Federal grand jury opens investigation on Detroit demolition program

Federal grand jury opens investigation on Detroit demolition program

The investigation focuses on misappropriation of federal dollars.

June 16, 2017
CDR Staff
Demolition Legislation & Regulations
A federal grand jury has opened an investigation on Detroit Mayor Mike Duggan’s blighted home demolition program, a report by the Metro Times says. The program has received more than $250 million in federal funds.

The investigation is focusing on misappropriation of federal demolition dollars, the report says, and 30 contractors and city agencies have been subpoenaed to provide documents or testify as part of the investigation.

Detroit criminal defense attorney David Lee says a grand jury investigation may mean an U.S. attorney official believes there is criminal activity going on that could lead to an indictment. The target of the investigation is not known.

The demolition program is also being probed by the Special Inspector General for the Troubled Asset Relief fund (SIGTARP) and FBI over suspicious bidding practices and cost increases. According to the report, SIGTARP opened the investigation a year ago after hearing of an invitation-only meeting where four companies negotiated prices with the city for demolition work. After contract prices were set, they were the only companies that applied for and got the work.

The subpoenas call for communications between several contractors and Duggan’s office, the Detroit Building Authority, the Detroit Land Bank, the Detroit City Council, the Michigan State Housing Authority, Michigan Homeowners Assistance Nonprofit Housing Corp., Michigan Blight Elimination Team and more.

One subpoena sent to a contractor called for all financial records on completed work or work that was bid on under the federal Hardest Hit Fund, the report says. It also sought communications involving contractors Homrich Wrecking, ADR Consulting, MCM Management Corp., Bierlein Cos., Attwell and Atwell/DCR.

Lee says subpoenas can’t determine what case federal prosecutors may be trying to make. According to Duggan’s chief of staff, Alexis Wiley, the mayor’s office has been cooperating with officials during the investigations and plans to continue its cooperation.