Update, 7:35 a.m. Friday: A state audit of Detroit’s blight demolition initiative suspected possible bid rigging last year involving demolition contracts, but a state official tells Joe Guillen of the Detroit Free Press that it ultimately "didn't see any bid rigging."
Mary Townley, a state housing official who was at a meeting last year where bid rigging was discussed as a possibility, now clarifies:
"It was probably brought up not knowing what we were dealing with until we further completed, or further got into our analysis."
Update, 10:40 p.m. Thursday: Erica Ward Gerson, who heads the Land Bank Authority board, issues a statement to Deadline Detroit in response to the WDIV story:
MSHDA (Michigan State Housing Development Authority) had a responsibility to conduct a very thorough audit and consider every possibility, which it clearly did. At the end of an exhaustive audit process that lasted several months, MSHDA did not find any bid rigging.
We worked closely with the State to implement a series of new internal controls. Since those improvements were put in place, MSHDA and the Treasury Department have released another $130 million to continue the demolition program and MSHDA has fully released us from any claims regarding the bid process.
Original article, Thursday night:
We know from media coverage that the FBI is looking into possible bid rigging involving the Detroit's demolition program.
What we didn't know until know is how the feds entered the picture. Kevin Dietz of WDIV reports:
New documents have surfaced that uncover a big secret. The state of Michigan went to the FBI in 2016 to report possible bid rigging and over-billing by the Detroit Land Bank.
The new documents are part of a discovery in a lawsuit, and they show that the state agency in charge of distributing millions of dollars for demolition conducted an audit, and they didn't like what they saw, so they took it to the FBI.
The documents surfaced as a result of community activist Robert Davis' suit to get details of the state agency dolling out funds that was conducting an audit.
Mayor Mike Duggan (Deadline Detroit photo)
WDIV posts state memo excerpts:
"Update on audit: Have been digging into the Detroit Building Authority and the findings are not very good. Possible bid rigging going on. Funding has been immediately suspended.
"Mayor [Mike] Duggan has been advised that all funding has been pulled and we are in the process of figuring out who may be involved."
To date, no one tied to city hall has been charged.
During this year's mayoral race, challenger Coleman A. Young II accused Duggan of rigging bids, which the mayor denied.
