Stateside Podcast: Corruption scandal over marijuana licenses
Former Michigan State Representative Rick Johnson has pleaded guilty in one of the biggest state Capitol-level public corruption scandals in decades. Federal court filings allege that Johnson accepted tens of thousands of dollars from lobbyists to help clients earn medical marijuana licenses. Johnson was serving as chairman of Michigan's marijuana licensing board at the time.
Today, Craig Mauger and Robert Snell of The Detroit News reported that one of those clients was Green Peak Industries — more recognizable by the name Skymint, under which the company sells cannabis at 20 locations around Michigan. They're cooperating in the investigation, and handing over thousands of documents to the FBI. Craig Mauger joined Stateside to talk about the case.
When did the corruption happen?
"As soon as Rick Johnson was chosen to be the chairman of the Medical Marijuana Licensing Board in May 2017, he almost immediately began using that position to try to win benefits for himself and for his wife, Jan Johnson," Mauger said. "Rick Johnson, so far, in the charging documents has admitted to taking [over] $100,000 in bribes."
Johnson represented the 102nd House district in the Legislature and spent three years as Speaker until leaving elected office in 2004. Since then, he's worked as a lobbyist, and then spent two years as chairman of the Medical Marijuana Licensing Board, appointed by former governor Rick Snyder to be a hand on the tiller of an evolving industry. Until Governor Gretchen Whitmer disbanded the board early in her first term, Johnson accepted bribes from lobbyists who represented industry clients seeking licensing — including Green Peak Industries. Those two lobbyists, Vincent Brown (who has pleaded guilty) and Brian Pierce (who is scheduled to plead guilty) have also been charged. It remains unclear whether Green Peak or any individuals at the company knew about the corruption.
"Why this is important gets to the root of everything that's occurred with the marijuana industry in Michigan," explained Mauger. "The state set up a system for medical marijuana. The people who got in on the ground floor through the medical marijuana licensing in 2018 and 2019 were positioned to be the big winners after recreational marijuana was authorized in 2018, and that took effect after 2018. So this industry now is $2 billion in sales a year ... There is a lot here that has occurred and the regulations help some people win big and kept others out of the marketplace altogether."
Why wasn't there any public transparency?
"It gets to the secrecy that often kind of shrouds how our state government works," said Mauger. Michigan's governor's office and Legislature are not subject to freedom of information (FOIA) requests, meaning they don't have to turn over records or documents when asked. But that wasn't supposed to be the case for Rick Johnson's board position.
"Under state law, Rick Johnson was required to file a financial disclosure about his financial interests when he got appointed to this board in 2017 and annually afterwards, so at least in 2018 and possibly in 2019 under Governor Whitmer before she disbanded the board," Mauger said. "These financial disclosures, though, are not public records. Why is that? Well, it's because under the state law that lawmakers crafted in 2016, they specifically said that Rick Johnson and other board members' financial disclosures went to the governor's office."
Mauger explained it as a kind of "sleight of hand" by state lawmakers; redirecting Johnson's disclosures from the marijuana regulations agency to the governor's office exempted them from FOIA.
"So there's a lot of secrecy still hanging over all of this. You know, it's just a fascinating situation where state lawmakers set up a financial disclosure requirement, but the disclosure was only made to the governor," Mauger added.
You can read Craig Mauger's reporting on the investigation in The Detroit News, and hear our full interview with Mauger, plus more details about the case, on this episode of the Stateside podcast.
[Get Stateside on your phone: subscribe on Apple Podcasts, Google Podcasts, or Spotify today.]
Looking for more conversations from Stateside? Right this way.
If you like what you hear on the pod, consider supporting our work.