US attorney’s office leaks favorable grand jury information about Mayor Duggan

Any reporter who regularly covers federal courts will tell you it’s incredibly rare for the U.S. attorney’s office to reveal information about a grand jury investigation. 

That’s because grand jury proceedings are secret and the records are sealed to prevent witnesses and the accused from being influenced by each other’s testimony or the direction of the investigation. 

So it was more than a little troubling when the U.S. Attorneys Office for the Eastern District of Michigan leaked secret information to reporters Tuesday about the grand jury investigation of Mayor Duggan’s demolition program. Although the office declined to even confirm the existence of a grand jury probe, a federal employee told reporters that Duggan was not the “target” of the investigation. 

That disclosure is baffling because subpoenas obtained by Motor City Muckrakers show that federal prosecutors are demanding that contractors turn over records they’ve received from the mayor’s office. And because the investigation is still in the fact-finding phase, it’s premature to discount anyone as a target, especially since investigators are still combing through tens of thousands of records and interviewing witnesses and suspects. 

Nevertheless, the disclosure was widely reported and attributed to “federal sources.” Perhaps most egregiously, WXYZ placed its focus not on the revelation of a criminal grand jury investigation, but on the leaked information that suggested Duggan was not a target of the probe. The headline read, “Mayor Duggan not a target of FBI probe into home demolitions.” 

The leak appears to be in response to Motor City Muckraker’s story that indicated the mayor’s office was targeted in the subpoenas because of the demand on at least three contractors to disclose all correspondence from Duggan’s office. 

Three sources close to the investigation told us that authorities suspect city officials colluded with select contractors to rig the bidding process for demolition work. Some of those officials, who were hired by Duggan, have since resigned. 

The sources said investigators are trying to determine whether those officials were directed by Duggan or anyone else to rig the bidding system. 

In 2015, investigative journalist Charlie LeDuff revealed that city officials met privately with preferred contractors to set a price for bulk demolition. Duggan confirmed the meeting and even told LeDuff that it “was a negotiated price; there’s no question about it.” 

But, the mayor added, “I don’t believe it was collusion.” 

Whether it was collusion will be determined by the grand jury. 

On Twitter today, LeDuff alluded to the leaks.

Authorities also are investigating allegations that city officials knowingly paid contractors for work they didn’t perform. 

Criminal charges are filed in the vast majority of grand jury investigations. 

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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.