“This story was originally published by Bridge Michigan, a nonprofit and nonpartisan news organization. To get regular coverage from Bridge Michigan, sign up for a free newsletter Here.
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BY SIMON D. SCHUSTER
Bridge Michigan Staff Writer
LANSING — Shortly after Jake Leider began his new job as chief financial officer for the Complete Health Park nonprofit in Clare, a pair of invoices caught his eye.
At least one of the invoices for IW Consulting, which totaled more than $820,000 combined, appeared to be signed by and include the home address of Dave Coker, a former legislative aide who had created the nonprofit that obtained a $25 million earmark from the state of Michigan.
So Leider researched the consulting firm online and found what he considered another red flag: Coker also owned IW Consulting, which was billing the nonprofit.
“I thought it was odd for the director of a project to sign and approve invoices for themselves,” Leider testified Tuesday in Lansing’s 54-A District Court. “(I told him) that it’s a conflict of interest.”
Prosecutors allege Coker funneled money from Complete Health Park to his consulting firm and then into personal bank accounts, spending the cash on lavish purchases like gold, platinum, vehicles and firearms.
He has pleaded not guilty to various charges, which include acquiring or maintaining a criminal enterprise, making false pretenses, abuse of public money and two counts of embezzlement of $100,000 or more, a felony punishable by up to 20 years in prison.
The preliminary exam that began Tuesday will help a judge decide if there is enough evidence to bring the case to trial on charges brought by Attorney General Dana Nessel.
Former employees and board members of Complete Health Park nonprofit testified Tuesday that Coker tightly controlled the nonprofit’s business and decision-making.
Contracts with Coker’s consulting company, IW Consulting, showed Complete Health Park agreed to pay Coker’s firm 7% of the $25 million grant — which would equate to $1.75 million if applied to all spending — along with $200 an hour for other services.
Hired in February 2023, Leider testified on Tuesday that he had discussed concerns about the project with a CPA, an attorney and ultimately the nonprofit board that Coker had organized, including members who subsequently resigned.
“Within days, I received a termination notice from a law firm I’d never heard of,” Leider said, later confirming the letter came from attorneys at the Lansing-based Clark Hill firm.
A ‘passion project’
Josh Blanchard, Coker’s defense attorney, sought to portray his client as an “optimist” who was intent on bringing a health and fitness park to Clare County, which is both poorer and less healthy than the rest of the state.
In one witness cross-examination, he called Coker “a bit of a dreamer” who was working on “a passion project” he had begun to conceptualize even before the $25 million earmark was added to a 2022 state budget bill by then-House Speaker Jason Wentworth, Coker’s former boss.
The nonprofit then spent $3.5 million to buy land from the family of state Rep. Tom Kunse, who replaced Wentworth in the state Legislature in 2023. Wentworth and Kunse have denied wrongdoing, and Nessel has said there will not be any additional charges in the case.
Blanchard attempted to distance Coker from the nonprofit and the state grant on Tuesday. In questioning witnesses, he sought to illustrate the payments to Coker’s consulting firm were in line with the contract — not illicit.
“It’s a real shame that Dana Nessel decided to take (the health park) away from the people of Clare County,” Blanchard said after the hearing. “They were making real progress at something that would have changed the community for the good, and she took it away from them.”
Bridge Michigan first reported on “red flags” surrounding the state grant spending in May of 2023.
Darrell Harden, a state Department of Health and Human Services grant administrator, testified Tuesday that Bridge’s coverage led to a stop work order on the grant and, as Blanchard put it, “caused the whole project to come to an end.”
'Dave was in control’
A little more than a month before Coker’s newly formed nonprofit received its first $10 million in state funding, he met with three associates in a Panera Bread in Jackson to lay out how the nonprofit would work. Two of the board members appeared Tuesday as witnesses called by the state.
The one-time treasurer of the nonprofit, Terrance Powell, works in security at an insurance company. He testified that he was surprised when Coker invited him to join the nonprofit’s board as treasurer in October 2022 “because I had no experience.”
Despite being treasurer, Powell said he had no access to the nonprofit’s bank accounts. When Assistant Attorney General Kelli Megyesi showed him an invoice for over $600,000, Powell said he had never seen it before. He didn’t recall ever looking at any bank statements. Powell said it was Coker who led and directed meetings.
“On paper, we were in control — but Dave was in control,” he testified. “Dave directed every aspect of our meetings.”
But Blanchard challenged those characterizations, saying the board “negotiated” Coker’s salary on the project by agreeing to pay him a 7% consulting fee instead of the 8% he had initially requested.
In response to Blanchard questioning, Powell said he was never told how to vote or what to talk about during board meetings.
Lenn Wixson, a longtime friend of Coker’s, said he often felt “overwhelmed” by all the documents presented at board meetings.
Despite being president of the Complete Health Park board from its inception, when asked if he ever ran the meetings, he responded “technically, no.”
“I didn’t know how to run a meeting efficiently, so (Coker) just took the reins,” said Wixson, who testified that he resigned from the board in January 2023.
A code of conduct
Harden, the state health department employee tasked with overseeing the $25 million Clare health park grant, had previously noted Coker’s political connections in an email to colleagues.
He is “both well connected politically and a bit antsy, so I’m hoping to keep it moving,” Harden said in a December 2022 email — a little more than a month after Coker and Powell first met to form the nonprofit’s board.
Within 10 days of that email, the state distributed $10 million to the nonprofit.
In a meeting a month before, Harden said Coker had told him he “was not making any money on the project,” but Harden confirmed in his testimony that Coker’s firm was, in actuality, paid more than $820,000 within days of receiving the infusion of state funding.
Megyesi, the assistant attorney general, focused on provisions in the grant agreement between the nonprofit and the state, including a conflict of interest clause and a code of conduct that bars grant recipients from having a financial interest in the grant’s spending.
She noted the nonprofit had initially budgeted $33,000 for contractual and professional services and $2.1 million for “other expenses.”
Harden said it took three budget revisions and months for the nonprofit to list IW Consulting as a contractor on the documents. He testified that once he learned that Coker ran IW Consulting, he flagged it as a potential conflict of interest, but by that time, the health department’s office of inspector general was already reviewing the grant.
More witnesses are expected in Coker’s preliminary exam, which is scheduled to resume April 8.
PHOTO CAPTION: Michigan Attorney General Dana Nessel’s office led a two-year investigation into alleged theft from $25 million state budget earmark for a health park in Clare. — PHOTO BY JONATHAN OOSTING