Lobbyist sold his condo to a lawmaker at a loss while another rents rooms to legislators

Michigan lawmakers and lobbyists are doing deals that would raise red flags in other states, but we have no rules for such financial transactions here.

A lobbyist sold his downtown Lansing condo to a state representative at a financial loss in the largest-ever financial transaction between a lobbyist and a Michigan legislator over the last 20 years, an Eye On Michigan investigation into freebies influencers lavish on lawmakers revealed.

Over the last 20 years or so, lobbyists reported spending more than $6.3 million on meals and trips for lawmakers and state officials. Eye On Michigan reviewed the 17,500 transactions that transpired between influencers and legislators from 2001, the first year for which data was available, to 2023, the last full year for which data is available.

The vast majority of those interactions between lobbyists and lawmakers involved food and travel. But the professionals who make a living influencing state officials are also required to report to the Michigan Secretary of State their financial transactions with legislators.

That’s why Nathan Piwowarski, while registered as a lobbyist, disclosed that he sold his condo to then-state Rep. Phil Potvin, a Republican from Cadillac. Piwowarski bought the condo for $106,900 in 2003 and sold it to Potvin for $79,000 in 2011, according to property records (Piwowarski told the Secretary of State he sold it to Potvin for $78,000).

Potvin refused to discuss the transaction, but Piwowarski said he sold the condo for fair market value. Michigan law does not require an independent evaluation of that claim, unlike other states where the hefty exchange would be closely scrutinized.

Had a sale like the one in question occurred in Washington state — ranked first in the country for disclosure policies by OpenSecrets — it could be reviewed by the state legislature’s independent ethics review board.

Jennifer Struss, the board’s counsel, told Eye On Michigan that if the condo sale was reported to the board, they would conduct an investigation to figure out if it was sold below market value and, if so, why.

“Is the lobbyist expecting the legislator to do something for their clients in a sort of quid-pro-quo thing?” Struss said. “That’s how we would look at it.”

The board would then make its findings and recommendations available to the legislature for potential hearings, censure or removal. A similar mechanism doesn’t exist in Michigan, Secretary of State officials told Eye On Michigan, adding that a complaint would have to be filed in order for them to investigate.

Michigan law does not forbid or regulate financial transactions between lobbyists and lawmakers.

Piwowarski told Eye On Michigan that while he was registered as a lobbyist, he never engaged “in any lobbying as it’s understood under the statute.”

He and a colleague “thought it would be a bright idea” to register him as a lobbyist, but it “never panned out.”

Piwowarski did once testify before the Michigan House Judiciary Committee on behalf of the State Bar of Michigan’s Estate Planning Section, House records show. He did so in 2018 when Potvin was no longer in office and he said he was not paid for his lobbying effort.

Piwowarski never testified before any of Potvin’s committees, according to the House Clerk’s office.

Piwowarski said he bought the condo with his wife when they both attended graduate school at Michigan State University. He said the couple tried to sell it when they moved away, but struggled because of the recession.

“It was very difficult to sell the place and so we rented it out for a few years,” Piwowarski said. “When Phil was elected, he was aware that I still owned a condo down there and we sold it to him for the price that we’d listed it for previously.”

Piwowarski said he’s known Potvin since he was around 10 or 11 years old — the two went to church together and Potvin was a scout leader when Piwowarski was a Boy Scout, he said.

Potvin did not return messages. His wife told Eye On Michigan she would pass on a message, but added she was unsure if he would respond as he “hasn’t held public office for years.”

Potvin sold the condo in 2017 for $70,000.

Other lawmakers have real estate dealings with a lobbyist.

Nine lawmakers rented rooms in a house across the street from the Capitol.

Public records show Rep. Greg Alexander, R-Carsonville; Rep. Timmy Beson, R-Bay City; Rep. Ken Borton, R-Gaylord; Sen. John Damoose, R-Harbor Springs; Rep. Gina Johnsen, R-Lake Odessa; Rep. Brad Paquette, R-Niles; Rep. David Prestin, R-Cedar River; Rep. John Roth, R-Interlochen; and Rep. Curt Vanderwall, R-Ludington paid rent to “Capitol House LLC,” which is owned by lobbyist Scott Everett.

Piwowarski said “the way influence is achieved in Lansing is largely undisclosed” and said it was interesting that Eye On Michigan took an interest in a “fair market value transaction” from more than a dozen years ago. He said further disclosures of the business arrangements of legislators and their spouses would be helpful.

Piwowarski, asked if he thought the public had any interest or concern over transactions like the sale of his condo, said “until I started getting calls about this maybe six months ago, no.”

The time period he referred to is when Eye On Michigan began making requests for comment.

Eye On Michigan is a student investigative reporting program based in Detroit and East Lansing. Our mission is to recruit and train the next generation of watchdog reporters, provide high-quality investigations to Michigan news organizations at no charge and to increase diversity in investigative reporting by engaging and inspiring high school students in under-served communities. To support our work, please consider making a donation.