6/29/08

City union official upset by bribery revelations

FBI probes Detroit special-interest relationships

A waste contract approved last year by the City Council is under federal investigation and the involvement of at least one council member is under scrutiny, persons familiar with the case confirmed. The Detroit City Council voted 5-4 in November to award Synagro Technologies, Inc. a contract to handle the city's processed sewage for close to $47 million a year.

The FBI has been investigating allegations of corruption in connection with the contract, two persons familiar with the investigation said. The investigation has involved at least one court-approved wiretap, one of the sources said. The investigation of the waste contract is part of a broader investigation involving several City Hall contracts that has been active in the FBI and the U.S. Attorney's Office for several years.

The contract involves hauling of sewage and also provides for the construction of a plant that would incinerate part of the sludge and convert part of it into a crop fertilizer. The plant would be located in the Delray section of the city on east Jefferson, across the street from the city's waste water treatment plan. The city council approved the contract as part of its normal business operations.

"I'm very glad there's an investigation," said John Riehl, president of the American Federation of State, County and Municipal Employees Local 207, which opposed the contract because it threatened the jobs of more than 100 members who work at an incinerator where the sludge has been burned.

"We knew there was shady business, just from trying to deal with the City Council about it."

Councilwoman Monica Conyers, who had initially been vocal in opposition to the contract but switched her deciding vote from opposing to supporting the contract, is among those said to be under investigation in connection with the deal, a person familiar with the investigation said.

Detroit criminal attorney Steve Fishman would neither confirm nor deny Saturday that he is representing Conyers.

"It would be grotesquely premature for me to comment on any of this," Fishman said. "Call me back when you have something of substance."

Conyers could not be reached Saturday and a woman who answered the door at her home near Palmer Woods said she had no comment. She was absent from Detroit City Council for the latter part of the week and told colleagues she was being treated for a medical condition. Conyers is the spouse of U.S. Rep. John Conyers, D-Detroit, who chairs the House Judiciary Committee.

FBI Special Agent Sandra Berchtold said Saturday she could neither confirm nor deny the existence of an investigation. U.S. Attorney Stephen Murphy declined comment.

It is not known which council members are targets in the federal probe.

Synagro, a publicly traded national company based in Houston, Texas, partnered with Detroit-based RAS Development to help win City Council approval of the contract and to build in assurances that local firms would benefit from the contract dollars.

RAS is headed by Rayford W. Jackson, a Detroit businessman whose name was connected with an earlier City Council controversy over the sale of city-owned properties by Henry Hagood, the city's former planning and development director, to friends of his.

A 2006 audit by City Auditor General Loren Monroe found that many of the Detroit Neighborhood Development Corp. homes sold to Hagood's longtime friends Dalton Brown, Marcellus Oree and Vershawn Oree were first sold to Rayford Development or RAS Development Group, companies headed by Jackson.

Jackson could not be reached Saturday. Synagro did not return calls to their Houston offices Friday and Saturday. Michigan company officials could not be reached Saturday.

Rumors about a possible investigation have swirled around City Hall for more than a week.

James Canning, spokesman for Mayor Kwame Kilpatrick, said the mayor had no comment.

Council President Kenneth V. Cockrel was contacted Saturday morning on his cell phone but said he could not immediately comment.

Councilwoman Sheila Cockrel also declined comment Saturday morning.

Recently Conyers was criticized for an outburst where she called the council president "Shrek" and for traveling to Europe, Hawaii and other destinations to attend conferences on behalf of the city pension board. Those trips were paid with retirement fund dollars.

A spokesman for the water department, George Ellenwood, said his only information about the probe has come from news reporters.

"No one in the water department has been contacted or been approached about this by law enforcement," Ellenwood said on Saturday. "If they were, that would have come through the law department and we would have cooperated fully."

City officials say it's cheaper than the $52 million a year it would take to process the sludge using its 40-year-old incinerator complex, which would include $125 million in federally required upgrades.

Synagro plans on burning 60 percent of the sludge using fluid bed incineration, which burns hotter and more consistently than the city's current technology, Pam Racey, a Synagro vice president, said earlier. The rest will be treated by the city and Synagro will work with Michigan farmers to apply it as fertilizer.

(detnews.com)

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