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Facing wrath of Senate panel, Khouri elaborates on plans for treasury

June 8, 2015

Courtesy of MIRS News Service

State Treasurer Nick KHOURI felt the full heat of the Senate Finance Committee Wednesday morning as senators on both sides of the aisle grilled him for specifics on plans to change how the department operates.

The occasion was an advice and consent hearing on Khouri’s appointment, a right allowed the Senate under the state Constitution. Senate Democrats asked for the hearing shortly after Gov. Rick SNYDER announced his pick, and Senate Majority Leader Arlan MEEKHOF (R-West Olive) formally requested the hearing late last month (See “Meekhof Requests Senate Hearing On Treasurer Appointment,” 5/21/15).  

Khouri, who served as the chief deputy treasurer from 1991-97 under former state Treasurer Doug ROBERTS in Gov. John ENGLER’s administration and recently retired from DTE, said his top priorities as treasurer were three fold: to work on employee engagement, improve the many processes involved in Treasury and work on taxpayer service. 

“We’re not an enforcement business, but that’s part of our job,” he said. He later added that he also plans to work on improving the litigation process, noting that he views litigation as “a failure” of not being able to work with the taxpayers. 

But his outlined goals did little to appease the concerns of every member of the committee, who rattled off scores of complaints they’ve fielded about the Department of Treasury and worried they’d be getting more of the same without a strict set of goals. 

Sen. Rebekah WARREN (D-Ann Arbor) said the depth and breadth of complaints “has never been this bad.” Sen. Tom CASPERSON (R-Escanaba) wondered if the department was intentionally casting a wide net in order to generate revenue, and suggested department employees need a healthier fear of citizen taxpayers to do their jobs more effectively. 

“Your other unknown title as State Treasurer is human piñata, so welcome to your new job,” Sen. Steve BIEDA (D-Warren) joked to Khouri before questioning whether the state is bringing in enough revenue to pay its expenses and whether Khouri’s former status as a lobbyist would impact his judgment. “Well, maybe your new job.” 

Finance Committee Chair Jack BRANDENBURG (R-Harrison Twp.) doled out some of the harshest criticisms, however, providing Khouri with a list of specific complaints he’s commonly heard about the Department of Treasury. 

Among them were issues with property liens, denials of amended taxpayer returns with little to no explanation, voided returns, taxpayers being asked to provide the same documents over and over again and the department ignoring taxpayers’ attorneys in certain cases. 

“I really believe we have a distance to go to make this state great again,” he said. “I want to say, in the most emphatic way possible, that that distance will never be covered — we will never be as good as we can be — if this department is allowed to continue to operate the way it has in the last few years.” 

Khouri said it was the first time he’d seen the document and asked for more time to provide written responses. 

“Without some prior notice of what these issues are, I can’t tell off the top of my head what the solution is,” he said. 

Brandenburg was displeased with that answer. 

“Frankly, Mr. Khouri, I was expecting more,” he said. “I really want to work with you . . . a lot of people have spoken very, very highly of you. But your staff, the Treasury, we’ve heard ‘We’ll get back to you’ for 4.5 years now, and it just isn’t working out.” 

Brandenburg asked Khouri to provide written responses to his list of concerns by June 10. The committee did not make a recommendation one way or the other on Khouri’s status as treasurer Wednesday. 

The practice — permitted under Article V, Section 7 of the Michigan Constitution — allows the upper chamber the ability to approve or reject most high-level gubernatorial appointments through the 60-day advice and consent process.  

Khouri’s appointment was announced March 17. He took office April 17 (See “Khouri Returns To Treasury; Replaces Clinton As Treasurer,” 3/17/15).  

Advice and consent hearings were used often during former Gov. Jennifer GRANHOLM’s tenure, but the procedure has for the most part collected dust since Snyder was elected. 

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