ONE MAN’S WAR AGAINST DETROIT CONTRACTOR CORRUPTION

Jim Casha (center) with mother Anna Casha at left and brother Jerry Casha at right Grand Rapids Press photo/Jon Brouwer

“It’s not just about the Kilpatrick administration”–Jim Casha

Tunnel Inspector battled Feikens, FBI, contractors, mayors, prosecutors, state, to stop nearly half-billion dollars in fraud, pollution linked to Rouge projects

By Diane Bukowski 

DETROIT – Tunnel Inspector Jim Casha lives in Canada now, but after more than a decade he is still waging a war to compensate Detroiters for what he says totals close to $1/2 billion in mismanagement, malfeasance, possible fraud and bid-rigging and environmental hazards perpetrated by the Detroit Water and Sewerage Department (DWSD) and it’s contractors since 1999.

He says that amount was wasted on two projects alone. Their simple purpose was to build a one-mile long rock tunnel near the City of Detroit Wastewater Treatment Plant on W. Jefferson, ironically under the land that scandal-ridden Synagro Technologies meant to acquire. The tunnel, mandated by federal regulations, was to take treated sewage to the Detroit River and eliminate the discharge of raw untreated sewage into the Rouge River.

(Both projects are described at http://dwsdupdate.blogspot.com/search/label/DRO2,  published by the construction law firm of Cavanaugh and Quesada, PLC.)

Despite huge expenditures, the tunnel, which the federal government required to be built to comply with its environmental regulations, was never completed. It flooded in 2003, which Casha said resulted from contractor malfeasance. The city terminated a second contract in 2009. Casha says its remnants are leaking poisonous hydrogen sulfide into the DelRay community.

To add insult to injury, a DWSD contact has reported that the second contractor recruited for the project asked the city for $150 million for terminating its contract, which Casha says was bid at three times what it should cost to complete the project. Although the contractor was contacted regarding the payment, its representative had not responded before press time and it is currently unknown if that amount was paid.

“I am sick that people have had their water shut off and have lost their homes because their water bills were attached to their tax bills,” Casha said.  “Meanwhile greedy contractors, politicians and managers have been wasting billions of dollars. Over the last 33 years of federal oversight, the revenue ‘wasted’ was enough to pay off the Water Department’s entire debt of over $5.4 billion. Detroit can and should provide water free to its residents who cannot afford to pay.”

Casha grew up on Detroit’s southwest side and went to Holy Redeemer grade and high schools and graduated from the University of Detroit with a degree in Civil Engineering .

His family took their religious heritage to heart, he said, bringing him up to be honest. Their dedication caused them to adopt two beloved brothers who were Detroit foster children and victims of fetal alcohol exposure (FAE), in addition to their six biological children. Casha said both adopted brothers ended up in prison because their brain disabilities precluded them from being properly educated. and the State does not adequately deal with this issue. They went to school in St. Clair Shores. 

Casha has never ceased a separate battle to free his brother Terry, who he says did not commit the crime he was convicted of. He has fought to make the nation aware of the effects of FAE and the need for increased revenue to address this problem, even walking from the Lansing, Michigan’s Capitol Building to Washington, D.C. to carry out that campaign.

Casha said that Governor Jennifer Granholm and the state’s current legislators, as well as state officials over the last 30 years, have failed to deal properly with foster care, another battle he has taken up related to his brothers and thousands of others.

“Governor-elect Rick Snyder will have to act quickly to avert a federal takeover of the foster care system,” he recommended. See http://detnews.com/article/20101208/METRO/12080372

“We need dollars to deal with the effects of fetal alcohol exposure and to see so much money wasted or stolen on construction projects and mismanagement is a shame,” said Casha. “Fighting these two battles side by side has been an eye opener in the way the government works, or I should say – doesn’t work.”

Ironically, his classmates at U of D included members of the DiPonio family. Tom DiPonio is President of Livonia-based Jay-Dee Contractors. Former State Police Director, and now U.S. Marshall, Pete Munoz was a close childhood friend and classmate at Holy Redeemer. Andrew Arena, current head of the Detroit office of the FBI also has ties to Southwest Detroit and Holy Redeemer. DiPonio, Munoz and Arena all played roles in the cast of characters Casha describes.

Jay- Dee was part of the joint venture of Traylor/Jay-Dee, the contractor on the failed DRO-2 project. Traylor Brothers from Evansville, Indiana, managed the project. 

Casha said the first tunnel project, Detroit River Outfall–2, contract PC-709, a $100 million venture, began in 1999 under the Archer administration. The contractor designed the grouting program, used to stop inflows of water into the tunnel, which failed. The tunnel flooded in 2003.

He said he observed the general contractor Traylor/Jay-Dee deliberately pumping “hundreds of thousands” of gallons of a very “thin slurry” of water and cement (commonly referred to as grout) into cracks in the rock walls instead of the proper thick concentrate which would have sealed the cracks. He added that the JV charged DWSD $250 a cubic foot (cf) for the useless slurry, when it actually cost only $2.50 per cf to mix. Even when you add in labor and equipment, he said, the unit cost is excessive. 

“At the time, we tried and tried to get the engineers in the WaterDepartment to tell us what had happened, but we couldn’t get anyone to say anything,” said John Riehl, President of Local 207 0f the American Federation of State, County and Municipal Employees (AFSCME). That local represents hundreds of DWSD workers.

“What really happened on this project is Detroit’s ‘best kept secret’,” Casha said. “No one wants to talk about it. But if the new city and state administrations want to fix the problem, both with this project and DWSD in general, we need to talk about it. Contractor abuse and government malfeasance are widespread and there are ways to stop it.” 

Casha acted as an inspector for a subcontractor on the DRO-2 project.

“It’s a common trick,” he said. “Bid low, get the job, then the general contractor has control of the grouting costs. They knew how to rape the City of Detroit and they did. They just wanted to increase the size of their bank account. I wrote about it every day on my reports for one and a half years. I complained so much I was just about to get fired, but the next day the tunnel failed; just before it got to Zug Island, it flooded, and it’s currently under 300 feet of water. All that money was wasted.

“This would have been the time to hold the contractor accountable.  It was their grouting program – they should have been required to fix it, or compensate the city. Instead, they turned the tables on an inept and/or corrupt city/DWSD management.”

After that, Casha said, the department was going to award an $85 million change order to the same contractors to redesign the project and raise the tunnel up, but the order was not awarded.

Instead, after five years, according to the Cavanaugh law firm, “On November 17, 2008, DWSD issued Notice to Proceed to Vinci/Frontier-Kemper JV for construction of the Modified Detroit River Outfall No. 2 (MOD DRO2) project (DWSD Contract PC-771). DRO-2 is a $299 million project and is intended to meet a National Pollutant Discharge Elimination System (NPDES) Permit requirement to construct and place into operation a second Detroit River outfall for discharge of treated municipal wastewater from the Detroit Wastewater Treatment Plant (WWTP).

. . . construction of [the] initial project was halted following a flood event during tunneling activities in April 2003. To date, the tunnel excavation remains flooded and the construction contract (PC-709) has since been terminated.”

Casha said Traylor/Jay-Dee had the “audacity” to try and bid again, but subsequently withdrew; leaving only two groups left bidding for the project.

“The tunneling business is a very small world,” he said. “Eventually one of those bidders ‘dropped out,’ and the sole bidder Vinci bid $299 million, which was 45 percent over the city engineer’s estimate. The bid should have been thrown in the garbage and an investigation conducted to see if the two contractors colluded.”

At this point, Casha said he was fed up.

“The design for the Modified DRO-2 was extreme, in part, based on the misinformation and alleged difficulties perpetrated by the first contractor. I was there and I know this tunnel could have been completed the same way two other water intake tunnels had been completed in similar conditions in the 30’s and 50’s, one just down the road in Wyandotte. This was blown way out of proportion.”

In 2003, shortly after the ‘flood’, he said he tried to contact U.S. District Court Judge John Feikens. Under a federal consent decree, Feikens oversaw Wastewater Treatment Plant compliance with federal environmental regulations for 33 years, from 1977 until his recent retirement at the age of 93 this November. (See coming story on “Uncharged Criminals Destroying DWSD.” for further info on Feikens.)

“He wouldn’t return my calls,” Casha said. “I couldn’t get through to his Special Master Tom Lewand, the day before Feikens resigned, either. What is the point of having someone overseeing the water department for 33 years if they’re going to let contractors get away with robbing the city blind?”

He said he also contacted the Detroit FBI office, headed by Andrew Arena, to no avail. He emailed and wrote then City Council President and soon to be Interim Mayor Kenneth Cockrel, Jr., and Councilman Kwame Kenyatta to tell them not to approve the contract, that it could be done a lot cheaper, but neither responded.

He said he went to the offices of Wayne County Prosecutor Kym Worthy and State Attorney General Mike Cox without results

“I eventually had to go to State Police Director Pete Munoz to get anyone to look at it – the same as I had to do with my brother’s case in Grand Rapids to get the Michigan Department of Corrections (MDOC) to do their job. This is not the way it should be. If law enforcement wants the cooperation of good citizens to stop crime and corruption they need to stop treating them like ‘crap’”, Casha said.

Anthony Adams, who was acting director of DWSD because Victor Mercado had just left in the waning days of the Kilpatrick administration, attended a City Council meeting trying to get approval for the project as well as another unrelated $300 million tunnel project, Casha said.

“The last thing Mercado did was get the Water Board to approve the contract and Anthony Adams went to the City Council to get that $300 million contract approved. Why? I was living in Virginia then, but I drove all the way to Detroit to testify against it at a hearing only to learn that even though it was on the agenda for that day, City Council, under Monica Conyers as President, had already approved it!”

He said Steven Chester, who at the time was head of the Michigan Department of Environmental Quality (MDEQ), pushed the Council to approve the contract, even complaining to Feikens to get it passed, which Council finally did. Casha tried to get to Chester but was only able to convey his message to subordinates.

 “MDEQ was well aware of my concerns with both DRO-2 contracts,” Casha said.

John DiPonio, CEO of Jay-Dee Construction, and the Traylor Brothers administration were contacted for comment on this article, but had not responded by press time. (DiPonio is the brother of Steven DiPonio of Corktown, currently facing charges for assaulting and dragging a neighborhood homeless man behind his truck on Oct. 6.)

Messages were also left with a Vinci/Frontier-Kemp official for comment, but he did not respond.

Feikens, who retired in November, was not available for comment, and Lewand’s office did not respond. Chester, who is now a lawyer in private practice, said he does not know anyone by the name of Jim Casha and referred the question back to the Michigan Department of Natural Resources and Environment, as it is now known. Their representative Mary Dettloff said she would investigate the matter with their staff, but had not gotten back to the Voice of Detroit by press time.

Sandra Berchtold, spokesperson for the Detroit office of the FBI, said, “Information received from the public is forwarded to the appropriate squad for assessment.  For the specific questions about an investigation, DOJ/FBI policy is we cannot confirm [n]or deny the existence of an investigation. You can file a FOIA if you wish to see if there are records of a complaint or information on an investigation.”

The Voice of Detroit is filing such a request.

Worthy’s spokesperson Maria Miller said their policy is to refer all reports related to the “Kilpatrick investigation” to the federal government, while Cox’s office did not respond at all. Ironically, out-going Attorney General Mike Cox’s brother, Judge Sean Cox, has assumed Feikens’ duties.

Casha says, “This is not just related to the ‘Kilpatrick Administration’, this represents a total failure of city, state, federal as well as the county governments trying to wrestle control of DWSD from doing their duty to protect the public.”

Casha contacted several of the mayoral candidates, including sending a letter to Bing. Word must have gotten through to Mayor Dave Bing’s administration, because former DWSD Interim Director Pamela Turner canceled that project and another one unrelated to it shortly after Bing was elected.

The cancellation letter is at “DWSD Contract No. PC-771 Notice of Termination — March 30, 2009”.

That would be a good thing, Casha said, except for the fact that the contractors are now likely to get millions of dollars in compensation for termination of contract.

Hinshon Environmental Consulting authored the “Alternative Rouge River CSO [Combined Sewer Overflow] Program Executive Summary,” currently on the DWSD website. According to that report, a total of $1.2 billion in contracts for the Upper Rouge CSO Storage Tunnel, for $880 Million, and the New WWTP Outfall (DRO-2) for $400 million, both of which began construction in 2009, were terminated.

It is unclear if the additional $100 million Hinshon added to the DRO-2 contract includes compensation to Vinci/Frontier Kemp for its termination.

More frightening is the fact that Hinshon charted an estimated $1.8 billion worth of similar projects on the drawing board over the next twenty years.  Casha said the practices which led to the flooding of the Rouge tunnel in 2003 and the possible bid-rigging in 2008 are common. Who will see to it that the city of Detroit is not raped again, if it indeed has any control left over its Water and Sewerage Department by that time?

“I could have saved (and still can) the DWSD ratepayers, both Detroit and suburban,  hundreds of millions of dollars had the people I contacted, including suburban officials, talked to me instead of thinking they know everything,” Casha said. “I feel for the people, especially the children, who lost their homes because of this and for all those who need help, like my brothers, who can’t get it because there is no money. Snyder needs to talk to me, along with the Rakoltas, if he wants to straighten out this mess.”  

Walbridge Aldinger CEO John Rakolta, a major city contractor, contributed the maximum amount to Snyder’s campaign. His daughter Lauren Rakolta, a Walbridge executive, worked for Snyder on the campaign. (See coming story for more on the Rakoltas and Walbridge’s connection to another large Water Department contract.)

“The solution is False Claims (Qui Tam) Legislation for all municipal, state and federal contracts,” Casha said.

Such legislation already exists at the federal level, and in some states, according to Wikipedia.

“The False Claims Act (31 U.S.C. § 3729–3733), also called the “Lincoln Law“) is an American federal law that allows people who are not affiliated with the government to file actions against federal contractors they accuse of committing claims fraud against the government. The act of filing such actions is informally called “whistleblowing.” Persons filing under the Act stand to receive a portion (usually about 15–25 percent) of any recovered damages .  .  .  . The government has recovered nearly $22 billion under the False Claims Act between 1987 .  .  .  and 2008. (http://www.taf.org/FCA-stats-DoJ-2008.pdf ).

Several states including California have versions of the False Claims Act. Michigan’s version currently is limited solely to the Medicaid program. The act is known as the Lincoln law because it was passed by Congress during U.S. President Abraham Lincoln’s administration on March 2, 1863, to counteract rampant contractor fraud related to military spending during the Civil War.