Feds subpoena Detroit for blight removal records

Image 1 of 3

The feds gave Detroit big bucks to tear down blighted homes all over town - but is that money being spent the way it should be?

It's an investigation that first started when Charlie LeDuff and the Americans took a closer look at the demolition books. Now the government is slapping the city with a subpoena for all records related to blight removal.

A city looking to rebound from bankruptcy and blight, Detroit's demolition program under Mayor Mike Duggan is taking a hit from federal investigators as a subpoena was issued for all records relating to the millions of dollars of federal funds given to the city.

It is an unusual step according to the city's auditor.

"As far as them subpoenaing our records, that hasn't happened in quite some time," said Mark Lockridge, Detroit auditor general.

The subpoena from the inspector general, is forcing Detroit's auditor general - who looks at all demolition activity - to give up all records information, documents and accounts in relation to the Troubled Asset Relief Program or TARP and The Department of Treasury's hardest hit fund dating back to January of 2014 when Duggan took office.

"There's no indication of anything specific," Lockridge said. "They are aware we were doing our audit and I'm aware they were doing their audit or slash, investigation."

Detroit's auditor general is already investigating the city Mark Lockridge tells FOX 2 Monday. So far, one audit report a few weeks ago revealed one red flag.

"What we found was that the director of the Detroit Building Authority was also the chief operating officer of the city of Detroit," Lockridge said. "And we found that to be a conflict of interest."

Lockridge says he's unsure what the feds are looking for, but the program has come under fire within the last few months for the cost of demolitions going up by thousands when Duggan launched the demolition program.

"We built it in order to get away from all the charges of corruption and concerns about efficiency," said Erica Ward-Gerson.

Erica Ward-Gerson is chair of Detroit's Land Bank Authority. She says through the program 8,000 homes have been demolished, adding that the program has been audited numerous times with clean reports.

"We don't know what they're after, if there is something they are after," Gerson said. "We don't know if it is routine, we don't really know."

Gerson says the city has received over $150 million in federal funds for blight removal and is just doing their job looking into how that money was spent.

"If they find something they are doing their job doing it," Gerson said. "I welcome anybody coming and looking at us."

Gerson also says she isn't worried about the investigation and vows to remain transparent.

With no timeline set, Lockridge says he plans to fully cooperate and conduct a series of reports and says if or when he does find something:

"I'll report it, as soon as possible," he said.