CORPORATE CRIME REPORTER
Patrick
Clawson and the State of Public Corruption in Michigan
24 Corporate Crime Reporter 14(9), April 5, 2010
Patrick Clawson is a long time investigative reporter and private investigator.
He’s based in Flint, Michigan.
Last month, Michigan Governor Jennifer Granholm announced $9.1 million in tax credits to Renewable and Sustainable Companies (RASCO).
RASCO was headed by a gentleman named Richard Short.
Short promised to bring hundreds of jobs to Flint.
The idea was to make renewable energy products that could be exported to Third World countries.
Clawson checked out the company’s website and immediately suspected something was up.
“The biographies of the company’s officials were very sketchy in terms of their accomplishments,” Clawson told Corporate Crime Reporter last week. “There was no address listed for the company’s headquarters. The prose was typical con man prose. The CEO of the company was described as being a charismatic personality – that’s a term that con men frequently use in sales pitch materials.”
“I could tell immediately based on my investigative experience that there was something wrong here,” Clawson said.
“I then brought up the Michigan Department of Labor and Economic Growth web site. I pulled the corporate records. I saw that the business had been chartered as a limited liability company only about six months earlier. And it’s address was in a trailer park in the north side of Flint in the ghetto. I recognized the address, because I served subpoenas out there as recently as a week ago.”
“That’s when I knew immediately this thing had to be a fraud. There was no multi-million dollar company operating out of that trailer park. This is one of the worst trailer parks in the city of Flint”
“I then accessed the on-line public records available through the Genessee County court system. The principal of the company was Richard Short. So, I looked him up. And I saw that not only had Richard Short had a record of some civil litigation. But more importantly he had criminal convictions.”
“The court records also indicated that he had other criminal convictions in other jurisdictions in Michigan. I then pulled up his Michigan Department of Corrections record – which is available on a publically accessible web site.”
“It showed that he was out on parole for his financial crimes. And under the terms of his parole, he could not hold a checking account or credit card account. He was barred from having those as a condition of parole.”
“I then pulled up his Michigan State Police criminal history record – again, that’s available to the public. You pay a ten dollar fee to get it. And literally from start to finish, it took me fifteen minutes and I had the whole story.”
Clawson went public with the story.
And within hours, Short was arrested by the Michigan State Police.
“The chairman of the Michigan Economic Development Corporation, which administers the economic growth program and handed out the tax credits, admitted at a Senate hearing last Thursday that his agency had done no – repeat no – due diligence of any type on RASCO or Richard Short, before they had awarded the tax credits,” Clawson said.
“And he further acknowledged that they routinely did no due diligence on any corporate applicant before they awarded tax credits.”
“Basically what they were doing was relying on the applicant to disclose. And there was a check box on the application asking them if they had any kind of legal problems and if the party checked no, they did no further investigation.”
“This has struck a visceral nerve with citizens here in Michigan,” Clawson said. “There has been quite a bit of public comment about this in the newspapers, on talk radio. It is something people are talking about quite a lot.”
“You have to understand. Michigan is in a depression era economy right now. Our people are hurting. They are bleeding. They are out of work. They are losing their homes. They burned up their savings. They are on economic death’s door for the most part.”
“And to see that the state of Michigan is so cavalier in handling our money, our tax dollars – that has just absolutely enraged citizens here.”
“They want somebody fired. They want some accountability in the state government. That is not coming.”
“Governor Granholm has refused to accept the resignation of the head of the Michigan Economic Development Corporation. She has failed to fire anyone involved in this fiasco.”
“The head of the agency refuses to give the legislature details of how the agency dropped the ball on the grounds that it would interfere with a pending investigation.”
“It would not interfere with a pending investigation. That’s just a bunch of bureaucratic gobbledygook aimed at protecting the agency from any kind of scrutiny.”
[For a complete transript of the Interview with Patrick Clawson see 24 Corporate Crime Reporter 14(9), April 5, 2010, print edition only.]
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