The illustrious occasion, which was live streamed on Facebook, showcased the city's ambitious efforts to eradicate blight — a feat that is, today, inextricably tied to Duggan.
What this legacy may be — an accomplishment, as implied by yesterday digital celebration, or an embarrassing foray into mismanagement, as implied by the FBI's current probe into bidding practices and the rising cost of demolitions — remains to be seen. One thing for certain, this is not the first time that Duggan has been tangled up in a simultaneously revered and questionable land-related initiative.
Let's take a stroll down memory lane, shall we?
When Detroit Public Schools was placed under state control for the first time in 1999, Duggan — who was then the Wayne County deputy executive — was approached to spearhead a summer building-rehabilitation program which included cleaning up classrooms and jump starting a $1.4 billion school renovation program.
While the assignment was fairly simple, it ultimately failed to make long-term — and necessary — improvements to the district’s school buildings, and more significantly, it raised a number of questions around suspect bidding practices and costs.
As a Detroit News article from that summer explained it, three issues were raised with the way Duggan handled the summer program.
Issue One: A number of top executives at companies that received hefty summer-contracts went on to host a fundraising dinner in honor of Duggan, who at the time was running for Wayne County prosecutor.
As the article explains, in August of that year — as the summer initiative was coming to an end — a fundraising dinner (with tickets costing $1,000 a seat) was hosted by John Rakolta Jr., whose company Walbridge-Aldinger was given a $4 million contract to refurbish 20 schools over the summer, and Frank Torre, whose company Torre & Bruglio was given $2.1 million for landscaping services.
While Duggan at the time told the News that he didn’t know the contractors were hosts until he got to the event, the invitation, which was printed in the old article (viewable below), very clearly notes who is behind the event.
Issue Two: There was no formal bidding process or advertising of the initiative — which raised questions about who was picked for the jobs and how.
While Duggan said he was not involved in the selection of contractors, leaders at Barton Malow, a firm helping to handle the summer program contracting, told the Detroit News that Duggan was in fact "critical" in the process.
More remarkable, the News got its hands on an internal email from June 1999, in which former facilities manager Kifah Jayyousi wrote the Associate Superintendent Nathaniel Taylor saying he had taken a stack of contracts for Duggan to approve but that Duggan "indicated that he cannot sign his name on the contracts ... because he was receiving campaign contributions from contractors/vendors."
When the News approached Duggan about Jayyousi’s email, the now-Mayor said the facilities manager misunderstand what he was saying and that what he had actually said was that his opponent for the prosecutor position had accused him of taking campaign contributions in exchange for contracts. "I never told Kifah I was taking contributions," Duggan told the News, "I told him I never sign contracts."
As the News pointed out, in place of Duggan's signature on the summer contracts was the 'John Hancock' of Bill Kelley, a longtime colleague of Duggan’s at the county, who worked as a civil engineer and collaborator with Duggan on the Wayne County airport. When Duggan was brought on for the DPS project, he immediately contracted Kelley for a $15,000 a month gig consulting on the summer renovation project.
Unrelated to the contract signing questions — but in line with the lack of a bidding process or advertisements — the News also pointed out that another person brought on for work with the DPS project was Betty Kilpatrick, the then-wife of Bernard Kilpatrick (father of Kwame, and then-colleague of Duggan’s at the county). Mrs. Kilpatrick was paid $100,000 to oversee a lead removal program.
Issue Three: A significant portion (75 percent — or $50 million) of the $76 million project was paid for with funds from a $1.4 billion bond that was passed in 1994.
State law says bond money must be used for structural or permanent changes — not maintenance — however, a majority of the work done that summer was superficial, such as repainting and landscaping (i.e. the $2.1 million contract with Torre & Bruglio referenced above). No fire, electrical, or plumbing permits were obtained for the summer work — rather much of what fell under "capital improvements" included "pencil sharpeners, toilet paper dispensers, paint, ceiling tiles and light switch covers," reported the News.
Jayyousi explained to the News, "The district has misrepresented much of the summer work as capital improvements when it’s really cosmetic and maintenance." (As a complete aside, when MT attempted to reach out to Jayyosui, who left the district that summer to serve as the chief facilities officer to the Washington D.C. School Board, we found that this would be a bit difficult. In 2005 Jayyosui was arrested in a Detroit airport and later convicted and charged as a conspirator with alleged terrorist Jose Padilla. Nearly a decade into a 12-year prison sentence, he maintains his innocence).
This use of funds for somewhat surface tasks is a big point of contention, especially as we look at the financially unhealthy school district today.
More notably, many of the schools that were worked on that summer were closed within years. A video from 1999 that Duggan featured on his campaign website when he was running for mayor highlights work being done at Mackenzie High School and Sherrard Elementary — and both of these schools are now closed. Unsurprisingly, Walbridge — Rakolta’s company — was the program manager in the demolition of Mackenzie in 2012.
The mayor's video (see below), however, highlights how the narrative around a project — even a questionable project — can be morphed. While the video was filmed in 1999, it — and it's positive message — has been touted by Duggan. The mayor — or more likely someone on his staff — even uploaded the video to YouTube in July 2013, noting that it was a "successful summer repair program."
When given the chance to comment, Mayor Duggan's camp directed MT to a column published the day after the original Detroit News investigation by longtime News columnist Peter Waldmeir.
"There is no shortage of construction jobs in Metro Detroit. Billions are being spent by private industry, government, casinos, stadiums — you name it. Given an impossible deadline, if schools were to be repaired before they opened in September, Duggan had to scramble to convince major construction companies to take on the work," wrote Waldmeir, later adding, "If Duggan's guilty of anything, however, it's a zealous drive to finish his task on time, somewhere close to budget. Any impression that he bought favors with contracts are almost humorous. He had to beg most of them to do the work at any price."
The FBI, which is focusing on the Detroit Land Bank's use of over $180 million in federal dollars from the Hardest Hit Fund, is expected to conclude its probe shortly. Duggan has promised to give his full cooperation during the investigation.
In the meantime, read the original Detroit News article below.
DN 1999 - Duggan - DPS by Allie Gross on Scribd