Governor Halts $1.1 MILLION Grant to Trucking Association For Misusing State Funds
Lansing, MI – The Michigan Trucking Association (MTA) is under fire after a Detroit Free Press report on Monday revealed a series of findings that have some state lawmakers, including Governor Gretchen Whitmer, expressing “concern.”
On Tuesday, Gov. Whitmer announced she is halting a $1.1 million grant to the MTA as state investigators look into the most recent findings that the trucking association misused state funds for its lobbying efforts.
“Given the concerns recently brought to light, we’ve tabled the contract and asked the Michigan State Police to review the program and the contract extending it,” said Tiffany Brown, a spokeswoman for Gov. Whitmer.
The explosive new report details a litany of findings by the Free Press and the state’s Office of Highway Safety Planning into MTA’s business activities and allocation of nearly $300,000 in state grant funds.
The state redirects $15 from each commercial truck registration fee, along with various other fees collected from trucking businesses, into the Michigan Truck Safety Fund (MTSF), which was created in 1988.
The MTSF takes in more than $3 million per year, according to the Free Press.
The safety fund supports not only grants for education, but also some commercial truck enforcement operations conducted by the Michigan State Police.
The State Administrative Board, made up of the governor, lieutenant governor, secretary of state, attorney general, treasurer, superintendent of public instruction, transportation director and others, votes each year to award grants from the MTSF to worthy organizations.
According to the Free Press, the Michigan Center for Truck Safety, MTA’s nonprofit arm formed for the purpose of providing safety training to truckers and education to the motoring public about how to operate safely around big rigs, has taken in almost $8 million in MTSF grants since 2012.
The Free Press’ report reveals that tax filings and other state records show the Center for Truck Safety, which shares office space in Lansing with MTA, “uses some of the state grant money to pay the MTA more than $51,000 a year in rent, up to $20,000 a year for services such as legal advice and personnel management, and $16,800 in annual interest payments on a loan.”
Further, the report details that a 2013 investigation conducted by the state’s Office of Highway Safety Planning found that revenues flowing into the Center for Truck Safety, such as tuition paid by truck drivers, were being diverted into the MTA.
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These revenues should have gone back into the costs of operations for the Center for Truck Safety, officials concluded.
Michael Prince, director of the Office of Highway Safety Planning, told the Free Press, “We didn’t find any intentional diversion of funds, but we could find some expenses that we said, ‘This really is an expense of the MTA.'”
Further, the Office of Highway Safety Planning discovered at least one employee being paid by the Center for Truck Safety was also working as a telephone receptionist for the MTA.
Additionally, the Office of Highway Safety Planning investigation found that “equipment worth more than $13,000, paid for with state funds, was sold to pay off an MTA debt for equipment storage.”
Following these findings, the Center for Truck Safety agreed to have future grant fund payments reduced by $287,492 in order to reimburse the state.
According to the Free Press, MTA agreed to an “action plan” to better appropriate the state grant funds going forward.
MTA executive director, Walter Heinritzi, has denied any wrongdoing, according to the Free Press.
However, on Monday after the Free Press’ report was published, Governor Whitmer told media members she intended to “get some answers.”
Whitmer, along with her colleagues on the State Administrative Board, was expected to vote on Tuesday whether to award another $1.1 million for the fiscal year that begins October 1, 2019, to the Center for Truck Safety and MTA.
However, Whitmer has chosen to put that vote on hold pending the findings of a new investigation.
Transportation Nation Network will bring you an update on this as news breaks.