Welcome back and thanks for tuning in.

The fallout from the semiconductor loss with State Senator John Cherry was in his district that suffered the loss.

Our lead story, a raucous House session in disarray wins the day.

Providing the analysis we have, Beth LeBlanc, Jordyn Hermani, and Simon Schuster.

Sit in with us as we get the inside out.

Off the Record.

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And now this edition of Off the Record with Tim Skubick.

Thanks very much.

Welcome to Studio C, Off the Record as we continue.

The Michigan House gets more interesting by the day does it not?

Rather raucous session yesterday and does this disarray wins?

Yeah, absolutely.

I mean, I think that we saw a legislative session where they were gaveled in at noon, were in session for more than 6 hours, only to see a couple of agonizing votes come up on the board on key legislative priorities for a number of representatives.

A representative, Jim DaSana, was not in the legislature because he felt that the Republican caucus wasn't moving forward with his priorities.

And so they failed to cobble together enough votes to make a majority on these key pieces of legislation.

And we saw Representative Alabas Farhat even seem like indicate like he was going to go yes, but then go no on a key priority of reps, their lightness.

He's the Democrat that Speaker Hall was depending on.

Remember, Speaker Hall appointed him the Democratic vice chair of approps which ain't a bad gig.

All right.

But he also, when he gives, he takes away.

Right.

Yeah.

While, he had that gig.

I mean, last night.

He also stripped Farhat of that command after Farhat voted no on the Juvenile Lifers bill.

You know, it would have delved into a very particular topic, which is going back to whether or not people who are 19 and 20 can receive mandatory life sentences as a as a juvenile individual.

You know, as Simon pointed out, it looked like Farhat was going to vote yes.

There was a rather tense standoff on the House floor regarding the House.

The Democratic minority leader, Ranjeev Puri, and a number of other representatives.

At one point it looked like they were very much in each other's faces, that there was going to be something maybe tumultuous happening there.

But in the end, Farhat voted no.

Hall stripped him of his post on the Appropriations Committee, and Farhat came out swinging after session, saying that, you know, this is the town's in disarray.

Frankly, Lansing's in disarray.

And I can't help but think that, you know, if we think back to 2024, we've seen the song and dance before.

What do you make of all this?

I think there's going to be a long budget season, Tim.

I think we're in it for the long haul.

Christmas Eve?

Christmas Eve?

I don't know.

But yesterday was not encouraging.

And, you know, it wasn't just that Hall couldn't get any Democrats to come over and help.

It was that he was missing three of his own members, including Rep DaSana who did it as a sort of statement because they weren't acting on his priorities.

And if you're wondering where he learned that behavior, it might have been in last year's lame duck when Republicans walked out of session.

So things are really coming around.

You know, I thought former Speaker Tate on the House floor last night kind of laughing while all of this was going down.

Ouch.

I think..Ouch.

I think it brought up, you know, some remembrances of of lame duck last year.

And they've got to get it together if they have any hope of passing the budget.

Well, in defense of these House Republicans, every Republican or Democratic caucus had had a narrow margin of control over the years, is always faced this problem because one or two people become mini speakers.

They can control the process and who like got some power here in the Senate who would marches to his own drummer.

No surprise that he would be one.

Say I'm a no show.

Yeah, absolutely.

I mean, we're in a hyper partisan environment where, as you mentioned, these slim majority margins that the Republicans have to deal with here means that you also have to appeal to your right flank.

And so as you're trying to cobble together a coalition to get things done, if you can't rely on that right flank, you've got to make compromises with people who are willing to maybe jump across the aisle here.

And clearly, Republicans wanted to make that happen on the juvenile lifer legislation.

But if you listen to Matt Hall, he said that Farhat had agreed and then had second thoughts on an amendment that they had acquiesced to.

But then if you listen to Farhat say he said he had never said yes on the legislation.

Which makes our job so interesting because where's the truth between those two?

Well, exactly.

And you know, I can't help but think whether or not Matt Hall, House Speaker Matt Hall went home after yesterday and maybe is rethinking the style of leadership.

I mean, for for what it's worth, all all year we have seen name calling.

We have seen finger pointing.

We have seen him call, for instance, the House minority leader, Ranjeev Puri, weak, ineffective, useless.

I mean, Puri really flexes muscles last night for Democrats.

This arguably was a win.

It showed that they could keep their caucus together, that they could spike major priorities for Republicans and they could kind of turn around and say, now, what are you going to do if you can't rely on us because you clearly can't rely on your own caucus?

I mean, will he go home and change his leadership style?

No, I'm under no delusion by it.

I mean, it's definitely worth some thought here as to whether this antagonistic and bullish nature is going to net him more wins as the year continues as the clock ticks down to our budget deadline.

Yeah, I think Jordyn is making a great point here, because when you're in the House minority caucus, you essentially have as the leader one big ability which is acting as that stopper.

The idea that you're not going to let your side bleed and let them cobble together these bipartisan coalitions.

And I think Puri definitely offered a refutation of some of that criticism.

Hall has lobbed his way.

Well, but that's a ticking time bomb for him as well, because he's got people in his caucus who could walk on him in a moment.

That's very true.

All right.

What's happening on MEDC?

Bring us up to date.

Well, the investigation is ongoing, but I feel like the most recent news is that the MEDC Executive Committee, which oversees operations and is made up of appointees of Governor Gretchen Whitmer, they met earlier this week in Traverse City just about as far away from Lansing as you can get.

And I... Marquette was Closed.

And they they spoke they spoke no word of the fact that the agency they oversee was raided a month ago.

This, of course, is the $20 million grant that's been investigated by the attorney general.

She says there is, quote, probable cause that a crime was committed.

But are you surprised that they didn't want do their dirty wash out in public?

I mean, if you're if you're smart, keep your mouth shut.

Well, I mean, who's their duty to?

Is their duty to the governor or is it to the taxpayers who fund the agency that they oversee?

And if their agency has been raided by law enforcement, then if there is a criminal investigation into a grant that they oversaw, I think their duty is to the taxpayer to tell them what they're doing to address this.

Well, and didn't.

You talked to the director.

What did.

He say?

I talked to the MEDC CEO, Quentin Messer.

He he defended the work of the agency in administering this grant.

Essentially indicating that his hands were tied in terms of administration because of the way the legislature wrote that that budget bill and wrote that grant.

But, you know, I think there are a lot of questions about, you know, what level of involvement his agency had because they do know the recipient of this grant met with his agency repeatedly in the year leading up to that grant about the possibility of getting that grant.

So his agency was well aware that she was pursuing this.

But his quote was interesting.

He said they complied with the oversight guidelines of the legislature.

That was not a denial that we didn't do anything wrong, was it?

He he said, yes, that they complied.

This has been the MEDC's argument for close to two years now, that they are tied by the the language that the legislature put in that budget.

And it is true.

I mean, I think when we wrote about that budget in the grand Senate, we had a quote in the headline calling it Shady as hell.

And I mean, the the grants that they put through there were meant to not have a significant amount of oversight.

But the MEDC, they canceled the grant in March based on issues that they knew about for a full year.

And so there's a question of what what tipped the scales here?

What what caused you to cancel the grant?

Because they did in the legislative language, have the ability to cancel the grant earlier.

And they didn't for close to a year.

Yeah.

You know, I think what's important to note is that the MEDC has a level of independence that's beyond regular state agencies, and they have like one single corporate purpose, which is sort of the stewardship and administration of economic development dollars.

And I think one of the holes in Quentin Messer's explanation here is that if we have to say that, you know, the legislature gives us some money, they want us to administer it, that we don't have any sort of mandate to provide oversight or stewardship beyond what's written out in a budget.

I think it's a difficult argument to make.

Would that mean that if somebody came into the MEDC and robbed them, that they couldn't report on that because it wasn't in their oversight committee language?

Or do I digress?

I did have an opportunity to talk to the attorney general the other day, and I asked her, is the governor involved here?

And here was her quote.

Look, I have no idea of the extent of anybody's involvement here.

End quote, then I asked her about somebody in her office, namely the chief of staff, quote, All I will say is that we don't have any specific targets of the investigation.

Interpret that for me.

Tim, I'm going to let her words stand on their own on that one.

You want to go into politics.

You want to take a shot at that, or no?

I mean, I think I'd say that criminal investigations aren't in jazz.

It's not like a free form improvizational exercise where, like, there's an abstract notion of something that's going on.

If there's not sort of an idea of wrongdoing committed by a specific party, I don't think anyone would initiate a criminal investigation.

All right.

There is money is in.

Ms.. Benson did pretty well, didn't she?

Yeah.

You know, she reported I believe it was something over $3.5 million, around $3.5 million of a fundraising haul.

I mean, out the gate, that's a pretty big get.

History making.

History making indeed.

You know, we're still seeing some of the other numbers flow in for other candidates at the moment.

There will be money definitely on the Republican side.

The DeVos' have already, I believe, with what John James has said, that they're going to give about $5 million to his campaign as well.

So we can expect a rather large fundraising haul out of him as well.

But yeah, I mean, it definitely puts her out in front of the pack and makes the statement.

Yeah.

You know, and I think what's important to note, like why these numbers matter when we're still more than a year from the primaries on both sides is that Benson is at minimum accrued more than three times the amount that Genesee County Sheriff Chris Swanson has.

And Lieutenant Governor Garlin Gilchrist reported about $750,000.

And so the difference here is we're seeing.

You describe that as sort of chump change.

Unfortunately, when the prior, you know, winning governor raised $36 million over the course of her campaign, her last campaign.

You know, it is a relatively small amount.

And what I think this telegraphs is the level of grassroots support and the amount of national profile that these people have.

The secretary of state has benefited from being in one of the most heated and contested elections in Michigan's history in 2020 and as a result, developed an enormous national profile that these other candidates can't benefit from.

Well, it's another thing to to show that if Republicans I mean, if we'll recall in the state legislature, Secretary Bunsen has been pulled in front of the legislature a couple of times now.

Either her staff or her specifically to discuss, for instance, the Michigan the campaign finance portal that has had a shaky start, the records requests and subpoenas that she's been issued.

And if this is any attempt at trying to diminish potential star power here in the field, it's very clearly not working.

I think to one interesting tale is going to be when Duggan eventually submits his reports and everything, I, I think, you know, there's been doubts that that that fundraising or support could be diminished by Duggan's presence in the race as an independent.

And I think this is a good tell that in fact Bunsen is able to fundraise just as much, if not more, than than any Democratic candidate before.

And I think to best point to Mike Duggan as an independent is not going to have that traditional political apparatus that's going to help him, like the Democratic Governors Association and the Republican Governors Association.

So he has to show that he can perform above and beyond the traditional candidate.

But then again, also the way he's fundraising as a candidate historically has primarily been through external vehicles.

He's had a 501(c)(4)nonprofit account, so-called dark money accounts support both of his run for mayor.

And if you're driving around on Michigan highways lately, you've seen billboards saying that he's America's most effective mayor.

That's from another 501(c)(4) account not connected to his campaign.

Very quickly, before we call in our guests to talk about the the semiconductor story, is the governor got her $50 million from her friend in the White House.

What's that guy, Mr. Trump, huh?

Yeah, You know, for disaster relief up North, the governor did secure some money to aid in these storm cleanup.

It's a big get.

Do you agree?

Yeah, it's a big get.

I think they're still gunning for more for up north.

I think they've they've clocked the losses at about 137 million, perhaps even higher.

So they're still in need of more aid.

But it's it's an initial step for that.

It bought her the headline which she wanted.

Yeah, absolutely.

I mean, it plays to Whitmer's strength, which is a retail politician, helps when you have the president's cell phone number.

But at the same time, she's fighting against an administrative posture that says states for the most part should be on the hook themselves for this emergency repairs.

And what she didn't say, but what she thought was what is everybody in town think I was going the wrong direction.

Think now?

if I dare put words in the governor's mouth.

No.

Let's call in Senator Cherry.

Senator, please.

Come on in, man.

Welcome to off the record.

Your friend Matt Hall had some unkind things to say in his news conference yesterday.

Basically said that you were in on this deal to begin with, didn't know what was going on.

And secondly, for you to blame Donald Trump is just absolutely, posi-tutely wrong.

Then what's the question, Tim?

Is he... Is he right?

Oh, well, what we've heard from the company told the state, we've heard from the governor, it's been reported, is the company said that Michigan is where they wanted to locate their $63 billion semiconductor manufacturing facility.

And they have decided they're not going to build it anywhere in the United States because of national economic uncertainty, etc..

So what that says is Michigan won this project and unfortunately, the United States lost it.

Because.

National economic uncertainty.

Well, I didn't hear you used the word Donald Trump in that answer.

I think there's a I think there's lots of blame to go around, including Congress, who's been just saying yes to everything that's happened nationally.

But do you hold the president accountable for losing this thing?

I think the administration does bear some responsibility.

Does the Biden administration bear responsibility as well?

I mean, they had the opportunity to approve some of this chip's funding on their way out the door.

Yeah, absolutely.

They did have the opportunity.

I think this went to the chip's office like August, September last year.

They could have approved it and they should have.

So then who here shares, I guess that that that blame because it seems to be that a lot of folks right now are pointing fingers at the president.

But in acknowledging that the former Biden administration also shares, I mean, was this just simply a long time coming?

Would this have happened regardless, in your opinion?

You know, as I said, we know Michigan won this competition and quite frankly, it's it's really disheartening.

It's hurtful that we're not going to get this because.

Well, what we're talking about here, 10,000 jobs, you know, back, you know, many years ago, Flint used to be in Genesee County, used to have the best quality of life in our country, some of the highest incomes in our country.

And that was based on good quality manufacturing jobs.

Well, today, when we're talking about high paying manufacturing jobs, that's advanced manufacturing.

And then there's and there's no more advanced manufacturing than semiconductor manufacturing.

This is the type of thing that is transformative, not just for a community, but for our state.

So then what kind of conversations, if any, are being had right now?

It's it's my understanding that the site is still being developed to eventually have a potential something come in there.

I mean, if you could pull the switch tomorrow, what's what's the hope here, another semiconductor factory or.

Yeah, certainly.

So what we've also heard and what we know to be the case is that Michigan and Genesee County has the best site in our nation for semiconductor manufacturing.

1400 acres unprecedent, unprecedented access to water, 85 million gallons of water a day coming straight from Lake Huron via the Karegnondi pipeline.

Three are one research universities.

Within 45 minutes, half a dozen freeway exits to two international interstates, right?

Within 5 minutes, an international airport within 5 minutes and rail access.

We have heard from site selectors, we've heard from the company SanDisk.

We have the best site in the nation.

So once things get worked out at the federal level, we should be at the top of the list to land that type of manufacturing here.

Our colleague Paula Gardner recently reported that the state was prepared to offer up in a total spending package of to $6 billion for this.

I'm curious, you know, do you think that's a fair amount to pay for a single project that's going to have relatively localized economic impact?

Well, I.

Don't I don't agree that it's relatively localized economic impact.

I think it's really statewide economic impact.

But we're talking about 10,000 jobs and bringing in an entirely new industry to our state.

That being said, the way that I approach looking at whether or not incentives make sense, generally I don't like incentives.

I don't think most people do.

Right.

But the world that we're living in is that's a reality that states have to deal with.

So when you look at other states that have received these massive multibillion dollar semiconductor facilities, New York and Micron, Ohio, Arizona, you look at all of them and they have some sort of state incentive package.

So the way that I approach it, I mean, look at what is Michigan offered.

Is it comparable to what these other states are offering or better, you know, better for the taxpayer, that is?

Or are we doing something excessive?

And we're still going through like I don't sign NDAs, so I don't have all the details of of what the offer was.

But we've read your reporting.

It's been good.

And so we're digesting some of that and looking at what those other states are doing.

I haven't gotten to the full detail of New York's offer, but the headline number was 10 Billion in New York.

So, you know, as a Senate Democrat, they're working with House Republicans right now attempting to get a budget done.

And also roads deal.

House Republicans drug deal would essentially empty out these economic development accounts.

Does that mean that, you know, if that happens, that these sort of deals where you can offer these multibillion dollar incentive packages are off the table?

Well, you know, it's tough to say what the House Republicans are doing because they haven't passed a budget yet.

You know, they're three months late.

They have passed the roads package.

But the roads package means nothing when you're doing 3 billion worth of funds.

And you're not saying where the money is coming from in the funds.

Yes.

Right.

So they have shown that it's going to empty out these corporate incentive accounts.

They've repealed, you know, in their package, they repeal the mega tax credits that occurred decades ago.

As an observer of this process when you come from a roots that your dad knew a little something about legislating and I assume he shared some of this wisdom.

How would you describe the current situation in the Michigan House vis a vis the leadership of the Speaker?

Seems to be based off of what I saw last night, Ineffective.

Why?

Well, they seem to have... Why are you smiling?

They seem to have trouble getting stuff across the line.

Right.

But, you know, quite frankly, it doesn't surprise me that they haven't passed a budget yet.

You know, even though we're, you know, three months, months late from the normal process in the House, because if you look at what Speaker Hall has been doing, they've been spending their time passing these messaging bills that, you know, you you mentioned some of it, but irresponsible tax cuts, $3 billion worth of fund shifts, you know, hundreds of millions of dollars, $100 million in earmarks.

And quite frankly, you can't fit all those messaging bills into a budget.

He can get out of the chamber.

So I'm not surprised he's having trouble.

Senator, the the the offer packages for Michigan for Micron, which shows New York for SanDisk, which abandoned the project.

They have been largely comparable, if not more than what New York was offering or other states.

Why is Michigan losing these projects?

Well, like I said, Michigan won this project.

It's the United States that lost it.

So we got to sort out the stuff at the federal level, and that's what it's going to take to make sure we advance here.

Well, they never signed an agreement with the state.

They they submitted us as the entity, the location they intended to build their manufacturing facility when they applied for chipset dollars.

So is there a possibility that this this project, this specific one, could be resurrected?

You know, that's answer I don't have a question.

That's a question you have to ask of the company.

What does your gut tell you?

Likely not.

I mean, they said they're not going to build a facility like this in the United States at this time.

Senator, there's a proposal right now to use state funding through the local economic development agency to purchase the Swartz Creek School for 40 million, to destroy it because it's in the pathway of that mega site and then to rebuild one elsewhere.

Where do you stand on that?

Do you think state money should be used to basically shut down a school and move it elsewhere?

So, yeah, the proposal is that they give the school district $40 million to build a brand new elementary school.

I think most school districts in the state would love $40 million to build a brand new elementary school to replace one that's 50, 60 years old.

But would Michigan taxpayers love it?

I think what we're talking about here is making sure that we are able to get a generational investment for the people of the state of Michigan.

And what does that mean?

It means about having.

It means about having prosperous communities, prosperous families.

It's about being able to have your kids stay in Michigan and have careers that can support families.

I think the people of the state of Michigan want that type of economic development in the state of Michigan.

Senator, you I would like to return to the budget for a second.

You know, we've already mentioned that Senate Democrats have passed their version of a budget.

House Republicans have not yet but have passed a roads plan.

And it appears the snafu is what to do with the roads plan.

You know, in your opinion, just a yes or no answer?

Are we headed for a government shutdown?

I don't I'm not going to give a yes or no answer.

What what I'll say is this.

But I think that's right.

I don't think that, you know, when you're three months late on beginning the budget process like the House is, and when the speaker's been talking about a government shutdown since he came into office, I mean, I think that points to the direction that we're headed.

Correct me if I'm wrong.

Are you not in a subcommittee for the D.C.?

No.

Oh, yes, I am.

I am on the subcommittee over there.

So what do you make of what's going on over there?

You referring to the Fay Beydoun Uh.

grant?

Let's start with... work backwards, ok?

Yeah, well, first, I wasn't on the subcommittee when all that happened.

I was in the minority in the house.

But, you know, the attorney general has, you know, begun a criminal investigation, and I don't want Michigan's taxpayer funds to be misspent.

So if there is any thing that's happening incorrectly or anything illegal that's happening, I think it should be prosecuted.

The attorney general has been very aggressive in pursuing these types of criminal complaints.

And I expect that she will be aggressive in rooting out anything that should not have happened.

As she goes through her investigation.

I'm curious.

And on that note, you know, given that you're on the committee that's tasked with oversight of this body, what do you think about MDEC CEO, Quentin Messer's investors explanation that essentially they don't have control over where the money goes, but that they did everything that was dictated to them by the legislature in terms of oversight of these funds?

Yeah.

You know, right now the attorney general is conducting her investigation.

I'm I want to see what the results of that investigation is and learn from it to see what changes we need to make because this shouldn't be happening in the first place.

Right.

So what we need to do is whatever the results of that investigation is, take those results, understand why it happened, and then make changes going forward to make sure it doesn't happen in the future.

I mean.

You know, Beth is reported that they bought a $4,500 coffee machine.

Do you think that's something that should raise a red flag within the agency?

Yeah.

Do you think they should have shut down the money earlier when they first heard about that?

If if if they knew that the money was spent on that type of expenditure, my hope would be they would not continue to expend.

Who's your candidate for governor?

I've not endorsed anybody.

You have somebody in your district, I think, running for governor.

I think I do.

Yeah.

He's a.

Good guy.

Well, yeah, that was.

Is that an endorsement?

I'm not.

I'm not making an endorsement.

I've worked with all these candidates.

I think they're all excellent.

And whoever we end up nominating, I think they'll be a great governor.

Are you going to endorse.

Once the primary is over.

There's a profile in courage.

Rright.

Senator, it's good to see you.

Thanks for Thank you very much.

More of Off the Record right here next week.

See you then.

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