Michigan Capitol | Susan J. Demas
It shouldn’t be controversial to say that elected officials have a responsibility to be trustworthy stewards of taxpayers’ money.
Unfortunately, conservative legislators in Lansing have no problem squandering taxpayer funds on contracts with Real Alternatives, a politically connected, right-wing organization that year after year failed to do what the state pays it to do.
If you’re not familiar with Real Alternatives, you’re not alone.
Real Alternatives is a Pennsylvania-based group that uses taxpayer money to fund anti-abortion centers in the states where it operates. Michigan contracts with Real Alternatives to carry out the Michigan Pregnancy and Parenting Support Program. The organization recruits providers and facilitates payment to them to theoretically provide services for pregnant Michiganders.
Since 2013, Michigan taxpayers granted almost $2.6 million to Real Alternatives. The group consistently failed to meet its own benchmarks for the state.
After promising to serve 2,000 Michiganders within one year of its initial contract, Real Alternatives only provided services to 3,771 pregnant women over the 4 1/2 years that it has administered the Michigan program.
But wait — it gets worse.
Real Alternatives implemented a clever system to skim money from service providers to put money back into its coffers. It works like this: Real Alternative charges its service providers a 3% fee, similar to a kickback. This money is intended for the service providers and for people in the state, but Real Alternatives reclaims the fee for its own private use and to grow its footprint.
According to a recent government audit of the organization, Real Alternatives stated that the 3% fee is “used to fund expenses… such as travel and other expenses to support advancement of the program in other states.” So, in its own words, Real Alternatives likely uses the money it siphons from one state’s taxpayer dollars to set up its programs in other states to then collect even more tax dollars.
We don’t know exactly what Real Alternatives is doing with those taxpayer funds, but we have a pretty good idea.
To begin with, its executives profit quite handsomely.
Real Alternatives’ CEO, Kevin Bagatta, made almost $250,000 in 2017. The same year, Thomas Lang, vice president of operations, took home more than $175,000. They earned those salaries while serving fewer than 1,000 women each year in Michigan and making significantly more than the $159,300 the Michigan governor makes.
It also appears that Michigan tax dollars may have subsidized the organization’s Indiana expansion. Real Alternatives got its first contract in Michigan in the fall of 2013. In 2014, the state of Indiana gave Real Alternatives a likely no-bid $1 million contract to do the exact same thing.
Real Alternatives’ conduct is so questionable that in Pennsylvania, the auditor general asked that the group return the money it was granted.
Does this sound like the kind of organization that deserves taxpayer dollars? Governments should allocate taxpayer funds to groups that are good fiscal stewards, not those that consistently fail to deliver.
Gov. Gretchen Whitmer has zeroed out funding for Real Alternatives in her budget, but conservative legislators are digging in their heels and insisting on throwing more taxpayer money at their allies in the anti-abortion community.
Will these conservative ideologues keep funding a mismanaged and wasteful program that likely sends Michigan dollars out of state? Or will they fund priorities in Michigan? We urge them to do the right thing and put the needs of Michiganders over ideology.
Disclosure: Equity Forward is a project of the Hopewell Fund, a Washington D.C.-based progressive 501(c)(3), as is North Carolina-based The Newsroom, which supports the Advance. There is no coordination or relationship of any kind between the Advance and Equity Forward.
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