Nessel 'pleading' with Michigan lawmakers for transparency reforms after Chatfield charges

Lansing — Michigan Attorney General Dana Nessel said Tuesday she was "basically pleading" with lawmakers to enact new transparency policies as she unveiled criminal charges against former Speaker Lee Chatfield for allegedly embezzling money and misusing nonprofit funds he collected while in the state House.

Nessel unveiled the allegations against Lee Chatfield and his wife, Stephanie Chatfield, during a press conference, making them the eight and ninth political figures in Michigan charged with crimes related to the movement of money over the last 13 months.

The group includes two former House speakers — Lee Chatfield and Rick Johnson, who is now serving a prison term for accepting bribes — two marijuana lobbyists, a prominent political fundraiser and two former Chatfield staffers.

The Democratic attorney general said Lansing had a "dark money fueled culture." For years, Michigan officeholders on both sides of the aisle have allowed themselves to raise limitless contributions for nonprofit organizations from secret donors while providing little to no information about how they use the money.

"Michigan residents deserve more," Nessel said on Tuesday. "They deserve better than what this flawed system has allowed."

Lee Chatfield's lawyer, Mary Chartier, has denied that her client did anything illegal and has vowed to fight the charges.

While Lee Chatfield was speaker, he allegedly used his nonprofit organization, named the Peninsula Fund, to pay off an $132,000 balance on his personal credit card, according to the Attorney General's office. In 2020, his last year as speaker, the Peninsula Fund raised $753,483 from secret donors, according to a tax filing obtained by The Detroit News. The organization, under federal guidelines, is supposed to be focused on promoting social welfare.

In Michigan, these social welfare nonprofits, or 501(c)(4)s as they are often known, spend money on officeholders' travel, meals, community events and other expenses related to holding office. They fall outside of traditional campaign finance disclosure requirements because they usually don't spend dollars on ads telling people expressly how to vote.

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In March, a group of Michigan House Democrats introduced a set of bills to require nonprofit organizations, directed by lawmakers, to register with the Secretary of State's office.

The proposals would reveal connections between fundraising accounts and decision-makers that have previously been hidden but wouldn't disclose donors' identities.

The Michigan House Ethics and Oversight Committee is scheduled to begin taking testimony on a transparency package that includes the proposals on Thursday. The legislation is known as the BRITE Act. Nessel and Secretary of State Jocelyn Benson plan to testify at the hearing.

"As I read through the charges and outrageous revelations surrounding this case, what’s clear to me is that this culture of corruption must end," Benson said Tuesday. "Our citizens deserve better than this."

Michigan House Ethics and Oversight Chairwoman Erin Byrnes, D-Dearborn, said the alleged misuse of funds by Chatfield "disgraced the Legislature and our government institutions."

Similarly, Rep. Jason Morgan, D-Ann Arbor, said lawmakers "must put an end to corruption and restore power to the people of our great state."

Sen. Jeremy Moss, D-Southfield, said nonprofit accounts had been "abused time and time again."

Moss, the chairman of the Senate Elections and Ethics Committee, said there has to be some legislative action in response to the corruption charges against Chatfield.

"Now is the moment, really, to discuss how we can prevent things like this from happening ever again," Moss said.

More:Bribe-taking Michigan marijuana regulator tied to secret donations before appointment

Democrats currently control both the Michigan Senate and the House.

But Sen. Ed McBroom, R-Vulcan, also said it's past time to talk about how to combat the use of nonprofit fundraising accounts in Lansing.

Lawmakers could restrict the ability of legislative staff to work for the organizations or bring back officeholder expense accounts, which previously provided a transparent mechanism for lawmakers to raise and spend dollars on expenses related to their positions.

Officeholder expense accounts were abolished in the 1990s.

McBroom labeled the charges against Chatfield "heartbreaking."

"Our history is full of leaders who make mistakes, very serious mistakes but also find redemption and renewal," McBroom said.

Michigan Gov. Gretchen Whitmer didn't release a statement reacting to Chatfield's charges on Tuesday. 

cmauger@detroitnews.com