Nessel's office to investigate $20M grant used by businesswoman to buy $4,500 coffee maker

Lansing — Attorney General Dana Nessel's office has opened an investigation into a $20 million grant awarded to a Metro Detroit businesswoman that was used on expenses that included a $4,500 coffee maker, an $11,000 first-class plane ticket and $408,000 in salaries for two people over three months.

Nessel's office confirmed Wednesday it had opened an investigation into the grant given to Fay Beydoun for a nonprofit incorporated 10 days after the passage of the spending bill containing the earmarked funds. The office declined to provide further information, including what prompted the office's interest in the issue.

"Due to the ongoing nature, we cannot comment further," said Kim Bush, a spokeswoman for Nessel's office.

Beydoun — a frequent Democratic donor who contributed $750 to Nessel's campaign between 2021 and 2022 — did not immediately respond to a text message Thursday seeking comment.

The Michigan Economic Development Corporation, which administers legislative grants like Beydoun's, did not immediately comment on the investigation. Earlier this month, the MEDC said it receives quarterly reports from grantees on their spending but does not conduct an official audit of expenses until the first half of the grant is spent. In Beydoun's case, that would mean an audit would be conducted after she'd spent $10 million.

In July 2022, the Legislature included a $20 million grant in the annual budget that went toward a nonprofit business incubator called Global Link International. The nonprofit was incorporated by Beydoun with the state 10 days after the passage of the budget.

At the time, Beydoun was executive director of the American Arab Chamber of Commerce and an appointee to the executive committee of the Michigan Economic Development Corporation, which is tasked with overseeing the grant she received.

Beydoun, former vice chair of the Michigan Democratic Party, has been a frequent Democratic donor over the years to Gov. Gretchen Whitmer, the Michigan Democratic Party, Biden's re-election campaign, U.S. Rep. Elissa Slotkin's U.S. Senate campaign and former state Sen. Curtis Hertel's congressional campaign.

The Slotkin Senate campaign parted ways with Beydoun, an unpaid finance co-chair, two days after The Detroit News first reported on how Beydoun was spending the taxpayer money.

More:$4,500 for a coffee maker? How a Michigan businesswoman is spending a $20M taxpayer grant

More:Senator questions MEDC's 'guardrails' after state grant used to buy $4,500 coffeemaker

Beydoun's position on the MEDC executive committee expired April 5.

Whitmer has not yet announced appointments to fill Beydoun's vacancy on the executive committee, so it's unclear whether Beydoun will be reappointed to the oversight position. Beydoun was appointed to the executive committee shortly after Whitmer took office in 2019; she was reappointed in 2020 for a four-year term.

The News reported earlier this month that there were disputes over how Beydoun's $20 million state grant was obtained and concern over some of the spending. Beydoun reported spending $4,500 on a Jura coffee maker, $11,000 on a first-class airfare to a conference in Budapest and $408,000 on salaries over a three-month period for what appeared to be herself and one other employee, according to state records obtained through a public records request.

In all, through December, Beydoun had spent more than $800,000 of the initial $10 million installment of her grant for the business incubator Global Link International.

Beydoun has defended her spending. She told The News the salary expense essentially included backpay for prior months where herself and another employee went unpaid and said the $11,000 first-class airfare was a mistake that couldn't be switched for lower cost fare. She did not respond to questions about the coffeemaker earlier this month.

Among the disputes related to the grant are who actually sponsored it. Former Republican House Speaker Jason Wentworth denied he was the sponsor, but the State Budget Office, Beydoun and political donor Sharif Hussein maintained he was.

The start of the investigation marks the second grant linked to Wentworth in the 2022 budget that is now under investigation by the attorney general. Late last year, Nessel began an investigation into a grant Wentworth secured that would provide $25 million for a community health and recreation center in Clare. That grant involved David Coker Jr., a former legislative aide to Wentworth.

Both Hussein and the American Arab Chamber of Commerce maintained they were meant to also benefit from the grant; the chamber maintained it had asked Beydoun to solicit the Legislature for money to support a business incubator within the chamber.

Ahmed Chebbani, chairman of the American Arab Chamber of Commerce, has said he did not learn Beydoun had received the grant until March 2023, when The News profiled it as one of several grants distributed in the annual budget that had raised questions. Beydoun left her position at the chamber shortly after the March 2023 article.

Beydoun argued Chebbani and Hussein expected her to act as a "mercenary" in obtaining the grant funding. She said their disgruntlement with the arrangement stemmed from their failure to obtain grants from the Legislature and their inability to accept female leadership.

Both Hussein and Chebbani suggested the state should take a closer look at how the grant was obtained and how it was being spent. Several lawmakers also called for the money to be returned and for the grant to be investigated further.

eleblanc@detrointnews.com