Monday, January 5, 2015

Fraud in Regional Water Deal?

On Sunday, January 4, 2015, Oakland County Executive L. Brooks Patterson appeared on Carol Cain’s Michigan Matters television program (CBS, Channel 62, Detroit).

I thought I heard Mr. Patterson say that the new Great Lakes Water Authority is on shaky ground financially because Buckfire, a consultant and negotiator for the City of Detroit in secret, court-ordered negotiations to create a regional water authority, had given suburban negotiators fraudulent numbers concerning the finances of the Detroit Water and Sewerage Department (DWSD).

Readers may recall that DWSD’s last two annual audit reports have not been made public,* apparently on orders from Detroit’s emergency manager, Kevyn Orr; thus the dearth of financial information during water authority negotiations, apart from what Buckfire presented.  

If, upon investigation, fraud appears probable, it seems to me that, by its very nature, it would qualify as RICO fraud,** which ought to be prosecuted by Barbara McQuade, the U.S. Attorney in Detroit.

>>>>>   JL  <<<<<

* Note, for example:

From: [sender omitted]
Date: Thu, Feb 20, 2014 at 3:18 PM
Subject: Re: 2013 Annual Audit Report
To: James Lang <>

Thank you for your email.  The Water and Sewerage Department welcomes your comments and requests.  Please be advised the 2013 Annual Report has not been released by the City of Detroit. Unfortunately, a time frame is not available.

[sender omitted]
Detroit Water and Sewerage
735 Randolph #1001
Detroit, MI 48226
313-964-9575 office
313-964-9370 fax
Mike Duggan, Mayor

** Excerpts from USA Today, citing Nathan Bomey in the Detroit Free Press, July 10, 2014:

“But the debt-cutting goals — which will still face extensive scrutiny and opposition during a sweeping mid-August bankruptcy trial — come at a steep price, with investment banking firm Miller Buckfire expected to charge $28 million for helping the city restructure, the documents show.”

“Miller Buckfire will collect the full fee ‘upon a successful recapitalization or restructuring’ of the city's debts, bank President Ken Buckfire said in an ‘expert report’ prepared privately in advance of court hearings and acquired by the Free Press.”

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