Macomb commissioners back audit of prosecutor's spending

Mount Clemens — The Macomb County Board of Commissioners' finance committee voted unanimously Wednesday in favor of authorizing a forensic audit of county Prosecutor Eric Smith's asset forfeiture accounts.

By a 13-0 vote, members supported a resolution to pay $100,000 out of the general fund to review all financial transactions stemming from the forfeiture accounts since 2012 in response to questions about whether proceeds were used for inappropriate expenditures. A final vote by the full board is needed to appropriate the money for the audit, which is expected Thursday.

Matters that may violate county or state statutes can be relayed to the appropriate body, “in this case the Attorney General,” board attorney Peter Webster told commissioners.

Before the vote, some citizens implored the board to act.

“I ask you as trustees of the county to authorize such an audit,” Timothy Barkovic of Harrison Township told the board during public comments, saying he believed there had been “suspicious transactions and financial improprieties …”

Another resident, Kevin Brown of Ray Township, described the controversial accounts as “a black mark on the county.”

Questions over the prosecutor office's spending practices were raised last month by Jared Maynard, the former chairman of the Macomb County Republican Party, who sued the county to obtain bank records for accounts Smith’s office set up for funds from forfeitures and bad checks.

A Detroit News review of hundreds of checks that have passed through the account in the past two years indicated that many sizable amounts were made out to various police agencies in Macomb County that are supposed to share in forfeiture funds related to arrests in their communities.

The accounts, which reportedly have passed about $1.8 million in transactions since 2012, consist of forfeitures made from drug dealers, drunken drivers and bad check cases.

Under state law, the seizures are lawful but the proceeds are supposed to be used for law enforcement efforts that have been approved by the county treasurer and the county board.

According to critics, Smith has bypassed those elected offices and instead, spent the funds at his discretion. While the lion’s share of funds have been given to Macomb County police agencies, others have been paid to nonprofit groups, used to purchase office furniture, and even underwrite birthday, retirement and holiday parties.

“There are no receipts for many of the checks that have been written — the accounts have been his own personal slush fund,” said attorney Frank Cusumano, who filed a Freedom of Information lawsuit with the county to obtain bank records.

The forensic audit will seek receipts and documents that may or may not support expenditures, Commissioner Leon Drolet said.

“Some of these expenditure may very well be justified but we have no way of knowing without proper accounting of them,” said Drolet, who noted commissioners who have met privately with Smith and his staff in recent weeks have been less than satisfied with some of their explanations.

Smith was not at the meeting and unavailable for comment, an aide said. He and his staff have repeatedly insisted they have followed the law, reported the accounts to the state and have never been subject to an audit but would welcome one.

In a Facebook post last month, Smith defended his office's handling of forfeiture funds.

"These lawful funds, paid for by repeat drunk drivers and convicted drug dealers, are used to combat crime and keep our community safe," Smith said. "And I am very proud of that statement. Furthermore, no tax revenue of any kind is used in the funding of these accounts."

Drolet said many of the checks from the funds were written to Visa and American Express credit card accounts, which he said was “highly unusual.”

“Two $1,000 checks were written to the Chippewa Valley High School yearbook,” said Drolet. “The books carry a half-page ad, ‘Go Big Reds,’ signed by ‘Macomb County Prosecutor Eric Smith, grad of 1984.’”

“The Big Reds is a nickname for the school’s students,” said Drolet. “When we asked for an explanation on what law enforcement efforts the donations were intended for, one of Smith’s assistants gave us a copy of an undated one-page letter in which Smith reminds students not to drink and drive or use drugs. The letter concludes  with “You should be proud to be graduating from Fraser High.

“The letter had nothing to do with the Chippewa Valley yearbooks and the reference on it was to a completely different high school.”

Another 2012 check, for $5,000, was made out to the Beacon Tree Volunteers, a volunteer parent group at Beacon Tree Elementary where Smith’s children were enrolled, Drolet said.

“Politicians donate money to such groups and organizations all the time because they are also people who support them (with votes),” Drolet said. “But they do so with their own personal, private funds — not public monies earmarked for specific purposes.”

Large expenditures are particularly troubling, Drolet said, citing $160,000 paid to Weber Security Company. There is no record of any contract with the company and Drolet has requested an invoice to see what he funds were used for by Smith.

Smith was not at the Wednesday meeting and unavailable for comment, an aide said. He and his staff have repeatedly insisted they have followed the law, reported the accounts to the state and have never been subject to an audit but would welcome one.

Macomb County Corporation Counsel John Schapka told The News in a recent interview there are questions about the accounts that need to be resolved.

"All expenditures of county money require approval by the Board (of Commissioners)," said Schapka. "The board does so through its annual appropriation ordinance, which establishes the county's budget. The ordinance is broken down on a department-by-department basis, and within each departmental budget further appropriated to specific purposes."

Under state law, drug forfeiture proceeds "shall be distributed by the court having jurisdiction over the forfeiture proceedings to the treasurer having budgetary authority over the seizing agency," Schapka said.

"Only those organizations whose core reason for being is to (1) assist law enforcement with drug-related criminal investigations, and (2) obtaining information for solving crimes" may receive such funds, Schapka said. "Any other use is unlawful."

Chris Peterson, of UHY Advisors, which will conduct the audit, said it could take 45 to 90 days to complete, depending upon how difficult it is to obtain supporting documents or to conduct interviews.

mmartindale@detroitnews.com

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