SIGTARP Is Still Investigating Flint & Detroit Blight Demolition Programs

Did you know the Flint TARP Blight Demolition program is under federal investigation, too?

Did you know the Flint Water Crisis generated lots of blight, too?

MITIGATING THE RISK OF OVERCHARGING AND FRAUD REQUIRES STRONG OVERSIGHT

The question of why costs are rising in Michigan and Ohio is one that SIGTARP will be conducting oversight to answer. Even if there may be explanations for certain rising costs, that does not necessarily mean that federal taxpayers have to pay for it with TARP dollars. In order to understand demolition costs at a more granular level, SIGTARP recently announced an audit of demolition costs in Flint, Michigan, the second largest city in TARP blight demolition funding.

Funny how this works.

Detroit Land Bank Authority and Mike Duggan did not publicly disclose that the Treasury Department had suspended TARP Funded Demolition funding.

Then, the "Legal Geniuses" (trademark pending) came out with the story that everything was honky dory because they had miraculously stopped fraudulently billing TARP for demolitions immediately after SIGTARP told them they were fraudlently billing TARP for demolitions.

via GIPHY

TARP-Funded Demolition Costs Rose 57% in Detroit and Decreased After SIGTARP’s Audit Detroit, Michigan is the city that receives the largest amount of TARP-funding for demolitions in the nation at $130 million. In Detroit, the average cost of demolition per house rose 57%. The average of TARP-funded demolition in Detroit at the time of SIGTARP’s June 2016 audit was $17,622, very close to the peak average for the entire state of Michigan, as shown in figure 3.2. Source: SIGTARP analysis of Michigan HHF Blight Demolition data through 12/31/2016, obtained via Michigan State Housing Development Authority response to SIGTARP data call.

SIGTARP Graph Identifying Detroit Land Bank End of Fraudulent Billing Miracle - June 2016

The data shows a direct correlation to the timing of SIGTARP’s June 2016 audit and the decrease in demolition costs. After SIGTARP issued its June 2016 audit, costs immediately dropped, and since then have dropped significantly. In addition, Treasury temporarily suspended all TARP dollars in Detroit for blight demolition in August 2016. With an additional $67 million in TARP dollars committed to blight demolition in Detroit, cost savings to taxpayers is critical.

PROTECTING TAXPAYERS FROM RISING BLIGHT DEMOLITION COSTS IN TARP - Special Report April 26, 2017 by Beverly Tran on Scribd

US SIGTARP Detroit Land Bank Authority Subpoena Redacted - 5-19-2016 by Beverly Tran on Scribd

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