Did ex-Treasurer Dillon steer lucrative Detroit bankruptcy contract to future employer?

Bankruptcy_17

dillon andy
Andy Dillon

When Gov. Rick Snyder asked Andy Dillon to serve as state treasurer in the fall of 2010, he declined.

At the time, the former Democratic speaker of the state House said he “was ready to go back to the private sector,” according to his deposition in the Detroit bankruptcy case. But two weeks later, Dillon took the job, though acknowledging he had just “a little bit” of experience improving local governments, which would be his major task as he oversaw the financial takeover of numerous cities and schools.

A little more than three years later, Dillon is back in the private sector and working for Conway MacKenzie, which received a lucrative $19 million contract to serve as consultants in Detroit’s bankruptcy under Dillon’s leadership. What Dillon didn’t reveal was that he’s a longtime friend of the firm’s president and CEO, Van Conway.

Now key lawmakers in the state House and Senate are calling for an “immediate investigation” to determine the extent of the relationship between the Birmingham-based restructuring firm, the governor and Dillon, who resigned on Halloween after we revealed alcohol problems and racially charged text messages sent from his cell phone.

“This latest news raises the obvious question of whether Andy Dillon helped land this lucrative contract for Conway MacKenzie because of his personal relationship with the company’s CEO, because he was angling for a job with the firm down the road, or both,” Sen. Coleman A. Young II said. “This is yet another reason for an investigation into the Department of Treasury, but this now also raises serious ethical questions about the role Dillon played as treasurer steering Detroit into bankruptcy in the first place and then awarding a lucrative contract to a company he now works for.”

Dillon and Conway and MacKenzie have not responded to numerous requests for comment.

A Motor City Muckraker review of records, e-mails and bankruptcy transcripts shows that Dillon played an integral part in getting his friend’s firm hired. The initial $4 million contract has ballooned to a whopping $19.3 million, city records show.

Sen. Democratic leader Gretchen Whitmer and House Democratic leader Tim Greimel also are calling for an investigation.

“Conflicts of interest, corruption and cronyism are all becoming business as usual at Snyder’s Treasury Department, and that’s why we need an immediate investigation,” Lon Johnson, chairman of the Michigan Democratic Party, said. “Dillon used his position of public trust as State Treasurer to line up his next job and feather his own nest with the very firm he was supposed to be monitoring.”

Johnson added: “Rick Snyder may think allowing his former treasurer Andy Dillon to use his position of public trust to secure his next job is business as usual, but it’s not the way Michigan does business. This is an outrageous abuse of public trust and demands an immediate investigation. It’s the very definition of a conflict of interest. Dillon helped this firm land a $20 million contract with the City of Detroit, and then was promptly hired by them.”

Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.