Included in Michigan’s 2023 budget was a $25 million earmark to build a community health campus intended to serve the physical, mental and behavioral health needs of mid-Michiganders.
The project was never completed.
Instead, it was halted amid allegations the grant recipient, a former legislative aide, used hundreds of thousands of those grant dollars to purchase personal vehicles, precious metals, rare coins, firearms accessories and other goods for himself.
“This was intended to be a massive development, one that would deliver significant community need in this part of central Michigan, but also one that would require much to manage and see through all the way to fruition,” said Attorney General Dana Nessel. “It would appear to be an inherently well-intentioned idea. However, in the hands of David Coker, it would never come to be.”
Nessel charged Coker, a former legislative aide of former Michigan House Speaker Jason Wentworth, R-Farwell, on Wednesday with seven felonies on allegations he misused state grant funds related to the project.
Related: Former Michigan House speaker’s aide charged with embezzlement in $25M earmark case
Coker’s nonprofit, Complete Health Park, was paid about $9.9 million of the total $25 million before the state suspended further payments and issued a stop work order on the project in May 2023 amid allegations of wrongdoing.
Nessel said $3.5 million of that money went toward a property purchase near Clare for the proposed health campus, while another $5.4 million went to equipment and capital expenditures. A consulting firm owned by Coker was paid $820,000.
Nessel alleged Coker, 51, billed his nonprofit bogus invoices from his consulting firm, IW Consulting, to embezzle the taxpayer dollars and later use it for personal purchases.
He faces charges of acquiring or maintaining a criminal enterprise, three counts of false pretenses of $100,000 or more, two counts of embezzlement of $100,000 or more and one count of misappropriating public money.
He faces up to 20 years in prison on the charges.
Coker’s next court appearance is May 23 in Lansing District Court. His attorney did not immediately respond to a request for comment.
Nessel told reporters Thursday that Wentworth, who sponsored the $25 million legislative earmark Coker later received, was cleared of any wrongdoing. Coker worked in the House from 2019 to 2020.
State Rep. Tom Kunse, R-Clare, who sold the property to Coker for the health campus, was also cleared of wrongdoing. Kunse did not immediately respond to a request for comment.
Coker paid Kunse $3.5 million in state grant funds for the roughly 70-acre property. An appraisal was never conducted.
It wasn’t clear what Kunse originally paid for the property, as that wasn’t detailed in online Clare County property records.
“I was concerned that there was no appraisal of the property and that $3.5 million was paid out for property that, you know, could it have exceeded that value? Possibly,” Nessel said. “Could have been far less than that value? But this is state tax money.”
According to Nessel’s timeline, Coker formed the nonprofit in June 2022. The formation came a month before lawmakers signed the budget bill that included Wentworth’s $25 million earmark for a community health campus pilot project.
In October, Coker’s nonprofit sent the Michigan Department of Health and Human Services (MDHHS) a proposal to fulfill the project. It was later approved.
The campus was supposed to be an integrated wellness facility with optical, dental and urgent care, mixed-use courts, chiropractors, a running track, indoor aquatics and gymnasiums and more, Nessel said. It also included behavioral health and mental health components.
Nessel said she doesn’t believe the project could’ve been completed with $25 million and that Coker would’ve likely had to gone back to the state Legislature to ask for more money.
There’s also no evidence that Coker had the requisite qualifications to run the project, Nessel said.
“That’s the way that, unfortunately, oftentimes things have been done in Lansing, where it’s more about who you know then what your expertise is or your experience or your ability to carry out that project,” Nessel said.
Nessel alleged Coker appointed people to the nonprofit’s board that acted as a “rubber stamp” for him. In November, the board approved a contract with IW Consulting, which Coker owned and operated, to provide consulting and project management services.
In December the nonprofit requested a grant disbursement from the state of $9.9 million to, among other things, pay two invoices from IW Consulting totaling $820,000.
Coker was required to disclose his role in IW Consulting and the conflict of interest to the MDHHS, but he didn’t, Nessel alleged.
The funds were disbursed in January 2023 and that same day were moved from the nonprofit’s bank account to IW Consulting’s.
“Once he transferred the funds from the Complete Health Park account to the IW Consulting account, he began emptying the business account into his own personal accounts and very soon began paying off his personal debts and making extravagant purchases with that money,” Nessel said,” such as four vehicles, including a 2023 Honda ORV and a 2024 Chevrolet Trax, over 70 silver, gold and platinum bars … and rounds, at least 50 rare coins and a few literal silver bullets, firearm accessories and more.”
The alleged scheme was brought to the attention of officials by state Sen. Roger Hauck, R-Mount Pleasant.
Nessel said Hauck warned MDHHS of potential misconduct, raising concerns about how Coker had previously worked for Wentworth and that Kunse owned the land purchased for the development of the project.
Hauck also raised concerns about another man’s involvement in the project who had spent time in prison on federal fraud charges.
Nessel said her office is continuing to investigate two other cases involving legislative earmarks.
One of them is a $20 million state grant awarded to a nonprofit run by businesswoman Fay Beydoun, and the other is a $2 million state grant awarded to a nonprofit run by Gavin Brown. She didn’t provide further details.
Beydoun’s grant was for a nonprofit business incubator. According to the Detroit News, she reported spending some of the funds on a $4,500 coffee maker, $11,000 in first-class airfare and $408,000 on two people’s salaries – one believed to be her – over three-month period.
According to Bridge Michigan, Brown’s $2 million grant was to study bringing commercial rocket launches to the state.
After taking power earlier this year, House Republicans adopted new rules around earmark funding that would have prevented Coker’s nonprofit from receiving earmark funding.
Among those rules, nonprofits are only eligible for earmark funding if they’ve been established in the state for at least three years and have maintained a physical office in the state for at least a year.
Earmark sponsors also must certify they have no conflicts of interest with the recipient.
Other changes include publicizing all earmark requests and requires each request to include the sponsor and co-sponsors’ names, the intended recipient’s name and location, the project’s purpose, timeline and benefit.
Current House Speaker Matt Hall, R-Richland Township, said Wednesday that “shady deals like this were the norm in Lansing for far too long.”
“My plan is already working, and now every single legislative earmark in future state budgets will be vetted and will have legislators willing to put their name to it and own up to their actions,” Hall said. “For some reason, the Senate Democrats are fighting me on this. But I am holding the line for more transparency and accountability in government so nothing like this will ever happen again.”