GOP candidate John James’ companies hit with tax liens, got tax breaks for jobs they didn't create

The Michigan Senate candidate touted his family business at the Republican National Convention

By Igor Derysh

Senior News Editor

Published August 28, 2020 3:46PM (EDT)

John James, Michigan GOP Senate candidate (Bill Pugliano/Getty Images)
John James, Michigan GOP Senate candidate (Bill Pugliano/Getty Images)

Companies owned by Michigan Republican Senate candidate John James have a history with tax liens in multiple states, while another got tax breaks for jobs it did not create, the Detroit Metro Times reports. 

James has worked at James Group International, which was founded by his father, since 2012 as its director of operations, and became its president in 2014. The company owns subsidiaries like Renaissance Global Logistics and Magnolia Automotive Services.

In 2014, James Group International owed $10,439 in state taxes to Mississippi, according to a lien recorded in Madison County that was reviewed by Salon. The lien was released about three months later, according to records.

The Indiana Department of Revenue also filed two tax liens against Magnolia Automotive Services, which is part of James Group International and is run by James' brother Lorron James, last year. One lien was for $6,451 and another was for $396, according to Indiana court records reviewed by Salon. Both liens have since been resolved.

The James campaign told Salon that the $6,451 lien was produced due to a clerical error and was resolved, but provided no documentation to corroborate the claim. The campaign said the company did not receive a record of the second lien but would resolve it as necessary.

James, whose campaign has gotten a sizable financial boost from the family of Education Secretary Betsy DeVos and Postmaster General Louis DeJoy, touted his family's company during a brief pre-taped appearance at the Republican National Convention this week when he shared his family's journey "from slave to share cropper, from mason to entrepreneur, to the door now of the U.S. Senate."

James, who trails first-term incumbent Sen. Gary Peters, D-Mich., in most recent polls, has invoked his business career since his first national television interview with "Fox & Friends," where host Ainsley Earhardt described him as the possible "future of the GOP."

"I got out of the military and I joined my family business, a small automotive logistics company in Detroit, and grew the company from $35 million to $137 million in revenue and added 100 jobs in Michigan and east of the Mississippi," James said at the time.

The story of the Iraq War helicopter pilot-turned-entrepreneur drew the attention of President Donald Trump, who has twice endorsed James. "He will be a star," Trump declared.

Another company with a history of tax liens, Motor City Express, has been reported by multiple news outlets as being part of James Group International, which the James campaign says is not the case. Salon reviewed tax liens filed against Motor City Express in Michigan's Wayne County for $6,732 in 2012 and in Indiana for $253 that same year. The James campaign said that the company was sold in 2011 but did not provide any documentation, nor was Salon able to find a publicly available record of a sale. Asked who owns the company now, campaign spokeswoman Abby Walls replied, "not John James."

"John James' family business is a good community citizen that pays its taxes, works to provide good jobs with quality healthcare, and support our Michigan-made manufacturing," Walls said in a written statement. "Through the company, John and his family have been community leaders noted for their charitable and philanthropic work in the Detroit community. They did this while Sen. Gary Peters sat in Washington and voted to raise taxes 106 times. Michigan needs more business people with the hands-on knowledge and skills it will take to help our country recover, not more failing career politicians."

The statement came after documents published by the Detroit Metro Times earlier this week showed that Renaissance Global Logistics, where James serves as chief executive officer, received $1.75 million in tax breaks from the Michigan Economic Development Corporation (MEDC) on the condition that the company create 108 new jobs prior to James becoming CEO. Instead, the company has lost more than 30 jobs after he took over, the outlet reported, adding that the "MEDC revoked its tax-exempt status after it failed to create the jobs it promised."

The report added that it does not appear that there was a "clawback" clause that would have required the company to pay back the taxes.

James became CEO of the company in 2015, the year of the jobs creation deadline. In February 2016, the MEDC warned that the company had 90 days to meet the condition or have its tax status revoked. The company sought an extension until the end of 2017, citing the auto industry's struggles. But the MEDC said in a 2017 memo that the company "failed to create one-hundred eight (108) new jobs by December 31, 2015 as required per the agreement."

Crain's Detroit later reported that the company failed to create a singe job in Michigan during James' tenure between 2012 and 2017.

The report appears to contradict claims made by James during his previous unsuccessful 2018 Senate bid.

"Send a job creator to Washington who understands that working-Michiganders are looking for a fair hand up, not a free handout," he tweeted in 2017.

The campaign did not comment on the report.

Renaissance Global Logistics later received a Paycheck Protection Program loan worth between $1 million and $2 million, despite James' vilifying government "handouts" on the campaign trail.

"We believe at West Point that you don't lie, cheat, steal, or tolerate those who do, which is why I've gotten President Trump's endorsement," he told Fox News in 2018. "I've never taken a handout a day in my life."

(Disclosure: Salon received a PPP loan to keep our staff and independent journalism at 100%.)

By Igor Derysh

Igor Derysh is Salon's senior news editor. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

MORE FROM Igor Derysh

Related Topics ------------------------------------------

Betsy Devos Donald Trump Furthering Gary Peters John James Politics Reporting