Nessel accuses ex-Speaker Chatfield of stealing political funds in criminal charges

Lansing — Attorney General Dana Nessel unveiled 13 criminal charges against former House Speaker Lee Chatfield on Tuesday, saying he had flagrantly misused nonprofit dollars to pay off his personal credit card and fund purchases at wineries and luxury retail stores.

Nessel's office is also charging Chatfield's wife, Stephanie, for her role in the alleged scheme. Lee Chatfield got kickbacks from his associates and used $132,000 from his nonprofit organization, named the Peninsula Fund, which was supposed to be focused on promoting social welfare, to pay off his personal Chase credit card, Nessel said. Chatfield's political money went to a trip to the Bahamas and buying products from the luxury fashion retailer Coach, groceries and food deliveries, Nessel added.

The announcement, which came after a two-year investigation into the Republican politician from Levering, set up a potential crossroads for ethics reforms in Lansing, where influential officeholders have long been able to raise money from donors in secret through nonprofit accounts.

Lee Chatfield's actions were the product of a "dark money fueled culture" in Michigan's capital, said Nessel, a Democrat and the state's top law enforcement official.

“The Michigan Campaign Finance Act is effectively toothless, useless and utterly worthless as a deterrent to these crimes," Nessel said. "The statutes governing political funds and donor disclosures in this state couldn’t be more futile if they were literally drafted by crooks for the very purpose of violating them.”

Chatfield's lawyer, Mary Chartier, indicated in a statement on Tuesday before Nessel's 2 p.m. news conference that the former speaker expected to face charges.

"It took almost two and a half years for the Attorney General’s office to come up with charges against Mr. Chatfield," Chartier said. "We are prepared to fight them each and every step of the way."

Chatfield, a former teacher, was once viewed as a rising star in GOP politics. He went from unseating a Republican incumbent in a 2014 primary election to holding the most powerful position in the Michigan House in 2019 and 2020.

The criminal charges against Chatfield included embezzlement, larceny and conducting a criminal enterprise. The criminal enterprise allegation is the most serious, bringing a potential penalty of up to 20 years behind bars.

Stephanie Chatfield is charged with conspiracy to commit embezzlement from a nonprofit organization and embezzlement from a nonprofit organization. Each count would carry a maximum term of 10 years in prison.

Investigation ongoing

Nessel previously announced criminal charges against Lee Chatfield's top two advisers from his 2019-20 term as speaker in the corruption probe, Robert and Anne Minard. The Minards allegedly financially exploited and defrauded Chatfield's political fundraising accounts through a pattern of improper reimbursements, double billings and falsified records. 

On Tuesday, Nessel said the investigation of Chatfield's use of political funds remains ongoing.

"We have definitely not ruled out additional charges against the Chatfields and many others," Nessel said at the press conference. "... This is the beginning of the charging process for the former speaker."

Chatfield will be permitted to turn himself in to authorities for a May 2 arraignment on the charges in Ingham County District Court.

Money from the Peninsula Fund allegedly paid for credit card purchases during a Chatfield family trip to Universal Studios in Florida, including transactions at the Spider-Man Shop, a souvenir store, and at Three Broomsticks, a "Harry Potter"-themed restaurant.

In addition to using his nonprofit to pay off personal credit card expenses, Chatfield filed for improper mileage reimbursements from the House of Representatives and subleased an apartment in downtown Lansing that he paid for with nonprofit funds.

As speaker, Chatfield sought reimbursement from the House for 42,337 miles driven in 2019 and 2020, but approximately 21,280 miles appear to be associated with trips not actually taken, according to the Attorney General's office.

Chatfield’s monthly rent — paid for by the Peninsula Fund — was $775 for the downtown Lansing apartment near the Capitol. He subleased space in the apartment for $250 a month, pocketing the money he made instead of returning it to the Peninsula Fund, Nessel said.

The Detroit News revealed in December 2022 that Chatfield used money from the Peninsula Fund to rent an apartment from a business entity tied to the Michigan Automobile Dealers Association, a lobbying group with regulatory issues before the Legislature.

Nessel said Chatfield also wrote a $5,000 check to his brother, Aaron, in November 2020 from one of his political accounts, listing the expenditure as "wages." Instead, Lee Chatfield allowed Aaron Chatfield to keep $1,500, with $3,500 flowing back to Lee. The $3,500 was used to help fund a family vacation to Florida, Nessel said.

In addition, Lee Chatfield and some of his friends and staff members went on a December 2018 trip to the Bahamas, Nessel added. The Peninsula Fund paid to reimburse $32,000 in costs related to the trip, she said.

Stephanie Chatfield was in charge of monitoring the balance of Lee Chatfield's personal credit card and making payments from the Peninsula Fund's accounts, according to the Attorney General's office.

"Lee and Stephanie Chatfield worked together to facilitate using Peninsula Fund money to pay for Lee's personal credit card charges," said Robert Menard, a special agent for the Attorney General's office, in a criminal complaint filed Tuesday in court.

More:Lee Chatfield traveled the nation as Michigan's speaker, but who paid?

History of the probe

Michigan police began probing Lee Chatfield around January 2022 after a complaint was filed by his sister-in-law, Rebekah Chatfield, who said she'd been sexually abused by Lee Chatfield beginning when she was 15.

Nessel said Tuesday the sexual assault investigation had been closed without charges.

"We found we could not prove criminal sexual assault charges beyond a reasonable doubt," Nessel said.

The investigation into Rebekah Chatfield's claims set off a deep focus on the former lawmaker's use of millions of dollars in political contributions he collected while holding the top position in the Michigan House in 2019 and 2020. Chatfield maintained multiple nonprofit organizations that raised and spent money, largely in secret.

More:Lee Chatfield suspected of engaging in criminal enterprise

First elected in November 2014, Lee Chatfield left office at the end of 2020 because of term limits.

Jamie White, an attorney for Rebekah Chatfield, said the decision not to charge Lee Chatfield with a sex crime was "crushing" for his client.

"The attorney general’s office got this wrong," White told The Detroit News on Tuesday.

More:Closure of investigation of Chatfield sexual assault allegations 'crushing,' lawyer says

Sen. John Damoose, R-Harbor Springs, who won Chatfield's House seat after Chatfield departed Lansing, told reporters Tuesday morning that if laws were broken, people need to be prosecuted.

"The public trust is so important," Damoose said. "People send us down here, and they're trusting us to do the right thing to the best of our ability."

The charges against Chatfield come about a year after former Michigan House Speaker Rick Johnson, a fellow Republican, was charged on April 6, 2023, with taking bribes as chairman of the state's medical marijuana licensing board. 

cmauger@detroitnews.com

Staff Writer Beth LeBlanc contributed.