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Posted on Thu, Sep 30, 2010 : 10:53 a.m.

Rick Snyder's venture capital companies hit with liens for unpaid taxes

By Nathan Bomey

Michigan Republican gubernatorial candidate Rick Snyder's Ann Arbor venture capital firms were hit with tax liens from the states of California and Michigan over unpaid taxes, according to a Detroit News story published today.

The Detroit News reported that the state of California filed a tax lien tied to $1,265 in business taxes that were not paid in 2008 by Snyder's Avalon Ventures LLC. The story also reported the state of Michigan filed a tax lien against Snyder's Avalon Investments LLC for some $13,000 in unpaid employee withholding taxes from 2001.

Rick Snyder at Chelsea town hall.JPG

Venture capital firms run by Rick Snyder, shown here talking to a voter at a town hall meeting in Chelsea last month, were hit with tax liens, the Detroit News is reporting.

Melanie Maxwell I

Snyder's campaign attributed the liens to an "oversight" and a "double billing error," the News reported. A spokesman for Democratic gubernatorial candidate Virg Bernero accused Snyder of "mismanagement at best and tax evasion at worst."

Snyder's two Ann Arbor venture capital firms, one founded in 1997 and another in 2004, raised $100 million apiece for investments in high-tech companies in Michigan and elsewhere.

A recent Wall Street Journal analysis of Snyder's venture capital record found that 10 of the 36 startup firms that received funds from Snyder's firms were based in Michigan. Of all the investments, four companies went public, 13 were acquired or merged with other companies, 11 are still private companies and seven went out of business, WSJ reported, citing data from VentureSource.

Two Michigan companies went out of business but "that doesn’t indicate poor fund performance since venture-backed companies have a high failure rate," WSJ said.

In the Ann Arbor area, University of Michigan startups HealthMedia, sold to Johnson & Johnson in 2008, and HandyLab, which was sold for $275 million in 2009 to Becton, Dickinson and Co., are "among Snyder's successes," the WSJ reported. Those companies collectively employ nearly 300 workers in the Ann Arbor area.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.


michigan face

Wed, Oct 6, 2010 : 4:15 p.m.

Right on, Gene! There are many holes that Snyder is trying to block us from seeing. He is a pitchman for himself and too many people seem to be buying his "tonic" without reading the label!

Gene Alloway

Wed, Oct 6, 2010 : 9:14 a.m.

While this is a small thing, and not a huge deal as far as I am concerned, I do think Snyder has a problem. I too heard the radio interviews with both candidates, and Snyder is flat out lying in one area. He says the Value for Money approach was used in Washington State to balance the budget. I am not sure what budget or when he was looking at, but they still have over a 1.5 billion per year in that state, and a quick google search is all you need to figure it out. I could not find any reference to a balanced state budget there, and none (from the state itself) that referenced the kind of plan he suggests as a great tool for saving the budget there. So, his major economic argument seems to have a hole in it, one that seems to either be purposefully misleading or poorly studied - not something that encourages me to support him. I wish the WUOM interview had done more research in this.


Sat, Oct 2, 2010 : 5:05 p.m.

Atticus I've waited two days for your response (assuming that you are monitoring this thread yet), and obviously you haven't. When weighing each candidate, don't you think that slowing down the judgement process would be fairer? It's clear what side you are on. That's OK. Let's give each candidate the benefit of doubt until proven otherwise. I don't see any proof of anything here.

G.W. Williams

Fri, Oct 1, 2010 : 7:37 p.m.

A multimillion dollar company with $1,000 in unpaid taxes? That's like a minor accounting discrepancy. That's the worst that can be said about Rick Snyder? Why not focus on the economic issues than these trivial issues? - Michigan has lost more than 780,000 jobs since 2000. At over 15%, Michigans unemployment rate is 60% higher than the national average. - Michigan has lost more private sector jobs since the year 2000 than any other state in the country. - Michigan has lost more than half of all the private sector jobs lost in the United States from 2000 through May 2009. We need a plan to get our economy turned around. How about the Michigan Turnaround Plan? It's a five-step plan to make Michigan a top-ten leader in economic growth. It's exactly what our state needs to move forward.


Fri, Oct 1, 2010 : 12:30 p.m.

I agree with 81 wolverine except for the conspiracy theory. As a tax professional for a multi-state, multi-national comapany, I know that these administrative liens happen frequently. Most state governments shoot first and ask questions later. They have outdated, inadequate accoutning systems and controls. I do not beleive for a minute that these are willfull acts to cheat the state out of revenue. This is nothing story.


Fri, Oct 1, 2010 : 12:16 p.m.

Tax codes are so complex and contradictory that if governments want to nail you on something they will. That's part of the reason why Snyder's 6% flat business income tax is a very good idea. People shouldn't have to pay big money just to figure out how to comply with the tax code!


Fri, Oct 1, 2010 : 10:19 a.m.

Atticus You still haven't addressed the most salient point, to whit: Calling Mr Snyder a 'tax cheat'. That is the point I am focusing on, and the one you are steadfastly refusing to answer. You can try to throw all kinds of distracting points around, but it won't work. Try to answer that one, can you? DonBee makes my point for me. If you can call the tens of thousands of pages of tax code 'simple', then you have the advantage of vitually every single person on this planet. Several years ago, the IRS acknowledged an error on one of my returns going back many years, and credited a current year's return. Would that make the IRS a 'tax cheat'? Certainly there are flaws in both candidates. Seriously, though, the finger pointing has to cease. At some point, we have to recognize a common enemy (call it what you will), and go it shoulder to shoulder. The silver lining in all this may be that both parties will be forced into truly working together, and not just giving lip service to bi-partisanship. I fear that if we don't start working together soon, we will be left eating the crumbs falling off the world's manufacturing table.


Fri, Oct 1, 2010 : 9:47 a.m.

I just listened to the WUOM interview with Rick Snyder. I would suggest anyone who did not get the audio of both Virg and Rick's hour long call in shows. I am disappointed in both of these folks after the call in shows. Neither impressed me as the leader Michigan needs.


Fri, Oct 1, 2010 : 9:19 a.m.

@GARYPLAYER Now let's talk about the all the crooks that the LEFT hasn't denouced because of actual and acknowledged **personal** tax evasion, i.e. Charlie Rangle, Treasury Secretary Tim Geithner, etc. I remember the outrage from the right wing media over Geitner and others...why should Snyder get a pass because "the left" has not denounced them? Should "the right" not hold their own to the same standards they hold "the left"? Is not "the right" the standard bearers of solid morals, no flip flopping and "core values"? How many of the jobs created by Mr. Snyder at Gateway still exist in America? How many people lost their homes when their job was moved overseas? Isn' that a part of what is going wrong in America now, that a few gain vast wealth "creating jobs", then turn around and toss off the workers that helped build the company? Poverty is growing at the same time the top is growing wealthier, the income gap is growing. Didn't Saint Reagan desire that all boats should rise?


Fri, Oct 1, 2010 : 8:43 a.m.

Snyder claims that these were basically clerical errors and that they were quickly cleared up as soon as they became aware of them. That's fine. The total amount of unpaid taxes is only $14,265. If Rick Snyder, a millionaire, was trying to evade paying his taxes, it wouldn't have been such small potatoes as that. I actually believe him when he says that it was completely unintentional. Fine. So why is this a big deal? It's a big deal because Rick Snyder is running a campaign based on the fact that he's not a politician but, rather, a successful businessman who will be able to run the state because of his vast experience running businesses. That's fine, too. But when it becomes clear, as it now is, that he hasn't done a particularly good job at running these companies, then it becomes part of the overall discussion of his suitability for running the state of Michigan. It calls into question his hiring practices if he hires accountants that fail at their duties. It calls in to question his management style and effectiveness if his companies get into tax trouble. It calls into question his leadership ability. Rick Snyder doesn't get to point to his business acumen as a reason to vote for him and then turn around and ask us to overlook his mistakes and screw-ups. It's very reasonable for us to look at those failures and ask hard questions about his ability to run the state just like it's fair to ask about the fact that thousands of jobs were outsourced to Asia when he ran Gateway, a company that is now a Chinese company. A major airline executive once talked to his employees about the importance of the little things -- things like making sure the seatback tables are clean every time. Because, he said, if our customers see a coffee stain on the table they think to themselves, "If they can't get the little things right, why should I trust them to get the big things right, things like engine maintenance and luggage handling?" So these tax liens may have been due to "little" mistakes and not willful efforts at tax evasion. But they still are important in this campaign. Because if Rick Snyder can't get the little things right, why should we believe he'll get the big things right? Big things like getting the state of Michigan back on its feet and prosperous once again. It's a very fair question.


Fri, Oct 1, 2010 : 8:22 a.m.

@Atticus F. - If it were only that simple. Corporate taxes, and especially multi-state taxes are complex and almost always wrong. If you file in one state and pay taxes that comes off the other state's taxes and the taxes to the second state come off the first. Many rates (unemployment) are trailing rates, so the rates for the prior quarter are set later based on some factor and you have to adjust what you paid in a prior quarter. In many cases tax rates are set after the software you use is finished that lets you do your taxes. Then there is the review of your taxes and the decision that because you bought asset "A" in state "X" and use it in state "Y" that you can not claim it as a deduction in state "Y" and have to pay sales tax in state "Y" even though you paid sales tax in state "X" and state "X" will not refund the taxes paid there. On average it takes us 4 to 5 years to close the books on taxes from a prior year with the 11 states we have to pay taxes to. Our life is even more complex because we have employees in Canada. In most years the complexity of the taxes overwhelms our accountants. We end up hiring an accountant in each state to deal with the state taxes there. Right now depending which set of letters you believe we either owe or are owed several thousand dollars in at least 5 states. I cheer each time we close the books on a year. Add to that complexity we are shifting from a partnership to a LLC and that will have a whole new set of tax issues. The amounts that are stated are typical of a business in the 2 to 3 million dollar a year revenue for adjustments to the taxes, in my experience. The time frames are also typical. Rather than jumping on the tax payer, we need to fix the tax system. We have 2-4 drawer filing cabinets filled with tax paperwork, roughly 1 drawer for each year we have been in business.

Atticus F.

Fri, Oct 1, 2010 : 8:09 a.m.

sbbuilder, I'll break it down to it's simplest form...You declare a profit, the state sends you a tax bill. Then after several attempts to collect their money, they put a lein on your property. Whats so hard to decipher? I pay my taxes, $15,000/yr to be exact. Why shouldn't Snyder pay his taxes?

E. Manuel Goldstein

Thu, Sep 30, 2010 : 7:29 p.m.

Lets see: if I as an individual fail to pay my taxes - on time - I will most likely have to pay some kind of monetary penalty. And if its especially egregious, I, as an individual, would likely see some time in jail. Sure we all make mistakes of some kind, but for some millionaire who is running for Governor of Michigan, who is running solely on his "business acumen", to make such a mistake, really does not pass the sniff test. To those who are apologetically arguing that Nerdy McMilquetoast deserves a free pass for not handling all of his financial affairs in stellar fashion, I say EAT THE RICH!


Thu, Sep 30, 2010 : 5:12 p.m.

Atticus I didn't say anything about "giving Rick Snyder a 'pat on the back' after laying off 10,000 employees and then selling an American company to the Chinese." You did. What you also did say was "He's willing to do anything to make a buck... Including becoming a tax cheat." So, I'm going to call you on that one. You have convicted Mr Snyder based on a few lines in an on-line article. Is that enough evidence for you? If so, you set the bar very low indeed for evidence to convict. Again, I believe the REAL Mr Atticus Finch would howl with rage at your usurpation of his character.


Thu, Sep 30, 2010 : 3:39 p.m.

to 81Wolverine: I have been in business for 23 years, have always paid taxes and and never had the MESC, the state or the feds write me saying they didn't receive it or it was in escrow, etc. If taxes are paid, they are paid. The story says he did not remit Michigan withholding taxes from 2001 and California business taxes for 2008. The guy probably is really delinquent. I read plenty into this story, and because of that, I won't vote for Rick Snyder.


Thu, Sep 30, 2010 : 3:38 p.m.

I am not a big Snyder fan but this is not a huge amount of money and it is obvious that someone in his company messed up and didn't pay these bills on time. That being said, his business tax cuts don't set well with me. Maybe we need to streamline the business tax system, but it should not reduce business taxes. Michigan is having a big problem maintaining essential services like police, fire, and education but tax cuts are not the way to handle this.

michigan face

Thu, Sep 30, 2010 : 2:43 p.m.

"choosing none of the above" is not a solution. I am also concerned that the election is not one of honest debate and proposals. The governor race should definitely have included several debates with a live audience that is able to ask the questions and get the answers. Please don't give up - we must vote and with our minds, not our anger. We are all in the same boat here and I honestly believe the democratic party is still the best option to save us and protect us from special interest groups and big business control.


Thu, Sep 30, 2010 : 2:16 p.m.

I'm starting to get really concerned about the potential "leadership" that Michigan has a choice of electing. Lawsuits for messing with ticket sales figures in one election. Tax leins in another election. We need better people running for these positions than what we have now to choose from. Too bad we can't choose none of the above on election day.

Atticus F.

Thu, Sep 30, 2010 : 1:45 p.m.

sbbuilder, I'm not "jumping to conclusions"...Snyder's record speeks for itself. And somehow I doubt the "real Atticus" would be giving Rick Snyder a 'pat on the back' after laying off 10,000 employees and then selling an American company to the Chinese.

michigan face

Thu, Sep 30, 2010 : 1:28 p.m.

Oh what a surprise!!! Greedy rich people like Snyder don't care about details - like a measly few thousand dollars. He is more concerned with building his millions - laws be damned! He is a fraud and a joke. Definitely "business as usual" describes him well. Michigan needs a hard working governor who cares - Virg!!!


Thu, Sep 30, 2010 : 1:01 p.m.

Corporate taxes ARE a screwy thing. I agree with 81Wolverine. I've been audited for items three or more years in the past, to only find that some technicality wasn't met. I even hire an accountant to do the year end filing. The most I have had to pay is about $350 in taxes and interest, but the real pain is all the back and forth paperwork. I don't know the size of Avalon's corporation, but a few thousand here or there is chump change. Does that excuse the error? Of course not. But was there intentional fraud on the part of the Avalon? Was this more than an honest oversite? Do any of you detractors know the full story? You most certainly don't. But, you are chomping at the bit to act as judge and jury here, aren't you? "He's got to be guilty, dang it. He's some kind of money grabbing corporate Republican. Let's take him out and tar and feather him right this very minute." Sorry, but I am calling you guys on the carpet for this one, esp Atticus. My recollection of the REAL Atticus, is that he tried his darndest to get the jury not to jump to conclusions. Get all the facts first, then come to a conclusion.

Atticus F.

Thu, Sep 30, 2010 : 12:50 p.m.

MB111, it's corporate fat cats like Snyder that have caused the majority of job loss in this state, and country. The rich get richer, and the middle class collapse through unsustainable financial policy.


Thu, Sep 30, 2010 : 12:45 p.m.

As an independent voter both these candidates fall short of real Michigan leadership. In this economy we need someone who has worked with multi-million dollar budgets, the ability to negotiate and place a hard line with teacher and labor unions when necessary, have a respect for the natural resources Michigan needs to protect and the business acumen in cultivating a plethora of industries that will gradually displace the manufacturing sector while at the same time promote small farmers and a service industry that treats the individual worker with a sustainable income and benefits. Running a tech company during the tech boom is not enough and the mayor of a second Michigan tier city are not qualifications to run the entire state. As Michigan voters, we need to not accept the status quo but demand better with a write in vote, someone with the qualities of Lee Iacocca, Rahm Emanuel or perhaps Mitt Romney. I would hope other third party candidates might emerge.


Thu, Sep 30, 2010 : 12:44 p.m.

Atticus F. What sort of job creation has bernero been responsible for? oh yes, hiring people using the tax payers $, nevermind.

Gary Player

Thu, Sep 30, 2010 : 12:40 p.m.

I work in the accounting field. There are several reasons that might cause an issue, i.e. (1) a tax audit which the state does on companies every 3 or 4 years for the previous years since the last audit; (2) maybe the company did not update and use the correct rates timely thus have a shortage in payments. There could be any number of legitament reasons. There were 36 different companies and there was an issue at 2 of them..... out of how many filings? Now let's talk about the all the crooks that the LEFT hasn't denouced because of actual and acknowledged **personal** tax evasion, i.e. Charlie Rangle, Treasury Secretary Tim Geithner, etc.


Thu, Sep 30, 2010 : 12:37 p.m.

$14,265. Do you think Rick made the decision not to pay to save this amount of money? Get real. Some accountant or bookkeeper made the mistake. If you are going to base someone's ability on something this minor, you are in deep trouble. Do you think Bernero has never made any kind of financial mistake? Probably has wasted more than this amount as a public servant.

Atticus F.

Thu, Sep 30, 2010 : 12:36 p.m.

trepang, Snyder has a history of laying people off and hemorrhaging jobs.


Thu, Sep 30, 2010 : 12:23 p.m.

Clearly, Bernero doesn't understand how startup companies work...and probably how new busines development works. Some work well and some not so well - but they still employ people and people gain experience on resumes. When un-employed - that has huge value.


Thu, Sep 30, 2010 : 11:59 a.m.

If everyone paid what they actually owed, and there was no waste, abuse or needless spending by government we would be pretty close to living in a great society.


Thu, Sep 30, 2010 : 11:43 a.m.

I have to pay my taxes on time, and I expect the same from my political leaders. There is no excuse for having a tax lien placed against you. This is just another reason to vote Democrat in November.


Thu, Sep 30, 2010 : 11:38 a.m.

Hmm, interesting that Ricky Snyder's Venture capital firms are facing these tax liens. Sounds like someone wasn't doing the books properly? Can Michigan REALLY afford Rick now?

David Briegel

Thu, Sep 30, 2010 : 11:17 a.m.

only little people pay taxes.

Atticus F.

Thu, Sep 30, 2010 : 10:57 a.m.

This just shows that with Rick Snyder, it's all about money. He's willing to do anything to make a buck... Including becoming a tax cheat. I guess he needs all of the money he can though, since he's essentially trying to buy the election. He's already out spent Bernaro by 2-1.


Thu, Sep 30, 2010 : 10:50 a.m.

It is interesting the tax liens are on the same startup companies. As far as the claim by 81 wolverine that the story created by the other side to try and discredit Sndyer, the story was published in the Detroit News. That papers is known to be conservative and pro-Republican. The story was not created. It is a manner of public records.


Thu, Sep 30, 2010 : 10:21 a.m.

This is another NOTHING story created by the other side to try and discredit Snyder. I used to own a small business paying employee withholding taxes. We received a number of these notices from the state of Michigan, NOT because we didn't pay the taxes, but because of a bureaucratic flaw in the way the MESC accounts for the payments. One office would delay crediting our account for the taxes we paid and another would issue the late payment lien. Duh. EVERY time our accountant would have to call them and get it fixed. I'm guessing the State of California is probably equally incompetent as Michigan in accounting for the taxes. So, don't read too much into this story. Let's pay attention to issues that really matter pertaining to the candidates.