The New Energy to Reinvest and Diversify, or NERD, fund is being replaced with a fund that will "go far and above" legal requirements by disclosing donors, the amounts given and an overview of expenditures, Snyder's spokeswoman Sara Wurfel said Monday. She said while the Republican governor has full confidence that the legal NERD fund met compliance and reporting requirements, criticism "had simply become an unnecessary distraction."
Snyder will not make public the donors who contributed nearly $1.7 million in 2011 and 2012 because, at the time, the parameters were such that they could be anonymous, Wurfel said. The nonprofit social welfare organization had a roughly $230,000 balance at the end of 2012, according to its most recent IRS filing.
The fund was created primarily to lessen the "financial burdens of government." The money has been spent to upgrade a press auditorium in his Lansing office and cover travel expenses of staffers, among other things.
But the decision to pay Snyder's "transformation manager" Rich Baird $100,000 a year from the fund drew criticism from Democrats. So did the decision to reimburse Detroit's emergency manager Kevyn Orr's housing and commuting expenses. Orr's $275,000-a-year salary is paid for by the state Treasury Department.
Baird, who has been involved in key administration hires and other initiatives, was moved to the state payroll last week and will make $140,000 a year. Snyder recently testified under oath that he did not know who contributed to the NERD fund and that an independent board runs it.
It is not unusual for governors to have nonprofit or charitable funds that are separate from their campaign and leadership committees. They typically pay for upgrades to the official governor's residences or for more political activities such traveling to partisan conventions.
But the NERD fund attracted more attention in part because it is a 501c4 that can accept unlimited, secret donations from corporations and others. Democrats and a campaign-finance watchdog said it flew in the face of Snyder's pledge to make Michigan governor more transparent.
"This should be considered an admission of guilt by Rick Snyder," Democrat Mark Schauer, Snyder's likely opponent in 2014, said in a statement Monday. "If it's right to disclose the governor's political donors moving forward, then it was the right thing to do from day one."
He again called on Snyder to disclose existing donors to the fund.
The NERD fund's board of directors issued a statement defending the fund, saying it eased the burden on taxpayers.
"We believe the governor's work to reinvent Michigan is too vital to be sidetracked, and fully support his request to end the NERD fund and replace it with a new fund that provides regular reports of its finances and donors," the board said.