Detroit’s demolition scandal in the hands of the FBI

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DETROIT – A secret witness for the FBI regarding Detroit’s demolition scandal is revealing himself for the first time and sharing his story with the Local 4 Defenders. Efforts to demolish vacant and blighted Detroit homes have run rampant with massive cost overruns and accusations of bid rigging.
Now, for the first time, a contractor cooperating with federal investigators is speaking publicly about the case. The wide-ranging investigation involves millions of spent tax dollars, and there’s a full-scale criminal investigation underway by the FBI and U.S. Attorney’s Office into corruption by Detroit officials in the demolition program.
Demolition is a dirty business beyond the mess that’s made by knocking down houses. Tim Drakeford, of Direct Construction, is a witness who is talking about being interviewed by the FBI in the massive federal investigation. He has been suspended from doing demolition work due to questionable practices.
“The federal investigation is always stressful because you don’t know who is turning the corner, who is looking at you, who is coming in, who is watching you on the job,” Drakeford said. Federal officials have been to Direct Construction three times, and Drakeford said when they want answers, he gives them answers. “You’re not hiding anything from the FBI?” Local 4 Defender Kevin Dietz asked. “No,” Drakeford said. “If they want to come in here and get everything, they’re more than welcome.” Drakeford’s attorney said he’s not a target, but a cooperating witness helping federal officials with information that could lead to charges against city officials. “I just fully cooperated with everything,” Drakeford said. “Whatever they asked me, I gave it to them, fully cooperated.”
Drakeford turned over records on bidding and pricing and shared what he knows about who is getting the work. He said the big firms have been getting the contracts, leaving the little guys to get hired as subcontractors with little profit. He said many were muscled out as contracts became more convoluted.
“Ten years ago there were about 20 to 30 of them,” Drakeford said. “Small, big, everybody had their niche. Everybody had their little go-around. It wasn’t just six or five contractors.” The profits of the big three demolition companies is at the heart of the FBI investigation. The Defenders obtained numerous documents that hinted at “bid rigging” and “price fixing.” “In February 2016, Michigan was in line for $300 million from the federal “hardest hit fund.” In Detroit, houses were coming down in record numbers, but the cost jumped from $11,500 per property in 2014 to $18,000 in 2016, creating millions of dollars in overbilling. “I’m praying to God that it does get clean and back to normal because there’s a lot of people hurting,” Drakeford said.
Federal officials are now in Detroit to grill cooperating witnesses such as Drakeford. “Whatever you do in the darkness shall come to light, and that is what is happening,” Drakeford said. “It is all coming to fruition, full turn.”
John Roach at the mayor’s office said city officials are cooperating fully with the FBI investigation. He said there was a dispute in billings, so they agreed to pay back $5 million and fix the problems that had led to the dispute. He said the program is running properly now, and another $100 million in federal money has been released for demolition. If crimes were committed, Roach said those responsible should be held accountable.

Copyright 2018 by WDIV ClickOnDetroit – All rights reserved. By Kevin Dietz – Reporter, Derick Hutchinson

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