Duggan: Mayor’s office not questioned in jury probe

Christine Ferretti, and Robert Snell

Detroit — Mayor Mike Duggan declared Wednesday that nobody from his office has been questioned or subpoenaed in regards to a federal grand jury evaluation of the city’s demolition program.

The mayor added he’s hoping for a speedy conclusion to the matter, and if people did wrong, they should be held accountable.

Duggan, during a public appearance in northwest Detroit on Wednesday, briefly addressed the investigation a day after The Detroit News learned the grand jury was empaneled to focus on the blight fighting program and whether federal money was misappropriated while Detroit spent almost $200 million to demolish homes after the city’s bankruptcy.

The effort has been under scrutiny and the focus of several investigations and reviews in the wake of concern over rising costs and bidding in fall 2015.

“I hope they’ll move quickly because what we want is if somebody did something wrong they should be charged. If nobody broke the law, they should be cleared as soon as possible,” Duggan told reporters.

“I hope they resolve it quickly, and we’ll continue to cooperate in any way we can to speed the process.”

As many as 30 contractors and city agencies are believed to have been subpoenaed to testify or provide documents regarding the program, according to sources familiar with the investigation and subpoenas reviewed by The News.

The target of the investigation is unclear.

The mayor stressed Wednesday his administration has been “completely open from the beginning.”

The grand jury is weighing potential violations of federal wire fraud and antitrust laws that prevent bid-rigging and unfair competition for federal funds, according to a source familiar with the investigation.

Detroit has spent almost $200 million in mostly federal funds earmarked to help cities demolish thousands of homes hardest hit by the Great Recession. The city has taken down more than 11,670 under the program.

The grand jury investigation has been underway for approximately one month and investigators have sent contractors subpoenas demanding they provide copies of communications with various city agencies and Duggan’s office, according to a subpoena obtained by The News.

The program also has been under investigation by the FBI and Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP.

SIGTARP has said it does not publicly confirm or deny the existence of investigations. But Christy Goldsmith Romero acknowledged the probe in court filings last year. SIGTARP spokesman Rob Sholars declined to comment on Wednesday.

The U.S. Attorney’s Office has declined comment.

Duggan, a former prosecutor, said the U.S. Attorney’s Office is doing what it’s supposed to do. The reason for a grand jury, he said, is to determine whether a crime has been committed.

“What you are seeing are issues that may or may not have occurred in 2014,” said Duggan on Wednesday, adding U.S. Treasury recently released another $130 million for the program and it’s “moving full speed ahead.”

At issue during the demolition program’s history is a controversial 2014 set-price pilot program for bulk demolitions that emerged after city officials met with a group of contractors.

Three of the four local contractors participating in negotiations — Adamo Group, Homrich and MCM — were the sole bidders after the project was publicly offered. They were awarded the work.

Duggan has said the move was designed to attract firms able to handle big bundles of demolitions as the city moved with urgency to raze homes and meet a deadline to draw down federal dollars earmarked for the program.

The mayor on Wednesday declined to say if he believes contractors are targets in the probe.

“You need to draw your own conclusions,” he told reporters. “I have a pretty good idea of what’s going on, but it’s not appropriate for me to talk about it.”

The federal subpoena sought communications involving several contractors, including: Homrich, ADR Consulting, MCM Management Corp., Bierlein Companies, Atwell and Atwell/DCR.

Homrich, ADR, MCM and Bierlein have not returned messages seeking comment. An attorney for Adamo could not be reached.

Atwell on Wednesday said it never had a contract with the city or the land bank, is not a demolition contractor and didn’t provide any demolition services in Detroit. The company did receive a subpoena some months ago and responded.