MICHAEL HENRY HAS served as the Chair of the Ann Arbor City Democratic Party since 2013. Prior to his 2013 election, he served as a co-Chair for two years. The Ann Arbor Independent was given documents and emails which addressed Michael Henry’s withdrawl using an ATM card of somewhere north of $6,000 dollars in cash belonging to the Ann Arbor City Democratic Party. When the 2013 withdrawls were discovered, Henry was unable to provide original receipts, according to Executive Committee members.
After The Ann Arbor Independent was told that members of the Ann Arbor City Democratic Party’s Executive Committee were allegedly not pursuing a comprehensive financial accounting, the newspaper contacted Ward 4 Council member Jack Eaton, an active member of the group’s Executive Committee.
Eaton confirmed that the group’s Executive Committee had instituted a new Treasurer’s Policy regarding cash withdrawls (they were banned without pre-approval of the Treasurer). The December 2013 Treasurer’s Policy also states that “The Treasurer ensures that prompt reimbursement will take place upon submittal of receipts – in most cases within 5 business days.”
The new Treasurer’s Policy was accompanied by the return of the ATM card by Mike Henry.
Eaton pointed out that the new Treasurer’s Policy resolved the issue of “sloppy accounting.”
“It does not resolve questions about the cash withdrawls Mike Henry made,” he said.
Since the cash withdrawls have come to light, there have also been concerns raised that Henry has had access to an Act Blue online payment processing account through which the group’s event tickets and sponsorships have been sold.
Top-level sponsorships for AA Dem (as the group is known) events have been priced as high as $5,000.
There was an Act Blue event page set up for the group’s summer Chili Cook-off fundraiser—an event for which tickets were sold at the door, according to a member of the Executive Committee. The same person was shocked to learn that Act Blue sponsorships of the group’s modestly attended events were being offered for as much as $5,000.
For well over a year the group’s treasurer has not provided an accounting of any Act Blue income. Neither has the treasurer provided a comprehensive accounting of the group’s finances, Executive Committee members say.
While it’s common for organizations with volunteer boards to struggle with accounting mix-ups and the occasional misplaced receipt, the amount in question represents 60-70 percent of the $10,000 total the group is permitted to run in and out of its bank account in any 12 month period.
Around the time Mike Henry was serving as co-Chair of the AADems, he was the Exalted Ruler of the James L. Crawford Elks Lodge, located at 220 Sunset.
Members of that group alleged Henry was defeated when he ran for re-election for reasons related to financial irregularities.
That organization is working with an accountant to determine the exact nature of its losses. It is unclear whether the organization will press charges if a final report indicates that there were, indeed, financial irregularities.
Federal income tax returns show that in 2009 the James L. Crawford Elks Lodge had gross receipts of $522,207, including $325,000 in investment income and a $300,965 profit. The 2010 federal tax return lists Mike Henry as Exalted Ruler and gross receipts of $112,125. The tax return for that year shows the group lost $4,027. In 2011, the 990 tax return shows the James L. Crawford Elks Lodge declared gross receipts of $113,079 and a $78,123 loss.
While the James L. Crawford Elks Lodge leadership made members aware of the $78,123 loss, AADem Executive Board members say specifics concerning Mike Henry’s cash withdrawls have not been shared with that group’s membership. Neither has the fact that Mike Henry was unable to produce original receipts to document his use of the group’s money.
The dispute pits Executive Board members who are deeply concerned that there have been financial irregularities against Executive Board members who do not wish to have the matter made public and who have not made a full accounting of the Chair’s use of the cash withdrawls during 2013 available to the group’s members.
Several of the latter AA Dem Executive Board members are deeply involved in local politics, serve on the boards of local non-profits, work as university executives and lawyers.
“These are people who should know better,” said Lou Glorie, a long-time member of the group and former long-time Executive Committee member. “The books need to be opened and this issue resolved once and for all.”
“No original receipts?” said John Floyd, a CPA and candidate running for Washtenaw County Board of Commissioners. “Then the money needs to be reimbursed.”
Floyd is running against Conan Smith, a former Ann Arbor City Democratic Party Chair.
Local attorney Tom Weider told the former AnnArbor.com in 2011, “It’s just really maddening — particularly the people who are still serving,” he said. “They should all repay, but there’s something awful about people who are sitting there… and they won’t pay back money they improperly took. And nobody’s doing anything about it. It’s mind boggling.”
There are members of the Executive Committee of the AA Dems who’ve said they feel the same way about Mike Henry’s actions and the fact that there has not been a transparent reckoning to the Executive Committee or the membership.
According to an email chain (disclosed to The Indy) between a small group of members belonging to the Executive Committee, AADem treasurer Doug Scott recently reiterated that Henry had not provided receipts for the over 40 cash withdrawls made during a period of months in 2013.
Scott was responding to Ward 4 City Council member Jack Eaton’s email in which he stated a member of the Executive Committee had purported to The Ann Arbor Independent that Henry had, indeed, given Scott all of the original receipts documenting what had been done with the cash withdrawn from the group’s bank account during 2013.
What those present at a Fall 2013 Executive Committee meeting say happened is that Henry eventually provided homemade vouchers, handwritten notes allegedly documenting how the funds he withdrew were spent.
This accounting satisfied several on the Executive Committee and horrified others. Allegedly among the expenditures made by Henry were donations to candidate committees totaling $386.
“That was an inappropriate use of Party funds,” says Jack Eaton. “Mike was given the opportunity to repay the money, but didn’t.”
The Ann Arbor Independent learned that Mike Henry repaid the $386 shortly after the newspaper began its investigation—on August 11—of the cash withdrawls.
One Executive Committee member said that the former lack of financial controls “was a terrible policy.” The same individual purported to The Ann Arbor Independent to have been told by Doug Scott that Mike Henry had, indeed, provided “all the receipts.”
When The Indy asked to view the receipts, the Executive Committee member initially agreed to ask the Treasurer to produce them. The individual then said a private organization “has no obligation to show its documents.”
The Ann Arbor City Democratic Party is not subject to Freedom of Information Act requests and is only obligated to share its financial records with club members.
Treasurer Doug Scott did not return multiple phone messages requesting a comment. Emails shared with The Ann Arbor Independent indicate that Scott did not want the newspaper to write about the cash withdrawls. Emails show he was concerned any news story about alleged undocumented cash withdrawls made by Chair Mike Henry would be “embarrassing.”
Phone calls to members of the group’s large Executive Committee revealed that most were unaware of the cash withdrawls or the ongoing struggle by several members of the Executive Committee to push for an exact accounting of what happened to the group’s money.
Sumi Kailasapathy, a member of the Executive Committee by virtue of her position as a Democrat elected to local office, said she had just recently been added to the group’s listserv.
“I wasn’t getting the emails and asked,” she said. “I was told I had to join the listserv.”
Neither all the members of the group’s Executive Committee, nor the group’s general membership have been given a full accounting by Treasurer Doug Scott, some eight months after a new Treasurer’s Policy was adopted aimed at stopping unauthorized ATM card use and the reimbursement of expenses without receipts.
Ward 1 Council member Sumi Kailasapathy is a CPA. She served as Treasurer of the Ann Arbor City Democratic Party prior to Doug Scott. She resigned in December 2011, to run for City Council.
“There were never cash withdrawals when I was treasurer,” she confirmed via email. “I stepped down December 2011 because I was going to run for office in 2012.” Kailasapathy also said that she required original receipts in order to issue a check for reimbursement.
That the exact amount of Henry’s cash withdrawls has never been revealed to the entire Executive Committee or the membership does not sit well with Jack Eaton and others.
Jason Morgan is the VP of Governmental Relations at Washtenaw Community College. He sits on the Board of the Jim Toy Center, as well as on the Executive Committee of the Ann Arbor City Democratic Party.
While Morgan participated in email chains forwarded to The Indy, he would not speak on the record about the cash withdrawls or concerns that the Executive Committee was attempting to keep the undocumented withdrawls under wraps.
Morgan did say that his “approach is to be straightforward. If someone is doing something inappropriate, everyone has to be held accountable.” He also suggested the questions about undocumented withdrawls of thousands of dollars in cash was an effort to smear Mike Henry.
Likewise, Executive Committee member lawyer Nora Wright, at whose office Executive Committee meetings have been held, said she had “no time to talk about” the Ann Arbor Dems.
On the group’s website, there are no recent copies of either meeting agendas or meeting minutes.
Jack Eaton says that shortly after he began urging members of the Executive Committee to investigate the matter, Executive Committee meetings began being moved without advance notice. He was not the only member of the Executive Committee to make this assertion. Anne Bannister, the group’s immediate past Chair, likewise, alleged meeting times and places were changed without notice.
During the summer of 2014, an Executive Board meeting was held at mayoral candidate Christopher Taylor’s campaign headquarters. At that meeting, according to individuals present, there was a discussion about the group’s finances and a decision to have tickets for the Labor Day fundraiser sold only at the door.
One AA Dem Club member suggested to The Ann Arbor Independent that Democratic mayoral candidate Christopher Taylor, long-time AA Dem member Tom Weider (also an attorney) and David Cahill (the group’s parliamentarian and husband of Ward 1 Council member Sabra Briere) should be asked to examine the group’s finances and produce a reckoning of exactly how much undocumented cash Mike Henry withdrew before his access to the ATM card was cut off in Fall of 2013.
Cahill said he would not be willing to examine the group’s finances.
“That’s Doug Scott’s job.Mike paid back the $386,” said Cahill. “I’m following Doug Scott’s lead.”
When asked about the cash withdrawls, Cahill, a lawyer, said, “Mike provided a verbal explanation.” The issue of the missing original receipts, Cahill said, “is above my pay grade.”
Behind the scenes, Cahill has supported efforts to find out how the thousands in cash withdrawn was spent.
A Club, Not Affiliated With the State Dems
In October 2013, AnnArborChronicle.com reported that, “At a morning meeting on Saturday, Oct. 12 held at the Ann Arbor Community Center, Ann Arbor Democratic Party members affirmed the party’s endorsement of Kirk Westphal in the Ward 2 city council race.” Westphal posted the endorsement to his website.
What neither the AnnArborChronicle.com nor Westphal made clear is that the Ann Arbor City Democratic Party is a club, not an affiliate of the national, state or county Democratic parties.
The organization is not registered as a business entity or a charity, according to the state’s business licensing bureau and the Michigan Secretary of State’s office.
The group has no state license to solicit, but holds fundraisers advertised to the public on a regular basis.
Since Mike Henry’s cash withdrawls and the Executive Committee’s inability to account for all of the funds or to prompt repayment, donations to the club have dropped off.
“I’m not donating until Mike Henry steps down,” said a long-time member of the club who asked not to be identified.
The group’s funds are used for a variety of purposes including providing refreshments for the monthly meetings, as well as paying the rental fees for the group’s Main Street Community Center meeting space.
So who can join the club? According to the club’s bylaws: “Residents of the Ann Arbor area who are in sympathy with the general aims and policies of the Party are considered members of the Party and are eligible to participate in Party activities and to vote at Party meetings. A person becomes a member of the Party for purposes of notification by indicating his or her wish to become a member by being placed on the membership list.”
Ann Arbor has more than 90,000 registered voters, approximately two-thirds of whom are Democrats. About 50-80 people show up to monthly meetings, often including a handful of City Council members, Ann Arbor’s County Commissioners and state representatives. U.S. Rep. John D. Dingell, Jr. has been known to attend the meetings, as has Debbie Dingell, currently running for the U.S. Congress from the 12th Congressional District.
In 2013 when Mike Henry stood for re-election to his position as Chair of the Ann Arbor Democratic City Party, Jack Eaton suggested to those in attendance at the meeting that the issue of the cash withdrawls needed to be resolved.
“I suggested we needed to look at the issue of the cash withdrawls. I was called a racist,” said Eaton. “It was ridiculous.”
Another member of the Executive Committee suggested that there are those on the Committee for whom a black man as Chair serves a convenient political purpose.
“Mike Henry is African-American. I think some people like that because it makes the City Party look more inclusive than it actually is,” said the club member.
Questions
In the 2014 Ward 1 City Council race, City Party Chair Mike Henry campaigned for Don Adams, Jr., a pro-life, anti-marriage equality Democrat. Henry campaigned for Adams in Arrowwood (a polling place) on August 5 (election day). Henry entered the polling location and was seen handling the voter affidavits. He was subsequently removed from the polling place.
Mike Henry’s open support of a pro-life and anti-marriage equality candidate raised questions about his politics.
That inconsistency is not the only one which has caused consternation among long-term members of the Ann Arbor Democratic City Party.
“Who is Mike Henry? Where does he work? Where does he live?” asked Lou Glorie.
She was not the only person to ask those same questions over the course of the interviews conducted for this article.
Mike Henry did not respond to multiple phone and email messages seeking a comment about the cash withdrawn from the AA Dems’s account or the calls for a fuller investigation of what happened to the money.
Ward 1 Council member Sumi Kailasapathy said, “When I was treasurer every penny was accounted for and I gave regular financial reports. ‘This is how much money we have now. This is how much money we had last month.’ That’s just the way these things must be done.”
Former AA Dems Executive Committee member Lou Glorie says, “This is just so disappointing. The longer it drags on, the worse it will be for everyone.”
Mr. Henry has been seen around town with many female friends, fine dining and mingling…..Looks like we see who picked up the tab.