By ZEINAB NAJM
HEIGHTS — The City Council voted 5-2 April 9 to override Mayor Daniel Paletko’s veto of the appointment of the Ottenwess, Taweel & Schenk PLC law firm for a forensic audit.
Before the veto, the council again voted 5-2 to reintroduce the law firm appointment resolution for possible reconsideration. The retainer agreement was also passed with a 5-2 vote after the override. All three votes were opposed by Councilmen Dave Adballah and Robert Constan.
Paletko’s veto came after the city council passed the law firm appointment resolution at a March 26 meeting, also with a 5-2 vote. Paletko said in an eight-page veto letter to the council that the forensic audit “is a political witch hunt that will waste city money and violate the law.”
The city council first voted on a resolution to seek a forensic audit to provide answers for questions surrounding the almost $1.4 million missing for the city’s Public, Educational and Governmental Fund during a meeting on Feb. 26.
Adballah and Constan voted against the proposal for the third party audit resulting in another 5-2 vote. The resolution said, some city records listed are administrative and employment practices, financial and accounting records, taxation, contracts, mismanagement of city funds, unfair negotiation of city labor contracts, cable franchise or PEG fees.
“According to the city charter, the city council has the subpoena power, therefore the city council is extending that power to the forensic approved audit to conduct interviews, collect evidence and obtain information or records related to audit from elected officials, employees, appointees, commissioners, boards members, city contractors, city services providers and others who may be related to city businesses,” the resolution read.
At the April 9 meeting, Corporation Counsel Gary Miotke spoke before the council voted, saying that if the two agenda items relating to appointing the law firm were adopted they would violate section 5.13 of the city charter. He added that the charter section does not provide for any designated general legal counsel to the city council.
“The section governs the office of corporation council among many other things that makes the corporation council the legal adviser to the mayor, the city council and each and everyone of the several departments, commissions, board and administrative offices and agencies of the city,” he said. “Section 5.13 of the city charter also governs how legal advisors serving the city are appointed, provides for the appointment of corporation counsel assistant corporation counsels and special legal counsel which have sometimes been referred to as special corporation counsel.”
Paletko told the council that Miotke informed them at a past meeting and the April 9 meeting that the law firm appointment is an illegal action and said the council should listen to Miotke in order to avoid getting themselves in trouble.
When Paletko wanted to complete his comments at the meeting, Council Chairwoman Denise Malinowski-Maxwell as the council chair denied him, claiming the mayor was making derogatory comments instead of participating in the discussion.
Before the law firm reintroduction resolution vote Abdallah said he wanted to reiterate again that the council should be very careful with the taxpayers’ money deciding to jump right to a forensic audit that could cost $1 to $2 million.
“I think it’s not the right thing to do before we talk to Plante Moran first at a study session or possibly get somebody else to talk to, but not jump right over to a forensic audit,” he said. “There are too many steps in between that we are skipping and I don’t think it’s in the best interest of the taxpayers to spend this type of money without checking first at this level before we go right away to a forensic audit. Without a dollar figure, we’re going to jump into this and then who knows how much.”
Maxwell said the council has a limit on a spending amount, which Abdallah responded by saying is $35,000, but that money would go to hire a law firm that would hire an accounting firm and then have to pay for the forensic audit.
Constan said if the city wants to hire accountants to do an audit it should hire accountants to do the audit, but added that the only reason the city would hire a law firm to hire the accountants would be for attorney-client privilege.
“The contract calls for your signature, if the city enters into any contracts the mayor and clerk have to sign it, again it’s $35,000 that’s taxpayer money — city money,” Constan said. “None of this at all makes sense. I think what we need to do is have our auditors Plante Moran or any other accounting firm go through those years and say X amount of money came in the PEG money and X amount of money went out, and here’s what it was spent on.”
In his letter, Paletko said he intends to exercise every legal option available to him if the city council majority were to override his veto.
“I will refuse to sign any agreement with the Law Firm of Ottenwess, Taweel & Schenk, PLC,” he wrote. “Further, I shall not authorize any payments to the Law Firm of Ottenwess, Taweel & Schenk, PLC or any of its agents. Consistent with the oath I took years ago, I will continue to protect the city, its citizens, and its future to the very best of my ability.”
During a Feb. 19 study session, Councilman Ray Muscat said he and Dearborn Heights resident Zouher Abdel-Hak researched past budgets, looking through every page.
Muscat said his research into Plante Moran audits and budgets from 2003-04 led him to see that was the time when PEG funds were shown as restricted, then there was a seven-year period where they were intermingled with transportation, and again the funds showed up in the audits for PEG fees.
Muscat also said PEG funds were set aside for public, educational and governmental access channels including the equipment or facility upgrade purchases needed for filming videos broadcasted on the PEG channels and that those fees show up on residents’ cable bills.
Paletko said during the study session there was a lot of time spent looking at the money and audits going back to 2003 and that he knows why questions are being asked by the city council so acting quickly on upgrading the equipment is important.
He added that PEG fees can be used toward salaries and fringe benefits for employees working on the city’s cable programs, which Muscat had questioned. Paletko said the city is doing everything right, and if not it will correct it.
All city council meetings are available on YouTube under the City of Dearborn Heights page.
(Zeinab Najm can be reached at [email protected])