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Dearborn Heights council, mayor clash over alleged misconduct

Sarah Rahal
The Detroit News

Dearborn Heights — City council passed a resolution earlier this week saying the Dearborn Heights mayor should cooperate with council members or be investigated for misconduct over his handling of a longstanding financial audit. 

The resolution, which passed 4-3, was brought before the council by its chair Tuesday after a heated public Zoom meeting.

The majority of the council said it was forced to take action, claiming Mayor Daniel Paletko did not comply with court orders, did not appoint corporate counsel and delayed a forensic audit of the city for more than a year. Paletko has a year left in his current term. 

Dearborn Heights City Council members and mayor during Sept. 8 Zoom meeting.

Members also hired an outside firm to begin investigating the process to remove Paletko from office should misconduct continue, but that's not the goal, said Council Chair Denise Malinowski-Maxwell.

"We don’t want to go to court, we don’t want to remove the mayor, we just want him to do his job," Malinowski-Maxwell told The Detroit News. "You can’t leave a city unprotected without a corporate counsel."

Paletko and the council have been at odds for nearly two years over the legality of the financial audit.

Council began the process of initiating a financial review in January 2019; however, Paletko obstructed the council at every turn, Malinowski-Maxwell said.

Last year, the council voted eight times on hiring an outside law firm to assist in the financial review and override the mayor’s vetoes in pursuit of the review. 

Dearborn Heights Mayor Daniel Paletko during Tuesday's meeting.

In September 2019, Judge Muriel Hughes of Wayne Circuit Court granted the council’s request and ordered Paletko to sign off on the new law firm; however, the council said nothing has changed in the past year.

“The Dearborn Heights City Council is committed to performing the financial review of City operations and the Mayor’s failure to sign the retainer agreement is continuing to interfere with that investigation… The Mayor’s violation of the court order… constitutes misconduct in office," the resolution states.

In return, the council sued the mayor and the Michigan Court of Appeals agreed that the council had the authority to set aside $35,000 in the city's budget to hire legal services. Paletko was also issued a subpoena for records of the city audit in July. Council members claim they were not provided with the documents and that Plante Moran did not hand over the documents to the firm hired by the council for review.

Paletko denied any wrongdoing, saying the situation is a "political witch hunt" led by Malinowski-Maxwell, who wants his job.

"Instead of trying to pick unnecessary fights, as the council chair would like to do with this resolution, we should all be working to find common ground … without wasting money on attorney fees. I have yet to be contacted by the attorney, the accountant or anyone else," Paletko said. "You want to be mayor and instead of using past experience or competence, you are running on attacks."

In May, the council did not reappoint corporate counsel Gary Miotke, per Paletko's recommendation. The motion was brought before the council to reappoint Miotke, but did not receive a second.

"I am simply confused," Paletko said to Council during the Zoom meeting. "You took no action. The motion (to reappoint Miotke) wasn't seconded and you moved on. If I had gotten some kind of response, I would have acted accordingly."

Emails provided to The News show Malinowski-Maxwell informed the mayor before the COVID-19 pandemic that there were concerns about reappointing Miotke.

Dearborn Heights City Council Chair Denise Malinowski-Maxwell

"That was clearly true when his appointment nomination did not even receive a second," she said. "But here we are, more than four months later, without any new names to consider. Fortunately, the city relies upon a few outside counsel firms to assist us during this interim period."

Malinowski-Maxwell said the mayor has not brought forth anyone to replace Miotke. "As of March, (Miotke) is no longer corporate counsel, and it is a crime to impersonate an elected official."

The city charter states that misconduct in office is grounds to remove an elected official, but Paletko said council has no authority to do so.

Under Michigan law, the governor has the authority to remove elected officials after receiving sufficient evidence that an official has been guilty of misconduct, willful neglect of duty, extortion, drunkenness or has been convicted of a felony.

Before being appointed mayor, Paletko retired from Ford Motor Co., where he was a financial manager, and served on Dearborn Heights City Council and in the Michigan House of Representatives.

"I'm being vilified," Paletko told The News. "I'm constantly being attacked and I'm very concerned no one from the city is controlling this financial review. Consultants are running the review without any oversight."

Not the first dispute

Councilman Ray Muscat said the issues go further than just the financial audit and that they’ve been battling with the mayor on numerous issues for years.

“We were in a fight to simply mark the city cars; we can’t have this no more," Muscat said. "A weak council doesn’t mean we have no powers. One time, he was supposed to sign a contract for a new ice arena. We had a big fight at a city council meeting about him signing it, then he finally agreed after he said he didn’t even know where it was at.

"To me, it’s a battle all the time. I think the resolution stands for more than a forensic audit but for a lot of things that have gone on for five or six years. If this is the way we have to show force, so be it."

Dearborn Heights City Council.

Council members told The News they have been given photographs of city-owned vehicles outside city limits being used for personal reasons. They said the mayor has held up more than a dozen passed resolutions by not signing them.

“We’ve already had 10 vetoes on resolutions," Malinowski-Maxwell said. "We reduced water rates by 10%, the council passed it almost two years ago and it never happened because he didn't sign it. We give raises to city employees, the mayor decides he doesn’t like them so he doesn’t give them a raise."

Dearborn Heights Mayor Daniel Paletko.

As chief executive, Paletko said it is his duty to ensure the city operates under budget and that $100,000 has already been spent on auditing fees.

"I believe this review will cost the city an exorbitant amount of money and has already," he said to the council. "Stating that your body needs its own attorney to represent the members is suspect in itself as it begs the question as to how your 'needs' defer from what’s best for the city."

The council divide

Councilmen Bill Bazzi, Dave Abdallah and Robert Constan voted against the resolution, saying they do not agree with the accusations of misconduct.

Abdallah confronted his colleagues Tuesday, saying, "we're almost acting like kids," adding that "back-and-forth resolutions and vetoing is getting the city nowhere."

Councilmen Dave Abdallah voted against the resolution saying they do not agree with the accusation of misconduct.

"To right away state someone that somebody has misconduct in office and want to remove them from office are not good words to move negotiations forward," he said. "We need to sit down together, work it out, and come to some sort of compromise and move forward."

Lisa Hicks Clayton, a member of the council since 2012, said she’s disappointed that it has come to this point but agrees with the resolution.

“The council, by majority vote, approved the resolution to have the forensic audit done and here we are a year and a half later … I’ve lost count of the vetoes," she said. "Cooperating is a two-way street."

Bazzi said the audit was not just about uncovering wrongdoing, but for the council to be better stewards for residents, which requires the cooperation of the mayor.

Councilmen Bill Bazzi voted against the resolution saying they do not agree with the accusation of misconduct.

"As long as the mayor complies with the financial audit and recommends an alternate corporate counsel, the city council will not need to initiate further action on this matter,” Bazzi said. "The two items should have been a seamless process. At this point, after months of requests from council members along with legal actions, we need to move forward. We’re in the middle of the pandemic right now and with many challenges before us. It is in the best interest for us to work together to prevent chaos."

Twitter: @SarahRahal_