CVS backs Michigan Gov. Rick Snyder’s NERD Fund

Introduction

Michigan Gov. Rick Snyder, a Republican, testified under oath Wednesday that he doesn’t know who donates to a controversial nonprofit he created.

But the Center for Public Integrity has identified at least one corporate powerhouse that has lent financial support to the group: retail pharmaceutical giant CVS Caremark Corp.

In March 2012, CVS donated $1,000 to Snyder’s New Energy to Reinvent and Diversify Fund, a company document shows. The voluntary disclosure offers a rare, if small, glimpse into the flow of corporate money into politically active nonprofit organizations.

The NERD Fund — the acronym is a nod to Snyder’s “one tough nerd” campaign slogan — has to date rebuffed calls to identify its funders. Snyder has indicated he may be open to releasing their names, although he’s offered no timeline for doing so.

The organization raised $368,000 in 2012, according to tax records posted online by the Detroit Free Press. That’s down from the $1.3 million it raised in 2011, the first year of its existence.

Last month, the Free Press revealed that Snyder’s NERD fund was footing the bill for Detroit emergency manager Kevyn Orr’s $4,200-a-month condominium, as well as some of his travel expenses. The NERD Fund additionally covers the $100,000-a-year salary of Snyder aide Rich Baird, who helped recruit Orr to serve as emergency manager. Snyder appointed Orr to the position in March.

The fund’s 2011 annual tax return shows it also provided a security system and furniture for the governor’s residences. Earlier this year, Snyder argued that people “should feel comfortable” with the fund because “it’s actually offsetting costs of government.”

As a “social welfare” nonprofit organized under Sec. 501(c)(4) of the U.S. tax code, it is not legally required to reveal its donors. Critics worry the fund could provide another avenue for special interests to influence policy and the governor.

Union officials are challenging Detroit’s bankruptcy filing. On Wednesday, union lawyers questioned Snyder under oath, including about whether the city’s bankruptcy law firm Jones Day, city restructuring firms or two creditor banks have donated to the NERD Fund.

“With respect to your questions as to who the donors were and that category of questioning, my answer would be I don’t know,” Snyder said. “There’s an independent board that does that work.”

Representatives for CVS Caremark and the NERD Fund could not immediately be reached for comment. CVS’ corporate website does state that its political engagement “ensures that the interests of our business, customers, shareholders and employees are fairly represented at all levels of government.”

At the federal level, CVS’ political action committee, which is fueled by its employees’ contributions, has donated $112,500 to politicians so far this year, according to records filed with the Federal Election Commission.

During the first half of 2013, the company also spent more than $6 million on federal lobbying, records show, on a range of health, labor and tax issues.

Adam Wollner contributed to this report.