5 more Michigan State football players arraigned; lawyers, judge spar over bond conditions

Republican Party chair calls on AG's office to probe Detroit grants office

Christine Ferretti
The Detroit News
Laura Cox

The state's Republican Party chairwoman is pointing to "serious allegations of impropriety" in her call Tuesday for the Michigan Attorney General's Office to investigate Detroit's grants office and its leader.

Laura Cox, in a released statement, noted allegations revealed in a Thursday lawsuit involving the city's Office of Development and Grants and Ryan Friedrichs, the office's chief development officer, who also is the husband of Democratic Secretary of State Jocelyn Benson.

“The allegations leveled against Ryan Friedrichs and the Detroit Office of Development and Grants are extremely troubling and warrant a full investigation by the Michigan Attorney General’s office,” Cox said in a released statement. 

In a whistleblower lawsuit filed Thursday in Wayne County Circuit Court, ex-Detroit employee Kennedy Shannon contends she placed on administrative leave and ultimately terminated after raising concern over the city's Motor City Match program, a federally funded effort designed to aid small businesses.

Meantime, Democratic Attorney General Dana Nessel's Office said last week that it's reviewing allegations that two city of Detroit employees were directed to delete emails related to Make Your Date, a nonprofit dedicated to premature births. One of the complaints was filed by Shannon.

The state's review comes amid a probe launched in April by Detroit Inspector General Ellen Ha to determine whether Detroit Mayor Mike Duggan, also a Democrat, and city officials potentially "abused their authority" by providing preferential treatment to the program run by Wayne State University. The investigation was sparked by a Detroit Free Press report that Make Your Date received $358,000 in city grants and benefited from a fundraising campaign that a city official led at the mayor’s request. 

"Emails were deleted and employees were fired. The Attorney General’s office must get to the bottom of the allegations involving the Motor City Match Program, the city’s involvement with Make Your Date, and the attempt by the Detroit Office of Development and Grants to delete emails sought through correct legal recourse," Cox said. "Will the Attorney General’s office do their duty or will Attorney General Nessel’s friendship with Jocelyn Benson allow this potential cover-up to avoid scrutiny?”

In response, Nessel spokeswoman, Kelly Rossman-McKinney, said the office is actively reviewing the complaints it received involving deleted emails. 

"Friendship or not, no one is above the law," she said.

Secretary of State spokesman Shawn Starkey also responded to Cox's comments, saying: “This is nothing more than the shamelessly opportunistic ramblings of a political hack.”

Shannon's lawsuit contends that she informed Katerli Bounds, the city's director of grants, and Friedrichs that there were "major compliance and HUD regulation issues" with the match program and that the city "should not make any more payments to this organization."

The lawsuit contends that she was told by Bounds that refusing to sign off on packets for the match program was "insubordination" and could result in termination.

In response, the city provided The Detroit News with a copy of a March email from Friedrichs sent to Bounds and Shannon following the meeting.

The email noted "takeaways" arrived at from the discussion, including that "staff members are supported in their ability to make a final decision on their sign-off on a packet." 

Shannon was suspended for 30 days without pay on May 1. She was terminated May 23. 

Duggan spokesman John Roach told The News on Tuesday that the city "strongly believes" the allegations in Shannon's lawsuit are false and "we are vigorously contesting that case in court."

"Injecting partisan politics into this matter isn't going to contribute to resolving the legal issues," he said. 

Detroit Corporation Counsel Lawrence Garcia has claimed Shannon's dismissal was tied to concerns involving her time cards. Her concerns about the match program, he said, were "welcomed" and used to improve the system. 

With respect to the emails, Garcia has said that Friedrichs and Detroit's Chief Financial Officer David Massaron learned of the "possibility of deleted or missing emails" in May and moved quickly to resurrect them and turn them over to the inspector general. 

Garcia has declined to provide further details, citing Ha's ongoing investigation. 

Shannon, in the filing, said she also flagged Detroit's inspector general about concerns involving Motor City Match and others tied to the Make Your Date.

On Tuesday, Shannon said Friedrichs and other city staff should welcome the review. 

"If Ryan and his office haven't done anything wrong and they are of the highest integrity as they claim, then they should welcome this investigation and the result of the OIG investigation as well," she said.