Demo subpoena can stay secret for now, judge says

Christine Ferretti
The Detroit News

Detroit — A Wayne County Circuit judge on Thursday ruled the Detroit Land Bank Authority can keep secret — for now — a subpoena it received from federal inspectors conducting a criminal investigation into Detroit’s demolition program.

In his decision, Judge David Allen said while he’s giving federal investigators the “benefit of the doubt” for now, he made clear to legal representatives for the land bank and United States government that the document is ultimately “the public’s business.”

“This could go on for a long time... eventually it is the people’s business and the people’s document,” Allen said. “How long do you think I can consider letting you sit on it? You guys could take two or three years.”

The judge’s decision follows a separate hearing earlier this month in which Allen was given a sealed copy of the subpoena along with a federal “declaration of harm” outlining the concerns over its release. After his Thursday ruling, he gave the single-sealed copy back to federal attorneys.

The court, he added, intends to revisit the matter in 90 days.

The battle stems from the efforts of a government watchdog group, headed by convicted felon Robert Davis. The group asked the court to compel the release of the document after the land bank this summer turned down a Freedom of Information Act request Davis filed to obtain copies of subpoenas received by the land bank, its attorneys, contractors and others from the FBI and Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, about Detroit demolition contracts or its program.

In its denial, the land bank cited law enforcement and personal privacy exemptions in the state’s FOIA rules. The land bank on Thursday reiterated its cooperation with federal inspectors.

“The Detroit Land Bank Authority has pledged to fully cooperate with SIGTARP, including their request to keep the contents of the subpoena private,” land bank spokesman Craig Fahle said in statement provided to The News. “We will continue to fully cooperate.”

Davis’ attorney, Andrew Paterson, argues the subpoena cannot be withheld because it is a public document. On Thursday, he said there’s no basis under Michigan FOIA to exempt a public document, such as a subpoena.

“It’s a public document; the public ought to have a right to see it,” he told Allen.

Davis said after the hearing that he’s pleased with the judge’s take on the matter.

“I applaud Judge Allen for acknowledging the documents should be public...,” Davis said. “It’s quite clear that he said on the record it’s the people’s business.”

While it’s not a party to the lawsuit, the federal government has weighed in the battle in court filings, confirming its probe and arguing it has a direct interest in preventing the public release of the subpoena. Doing so, federal authorities contend, would interfere with the ongoing investigation.

Officials for the U.S. Attorney’s office, Department of Justice and SIGTARP also appeared in court Thursday to stress that the release would harm the investigation.

In a declaration filed this month in Wayne County Circuit Court, Christy Goldsmith Romero, with SIGTARP, confirmed the agency issued an administrative subpoena to the land bank on May 9.

In the court filing, Romero wrote release of the subpoena “further identifies those individuals and entities who would be providing information to the federal government in a criminal investigation.” Additionally, it would interfere with the SIGTARP investigation by “revealing the focus, including the evidence sought and/or transactions being investigated and scope of the investigation.”

The decision comes weeks after the resignation of Detroit Building Authority’s deputy director, Jim Wright, who oversaw the city’s massive blight-removal program.

The Duggan administration program came under scrutiny last fall amid concerns over soaring costs and bidding practices. Detroit officials have defended the demolition program, which has brought down more than 10,500 blighted homes since 2014, and say they are cooperating fully with all investigations.

In April, Detroit’s auditor general confirmed his office had received a subpoena from SIGTARP after it released preliminary findings from an audit into the city’s demolition activities. The audit, requested by Detroit’s City Council, flagged potential conflicts of interest between the city and executive leadership of the city’s building authority.

The April report criticized David Manardo, then-director of the Detroit Building Authority, who also holds office as Detroit’s group executive for operations. Tyrone Clifton took over in May as head of the building authority.

In May, the FBI’s Detroit office acknowledged it’s investigating the program. The city’s Office of Inspector General is also conducting a review.

Last month, one of the city’s largest demolition contractors, Adamo Group, confirmed it received and fully complied with a subpoena seeking documents related to its contract with the Land Bank Authority for the federal Hardest Hit Blight Elimination Program.