Detroit’s lawyer draws criticism for unauthorized contract

Detroit’s City Council leader considered recommending disciplinary action for the city’s deputy corporation counsel after he approved a contract without permission.

Council President Mary Sheffied requested a resolution that called for Mayor Mike Duggan to punish Charles Raimi for authorizing a contract in violation of the City Charter. The resolution was placed on Tuesday’s formal session agenda but removed Monday afternoon, according to the clerk’s office. Sheffield’s resolution, drafted in February, urged Duggan to discipline leaders of the Detroit Law Department for violating the City Charter, which is a fireable offense.

The resolution states the Law Department unlawfully approved a contract with Hidden Assets, LLC to pay the company for recovering $448,790 in city funds that had reverted to the state of Michigan. The council approved the contract in April after holding a closed session on the issue in March. 

Raimi “made an honest mistake and apologized for it,” said Detroit spokesman John Roach, adding that “council approved the contract at issue and it’s our understanding the issue is closed.” 

Council Member Mary Waters said Raimi should face “some sort of reprimand.” Waters said a March closed session left her with unanswered questions about why Raimi approved the contract.

“I still don’t understand, because he’s an intelligent man and he knew better,” Waters said late Monday. “I’m at a loss. There was a void for me. I felt there was something missing and I don’t know what it is. I wasn’t satisfied with what I heard.”

When contacted by BridgeDetroit on Monday, a spokesperson for Sheffield said “we are urging the Mayor to take the appropriate disciplinary action on the matter.”  Three hours later, BridgeDetroit learned the resolution was removed from Tuesday’s agenda. Sheffield’s office did not respond when asked to clarify why the resolution was pulled and whether disciplinary action is still being sought. 

Sheffield’s resolution states the Law Department was approached by Kelly Thompson of Texas-based Hidden Assets, LLC in August 2022 with a proposal to recover funds held by the state in exchange for a 25% contingency fee. Waters said the funds were placed into the General Fund.

The resolution says Law Department leaders, including Raimi and Corporation Counsel Conrad Mallett, did not have the authority to approve the agreement.

Council documents show Raimi submitted a resolution in January asking to pay the contingency fee to Hidden Assets. It stated that Hidden Assets already provided services, helping the city recover funds from the state. The Law Department had agreed to pay up, subject to council approval, according to the resolution. Sheffield requested the creation of a resolution urging disciplinary action, which was released in February. 

The council met with city attorneys about the issue in a March 21 closed session, which means the public was not provided access to the meeting or a record of what occurred. 

A month later, council voted 4-5 to reject a $112,197 payment to Hidden Assets. Council then reconsidered the decision at its next meeting and voted 6-3 to approve the payment. Council Members Gabriela Santiago-Romero, Angela Whitfield-Calloway and Waters voted no both times, while Council Member Coleman Young changed his decision to support the payment. 

“The reason why I changed my vote is because I wanted the city to accept the money,” Young said Monday. “If we had not approved the contract, the vendor would have taken us to court and won. I wanted to save the city from that.” 

Waters said Raimi pledged not to violate the City Charter. She said there didn’t appear to be a connection or conflict of interest between Raimi and Hidden Assets either.

“(Raimi) just never gave a real good reason why he signed off on the contract,” she said.

Young said he scolded Raimi in the March closed session, receiving Raimi’s guarantee that it would not happen again “and that was the end of it.” Young said it’s important for the city to recover $336,593 it otherwise wouldn’t have had.

“What I said to him wasn’t PG,” Young said.

Sheffield’s resolution states Law Department leadership, naming Mallett and Raimi specifically, did not have authority to approve an agreement with Hidden Assets. 

Sheffield declined to comment. A spokesperson for the council woman pointed to language in the resolution when BridgeDetroit asked whether the council president believes they should be fired. The resolution states appropriate disciplinary action for charter violations includes, but not is limited to, removing those responsible.