By Steve Neavling
Motor City Muckraker
The Detroit Land Bank will spend up to $760 an hour for outside legal counsel during the federal investigation into the city’s massive demolition program, according to records obtained by Motor City Muckraker under the Freedom of Information Act.
The Land Bank hired two outside law firms that will charge between $300 and $760 an hour. The top attorney, Jeannie Rhee, of Washington D.C.-based WilmerHale, will be paid $760 an hour, a 20% discount from her normal fees.
Rhee is a former assistant attorney general, veteran trial attorney and expert in handling government-related investigations and white-collar crime.
The Land Bank defended the hourly rate, saying it was critical for experienced lawyers to help assemble and review documents that are requested by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The FBI is assisting in the investigation.
“In my 30 years of the practice of law in Washington, I always had the best possible counsel who specialized in dealing with each federal agency,” said Erica Ward Gerson, chairwoman of the Land Bank Board of Directors. “It’s essential to make sure that we comply fully and seamlessly with whatever that agency is seeking.”
What remains unclear is how the Land Bank, which uses federal funds to demolish houses, will pay for the legal fees.
In a letter to Detroit City Council President Brenda Jones, Detroit Corporation Counsel Melvin “Butch” Hollowell said it’s his “understanding that funding for the legal services will be paid from the Detroit Land Bank General Operating Account which includes Hardest Hit Fund allocations, proceeds from real estate sales, and foundation grants.”
The Land Bank is prohibited from using federal demolition funds on legal bills.
Federal investigators haven’t revealed what they are looking into, but questions have been raised about the rising cost of demolitions.
The Land Bank, which has received more than $170 million in federal funds in the past 30 months, has demolished nearly 9,000 houses since Mayor Duggan took office.
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.