Michigan Economic Development Corporation under pressure following fraud allegations

LANSING, MI (WOWO) Former criminal charges filed against a Michigan Economic Development Corporation board member are drawing renewed scrutiny of the agency’s oversight practices, while top MEDC officials declined to publicly address the controversy during a board meeting Tuesday in Lansing.

The meeting came one week after Michigan Attorney General Dana Nessel announced charges against former MEDC executive committee member Fay Beydoun, who is accused of improperly using a $20 million state grant administered through the agency. MEDC CEO Quentin Messer Jr., identified previously as a “potential target” in the ongoing investigation, did not take questions following his remarks to the committee.

Board meeting proceeds without public discussion

The MEDC executive committee met Tuesday in Lansing but did not publicly discuss the criminal charges or criticism surrounding the agency’s handling of the grant program.

Committee Chair Christina Grossi declined to answer questions following the meeting. Messer delivered a roughly 10-minute presentation focused on agency operations, including staff visits to businesses receiving state support and an update on the proposed 2027 budget timeline.

“I tell my peers across the nation I still have the best job in economic development,” Messer said during the presentation.

The committee later entered a closed session to discuss “information or records” considered privileged under Michigan’s Freedom of Information Act, according to Grossi. Most members attended remotely through videoconferencing. Grossi was the only committee member to return publicly following the closed session before adjourning the meeting.

Investigation centers on $20 million grant

The investigation involves funding approved by the Michigan Legislature in 2022 while Beydoun served on the MEDC executive committee, which oversees agency policy and operations.

Attorney General Dana Nessel said last week her office was concerned the MEDC failed to adequately review spending submissions after Beydoun received the first $10 million installment of the grant.

According to an investigative affidavit, questioned expenditures included:

• A French-language receipt for approximately $6,000 in Tunisian rugs that investigators said was not translated by MEDC staff
• A $40,800 apartment lease tied to addresses investigators identified as vacant lots
• Additional expenses investigators allege lacked proper oversight or verification

None of those allegations were addressed publicly during Tuesday’s meeting.

Critics raise accountability concerns

Former Michigan Strategic Fund board member Cindy Warner criticized the agency’s response following the criminal charges, saying public accountability is part of the board’s responsibility to taxpayers.

“They don’t ask (Messer) anything,” Warner told Bridge Michigan. “They don’t hold him accountable for anything. And I would challenge them to say, ‘Where is your level of accountability?’”

The Michigan Strategic Fund serves as the public funding arm connected to MEDC economic development programs.

Messer evaluations remained positive amid probe

Despite the ongoing investigation, internal performance reviews obtained through the Freedom of Information Act showed Messer received generally positive evaluations from staff, customers, and supervisors earlier this year.

The February evaluation marked Messer’s third consecutive positive review since becoming MEDC CEO in 2021. The reviews previously resulted in pay raises and eligibility for performance bonuses. According to an MEDC spokesperson, Messer has not received a raise this year and currently earns a base salary of $343,118.75.

“I have been relatively pleased with my ability to remain focused on the MEDC’s performance amid headwinds,” Messer wrote in a self-evaluation. “While room for improvement remains, the MEDC can look back on a challenging 2025 knowing that it can weather difficult, unforecasted storms.”

One unidentified evaluator wrote, “Quentin has led MEDC through arguably the most volatile time in the organization’s history.”

However, Messer received a lower score in the category of “continuous self-improvement,” with one unidentified manager writing that the agency’s long-term strategy “is not clearly communicated.”

Lawmakers continue criticism of MEDC

The MEDC has faced growing scrutiny since investigators from the attorney general’s office raided agency offices in Lansing in June 2025.

Debate over agency funding has also intensified in the Legislature. Governor Gretchen Whitmer’s current budget proposal would restore portions of MEDC site-readiness funding connected to the Strategic Outreach and Attraction Reserve program, while the Michigan House budget proposal would further reduce MEDC funding.

“There continues to be ongoing negotiations,” Messer said Tuesday regarding budget discussions.

State Sen. Jim Runestad, R-White Lake, criticized the agency during a Lansing press conference Tuesday, calling MEDC “a train wreck for a long time.”

“This should never have been allowed,” Runestad said, “that she’s on the board … being a part of the approval process as the guardrails to oversee her very own grant.”

MEDC says investigation remains ongoing

Michelle Grinnell, MEDC’s chief communications officer, said the attorney general’s investigation remains active and the agency would not release additional information while the probe continues.

“We’re always improving policies and procedures,” Grinnell said.

Grinnell also said the MEDC supports updated earmark rules approved by the Legislature after the Beydoun investigation became public.

The attorney general’s investigation remains ongoing, and additional legislative debate over MEDC funding and oversight is expected as state budget negotiations continue in Lansing.

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