Detroit — Mayor Mike Duggan on Thursday vowed an overhaul of the city’s municipal towing practices, a system he contends is “fraught with potential for abuse.”
The mayor’s comments come a day after The Detroit News reported towing operations in the city and allegations of bribery have emerged as the focus of a federal investigation that spurred Wednesday raids at the homes of two council members, their staff and at City Hall offices. Duggan added his observations lead him to believe that The News’ report that the investigation centers on towing is ‘likely to be true.'”
“The amounts of money that are involved are just breeding potential for abuse,” the mayor said at the end of a press conference at Detroit’s Public Safety Headquarters.
Duggan said he’s directed Detroit Police Chief James White to bring him a plan in two weeks to eliminate the city’s towing company rotation practice “once and for good.”
On Wednesday, the homes of at-large Councilwoman Janeé Ayers and District 3 Councilman Scott Benson were raided by the FBI. The two have not been charged with any crimes and the full scope of the investigation is unclear.
Ayers and Benson did not respond to requests from The News seeking comment on Thursday.
A widening public corruption investigation focused on Detroit towing operations and bribery allegations emerged Wednesday as the FBI agents conducted the raids. The developments are the latest in a scandal that has led to charges against longtime Detroit Councilman André Spivey.
Federal agents also searched the homes of Ricardo Silva and Carol Banks, chiefs of staff for Ayers and Benson, respectively.
Duggan on Thursday said the feds have not shared the focus of the investigation with him.
The mayor insisted he’s had a good working relationship with council members and in the last eight years hasn’t vetoed a single action of the council. He said he will withhold judgment until he sees what develops.
“All we know is that there is a search warrant, and I don’t know anything beyond that,” said Duggan.
Duggan noted the federal investigation is the third in four years that has arisen from towing operations.
“In 2017, we had a deputy police chief of his department, who was convicted and served a year in prison for taking bribes to change the rotation among the towers,” he said. “In 2017, we also had six police officers indicted for taking bribes for towing rotations. All six were convicted and this stems from a decision in 2011-2012, not to competitively bid the towing in this town, but to create a permit system with a preferential group of people in a rotation that people don’t fully understand.”
Then-assistant chief, White was tasked at the time with “Cleaning it up,” Duggan said.
The city implemented three elements of White’s four-point plan including terminating contracts of several towing companies based on “what we believe was inappropriate behavior and they all sued us but to my knowledge, we won and kept them all out,” Duggan said.
The police department also changed the practice in which towing companies could find a stolen car and claim the tow work after uncovering evidence that some towing firms were in cahoots with car thieves.
“After we stopped that practice of allowing people to find stolen cars and get the tow fees, the car theft rate dropped significantly in the city and the following year,” he said.
White had also implemented a Detroit Police Department towing operation, which at the time was a great deal of controversy, Duggan said. He touted that the department now tows 25% of all vehicles.
The police department was in the process of implementing the final step of eliminating the preferential rotation and “get this problem behind us for good,” Duggan said, adding plans to move to an open competitive bid were paused earlier this year.
He said White is working on restarting that effort and in the meantime, “the feds are going to do what they’re going to do.”
The raids represent the broadest federal investigation into City Hall corruption in the eight years since former Detroit Mayor Kwame Kilpatrick was convicted of racketeering conspiracy and sentenced to 28 years in federal prison. President Donald Trump commuted the sentence in January.
It was unclear which offices in City Hall were raided Wednesday but a source familiar with the investigation said it did not involve Duggan’s office or executive suite.
The raids come three weeks after Spivey was arraigned in federal court on one count of conspiracy to commit bribery over claims he accepted more than $35,000 to be “influenced and rewarded” for votes.
The council is on recess until after Labor Day but Councilwoman Raquel Castañeda-López is calling for ethics training for elected officials. Duggan said it was a policy he would endorse, however, there’s already a commission that does it.
Ayers, 39, is seeking a second four-year term as an at-large council member in the Nov. 2 general election and faces three other candidates for two at-large seats. Benson, 51, was unopposed in this month’s primary and advanced to the general election. He is seeking a third term representing northeast Detroit in District 3.
The raid at Ayers’ home comes three years after her name emerged in a bribery investigation involving Gasper Fiore, the towing magnate, that relied on a sealed FBI wiretap affidavit, which was obtained by The Detroit News. At the time, intercepted telephone conversations offered insight into the influence Fiore wielded over local officials and his attempts to rig the system in his favor.
Among the wiretapped calls from 2016 was an exchange between Fiore and a man identified as Nicholas Primus about secretly funneling money to Ayers to pay for advertising billboards. Federal agents did not list Ayers as a target of the wiretap investigation, and she has not been charged with wrongdoing.
Campaign finance records show no payments from Primus or Fiore to Ayers.
Fiore, known as the “Baron of Bribery,” was sentenced to 21 months in federal prison in August 2018.
Ayers, a former hospitality worker, has been an at-large council member for six years. Before joining the council, she worked as a mortgage banker at Quicken Loans and at MGM Grand Casino.
In 2015, Ayers was appointed to finish the at-large term of Saunteel Jenkins who stepped down for a position with a Detroit-based nonprofit. She was elected to a full term in 2017.
Benson, a U.S. Coast Guard veteran and former small business manager for Midtown Detroit Inc., first took office in January 2014.
In June 2014, Benson was arrested for drunken driving. Southfield police discovered the councilman passed out behind the wheel of his car at a traffic light on the southbound Southfield service drive near Eight Mile.
Benson spent more than three days in jail, had his driver’s license suspended for one year and paid close to $10,000 in fines.
He served his jail sentence in March 2015. The incident, he said in a 2018 interview, was “an embarrassment” and “something I don’t take lightly.”
In the Spivey case, federal authorities contend he and another unnamed official, identified in filings as “Public Official A,” accepted bribes in exchange for votes on the Detroit City Council and in subcommittees from 2016 to 2020.
The council has been in discussions for months about proposed rules to regulate the city’s towing industry, which has a long history of controversy and corruption. In 2018, citing what it called longstanding problems in the police towing process, the city took over some of the tow rotations.
Spivey’s Detroit-based attorney, Elliott Hall, has said Spivey has been “fully cooperating with the federal authorities for over a year.”
Spivey was charged in late July in a criminal information, which means he waived his right to a grand jury indictment. The case was assigned to Judge Linda V. Parker, though no hearing date has been set.
If found guilty, he could serve up to five years in prison and pay a fine of up to $250,000.
The U.S. attorney alleges that Spivey, 47, accepted a $1,000 cash bribe from an undercover law enforcement agent on Oct. 26, 2018.
Spivey is the second Detroit councilman this term accused of accepting bribes in favor of votes at the council table. This spring, Gabe Leland resigned from the council after pleading guilty to a state charge of misconduct in office and was sentenced to two-and-a-half years’ probation.
The 38-year-old Leland was accused of agreeing to accept $15,000 in cash and free car repairs from a Detroit businessman in exchange for his vote on a controversial land deal.
The state case came after Leland was indicted by a federal grand jury in 2018 on bribery conspiracy and two counts of bribery stemming from the allegations. The federal case against Leland was dismissed as part of his plea agreement.