spiritsoup's Blog

FBI probe just more bad news for Detroit.




FBI probe of sludge recycling contract is latest setback for beleaguered Detroit DETROIT (AP) -- Auto industry cutbacks, double-digit unemployment and one of the nation's highest home foreclosure rates have left Detroit with a dreary economic future.

Now, a mayoral text-messaging sex scandal, federal investigation into a City Council-approved $47 million sludge recycling deal, and poorly run and deficit-plagued public school system have dashed inroads toward respect and reopened Detroit to outside ridicule.

"When we're out doing business and trying to get customers we sometimes get asked 'You're from Detroit? What's going on there?'" Compuware Corp. senior vice president Jason Vines said. "As taxpayers and residents, it has to be disheartening. When your city is used as a public joke, it's not good."

Like most major cities, Detroit is no stranger to scandal. Former City Council members, and even a police chief, have been indicted, arrested or imprisoned.

But the current political crisis threatens to bury the city deeper in an economic grave.

While the mayoral text-messaging scandal has been going on since the end of January, the past week alone has brought a new round of bad news for the city.

On Monday, the same day the sludge contract probe was making headlines, the City Council voted down a plan that would have led to the sale of Detroit's half of the Detroit-Windsor commuter tunnel and averted layoffs of 1,300 city workers. On Tuesday, the council did an about-face and approved the plan to set up a tunnel authority to run the U.S.-Canada border crossing. The city will get $65 million under the deal to fill its budget deficit.

This is just another victory for Cintra, the Spanish owned transportation company that is now placing tolls on existing roads throughout Texas and Illinois and is setting it's greedy eyes on Ohio and now they have Michigan in it's pocket.

(For more information on Cintra see Super NAFTA, Cintra, and the Security and Prosperity Act )

Also on Monday, the Detroit Board of Education approved a school district budget that calls for laying off 518 teachers and 900 other staffers this summer. The 106,000-student district gave pink slips to 300 other teachers earlier this year.

Monday also was the day Council President Ken Cockrel Jr. told colleagues he had been questioned in the sludge contract probe. Federal authorities are looking into a contract with Houston-based waste hauler Synagro Technologies that the City Council approved by a 5-4 vote last November.

The Detroit Free Press, citing people with knowledge of the investigation that it didn't name, has reported that the investigation involves four council members, staffers, City Hall employees and people outside city government. No one has been charged, but Cockrel's chief of staff resigned last week. The Free Press and The Detroit News said he was videotaped accepting cash from a now-suspended Synagro official.

The probe into the sludge deal only adds to investor skepticism about Detroit, Mackinac Center for Public Policy analyst Michael D. LaFaive said.

"It's got to raise the question: Where will the next curve ball come from?" LaFaive said. "Reports suggest this is an expanding corruption investigation. So where will it expand next?"

The U.S. attorney's office and FBI officials won't comment on the probe, but one other council member and a former consultant to another say they have met with investigators.

Political consultant Sam Riddle Jr. said he met with the FBI at the agency's request in early June. Riddle had been a spokesman for Council President Pro Tem Monica Conyers.

Councilwoman Sheila Cockrel voluntarily met with investigators Monday. She and Ken Cockrel have said they are not targets of the probe. Riddle said he has done nothing wrong.

"With the body slams this city has taken over and over and over again, this is really profoundly unfortunate," Sheila Cockrel told The Associated Press.

Less than two years ago, Mayor Kwame Kilpatrick -- basking in the glow from Detroit's impressive hosting of Major League Baseball's 2005 All-Star Game and the 2006 NFL Super Bowl -- seemed to be a rising political star in the Democratic party. He proudly announced planned upscale condo developments along the long-neglected riverfront and updates to downtown buildings.

But in late January, excerpts of sexually explicit text messages were published by the Free Press and pointed to an extramarital relationship between Kilpatrick and then-Chief of Staff Christine Beatty. Those messages left on Beatty's city-issued pager contradicted testimony the two had given during a 2007 police whistle-blowers' trial.

Kilpatrick and Beatty were charged in March with perjury, misconduct and obstruction of justice. They are accused of lying about having an intimate relationship and about their roles in the firing of a police official. Both have denied any wrongdoing.

A fractured City Council then went on the offensive against the beleaguered mayor, accusing Kilpatrick of violating the city charter by not revealing a confidentiality agreement linked to an $8.4 million settlement in the whistle-blower case. The council has asked Gov. Jennifer Granholm, a fellow Democrat, to remove Kilpatrick for misconduct and is continuing its own forfeiture of office efforts.

Even Granholm appears weary of Detroit's embarrassments.

"Detroit is our big city. And to the extent that it's facing these tremendous challenges ... it's not good for Michigan," she told reporters this week.

But then again neither is she.

And the Synagro deal is only one of at least two federal investigations into public corruption.

Authorities also have been delving into $45 million in unauthorized contracts through the school district's risk management office.

The district has filed suit to get that money back, school board member Joyce Hayes-Giles said.

"It has taken many years for the district to get in the shape it's in now," she said. "We are trying to fix what is wrong.

"Lately in our city and schools, people are looking for people to blame, and the politicians have a lot to bear when it comes to being accountable for what is happening here.