Conservative think tank awarded $77K in suit over Michigan teachers’ union’s COVID-19 loans

A Michigan-based think tank sued the state’s teachers’ union for misusing pandemic relief loans – and won.

The Mackinac Center for Public Policy, a research and educational nonprofit, filed a lawsuit against the Michigan Education Association (MEA) in January 2022, claiming it was improperly distributed a $12.5 million loan through the federal Paycheck Protection Program (PPP).

MEA and its partner, Michigan Education Special Services Association (MESSA), are 501(c)(5) and 501(c)(9) organizations respectively, which Mackinac claims was prohibited from receiving PPP loans.

Even though they had already repaid their loans, MEA and MESSA agreed to settle, paying the federal government $225,000 and Mackinac $77,000 in attorney fees for initiating the case.

But despite agreeing to settle, the MEA maintained its innocence and smeared the Mackinac Center as a “right wing ‘think tank’ with a decades-long record of attacking public school educators and their unions.”

The union claims it was a victim of the “frivolous, politically-motivated lawsuit” and didn’t settle because it was wrong.

Mackinac is defending its suit.

“The Michigan Education Association applied for money intended for struggling businesses during the height of the pandemic,” said Joseph Lehman, president of the Mackinac Center. “The union and MESSA obtained some of the largest PPP loans in the country. They took these funds, for which they were clearly ineligible, while shuttered restaurants, stores, and other businesses and their workers struggled to stay afloat.”

The MEA already has a multi-million-dollar budget acquired from teachers’ paychecks. In 2017 alone, it reported over $60 million in revenue.

“This case follows successful efforts by the Mackinac Center to oppose the inappropriate use of power by government officials and special interests during the COVID-19 pandemic,” wrote Holly Wetzel, director of public relations for Mackinac.

The center says it will use its share of settlement money to promote school choice and inform Michigan educators about their right to opt out of unions, which are becoming increasingly politicized, with tens of thousands of educators leaving in recent years.