Detroit Land Bank subpoenaed by Department of Treasury

The federal net is tightening around Mayor Mike Duggan and allegations of mismanagement in his ambitious demolition program.

FOX 2 has learned that the United States Treasury has asked city officials to keep the contents of subpoenas it's issued to the city Land Bank under wraps for fear of jeopardizing its investigation.  Charlie LeDuff has been digging for months and files this report tonight.

In October, Mayor Mike Duggan confirmed that the city held private talks with preferred contractors last year in order to set a price for bulk demolition before they were made public.

"It was a negotiated price, there's no question about it," Mayor Duggan told LeDuff, when confronted with emails confirming the deal. "I don't believe it was collusion."

Mayor Duggan would not speak with LeDuff about the subpoenas. His chief of staff, Alexis Wiley, said they don't comment on ongoing investigations. That's a different tune from the last time she talked with us.

Charlie: "Why do you think the Feds are looking into this now?"

Wiley: "If they are indeed looking at what we're doing, we absolutely invite it because everything we do is above board, we're working to the highest standards, and we are doing the best possible work."

The Detroit Land Bank would not hand over the subpoenas. Instead they sent this letter that included SIGTARP telling the Land Bank not to "I am writing to strongly ask that you withhold subpoena contents, as, at a minimum, the disclosure of such contents would both reasonably be expected to quote 'interfere with law enforcement proceedings."

Here's the full letter:

The Detroit Land Bank Authority (DLBA) has received your request for information under the Michigan Freedom of Information Act, MCL § 15.231, et sec. The request was received at our office on Thursday, June 30, 2016 via electronic mail. Your request is deemed, pursuant to Section 5(1) of the act to have been received the next business day, Friday, July 1, 2016. The request specifically asks for the following records:

I hereby request to inspect copies of records or portions of records pertaining to: Specifically, but not limited to, any subpoenas issued by the United States Treasury Department, the Office of the Special Inspector General for the Troubled Asset Relief Program or the Federal Bureau of Investigation to the Detroit Land Bank Authority, its agents, employees and contractors in connection with the ongoing probe of the Detroit Demolition Program.

This request is denied pursuant to Section 13(1)(b)(i) and (iii) of the Act, MCL 15.243(1)(b)(i), (iii), since disclosure would reasonably be expected to "interfere with law enforcement proceedings" and could reasonably be expected to "constitute an unwarranted invasion of personal privacy." As we have indicated, the DLBA is cooperating fully with all investigations. Per the attached letter, SIGTARP has strongly asked that the DLBA withhold any documents related to this request.

Please note that pursuant to Section 10 and 10a of the Act, MCL 15.240 and 15.240a, a person receiving a written denial of a request or receiving a letter to submit labor cost may do one of the following:
1. Submit a written appeal to the head of the public body denying the request. Such appeal, if submitted, should specifically state the word "appeal" and identify the reason or reasons for reversal of the denial. MCL 15.240(1)(a); or
2. Commence an action in the circuit court to compel the disclosure of the public records within 180 days after the public body's denial of the request. MCL 15.240(1)(b). If a court finds that the information withheld by a public body is not exempt from disclosure, the requesting party may receive the requested record and, at the discretion of the court, reasonable attorney fees and/or costs. MCCL 15.240(6) and (7).

Respectfully,

Craig Fahle
Detroit Land Bank Authority

The Land Bank also included the letter SIGTARP included in response:

Office of the Special Inspector General
For Troubled Asset Relief Program
1801 L Street NW
Washington DC 20220

June 13, 2016

Via UPS and Email

Mr. Michael Brady
General Counsel
Detroit Land Bank Authority
500 Griswold St, Suite 1200
Detroit, MI 48226

Re: Response to FOIA Request

Dear Mr. Brady:

It is my understanding that you are legal counsel for the Detroit Land Bank Authority. You have made SIGTARP aware that "[t]he DLBA received the following request under Michigan's FOIA law: 'Any and all subpoenas that was received by any employee, agent, contractor or legal representative of the DLBA from FBI, SIGTARP, or from any other federal agency or department from Jan 2015 to the present regarding any demolition contract or program.'"

As you know, Michigan FOIA exemptions from disclosure are detailed in MCL 15.243. I am writing to strongly ask that you withhold subpoena contents, as, at a minimum, the disclosure of such contents would both reasonably be expected to "interfere with law enforcement proceedings" and could reasonably be expected to "constitute an unwarranted invasion of personal privacy." See Sec 13. (1)(b)(i) and (iii).

If any such future request is made for subpoenas, we will likely raise the same disclosure objections and ask that you provide us notice of any information request for a SIGTARP subpoena or anything else related to SIGTARP.

Thank you very much for your cooperation.

Sincerely,

B. Chad Bungard
General Counsel
Special Inspector General for TARP
U.S. Department of Treasury