DETROIT – A federal grand jury investigation is underway into Detroit Mayor Mike Duggan's demolition program.
Sources told Local 4 Tuesday that the grand jury has been seated in the investigation. Subpeonas have been issued to compel testimony -- a major development that signals the FBI investigation has uncovered enough evidence to convince the U.S. Attorney to take action.
When subpoenas are issued like the ones in this case, the government is almost certainly pushing to make a criminal case.
Detroit has been knocking down abandoned homes in record numbers, but sources confirmed a federal grand jury is investigating who got the contracts, how much they were charging and whether anyone got kickbacks or favors in the deal.
Detroit has knocked down around 11,000 houses during the Duggan administration, most of them with federal money. Now, federal officials want to know if the contracts were awarded fairly and if taxpayers were ripped off.
Public crusader Robert Davis was the first to find out federal agencies in Washington, D.C. were questioning contracts issued in Detroit. He has discussed the grand jury subpoena with a Metro Detroit contractor who received one.
"He shared with me the contents of the grand jury subpoena, in which they want to document all communications with mayor's staff, Land Bank or Mishta," Davis said.
Sources said the grand jury is looking at some of the documents Davis uncovered.
The cost to knock down and clean up a house skyrocketed after Duggan took office. Duggan said they were moving too fast to try to secure federal money, not trying to hand out favors. Davis said the contracts were awarded by the Detroit Land Bank under questionable circumstances.
"The Land Bank Authority was allowed to approve million-dollar contracts outside the public's eye, and they were approved unilaterally by the former director," Davis said.
Inside the federal courthouse, a grand jury is a few weeks into its inquire into demolition practices. They have subpoenaed contractors to turn over documents and emails, such as financial statements and billing records flowing between multiple state and city agencies, including the mayor's office.
Sources said the investigation is wide-ranging, but right now, the mayor and the mayor's office is not a target.
"We have fully cooperated with this investigation from the very beginning, and will continue to do so," said Alexis Wiley, Duggan's chief of staff. "The mayor's position always has been that if anyone has done something wrong, they should be punished."
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