Detroit City Council hammers Land Bank with questions

DETROIT (WJBK) - Detroit's demolition program was suspended for two months and the mayor kept it secret.

The feds, the state and now the city council, has opened its own investigation.

Charlie LeDuff explains:

The first thing to know is that the Detroit Land Bank is a separate legal entity from the city, even though Mayor Mike Duggan speaks for it.

The second thing to know is the Land Bank got caught fraudulently billing the state and federal government for demolitions in the city - so bad are the initial findings that the state has required the land bank to front $5 million in case repayment is required for more fraud or irregular billing.

The third thing to know is that the Land Bank claimed not to have that money.

So where did the Land Bank get the money? Duggan's chief financial officer secretly wired $5 million of the city's money to the Land Bank without  the city council's knowledge.

The city council only found out Tuesday and at their meeting, hit the roof.

"I don't want to say anybody is not telling the truth, but it seems like the truth is 200 miles away from what I'm hearing," said Brenda Jones, city council president. "We're talking about taxpayers' dollars, there seems to be little to no transparency.

"I'm getting phone call, my colleagues are getting phone calls. We can't answer things and we're seeing things that happened in the newspaper, in the media. We're getting things from the media - that's unacceptable when we're here every day, five days a week."

The next thing to know is the city council were not the only ones kept in the dark by Mayor Mike Duggan. The Financial Review Board empowered after the bankruptcy to keep an eye on the city's finances, also was not informed of the money transfer. The board will take up that matter at its next monthly meeting. Duggan has a seat on that board as well.

The feds continue to pour over the paperwork, there may be a grand jury and the saga continues.