Duggan: 'Very disappointed' at some Land Bank demo procedures

Detroit Mayor Mike Duggan in a previous press conference speaking about demolition program changes.

Detroit Mayor Mike Duggan admitted Monday that some major problems have plagued his trademark demolition program - but there is help coming in the form of $42 million in federal aid and more oversight.

Duggan held a press conference announcing $42 million in federal money already allocated for his hallmark demolition program.

"Treasury is releasing the next allocation of funds," he said.

But the real news came after that.

"It was a very vigorous review done by Michigan's state housing development authority and treasury," Duggan said. "And (they) did a very intensive review of all the Land Bank practices and concluded that the Land Bank did not have sufficient procedures in place to make sure we had proper documentation for all the bills and didn't have sufficient controls to assure treasury would not be charged for ineligible expenses."

United States Treasury officials suspended the demolitions funded with federal money for the last two months while the state investigated the practices at the Detroit Land Bank. What they found were irregularities in the bidding process, in billing and in the overall quality.

One year ago, Duggan said this to FOX 2's Charlie LeDuff: "Like most of your stories, it's false."

After a year of denying it and discrediting his reports, listen to Duggan now.

"Yeah, I think it's a question of whether eligible expenses were all charged the appropriate way," Duggan said. "They said we're going to put a hold on new contracts until you get a set of protocols and procedures that we find effective. And they were absolutely right. I was very disappointed by some of the things that I learned.

"The speed with which we went, outstripped the controls that we had in place."

Now the program will be baby sat by state overseers as federal, local, and state investigations continue. The legal bill on that so far: $81,000.

"I've seen no evidence of criminal activity, but that is a question that would be more appropriately directed to other people."

The Michigan Treasury released a statement about the ongoing investigation into the Land Bank.

"It says Michigan will continue its ongoing investigation and forensic audit, and nothing contained referred to herein shall constitute a waiver, release of any rights, remedies or claims available to the United States."

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