FBI raids Detroit's city hall, council members' homes as it focuses on towing operations

Detroit — A widening public corruption investigation focused on Detroit towing operations and bribery allegations emerged Wednesday as FBI agents raided Detroit City Hall and the homes of City Council members Janeé Ayers and Scott Benson, the latest development in a scandal that has led to charges against Councilman André Spivey.

The full scope of the investigation was unclear, but FBI agents were focused on municipal towing operations and accusations city officials received bribes, according to two sources. Federal agents on Wednesday also searched the homes of several City Council employees, including Ricardo Silva and Carol Banks, chiefs of staff for Ayers and Benson, respectively, though search warrant documents listing probable cause to search the locations remained sealed in court and no criminal charges were filed Wednesday.

The raids represent the broadest federal investigation into City Hall corruption in the eight years since former Detroit Mayor Kwame Kilpatrick was convicted of racketeering conspiracy and sentenced to 28 years in federal prison. President Donald Trump commuted the sentence in January.

“The citizens of Detroit have a right to a city government that’s free of corruption,” Timothy Waters, special agent in charge of the FBI's Detroit office, told reporters outside the municipal center after more than a dozen special agents were spotted leaving the building with boxes of evidence.

It was unclear which City Hall offices were raided but a source familiar with the investigation said investigators did not search Mayor Mike Duggan's office or executive suite.

In recent years, FBI corruption investigators have focused on Macomb County politics, and secured more than a dozen convictions before returning their focus to Detroit politics.

"Clearly, there is a culture of corruption that doesn’t stop at the city line or the county line," said Erik Gordon, a professor at the University of Michigan's Ross Business School.

The Wednesday searches come three weeks after Spivey was arraigned in federal court on one count of conspiracy to commit bribery over claims he accepted more than $35,000 to be "influenced and rewarded" for votes.

Ayers, 39, is seeking a second four-year term as an at-large council member in the Nov. 2 general election and faces three other candidates for two at-large seats. Benson, 51, was unopposed in this month's primary and advanced to the general election. He is seeking a third term representing northeast Detroit in District 3.

The raid at Ayers’ home comes three years after her name emerged in a bribery investigation involving Gasper Fiore, the towing magnate, that relied on a sealed FBI wiretap affidavit, which was obtained by The Detroit News. At the time, intercepted telephone conversations offered insight into the influence Fiore wielded over local officials and his attempts to rig the system in his favor.

Among the wiretapped calls from 2016 was an exchange between Fiore and a man identified as Nicholas Primus about secretly funneling money to Ayers to pay for advertising billboards. Federal agents did not list Ayers as a target of the wiretap investigation, and she has not been charged with wrongdoing.

In a May 10, 2016, phone call, Primus alerted Fiore of an alleged upcoming meeting he had planned with Ayers. The two men “discussed ways to get money to her but disguise it,” FBI Special Agent Robert Beeckman wrote in the wiretap affidavit.

Primus told Fiore he was providing billboards for Ayers, who at the time was gearing up for a special election to finish out a term on council in a vacated seat, the agent wrote. Primus allegedly offered Fiore the opportunity to pay for the billboards and said he would let Ayers know that he was doing so.

Primus also spoke with Fiore about a planned lunch meeting with Ayers and invited Fiore to attend, according to the court filing. Fiore acknowledged that he’d attended a party for Ayers a week earlier, and told Primus to let him know where the meeting would take place, and that they should keep it “close and quick.”

“I gave her a good deal,” Primus told Fiore, according to a transcript of the call. “I was gonna give her some money too. Not in my name, but, you know, but ... anyways, I gave her a good deal on some billboards, and she asked me for some extra time. And I said, ‘I don’t know, let me work with you.’ I don’t know if you want to tell her and you pay for it cause uh, I only charged her a thousand dollars a billboard.”

Fiore replied: “Alright. ... I – I’ll do something.”

Ayers has told The News she doesn’t know Primus.

“I have never had a private meeting with him. I’m not sure I’ve ever seen him publicly,” said Ayers previously, who added, “he has never donated to my campaign.”

Campaign finance records show no payments from Primus or Fiore to Ayers.

Fiore, known as the “Baron of Bribery,” was sentenced to 21 months in federal prison in August 2018.

Benson and Ayers did not return calls Wednesday from The News seeking comment. 

'I'm shocked'

Ayers was seen outside her westside home Wednesday, but a Detroit News reporter was stopped by police as she tried to approach the councilwoman. 

Federal agents searched through vehicles and boxes alongside the colonial home, and Ayers was seen speaking with a small group of family on the sidewalk before heading inside.

A handful of unmarked police vehicles were outside Ayers' home and half of the street was blocked off from traffic. Most surrounding neighbors told The News that they were unaware before Wednesday that Ayers lived on the block. 

Neighbor Latisha Hardwick has lived on the street for 13 years and said she’s never met Ayers but recognized her photo. 

“This is surprising,” said Hardwick, 42. “The newest thing that happened in this neighborhood was that they recently put up a gate in front of an already existing gate.”

Outside Benson's house in Detroit on Wednesday, a large black SUV was parked in the driveway and a Michigan State Police car was in the street as a group of agents gathered near the front porch. Some of the agents were wearing gloves. When a Detroit News reporter arrived, they all went into the house.

At one point, a group of four neighbors came outside to watch the raid as a helicopter flew over Benson's home.

Authorities left Benson's home late Wednesday morning with rolling black carts, and it appeared they also removed paper bags containing documents. 

The councilman's neighbors were surprised to learn about the raid on Benson’s home on Detroit’s east side and a stone’s throw from the suburb of Harper Woods.

“I’m shocked,” said Merlynn Sargent, 61, whose lived in the neighborhood since 2015. “In my opinion, when you see the FBI, they’ve already been investigating you and they raid your house looking for the evidence now. That’s how I look at it.”

She said she's been a supporter of Benson and his work for the city. 

“He’s done so much for the community," she said. "As a matter of fact, I voted for him.”

Sargent said she wasn’t familiar with Ayers and didn’t know much about her. She also said as a Detroiter, she’s tired of hearing stories about corrupt politicians in the city.

“When we got rid of Kwame, I thought that was the end of it. But every time you look around there’s someone else. There was Gabe Leland. There was Spivey, which surprised me, too."

FBI agents also searched the home of Ayers' chief of staff, Silva, in Detroit, according to the FBI. He did not respond to a message seeking comment.

The search coincided with a raid at Banks' home in the East English Village neighborhood on Detroit's east side.

She declined comment through her former representative, lawyer Todd Russell Perkins.

Banks has a controversial past. 

She was terminated from Detroit Public Schools in 2015 while serving as an ombudswoman and doubling duties at Benson's office. The Detroit Board of Education fired Banks that December following an internal investigation into misconduct. She went on to work for Benson full-time.

At that time, Benson told The News, he found no evidence of any wrongdoing on her part and that he supported her.

“Carol Banks is a huge asset to this community and to my office,” he said then. “I’m happy to have her.”

Detroit Mayor Mike Duggan declined to comment Wednesday on the searches at the council members' homes and City Hall through spokesman John Roach. 

Councilwoman Raquel Castañeda-López issued a statement Wednesday, saying she's "horrified and heartbroken" over the raids and Spivey's recent charge.

"Our country affords everyone the fundamental right to be presumed innocent until proven guilty and access to justice," she said. "Many on this Council, including myself, were elected just as we emerged from bankruptcy and emergency management was lifted. We have come a long way since then.

"In the spirit of accountability, I am hopeful these federal probes are resolved swiftly." 

Castañeda-López also said she intends to introduce a new section to the council's training rules to "foster accountability." The proposal, she said, would call for mandatory annual training on the city's ethics ordinance. 

"As council members, we took an oath to lead with integrity and defend the rights of every Detroiter, to protect the public’s trust," she said. "And while these recent events are devastating, I still believe in our democracy. ... So to my fellow Detroiters, do not lose hope. This November, we have the opportunity to elect new voices that can restore the public’s trust and integrity to city hall."

Ayers' road to council

Ayers, a former hospitality worker, has been an at-large council member for the past six years and serves as chair of the council's Budget, Finance and Audit committee and vice chair of its Public Health and Safety committee. 

Before joining the council, Ayers worked as a mortgage banker at Quicken Loans and at MGM Grand Casino. There, she became the youngest member of the UNITEHERE! Local 24 contract bargaining team and worked as a teacher at an alternative education center for the Detroit school district.

In 2015, Ayers was appointed to finish the at-large term of Saunteel Jenkins who stepped down for a position with a Detroit-based nonprofit. Ayers was elected to a full term in 2017.

Rickie Holt lives diagonally from Ayers' home on Heyden Street and watched the raid unfold.

“They were coming in and out the house and had various bags and little cases that looked like they had stuff in them and were taking things from the councilwoman’s car,” said Holt, 65. “I couldn’t see what they were taking, but they definitely ransacked the car.”

The city water department retiree said his faith in the city administration and its authority is not held to a high standard. But he's been supportive of Ayers. 

"Nobody’s perfect, but I believe she has a good heart for the people of the city,” said Holt, Ayers' neighbor of 15 years. 

Benson's past

Benson, a U.S. Coast Guard veteran and former small business manager for Midtown Detroit Inc., first took office in January 2014. 

While on council, the longtime resident of the city's Osborn community, has been an advocate for sustainability and the city's municipal airport. He has close to two decades of experience in community development and served the Coast Guard for 24 years. 

In June 2014, Benson was arrested for drunken driving. Southfield police had discovered the councilman passed out behind the wheel of his car at a traffic light on the southbound Southfield service drive near Eight Mile. Benson previously told The News he was driving from the 50th wedding anniversary party of a former boss.

The councilman spent more than three days in jail, had his driver's license suspended for one year and paid close to $10,000 in fines. 

He served his jail sentence in March 2015. He said he opted not to drive his city car afterward, in part, to earn back the trust of the residents of Detroit. The incident, he said in a 2018 interview, was "an embarrassment" and "something I don't take lightly."

Since 2008, more than 100 politicians, union bosses, bureaucrats and police officers have been charged with corruption in Michigan's eastern district, including more than a dozen politicians and contractors in Macomb County.

Karen Dumas, a communications strategist who served as chief of communications under former Detroit Mayor Dave Bing, noted Wednesday that “politics is a dirty game” and “very few people come out of it with their hands clean.”

“That’s the reality in any place and at any level,” Dumas said. “These things have been happening for decades. This isn’t anything new. We shouldn’t pinpoint it just to Detroit."

Dumas stressed that it would be disingenuous to speculate on guilt.

“If you look at a barrel of apples and one is bad, you are going to dig into that barrel. That doesn’t mean the rest are bad or rotten. They all could be great. It does prompt you to look closer at the bushel.”

Spivey charged

In the Spivey case, federal authorities contend he and another unnamed official, identified in filings as "Public Official A," accepted bribes in exchange for votes on the Detroit City Council and in subcommittees from 2016 to 2020. 

Specifically, the longtime city councilman and the member of his staff are accused of accepting more than $35,000 in bribe payments to be "influenced and rewarded" for votes on the council and in subcommittees "concerning an industry under review by the council," according to federal authorities.

The City Council has been in discussions for months about proposed rules to regulate the city’s towing industry, which has a long history of controversy and corruption. In 2018, citing what it called longstanding problems in the police towing process, the city took over some of the tow rotations.

Spivey's Detroit-based attorney, Elliott Hall, has said Spivey "did nothing in his official capacity as a city councilperson that they're claiming." Hall later noted Spivey was "only being charged with the $1,000, but that he and Public Official A collected together over $35,000." 

Spivey, his lawyer added, has been "fully cooperating with the federal authorities for over a year."

Spivey was charged in late July in a criminal information, which means he waived his right to a grand jury indictment. The case was assigned to Judge Linda V. Parker, though no hearing date has been set.

If found guilty, he could serve up to five years in prison and pay a fine of up to $250,000. 

The U.S. attorney alleges that Spivey, 47, accepted a $1,000 cash bribe from an undercover law enforcement agent on Oct. 26, 2018.

Spivey is the second Detroit councilman this term accused of accepting bribes in favor of votes at the council table. This spring, Gabe Leland resigned from the council after pleading guilty to a state charge of misconduct in office and was sentenced to two-and-a-half years' probation.

The 38-year-old Leland was accused of agreeing to accept $15,000 in cash and free car repairs from a Detroit businessman in exchange for his vote on a controversial land deal.

The state case came after Leland was indicted by a federal grand jury in 2018 on bribery conspiracy and two counts of bribery stemming from the allegations. The federal case against Leland was dismissed as part of his plea agreement.

The Detroit council has long been mired in other public corruption cases and scandals.

At the time of her death in 2004, former Councilwoman Kay Everett faced an indictment for taking a cash bribe from a city contractor.

In 2006, former Detroit councilman Alonzo "Lonnie" Bates was convicted of theft and bank fraud for placing "ghost employees" on his payroll. Bates in 2007 was sentenced by a federal judge to 33 months in prison and was ordered to pay a $10,000 fine and make $91,000 in restitution to the city of Detroit. 

Former Detroit City Council President Monica Conyers also was convicted of taking bribes while in office. Conyers pleaded guilty to corruption charges in 2010 and was sentenced to 37 months in federal prison for accepting money in exchange for her vote on a $1 billion sludge-hauling deal.

Former council President Charles Pugh resigned in 2013, months after leaving city hall amid allegations of an inappropriate relationship with a teenage boy. In 2016, he pleaded guilty to sexual assault charges and was sentenced to 5 1/2 to 15 years in prison.

This month, Pugh was granted parole by the state’s parole board. He will be released from prison in December.

Former Assistant U.S. Attorney Michael Bullotta was instrumental in prosecuting Kilpatrick and Macomb politicians in recent years, after securing the convictions of Bates and Conyers. Bullotta, who now works as a criminal defense lawyer in Detroit, wants to believe the dozens of corruption convictions in recent years would deter public officials from engaging in illegal behavior.

“But the current Detroit City Council investigation is a stark reminder that not every public official takes to heart the possibility of facing years, even decades, in federal prison,” Bullotta wrote in an email to The News. “Those officials seem forgetful of the recent past and doomed to repeat history.”

Staff Writers Charles E. Ramirez, Amelia Benavides-Colón and Noelle Gray contributed.