Nessel: Businesswoman stole from state, tapped political ties for $20M grant

Attorney General Dana Nessel files 16 criminal charges against metro Detroit business woman Fay Beydoun
Nessel’s office alleges Beydoun, a former MEDC official and donor to Gov. Gretchen Whitmer, ran a ‘criminal enterprise’
Instead of using the $20M state grant for a business incubator, it’s alleged Beydoun bought plane tickets, a coffee maker, rugs and more

LANSING — Businesswoman Fay Beydoun leveraged political connections to obtain a $20 million state earmark and then stole some of the funds for “personal expenses and her own enrichment,” Michigan Attorney General Dana Nessel alleged Wednesday in announcing criminal charges.

Beydoun, a past donor to Democratic Gov. Gretchen Whitmer, is accused of conducting a criminal enterprise, a felony charge punishable by up to 20 years in prison, along with 15 other counts.

New court records show a Beydoun associate told a top lawmaker that Whitmer and her team had personally “cleared” the earmark that was eventually included in a 2022 budget the governor signed into law.

But Nessel said there is no evidence the governor “knew that Beydoun” planned to misappropriate the money, and a spokesperson for Whitmer said Wednesday that “misuse of taxpayer dollars has no place in Lansing.”

Michigan Economic Development Corp. CEO Quentin Messer remains a “potential target” in the ongoing probe, according to Nessel.

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Beydoun, 62, “may face additional charges,” Nessel said. Current charges — including forgery, uttering and publishing and larceny — were authorized Monday by Farmington Hills 47th District Court Judge Marla Parker.

Todd Flood, Beydoun’s attorney, did not respond to a request for comment. But Vincent Haisha, a partner at Flood Law, called the allegations against Beydoun “illogical” and said her legal team spent months trying to make that case to Nessel.

“It is evident that certain parties felt the need to further this very public spectacle in a way that is neither supported by the evidence that we have seen nor the investigative materials we possess,” Haisha said in a statement. “As always, we will save our best arguments for the courtroom and pursue every avenue available for our client.”

The $20 million earmark was awarded to Global Link International, a nonprofit created by Beydoun and registered with the state just days after the state budget was finalized in 2022. House lawmakers have since adopted rules prohibiting state awards to nonprofits that have been actively working in Michigan for less than 36 months.

Beydoun previously served on the executive committee of the MEDC., through which the grant was directed, which Nessel called that a “clear conflict of interest.”

She was “a decision-making member of the MEDC executive committee at the same time she was seeking a specific appropriation that the MEDC itself would administer to an organization that she herself would lead,” Nessel said.

An MEDC spokesperson declined comment on the Beydoun charges but said the agency has cooperated with the attorney general’s office “from the beginning” of the investigation “and will continue to do so.”

The allegations

Beydoun had sought a financial grant for the American Arab Chamber of Commerce since at least 2019, according to an investigative affidavit by Special Agent Kyle Kolka.

But Beydoun later requested the grant on behalf of her own newly formed nonprofit. The $20 million earmark was to establish an international business accelerator and bring start-up companies from around the globe to do business in Michigan.

The MEDC had paid out the first $10 million of the grant, but Nessel said Wednesday that her office froze nearly $6.5 million in Beydoun’s accounts, which would be forfeited if Beydoun is convicted.

Among other things, Nessel alleged Beydoun used some of the state grant money for personal reasons and then submitted “deceptive records intended to conceal these fraudulent acts.”

dana Nessel — Attorney General Dana Nessel on Wednesday accused Fay Beydoun, a former Michigan Economic Development Corporation official and metro Detroit businesswoman, of conducting ‘a criminal enterprise for her own financial gain. (Jordyn Hermani/Bridge Michigan)

The Detroit News previously reported that Beydoun used state funds to buy a $4,500 coffee maker and an $11,000 first-class plane ticket to Budapest.

Beydoun also spent $6,000 on Tunisian rugs for what she represented as an “investor event abroad,” Nessel said Wednesday, telling reporters the MEDC had never translated the French-language receipt.

She alleged Beydoun also falsely described a $40,800 lease to the MEDC for what she claimed were apartment units for start-up business relocations, though the properties associated with the funds are vacant lots.

The money instead was spent on “two apartments elsewhere, only one of which was ever occupied — and only ever by her own son,” Nessel said.

In another instance, Beydoun allegedly told the MEDC she had spent $2,000 on catering or focus groups related to her Global Link nonprofit.

But in reality, Nessel said those costs were incurred by Beydoun “personally in order to host separate dinners” at her home in Farmington Hills for then-Detroit Mayor Mike Duggan, a current candidate for governor.

Duggan attended two small dinners as a guest of Beydoun, campaign spokesperson Andrea Bitely confirmed to Bridge on Wednesday, calling those dinners part of more than 100 small meet-and-greets hosted by Michiganders in homes and offices across the state.

“No money was raised and the mayor had no further events with her,” Bitely said in a statement. “The Mayor had no knowledge MEDC funds were used for the dinners. He accepted a host’s invitation to small meet-and-greets. Nothing more.”

Whitmer and other ‘political connections’

Whitmer appointed Beydoun to the MEDC’s executive committee in 2019, but how much she knew about the Global Link project remains unclear.

Nessel stressed that Beydoun “used her political connections” to get the grant but said that people who want others “to think that they have very, very close relationships with people who are high up” often misrepresent the nature of their actions and relationships.

gretchen whitmer — Michigan Gov. Gretchen Whitmer (Emily Elconin for Bridge Michigan)

Responding to Wednesday’s charging announcement, Whitmer spokesperson Stacey LaRouche said the earmark was sponsored by former House Speaker Jason Wentworth, R-Farwell, and pointed out it’s “the second time a grant of his has resulted in charges.”

“The Legislature needs to continue to work to improve their appropriations process to ensure that every penny of taxpayer dollars spent is used appropriately,” LaRouche said in a statement.

Beydoun is the second person charged in connection with a spree of earmarks officials added to a state budget that Whitmer signed in 2022.

Nessel last year charged former legislative aide David Coker with embezzling part of a $25 million earmark for a Clare health park project. A judge is expected to decide this month whether that case heads to trial.

The Legislature identified Wentworth as a sponsor on both grants, but he has denied sponsoring the Beydoun earmark.

Records in the Beydoun case show a businessman who helped her pursue the $20 million grant told Wentworth in January 2022 that “everything has been cleared by the governor and her team regarding the line item inclusion” in the budget.

There “will be no negotiations on the line item and it will be understood that agreement is in place to move forward,” Shariff Hussein said in a text message included in the investigative affidavit.

But Hussein later told investigators that he did not speak with anyone in the governor’s office regarding Beydoun or the appropriation.

In a February 2021 text message included in the affidavit, Beydoun told Hussein that she’d approached the governor directly to ask for a “budget line item” regarding funding for this startup, but that Whitmer “is under the impression that we are going through the MEDC” instead.

“We can discuss with her and get her support for budget line item,” Beydoun wrote in a text dated Feb. 24, 2021. “Should not be a problem.”

Asked about those messages Wednesday, Nessel noted that “just because you have a grant that is steered to a particular individual, that’s not the same as the person who’s steering that grant knowing that the money is going to be misappropriated.”

Bridge previously reported that Beydoun hosted a 2021 fundraiser for Whitmer around the same time she had claimed the governor was helping secure funding for the ill-fated project.

Whitmer raised $13,500 at the September 2021 fundraiser, and Beydoun personally donated more than $16,000 to the Democratic governor between two campaigns, according to campaign finance records.

‘Privileged status’

In the course of securing the $20 million earmark, Beydoun communicated with “political operatives, state legislators and high-ranking officials within the governor’s office,” Nessel said.

“And it certainly adds to my frustration that this so-called grant was afforded a much more privileged status and pathway under insufficient — even careless — oversight and state administration solely because of the political connections of Fay Beydoun.”

At some point while Beydoun worked at the American Arab Chamber of Commerce, she and Hussein, an Okemos entrepreneur, came up with a new plan to open a business incubator for Middle Eastern start-ups ready to do business in the US.

Hussein later told investigators the idea was to ask for $25 million in state funding over a five-year period for the incubator — a plan eventually ditched in lieu of a one-time ask for $20 million.

Beydoun contacted MEDC officials multiple times throughout 2021 regarding the incubator project, including Trevor Pawl, who at the time was the MEDC’s head of mobility, according to the affidavit.

Pawl later told investigators that Beydoun’s pitch was “one of the worst concepts that I had ever, ever seen” and accused her of having “no plan” and “no business model.”

Nonetheless, Beydoun went on to secure the grant. Pawl told investigators that Beydoun told him she’d “been talking to (the) legislature, other folks” and was able to come up with the funds.

“She was able to skip over the MEDC to get what she wanted, then ultimately – now, I’m making assumptions – but ultimately come back and force their hand,” Pawl said, according to the affidavit. “And since she’s a board member, what else do you do but congratulate her?”

Pawl said only MEDC CEO Messer or Josh Hundt, MEDC’s senior project adviser, could have approved the funds for Beydoun and that only the governor’s office could override that decision.