Evidence of City Attorney Dennis McGinty Billing Fraud

In several other posts, I explored the seedy relationship between the city and the City Center II developer. At the very beginning of the city's public relations campaign to cram this ill-conceived project down our throats, those of us who were opposed to this project from the outset were outraged that it appeared that the city was essentially offering its staff to Strathmore, providing a taxpayer “subsidy” to this failed developer. Some have estimated this subsidy at at least $1 million in direct costs (staff salaries and benefits) over the past decade.

More recently, after I had charged the city with abusing its power of Eminent Domain to force DTN to sell the “Evergreen Arms” apartments to Strathmore, Assistant City Attorney Tom Yeadon claimed that the Eminent Domain documents in question, were “prepared by the seller.”

Mr. Yeadon's letter put me on the quest for those documents, and, more importantly, on a quest for documents that would uncover just who paid the bill for the preparation of that correspondence (see Smoking Guns #10, #12, #15). The answer to that question is now clear: city taxpayers paid for much of the legal work involved in this private transaction. Yet, without question, DTN sold the Evergreen Arms apartments at 341-45 Evergreen to Strathmore Development Co.

Here's a run-down of the documents that I received through FOIA from the city relative to this “Evergreen Arms” private sale.

"Despite the stated claim that these emails are "exempt from public disclosure" pursuant to the Freedom of Information Act, FOIA only exempts "trade secrets and commercial or financial data" from disclosure. If there was any exempt material in these emails, the city would have either refused to send me the information, or redacted the "exempt" portions."

First, I've posted two pages of the McGinty law firm's billing record for September, 2007. The document (DEM-billing-doc) shows that the City Attorney (“DEM” in the billing records) billed the city for work on the “Museum Place” (the older name for City Center II) on 9-20, 9-21, and 9-28, 2007.

The evidence is clear: “Receive and review memo from McGraw. Draft correspondence to McGraw.” You can read this document and find the other instances where McGinty is clearly working for Strathmore, brokering a deal between this private developer and DTN.

There are two huge problems with this. First, the City Attorney is charging the city for drawing up a “letter of condemnation,” threatening DTN with the use of Eminent Domain to force Mr. Uppal to sell his property (see the “DEM-billing-letters”): “the city intends to acquire this property” as part of CCII. Of course, that's another bald-faced lie --the city never intended to purchase this property, they were simply using (abusing) their power of Eminent Domain to force a sale to Strathmore.

Which is exactly what happened. Adding to the deceit surrounding this private transaction, the State News' summary of the Mayor's statement concerning this sale is very curious: “the city bought the Evergreen Arms properties from DTN Management for $2.4 million under the parameters of Michigan’s Uniform Condemnation Procedures Act [eminent domain], but it has not sold the properties.” Of course, this is more bald-face lies from our Mayor. Of course, Tom Yeadon's letter directly contradicts the mayor on this point --as do the public tax and sale records.

The third set of documents that are posted on PR today are the emails exchanged between the City Attorney's office and Strathmore (DEM-billing-emails). Again, these emails clearly show that McGinty was working for Strathmore and billing the city for that work.

Now, it's obviously not against the law for Mr. McGinty to broker a deal between DTN and Strathmore --but I can't imagine any scenario that would justify the city paying the City Attorney for brokering that private deal. Also keep in mind that the City Manager, Ted Staton, was on the city's payroll, collecting his taxpayer-paid salary, all the while he, too, was working for the private developer, doing his part in brokering this private land sale.

One last thing: the documents show that the city issued a “1033 Exchange” letter to DTN, providing DTN with an “economic enhancement tool” (to use the mayor's phrase to describe this form of tax fraud) in clear violation of IRS tax code. (see audio link, below).

All of this “false billing” evidence has been collected by me in preparation for my request to the Michigan Attorney Grievance Commission to investigate these “false billing” charges --and many other charges-- against Yeadon, McGinty, Peters, and Triplett, all having to do with the shameful way the city has conducted the “public's business” throughout this entire “Museum Place”/City Center II disaster.

The three pdf files referred to above:

#1. McGinty law firm's billing record for September, 2007
#2. Exchange between City Attorney's office and Strathmore
#3. Eminent Domain to force Mr. Uppal to sell his property (see the “DEM-billing-letters”):

See the Yeadon letter here (along with my “Smoking Guns” analysis of it):

The mayor's deceit concerning the DTN sale can be found here:

The evidence of East Lansing coercion of the DTN sale through the abuse of its Eminent Domain power is here:

See the “Wickersham” case as an example of how the courts view the issuance of bogus “1033 Exchange” letters: http://cases.justia.com/us-court-of-appeals/F3/29/191/480581/

Also, listen to the Mayor and City Manager's “defense” of this clearly illegal practice of issuing bogus “1033 Exchange” letters --the second of these audio clips has Staton addressing the DTN case, directly: http://www.statenews.com/index.php/multimedia/32624

PR readers will also be interested in this 9-11 NYT article on “failed or stalled big development projects” --the discussion is directly relevant to the failed City Center II project: http://www.nytimes.com/2010/09/12/us/12filene.html?scp=1&sq=filene%27s%20basement&st=cse