Fundraising by Gov. Snyder's NERD fund spikes in 2013; not yet officially dissolved

Remember the NERD Fund? Fundraising by the controversial nonprofit created by Republican Gov. Rick Snyder increased in 2013, and the fund spent more than it took in, according to a recently released financial filing. And although the nonprofit reported that it has yet to officially dissolve, the NERD Fund's legal and compliance officer says that will take place once a pending lawsuit wraps up. 

In a report filed with the IRS, Snyder's 501(c)(4) "social welfare" nonprofit called the New Energy To Reinvent and Diversify (NERD) Fund said it raised $513,000 in 2013, up from $368,000 the previous year.

Spending by the fund also increased to $713,727 in 2013, up from $590,453 in the previous year. The fund hasn't accepted donations or paid out any money for expenditures since October 2013, a spokesperson for Snyder previously told MT.

Last fall, Snyder said he would dissolve the dark money fund just weeks after the Center for Public Integrity reported CVS Caremark Corp. had lent support in March of 2012. In June, MT first reported that pharmaceutical company Pfizer Inc. donated $1,000 to the Nerd Fund, making it only the second publicly-revealed donor of the nonprofit. Snyder's spokesperson said the donation was later returned, citing the governor's policy of not accepting money from political action committees (PACs). 

In the IRS filing, the fund reported that it had yet to officially dissolve. But, according to W. Alan Wilk, an attorney for Dykema Gossett who works as the fund's legal and compliance officer, that's due to a lawsuit filed by activist Robert Davis in 2013. 

"That continued in to 2014," Wilk tells MT. "So that's the reason that it's not officially closed on." 

The NERD Fund, under federal nonprofit rules, was controversial because it was not legally obligated to disclose its donors and could accept unlimited donations. Campaign funds and PACs have limits on contributions and must disclose donor names. 

The cloak of anonymity drew heavy criticism because the NERD Fund covered some of Detroit Emergency Manager Kevyn Orr's housing and travel costs, as well as foot the salary of Rich Baird, an old friend and aide of Snyder's who played a role in Orr's appointment.

After announcing the dissolution of the fund last year, the governor's office said Baird would join the government's payroll as an appointed "transformation manager" with a $140,000-a-year salary.

The NERD Fund in 2013 reported spending nearly $90,000 on management expenses for non-employees, about $263,000 in travel expenses, about $31,000 on conferences and meetings, and about $38,500 in office expenses.

The fund also spent about $45,000 in legal fees, up from $11,000 in 2012. It reported spending about $11,000 on advertising and promotion. A $56,000 expense for a miscellaneous events was also reported, which Snyder's deputy press secretary, Dave Murray, said relates to a number of items: the press conference announcing Detroit's bankruptcy, "or special messages and other press conferences away from Lansing."

"[A]nd those expenses can be for sound, media links, room rental, and other associated costs," Murray said in an email, adding that advertising and promotional costs were for related reasons.

"Signs for such events and informational brochures will fall into that category," he said. "The goal was to not use taxpayer money." 

The fund also reported paying a contractor, Detroit-based fundraiser Prues Hecker, $33,750 to solicit funds. Prues Hecker owner, Sarah Prues, previously worked as the finance director for the Michigan Republican Party and as Michigan Finance Director for former Republican presidential nominee John McCain's 2008 run. 

The NERD Fund's fundraising efforts plummeted in 2012, according to filings with the Internal Revenue Service, after it raised $1.31 million in 2011, its first year of existence. Snyder's administration has previously defended the fund as a tool to offset the costs of some government expenses.