CHICAGO - A former Wayne County, Mich. chief financial officer is one of three county officials indicted Monday in connection with an investigation into a $300 million bond-funded jail in downtown Detroit.
A Wayne County grand jury indicted former county CFO Carla Sledge on two counts of misconduct in office and two counts of willful neglect of duty. Sledge, who was CFO under outgoing county Executive Robert Ficano, retired in 2013 and now lives in Florida. She's accused of lying to the county board and building authority about the finances of the project.
The grand jury also indicted Steven Collins, former chief assistant Wayne County corporation counsel and board member of the Wayne County Building Authority, and Anthony Parlovecchio, a former county economic development aide who later became a contractor on the project. Collins faces two counts of misconduct in office and two counts of willful neglect of duty. Parlovecchio was indicted one count willful neglect of duty by a public officer.
"This has been a long and arduous undertaking," Wayne County Prosecutor Kym Worthy said in a statement. "The one-man grand jury was necessary to ensure that the process was impartial, fair, and free from politics."
The court began investing the jail project in September 2013 and convened the one-man grand jury to investigate fraud and corruption tied to the project.
The county halted construction on the half-built jail in June of 2013, a few months before the investigation began, amid cost overruns that boosted the budget to $390 million from an original projection of $220 million.
"We were surprised by that number and not in a position to say that you can go forward," Sledge told The Bond Buyer in an interview at the time. "We'd rather halt construction and bring in an independent third party to review some of their proposals and see whether these things make sense."
Wayne County operates three jails and had hoped to save money by consolidating services and costs at one facility in downtown Detroit.
The county sold $200 million of taxable recovery zone economic development bonds in December 2010 through the Wayne County Building Authority, with debt service payments coming from cash rental payments from the authority to the county, according to bond documents. The county commission authorized a $300 million borrowing, but the county never issued the remaining $100 million.
The bonds constitute a full faith and credit limited-tax GO pledge of the county, but are subject to property tax limitations.
When the county halted work last summer and was considering selling the site to a private developer, Sledge said she had been working closely with its bond attorneys and financial advisors to ensure compliance with Internal Revenue Service rules.
The county's financial advisor on the deal was Acacia Financial Group Inc. Bond counsel was Miller, Canfield, Paddock, and Stone PLC.
The case will go to circuit court for arraignment and then to trial, according to Worthy's office.