Selweski: Macomb Prosecutor Eric Smith's ‘Slush Fund’ Spending May Have Been Illegal

February 19, 2019, 10:00 PM by  Chad Selweski

Macomb County Prosecutor Eric Smith

Macomb County Prosecutor Eric Smith is under a spotlight, facing accusations of violating state law by spending hundreds of thousands of county dollars on unspecified credit card purchases, cell phone bills, satellite TV service, furniture and refrigerators for the prosecutor’s staff -- and lavish office parties.

In addition, hundreds of pages of financial documents recently made public show that Smith donated about $100,000 designated for crime-fighting activities to churches, schools and charities.

Critics say he has misused the funds to boost his public reputation by handing out large checks to community groups in a strategic effort to help him win re-election every four years. 

All the money was supposed to be used for law enforcement purposes since it was derived through the so-called asset forfeiture process, which allows police and prosecutors to seize cash and property from those arrested on drug offenses, and cars from repeat drunken driving offenders. The secretive spending accounts hold up to $300,000 at a time.

On Wednesday morning, the county Board of Commissioners will meet to consider proceeding with a detailed, forensic audit of forfeiture funds to scrutinize nearly $2 million spent over the past several years. These “off the books” funds have not been audited in the past 13 years. Yet, the prosecutor’s office says that a deep dive into the books that goes beyond two years would be “unnecessary and unreasonable,” given that some financial details may no longer be available.

If a multi-year county audit finds numerous improprieties, the matter could be sent to Attorney General Dana Nessel for an investigation into possible violations of state law.

Can the prosecutor survive?

One commissioner said privately: “I will be shocked if he survives this. I’m appalled at what I’m seeing.”

County Commissioner Leon Drolet

Another commissioner, Leon Drolet, who has delved deep into the financial details, said he believes Smith has “made a mockery” of spending procedures that require disclosure to the public.

“There certainly appears to be violations of the law,” said Drolet, a Macomb Township Republican. “A good portion of it … has the appearance of a slush fund. I question the public value of a lot of these expenditures.”

First elected in 2004, Smith, a Democrat, serves as one of the most prominent county prosecutors in the state. He was urged to run for Attorney General last year by some key Democratic strategists but he declined. His late father was the longtime police chief for Clinton Township, the largest township in Michigan, and his brother, Bob Smith, is chairman of the county Board of Commissioners.

Smith rarely talks to the press unless he is before the TV news cameras trumpeting a major conviction secured in court by his office. He could not be reached for comment by Deadline Detroit.

Over the past few weeks, the prosecutor has brushed aside his critics, claiming that he is “proud” of the way he has handled forfeiture money and is confident that his interpretation of the law will prevail.

The budding scandal emerged after Smith waged an aggressive court fight to block a Freedom of Information Act (FOIA) request from the public that sought the release of documentation about forfeiture fund transactions. He lost that battle in January.

Secrecy fight lost

In recent days, Smith, the county’s chief law enforcement officer, has tried to spin the controversy as a partisan political attack by Republicans. But County Executive Mark Hackel, a fellow Democrat and one of Smith’s closest political allies for many years, has very publicly raised concerns about “questionable” expenses paid with forfeiture money. In a recent radio interview, Hackel said Smith’s lack of transparency is troubling.

“Those funds should have been on the books all along,” he told WJR.

In addition, the chair of the county board’s Finance/Audit/Budget Committee who is pushing for a detailed audit is a Democrat, Commissioner Veronica Klinefelt of Eastpointe.

Since Smith took office, officials say the spending of these funds has never followed the required budgeting process. Smith oversaw sole discretion of the funds, never depositing them with the county treasurer and never seeking approval of individual appropriations from the county board. In November, after negotiations overseen by former Attorney General Bill Schuette’s office, Smith agreed to turn over nearly $250,000 in funds to the county treasurer.

Initially, that decision seemed to diffuse the issue. But Smith is now on the hot seat after a lengthy memo two weeks ago from the county’s chief legal counsel, John Schapka.

Schapka warned that, essentially, forfeiture fund donations to churches and charities are limited to expenditures that benefit “law enforcement purposes.” More specifically, another section of state law says that forfeiture money can only be disbursed to “nonprofit organizations whose primary activity is to assist law enforcement agencies with drug-related criminal investigations and obtaining information for solving crimes.”

Josh Van Laan, one of Smith’s chief deputies, maintains that it is state money involved, not Macomb County money, so Schapka’s concerns don't apply.

Half of the forfeiture money is shared annually with local police departments while the other half is spent on prosecutor’s office expenditures and contributions to nonprofit organizations. A substantial amount of the prosecutor’s share of forfeiture funds is spent on conferences and training sessions for Smith’s assistants.

$780 for cheesecake

But the stacks of documents also show irregular expenditures that go far beyond credit cards and cell phone bills.

Hundreds of dollars were paid for flowers at a funeral. About $200 monthly was expended on “purified” bottled water for the prosecutor’s office. In 2014, Smith somehow spent $775 from the fund at a coffee shop in Ferndale called Capuccino Man. A year later, he dished out $780 at a cheesecake shop.

About $160,000 was paid under the radar on a private security firm, apparently to beef up protections for the prosecution team’s offices located at the county Administration Building in downtown Mount Clemens.

Many questions have yet to be answered by the prosecutor’s office:

  • The relationship to law enforcement among Smith’s favorite nonprofits - churches, schools and civic groups like the Kiwanis and Goodfellows – remains murky at best. Smith has said churches and charities assist with addressing “causes of crime” such as helping the homeless, those suffering from substance abuse addictions, and the mentally ill. Still, how many priests would be surprised to learn that they received a check from Smith because they supposedly play a role in crime fighting? How does Habitat for Humanity or an environmental group, the Clinton River Watershed Council, contribute to criminal law enforcement?
  • Though Macomb County consists of 27 communities, why did Smith give a majority of funds designated for nonprofit groups to those in the Clinton Township/Mount Clemens area? Clinton Township is Smith’s hometown and it includes most of his brother’s county commissioner district. Beyond geographic preferences, a vast majority of the places of worship that received yearly checks from the forfeiture funds were Catholic churches.
  • Macomb County has 234 public schools but Smith limited the thousands of dollars he gave to schools to just three beneficiaries: his alma mater, Chippewa Valley High School in Clinton Township, and two other schools near where Smith now lives, in Macomb Township.
  • While state law specifically prohibits the use of public funds for government office parties and similar occasions, Smith used forfeiture money to pay nearly $8,000 for five events – Christmas parties and other extravaganzas -- from 2015-17.  One county commissioner who attended Smith’s 2015 party at Ciccarelli’s Sports Bar in Shelby Township, said hundreds of people were on hand, including the prosecutor’s staff, many fellow lawyers, and law enforcement officials.

Over the past week, Smith has engaged in lobbying and cajoling commissioners to get them to reject the proposal for a thorough audit of the forfeiture cash. But on Wednesday morning, the prosecutor won’t be there to answer questions from the officials. 

He is sending Van Laan as his representative. As for Smith, he is taking his kids to an indoor water park.

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