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REPORT NO. 21, VOLUME 45-- WEDNESDAY, FEBRUARY 1 2006 CUNNINGHAM NAMED HEAD OF D.L.E.G. Paula Cunningham, who had been the popular president of Lansing Community College, stepped down from that post on Wednesday and was immediately named by Governor Jennifer Granholm as the new director of the Department of Labor and Economic Growth. Ms. Granholm had been in discussions with Ms. Cunningham about the post for several weeks and the decision to name her was independent of the surprising controversy over disputes between she and the college's Board of Trustees that had surfaced in the capital city recently. At a press conference, Ms. Cunningham said, "I look forward to the opportunity to advance (Ms. Granholm's) agenda and to advance the state's agenda of economic growth. We look forward to moving the state forward and to connecting with higher education." Ms. Cunningham succeeds David Hollister at DLEG who will leave officially on Friday. Ironically, Mr. Hollister is going to run a Lansing-area development project that Ms. Cunningham was instrumental in starting along with Lansing Mayor Virg Bernero and Michigan State University President Lou Anna Simon. Mr. Hollister actually has left his post because of illness, and has cancelled a reception for department employees scheduled for Thursday. With Jim Epolito now running the Michigan Economic Development Corporation, Liz Boyd, Ms. Granholm's spokesperson, said the addition of Ms. Cunningham will make the department, "stronger on workforce development." The post is subject to Senate advice and consent, and Ari Adler, spokesperson for Senate Majority Leader Ken Sikkema (R-Wyoming) said the chamber will, "review her qualifications and experience with the same intensity we do of all nominees. We have no intentions of prejudging anyone." But the Senate will want to know if Ms. Cunningham, "has the qualifications to be the point person to bring jobs in the state." Among those questions was how Ms. Cunningham feels the department has handled economic development efforts. The appointment took many in the Capitol by surprise and reaction from business and labor groups was scarce. Chuck Hadden of the Michigan Manufacturers Association said it was an interesting move and he would adopt a "wait and see" attitude. Ms. Cunningham has served as president since 2000, but last fall a dispute began to develop between she and the college's Board of Trustees. The trustees took away some hiring authority and were critical of efforts to develop financial aid software. The disagreements were quiet until revealed late in January by the Lansing State Journal. On Wednesday, the paper published some nine letters on the issue, most supporting Ms. Cunningham. Among the support was a letter from Michigan Chamber of Commerce President Jim Barrett who said the board should stop interfering with Ms. Cunningham's job. He said her performance has been excellent. Another letter of support came from Lansing-area business executive and Republican activist Mary Ellen Sheets who called Ms. Cunningham, "highly respected." Ms. Cunningham's appointment was announced shortly after she resigned as the LCC president following a closed meeting with the board. Ms. Cunningham said she brings not only her time as a college president but also 25 years as a faculty member and college administrator as well as time as a business owner and appointments to various state positions, including the Cherry Commission on Higher Education and Economic Development. Ms. Cunningham also noted a number of accomplishments during her tenure at the college, including development of a master facilities plan that included the college's first administration building and creation of a West Campus and new extension centers in East Lansing and Clinton County. Ms. Cunningham said it was "yet to be determined" what role she would play in economic development versus that of Michigan Economic Development Corporation CEO James Epolito. But she said she looked forward to working with him. "He was the perfect choice for that position," she said. At the press conference, Ms. Cunningham said of the LCC controversy that she had offered to develop a plan to dissolve her contract back in September, but at the time the offer was rejected by board members. In recent weeks, she said board members approached her and asked her to develop a proposal. "It's hard to thrive in an environment that's not supportive," she said. But she said it was that same environment that put her in the market for a new job and left her open for this new post. "I would not have had my name in the hat had things been a little different," she said. Ms. Boyd said the governor had not played a role in urging either Ms. Cunningham to look at leaving her post or college board members to consider asking her to leave. "As soon as David Hollister said he wanted to step down, Paula Cunningham's name was at the top of the list," Ms. Boyd said. But she said it was not clear at that time whether Ms. Cunningham would be interested in or willing to take the job. "Perhaps it was divine intervention for the Granholm administration," she said of Ms. Cunningham's leaving the college. Ms. Cunningham is technically on a leave of absence from the college for the next year and will be paid her LCC salary during that time, as well as her salary for the directorship. "Considering I had a $1 million contract and this was a mutual release, I don't think one year salary is a problem," she said. Without the release from the board, her contract ran through 2009. She will begin her duties at DLEG sometime between mid-February and March 1. Until she comes into the office, DLEG Deputy Director Bob Swanson will oversee operations.