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FBI PROBES CITY COUNCIL

Some under surveillance in 5-4 approval of sludge-treatment plant; Investigation via wiretap could cast wider net

BY JIM SCHAEFER, DAVID ASHENFELTER and JOE SWICKARD • FREE PRESS STAFF WRITERS • June 28, 2008

The FBI is investigating some Detroit City Council members in connection with a multimillion-dollar sludge-treatment project the council approved last fall, the Free Press has learned.

Sources familiar with the public corruption investigation said the FBI has wiretapped phones, a move that suggests the probe has been under way for some time.

It was unclear Friday night how far the investigation has progressed, but agents have sought information from several people, including Council President Ken Cockrel Jr., who was interviewed Wednesday, sources said.

Cockrel, who voted against the project, is not a target of the investigation, according to the sources. The sources asked not to be identified because of the sensitive nature of the probe.

Cockrel declined to discuss the interview. He said agents told him he is not a target.

Agents have asked questions about people inside and outside Detroit city government, including Councilwoman Monica Conyers, sources said. Conyers was one of five council members who approved awarding the controversial sludge contract to Synagro of Houston last fall.

Conyers did not respond to phone calls Friday.

Steve Fishman, a criminal defense attorney said to be representing Conyers in the probe, declined to talk, except to express frustration.

"It is extremely irresponsible for anyone to have leaked information to the press about an investigation that may or may not be under way," he said. "If the time comes when I receive information from someone other than a newspaper reporter, I might be able to give an intelligent response."

The sources described the investigation as far-reaching and possibly stretching beyond the council.

In general, the use of wiretaps requires investigators to convince a federal judge the wiretaps will produce evidence of a specific crime.

Detroit FBI spokeswoman Sandra Berchtold said Friday night: "I can neither confirm nor deny the existence of an investigation."

U.S. Attorney Stephen Murphy also would not comment.

An executive from Synagro declined to take a phone call from the paper Friday evening.

The Free Press contacted other council members who did not comment. Others could not be reached.

The contract awarded last November to Synagro allows the company to invest $125 million in building a new plant in southwest Detroit that will convert wastewater-treatment plant sludge into fertilizer. Under the plan, Synagro would dispose of 183,000 tons of sludge a year. The city would pay Synagro about $47 million a year to process the sludge, saving the city an estimated $5 million annually.

Plans to turn sludge into reusable material have percolated in the City Council since 1998. The proposal originated with a company called Minergy, which had financial problems that prevented it from following through. Synagro purchased Minergy and took over the plans for Detroit.

Residents in southwest Detroit had fought the plan, fearful it would bring more pollution to the heavily industrialized neighborhood on West Jefferson. The new facility would go up near the city's existing treatment plant.

The plan purportedly would save money by sparing the city upgrades on existing incinerators, which are more than 50 years old.

During hearings on the issue last fall, Conyers asked questions that were critical of the Synagro plan, including why the city couldn't simply build and run the plant itself. Unions also opposed the plan, decrying the loss of city jobs to private-industry workers.

In the end, Conyers was among those who voted to approve the plan, 5-4.