State Red After Ex-Con Awarded Dev Incentives

LANSING, MI-State officials were “embarrassed” and pledged changes Wednesday to development incentive application requirements. The proposed changes come after a Flint businessman promised millions of dollars in tax credits Tuesday for a new headquarters project, but Wednesday was accused of violating parole from his two-year prison term for fraud. Michigan Economic Development Corp. President and CEO Greg Main, the leader of a public-private partnership tasked with bringing in jobs and new construction, said Wednesday that the state will now delve deeper into an applicant’s past, such as performing background checks on all company officers when a firm requests development incentives.

Richard Short is CEO of Renewable and Sustainable Cos., which pledged to spend $18.5 million to move a sustainable energy company into a Flint building near the former Buick plants, and promised to hire 765 people. Short applied for incentives from the Michigan Economic Growth Authority, through the MEDC, and his company was one of 11 firms selected recently to receive millions in incentives. Specifically, Short’s firm was promised a state tax credit valued at $9.1 million over seven years, and the city of Flint was considering a 15-year tax abatement. Short appeared with Gov. Jennifer Granholm at the public announcement of the incentives on Tuesday.

However, Short’s sordid past came to light the next day. According to the Detroit Free Press, Short was detained in a Flint jail for parole violation. Main said the MEDC had no idea that Short had served two years in prison within the past decade for fraud and embezzlement in Oakland and Muskegon counties, though the information is publicly available on the Michigan Department of Corrections Web site. According to the site, Short was paroled in January 2007 and is set to be discharged from parole in January 2011. He did not offer this information on his MEGA application, Main said. “Needless to say we are embarrassed by this matter,” Main said. “In this light, we will add to the MEGA application a more explicit requirement of the company that it disclose any prior felony convictions by senior company executives.”

The state official was quick to point out that no tax dollars have been given to Short; rather, he was just promised a reduction of taxes he would have paid, provided he had completed the investment and made the promised hires. “The MEGA award is performance-based and costs the state nothing if the company fails to meet the terms of the agreement,” Main said.

Short’s company Web site details his plans, with COO Kobina Atobrah, to provide sustainable energy, water and telecommunications solutions to people in countries such as Africa, Europe and China. The firm’s address is a Flint post office box. Calls to the business number on the site were unanswered. The Free Press article can be read here.