Friday, January 13, 2012

Ficano's former top deputy alleges severance cover-up

Lawsuit alleges Wayne Co. exec misled commission on payouts promised to 15 appointees

By Joel Kurth, Christine MacDonald and Mike Wilkinson
The Detroit News

Detroit— The severance scandal engulfing Robert Ficano has exploded with the release of a lawsuit that revealed his former top deputy was promised a payout of at least $300,000 and rich pension enhancements.

Ficano also pledged big payouts to at least 15 top aides and orchestrated a cover-up to mislead the public and commissioners about them, according to the $25 million whistleblower suit that former Deputy Executive Azzam Elder filed late Wednesday.

The allegations come atop continued outcry over a $200,000 severance in September to former economic development czar Turkia Mullin that prompted an FBI investigation.

The claims from Elder are "more explosive than Turkia Mullin," said Commissioner Kevin McNamara, D-Canton Township.

"If it's true, (Ficano) has hidden public records from us and perhaps the FBI," McNamara said. "He's not just in trouble. This is a smoking gun."

Elder's suit includes a 2009 letter from Ficano promising the former deputy at least $300,000 but not more than $350,000 when he quit. The money was a reward for staying aboard and forsaking pay increases beyond his $150,000 salary.

The deal also provided pension boosts that, according to former county Auditor General Brendan Dunleavy, would have allowed Elder, 42, to retire at any time and collect $150,000 per year for the rest of his life.

"This is the craziest thing I've ever heard of," said Dunleavy, who argued Ficano didn't have the authority to revise a retirement without commission approval.

Elder never received the money, and Ficano rescinded the deals with other aides the day after The Detroit News reported on them in October.

In a statement Thursday, Ficano said he's "disappointed that Mr. Elder continuously refuses to accept responsibility for his own actions."

"It's unfortunate that after his voluntary resignation he has chosen to be dishonest about events during his tenure to better serve himself in this suit," Ficano said.

Elder is under investigation by the FBI, along with Mullin, who took a job as CEO with the Detroit Metropolitan Airport but was fired Oct. 31.

Elder resigned in early November, shortly after Ficano placed him and another aide on leave for their role in the Mullin payment. In December, an ex-staffer said in a deposition Elder ordered the Mullin severance.

Elder: Ficano knew of deal

Ficano's staff didn't address specific allegations in the suit Thursday. The claims contradict Ficano's many responses about the Mullin payout since the scandal erupted in late September.

Initially, he defended her deal as a "standard contract" and said Mullin was worth the money because she brought in investment commitments.

But in mid-October, when he suspended Elder and others, Ficano called the severance a "mistake" that was put together in a "sloppy manner."

Elder's suit alleges that Ficano knew of the deal all along. Elder claimed he urged Ficano to "come clean" with the public and commissioners investigating the Mullin deal.

"Ficano told (Elder) that he could not afford to come clean because the timing was bad and it would hurt him politically," according to the lawsuit filed by Southfield attorney Geoffrey Fieger's law firm.

The suit claimed Ficano staffers removed more than a dozen severance agreements "from each of the employees' personnel files" and failed to comply with media Freedom of Information Act requests.

The News has requested Elder's personnel file since October, but the county hasn't provided it.

The letter promising Elder a payout — which he was set to receive this February, according to a Feb. 11, 2011, letter attached to the suit — was missing from his personnel file when lawyers requested it, according to the suit. It later emerged.

The deal called for Elder to receive the severance because he turned down other jobs. It also allowed him to jump to a better pension plan that allowed him to use his two years' best pay as a base — and include the severance in calculating it.

Detroit employment law attorney Joel Sklar said he's never seen such a lucrative "golden parachute." He noted the deal was inked months after the stock market crash and should have been approved by the commission.

"The timing suggests that when everyone else, including government, is having a difficult time, it should have been subject to public disclosure," Sklar said.

"If this is what public employment offers, then people in the private sector need to take another look. It's exceptionally generous."

County sources said the Elder deal was rescinded in October. But Sklar said Elder might be entitled to the money because he didn't agree to void the deal.

The revelation comes despite repeated assurances from Ficano staffers that there would be no more severance bombshells.

Commissioners learned of the suit during a meeting in which they approved an ordinance barring future severances.

"This is unbelievable to me that someone would make this kind of agreement," said Commissioner Laura Cox, R-Livonia. "It's very troubling and it shows there was a lot of stuff going on that we weren't aware of."

Suit names commissioners

News of the Elder deal comes one week after Ficano released details of another — a 2004 settlement that enhanced the pension by as much as $1 million to a former administrator who accused him of illegal activities.

The deals have infuriated rank-and-file workers who have taken 10 percent pay cuts and layoffs, said Thomas Richards, president of the American Federation of State, County and Municipal Employees Local 101 that represents 687 roads workers.

Mullin's attorney, Raymond Sterling, said Elder's suit shows that Mullin "was and continues to be an innocent victim."

She is suing the airport authority, alleging wrongful discharge from a contract that guaranteed her a severance of nearly three years' pay — $750,000 — if she was fired without cause. Airport officials haven't said why they fired her, but said they had just cause.

The suit also names Commission Chairman Gary Woronchak and Commissioner Bernard Parker.

Elder alleged Parker's son, contractor Bernard Parker III, "harassed and pressured" county contractors, including Ghafari Inc., a Dearborn architectural firm. It has a contract for a $300 million jail, a deal that also is under scrutiny by the FBI.

Elder said Woronchak and Ficano blocked his request to investigate the allegations.

Parker, his son and Woronchak denied the claims. After reading the suit, Woronchak said he's not sure why he was named.

Parker III said his inquiry to Ghafari was a "cold call."

"There were a number of letters we sent to contractors … introducing our firm and asking for informal meetings," he said.

Although Elder quit voluntarily, his suit in Wayne County Circuit Court alleged wrongful discharge on claims that Ficano forced him out by creating "intolerable" working conditions.

His suit contradicts claims made in a November news release saying he left voluntarily and "never saw myself as having a long-term career in government."


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