nov. 15.

The document sheds light on the wide reach of the organization's spending, funding groups focused on races up and down Michigan's ballot. The political spending fell outside disclosure requirements under state law because the group's advertisements didn't expressly endorse or oppose a candidate.

Citizens for Energizing Michigan's Economy, a nonprofit that ran ads about candidates for the state Legislature in 2018, spent about $12.9 million for the year, according to tax filing. This ad was critical of John Bizon, R-Battle Creek, who went on to win a seat in Senate.

"By operating this type of game to target politicians to get them out of office, hide the money, hide the campaign donations, it harms democracy," said Matt Kasper, research director at the Energy and Policy Institute, a national watchdog organization that monitors utilities.

Kasper's organization previously examined filings that Consumers Energy made with the Michigan Public Service Commission to determine the utility had contributed $43.5 million to Citizens for Energizing Michigan's Economy from 2014 through 2017.

In a commission filing for 2017, Consumers reported giving $20 million to the nonprofit. That's how much the nonprofit reported raising through dues in 2018.

As a "good corporate citizen," Consumers is engaged in the political process, said Katelyn Carey, spokeswoman for Jackson-based Consumers Energy. The money that went to Citizens for Energizing Michigan's Economy wasn't "recovered in customers' utility rates" but came from investors, she said.

"We support CEME as we support their mission to educate elected officials and the general public on issues facing Michigan, including pragmatic energy policies that are focused on safe, reliable, and affordable energy for Michigan," Carey said.

Citizens for Energizing Michigan's Economy aired TV ads in at least 10 races for the state House or state Senate during 2018, according to ad tracking by the Michigan Campaign Finance Network. The group's ads promoted candidates supported by Consumers or criticized candidates opposed by Consumers.

The group's 2018 tax filing shows it spent $3.2 million with a media-buying firm called Strother Nuckels Strategies. It also spent $420,281 on "direct mail" and $443,814 on "research," according to the filing.

In addition, the filing shows that Citizens for Energizing Michigan's Economy gave large sums of money to other politically focused nonprofits involved in Michigan's 2018 election. Among them was Faithful Conservatives for Michigan, which received $5.4 million.

This is the first page of Citizens for Energizing Michigan's Economy tax filing for 2018. The document shows the group spent $12.9 million during the year.

Faithful Conservatives, another nonprofit group, aired TV advertisements, sponsored radio advertisements and sent out mailers critical of Republican state Senate candidate Gary Glenn, who chaired the House Energy Committee and had been a vocal critic of the state's dominant electric utilities.

After Faithful Conservatives' heavy spending, Glenn, a Republican from Williams Township, lost his bid for the Senate to former Rep. Kevin Daley, a Republican from Lum, in the primary. Daley got about 58% of the vote while Glenn received about 41%.

In total, Citizens for Energizing Michigan's Economy gave out $8.4 million in grants or assistance to other organizations, according to its tax filing for 2018. Many of the organizations were heavily involved in state politics.

The group's tax filing shows it gave $300,000 to Progressive Advocacy Trust, a political organization that didn't have to disclose its donors but boosted Democrat Gretchen Whitmer, who was running for governor.

Citizens for Energizing Michigan's Economy also gave $290,000 in 2019 to Making Government Accountable, a nonprofit tied to former Gov. Rick Snyder's administration, $100,000 to the Michigan Chamber of Commerce and $100,000 to Leading Michigan Forward Fund, a nonprofit that ran ads promoting Republican attorney general candidate Tom Leonard.

Citizens for Energizing Michigan's Economy reported making $8 million in contributions to other organizations during 2018.

On top of those contributions, Citizens for Energizing Michigan's Economy gave $300,000 to a Michigan Republican Party administrative account and $325,000 to a Michigan Democratic Party fund. The Democratic fund and the GOP account didn't have to disclose their donors.

The nonprofit's contributions to other nonprofit groups appeared to be an attempt to mask the utility's financial activities related to specific candidates, said Fred Wertheimer, founder and president of Democracy 21, an organization that works to promote transparency and government integrity.

"We should not be in a position where a utility is able to mask its role in attempting to influence campaigns through issue ads without having that role disclosed," Wertheimer added, referring to so-called issue ads that praise or criticize candidates but don't tell viewers specifically how to vote. 

But Consumers spokeswoman Carey argued against a "dark money" label for Consumers' donations to Citizens for Energizing Michigan's Economy in 2018. Carey noted the money Consumers has given to the group had been disclosed in reports to the Michigan Public Service Commission.

"Like all of our nonprofit supported organizations, CEME ... is an independent organization and not part of Consumers Energy," she added.

Citizens for Energizing Michigan's Economy's spending in 2018 has been criticized by some lawmakers. In January, the Michigan Public Service Commission approved a larger settlement with Consumers that included a freeze on the company's contributions to political nonprofits.

However, Brandon Hofmeister, the utility’s senior vice president of governmental, regulatory and public affairs, has said the freeze could have limited impact because it didn't apply to CMS Energy, a holding company that owns Consumers.

Hofmeister is listed as Citizens for Energizing Michigan's Economy's vice president on the tax filing for 2018.

Citizens for Energizing Michigan's Economy disclosed having $21.5 million available at the end of 2018.