Michigan Senate paid $373K in 20 secret severance deals

Craig Mauger
The Detroit News

Lansing — The Michigan Senate says it's handed out $372,614 in severance pay through 20 secret separation agreements with departing employees over the last five years, revealing that Democratic Gov. Gretchen Whitmer's administration isn't the only branch of state government engaging in the practice.

In response to requests from The Detroit News, the Republican-controlled state Senate and House revealed Tuesday afternoon their total numbers of separation deals since March 3, 2016. But the two chambers didn't provide other details about the arrangements, including the identities of the individuals who received the payouts or whether they included confidentiality restrictions.

However, one of the Senate agreements reviewed by The Detroit News included a non-disparagement clause that limited the former worker's ability to talk about the individual's employment and a provision that required the deal be kept secret.

By comparison, the House says it's reached only one separation agreement worth $25,000 over the last five years.

In separate disclosures to liberal watchdog group Progress Michigan, the House revealed three agreements worth $59,500 over the last seven years, and the Senate disclosed 30 agreements worth $632,144 over that time.

Last week, The Detroit News reported that at least three officials who worked for state departments quietly signed separation deals under the Whitmer administration that included financial payouts ranging from $11,000 to $155,000.

Two of the agreements, one with former health director Robert Gordon and the other with former Unemployment Insurance Agency Director Steve Gray, included confidentiality provisions that barred them from discussing their departures. The deals drew criticism from both Republican and Democratic lawmakers who have questioned the public benefit of the non-disclosure requirements.

The Senate Business Office provided "as much information as the terms of the agreements allow," Senate Majority Leader Mike Shirkey, R-Clarklake, said in a statement.

The office released only the number of agreements reached and the amount of money involved.

"Like many public and private organizations, the Senate has occasionally offered departing employees from Republican, Democratic and nonpartisan offices severance packages based on their salary, longevity and other factors," Shirkey said.

Unlike state departments, the House and Senate are not subject to the Freedom of Information Act, which broadly requires the disclosure of government documents. The Legislature does release financial records, which is why some information about the severance deals had to be revealed.

Doug Simon, director of the House Business Office, said the House has entered into only one separation agreement over the last five years with a terminated employee to settle a legal dispute.

The settlement agreement released all claims against the House, Simon said. The House agreement was reached on Jan. 25, 2018.

"The House is not able to release the agreement due to the terms of the settlement," Simon said.

House Speaker Jason Wentworth, R-Farwell, said the House has "nothing to hide" in its finances.

"The House agreed to a few small settlements to avoid litigation and save taxpayer dollars, and that's it," Wentworth said. "No golden parachutes, no hush money and no hiding. The people of Michigan deserve a simple and transparent process like this, which is why we are making ethics reform and expanded government transparency laws a priority.

"Going forward, we will continue to fight for transparency and accountability in every branch of government."

Lonnie Scott, executive director of the liberal watchdog group Progress Michigan, slammed Republican lawmakers on Tuesday for criticizing Whitmer's use of the agreements.

"It’s clear more transparency is needed in Lansing, but the Legislature needs to get their own house in order before they can claim to take any sort of moral high ground on this issue," Scott said. "We need real transparency and accountability in Lansing, not politically motivated hot air and bluster from Republican lawmakers, whose sole purpose seems to be attacking the governor — even from a place of rank hypocrisy."

Over the last week, The News has asked 20 state government agencies to disclose any separation agreements with confidentiality requirements they've reached, at least since the start of Whitmer's term in office, Jan. 1, 2019.

After the House and Senate's disclosures, Whitmer's executive office became the last one to respond definitively to the request. The governor's chief operating officer, Tricia Foster, said Tuesday afternoon the executive office had $0 in separation agreements since the start of 2019, which is when Whitmer took office.

"Our administration remains committed to transparency, which is why this information is being provided voluntarily," Foster wrote in a letter addressed to "whom it may concern."

Two departments — Health and Human Services as well as Labor and Economic Opportunity — said their only agreements with confidentiality provisions were the ones previously made public.

Gordon, the former health director, received $155,506 under his deal, and both sides have to maintain confidentiality about the circumstances that led to his abrupt departure. Gray, the former director of the Unemployment Insurance Agency, received $85,872, and both sides agreed to confidentiality about the details of his state employment and departure.

On Friday, the Michigan Economic Development Corp., which describes itself as a quasi-governmental agency, revealed eight agreements worth $308,623 over the last four years, including one with its former CEO, Jeff Mason.

Under his March 2020 pact, which included a non-disparagement clause, Mason received $128,500 in severance pay. Also, the MEDC and Mason agreed that "employee’s departure will be announced as a retirement.”