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James Craig got corporate board gig days before launching campaign for governor

Lansing — Republican James Craig scored a seat on a company's board of directors just days before announcing his campaign for governor, highlighting how little Michigan voters might know about candidates' financial interests.

As he considered vying for the state's top office, Craig announced in May his retirement as Detroit's police chief. His 44-year law enforcement career ended June 1.

He officially announced his campaign for governor on Sept. 14. Two days before that announcement, the firm Palltronics, which makes shipping pallets, internally revealed that Craig would get a seat on its board of directors, a paid position.

Craig's campaign spokesman Ted Goodman declined to directly answer whether the former chief serves on other corporate boards.

"Chief Craig is recognized not only for his successful law enforcement career, but also for his ability to lead organizations and motivate others," Goodman said in a response to questions from The Detroit News. "His expertise is highly sought after."

The News asked three of the other top GOP contenders for the gubernatorial nomination if they sat on any corporate boards. Spokespeople for chiropractor Garrett Soldano of Mattawan and conservative commentator and businesswoman Tudor Dixon of Norton Shores said their candidates didn't.

Bloomfield Township businessman Kevin Rinke's campaign didn't respond.

Damian Kassab, director of Palltronics, who confirmed that Craig had been selected for the board, described himself as a longtime member of the Macomb County Sheriff's Department's Marine Division. Kassab said he's followed the former police chief's career and marveled at his accomplishments.

Kassab has recently been entangled in a legal fight with Grow Michigan, a lender that focuses on community reinvestment that's funded through a collaboration of banks doing business in Michigan, the Michigan Strategic Fund and the state through the Michigan Economic Development Corp., according to court documents.

As for Craig, Palltronics needed "insight into global supply chain security issues," on which Craig could help provide guidance, Kassab said.

"After he retired from DPD, I immediately reached out to James to see if he would be willing to serve on the board of Palltronics Inc. I, as well as the other directors, believed James' leadership and organizational skills would be invaluable to the success of Palltronics," Kassab added.

Craig will receive compensation for the board position, Kassab confirmed, but would not detail how much money was involved.

Because of his background, Craig is seen by many as the front-runner for the GOP nomination in 2022 among a field of 11 candidates who've formed committees to campaign for governor. The winner of the August primary will challenge Democratic Gov. Gretchen Whitmer in November.

No required disclosure

Michigan is one of just two states with no requirement that officeholders file some type of disclosure covering their personal financial interests to prevent potential conflicts.

It's a "gaping hole" in state law, said Simon Schuster, executive director of the Michigan Campaign Finance Network, a nonprofit that works to shine light on the role of money in state politics.

“The idea here is our elected officials make important policy decisions that can have significant repercussions for business," Schuster said, adding that the public should know whether officials stand to benefit from those choices.

Ahead of Michigan's last gubernatorial election in 2018, most of the top candidates, including Whitmer and Republican Bill Schuette, voluntarily released their tax returns. Former GOP Gov. Rick Snyder did the same when he was running for office in 2010.

Rep. David LaGrand, D-Grand Rapids, who has led the push for requiring financial disclosures in Lansing, said Craig's situation was "a concern."

The costs of running for office are steep, and being in business isn't bad, LaGrand said. But it's important that candidates be transparent for voters, he added.

A key question is if and how much Craig is being compensated for his role on the Palltronics board, argued LaGrand, an attorney by trade. His preferred reform, which hasn't advanced in the GOP-controlled state House, would require public disclosure if a board position brought more than $5,000 in pay.

"It's really important that the voters can have absolute confidence that the people they elect are single-mindedly serving the electorate," LaGrand said.

Not 'anything wrong'

The website of Palltronics describes its pallets as the only ones in the "world equipped with electronics which offers unprecedented technology."

Individuals with high public profiles, like Craig, are attractive to companies looking to fill board seats, said Sudip Datta, a professor in Wayne State University's Mike Ilitch School of Business. There's no law preventing a candidate from accepting such a position, and there's no conflict of interest at the current moment, Datta said. That could change if Craig becomes governor, but he also could step down from his board position, the professor added.

"I don’t think there’s anything wrong with this," the professor said of the arrangement.

The firm's resident agent is Kassab, according to filings with the state Department of Licensing and Regulatory Affairs. Kassab served as chairman of the Michigan Gaming Control Board under former Democratic Gov. Jennifer Granholm.

Grow Michigan, the state-tied lender, sued Kassab and others in 2020 in federal court over the handling of a $5 million loan for a business called Lightning Technologies. Grow Michigan has contended the loan wasn't sought to make the company operational, but to benefit Kassab in a proxy battle for control. Federal Judge Linda Parker in Michigan's Eastern District dismissed the suit this year, but Grow Michigan appealed.

Kassab has also been a political donor, giving $21,950 to state-level candidates and causes over the last decade.

On Feb. 6, he contributed $500 to Whitmer's reelection campaign, according to a filing with the Michigan Secretary of State's office. In 2014, however, he gave $500 to Republican Bill Schuette, who was the state's attorney general at the time.

In answers provided through email, Kassab said if Craig were elected governor and his legal team thought there were ethical issues, the ex-chief would likely resign immediately.

While the firm was incorporated in Michigan and uses a Rochester address on its website, its main facility is in North Carolina and its headquarters are in Florida, Kassab said.

"There is virtually nothing James could do for us in his official position as governor, nor would Palltronics ever ask him to," Kassab said.