March 5, 2009 at 3:12 pm

Veto raises stakes on Cobo debate

Bribes, 'race card' cloud plans for center's future.

Mayor Kenneth Cockrel Jr. announces his veto Wednesday of the council's rejection of the Cobo expansion plan. (Ankur Dholakia The Detroit News)

DETROIT -- Mayor Kenneth Cockrel Jr. on Wednesday vetoed last week's City Council resolution rejecting the transfer of Detroit's Cobo Center to a regional authority that would oversee a $288 million expansion.

In announcing his veto, Cockrel blasted those who have made the debate over the future of Cobo about race. "It is wrong for anyone to play the race card just to promote a political position they happen to hold, and those who do so should be ashamed of themselves," he said.

City Council President Monica Conyers remained steadfast Wednesday in her opposition and said the council may fight Cockrel's veto in court.

While race has become an issue, regional leaders say the real debate is about financial accountability and taxation without representation. Also, concerns over allegations of corruption in the management of Cobo, home of the North American International Auto Show, and the bidding of contracts with preferences for Detroit-based companies simmer beneath the surface.

Two successive Cobo directors -- Lou Pavledes and Glenn Blanton -- pleaded guilty last year in federal court to criminal charges and admitted taking bribes from a contractor who provided electrical, janitorial, catering and retail services at the center. The contractor, Karl Kado, has been charged with filing false tax returns. And a federal investigation continues.

Kado got favored treatment at Cobo because of bribes he paid, Pavledes and Blanton admitted in plea agreements. Kado, a West Bloomfield businessman, also had an edge in competing for work at Cobo because his Metro Services Organization companies had headquarters in Detroit.

Annual maintenance and construction contracts at Cobo total close to $20 million and the awarding of those contracts, overseen by mayoral appointees, is heavily skewed to favor businesses based in Detroit and those that pledge to hire Detroit-based subcontractors.

In one successful proposal for electrical work at Cobo reviewed by The Detroit News, the winner scored about 30 percent higher than losing bidders because it was based in Detroit and planned to use Detroit subcontractors. Eight out of 10 businesses awarded Cobo construction contracts in 2007 and 2008 were headquartered in Detroit.

The corruption and Detroit preferences issues are unrelated, but both irk suburban leaders subject to a hotel-motel tax to help pay Cobo's bills.

"In order to get the public to support Cobo (Center) expansion or redevelopment, there has to be a real perception that everything is on the up and up and public officials are upholding the public interest," Warren Mayor James Fouts said Wednesday. "This is more than a hint of scandal. It sounds like there is an outright scandal."

The expansion plan -- rejected in a 5-3 City Council vote -- would create a five-member board to own and run the facility with appointees from the governor, Detroit and Wayne, Oakland and Macomb counties. The authority would be required to create an "ethics manual" and its members would have to file financial disclosures.

Oakland County Executive L. Brooks Patterson said his county has sent $166.4 million to the city of Detroit since a hotel tax to support Cobo was introduced in the late 1980s and would send another $592 million if the tax is extended to 2039, as planned.

"We're not going to tolerate preferences for Detroiters," based on those numbers, Patterson said. "Our people should be able to bid on that business."

Patterson described the corruption issues at Cobo as a "violation of trust" and said his appointee to the planned regional authority will be a sharp-eyed business executive who would help root out such practices.

Council President Conyers declined a request to talk in-depth about corruption at Cobo, but in a radio interview she said the problems are not recent. "That was all before I was here," said Conyers, who was elected to council in 2005.

Blanton was Cobo director from November 2004 until February 2007. Pavledes preceded Blanton.

Last week during a council hearing on the regional authority, she told a white Teamsters official that workers at the auto show didn't "look like me." On Wednesday, she said: "Everybody has played the race card but me. I've never said anything about race."

One reason cited by Conyers and other council members against the deal is the fear that Detroiters will be shut out of job opportunities. "People have told me they can't get jobs in the auto show," she said.

The proposed legislation for a regional authority would effectively ban local contracting preferences that did not apply equally to the tricounty area.

City Council President Monica Conyers says the veto may face a court ... (Brandy Baker / The Detroit News)