YPSILANTI, MI - Ypsilanti is not renewing the contract of its economic director after an internal investigation was critical of her actions involving a trip made to China by her and several city officials.

City Manager Darwin McClary confirmed Beth Ernat's three-year contract as economic and development director ended April 9 and was not renewed after he received a copy of a 26-page report by Plato Law Firm, hired to review the overseas trip.

The law firm's report alleges Ernat did not do enough to confirm that a developer wasn't paying for the overseas trip. The developer was interested in using Ypsilanti's Water Street property for a large housing development called International Village.

Ernat could not be reached for comment on the allegations. An email to her city account also was returned with a message stating she is no longer employed by the city.

The law firm's report recommends that Ypsilanti City Council consider pursuing charges of misconduct in office for both Ernat and Mayor Amanda Edmonds, who was also on the trip to China. The city has not taken any action on that recommendation and the council next meets April 17.

According to Steven Hiller, chief assistant prosecuting attorney for Washtenaw County, no charges have been filed in connection with the report's recommendation.

In an emailed statement to The Ann Arbor News, Edmonds said the report confirms that everything she knew about the trip was shared with city officials last year and that she did not violate Ypsilanti's ethics ordinance or state law.

"I was disappointed upon reading the report, however, to learn that I and others had been misled, and that there were improper actions by some parties," Edmonds wrote. "No city staff, city legal counsel, or other members of council brought up concerns around the source of funding prior to the trip, and I had no reason not to trust our staff and legal counsel's professional experience on this matter."

A copy of the report has been provided to all members of the Ypsilanti City Council, McClary said, although a final report is still in the works by Plato and it is unclear what city council members may do with the information.

"I am not sure at this time if the reports will be discussed at an upcoming council meeting," McClary said in an email.

The trip to China was described as a fact-finding mission by city officials related to the $150 million to $300 million proposed development in Ypsilanti called International Village, a project that proposed financing through foreign investors.

Ernat, Edmonds, Mayor Pro Tem Nicole Brown and Police Chief Tony DeGiusti traveled to China from Sept. 21 to Oct. 3 in 2017.

City council voted Oct. 11 to investigate the trip after hearing hours of testimony from the officials involved, and questions arose about how the trip was financed.

The report by Plato Law Firm includes more than 1,500 pages of documents and 20 hours of sworn testimony from public officials, international students from Wayne State University, International Village developer Amy Foster and Jingming Liang, who, the report says, occasionally does work for Foster.

Foster was working with Ernat on the proposed International Village, a multi-use residential project proposed for Ypsilanti's Water Street property that would be financed primarily by Asian investors and designed to attract Asian immigrants.

The developer proposed the trip to China in May 2017, prompting the Ypsilanti City Attorney's Office to send out a memo in an email to city council members about the illegal and unethical nature of accepting funding for the trip from Foster.

The investigation report contends Ernat continued to organize the trip with Foster and was involved with arrangements for visas and flights after receiving an emailed offer of sponsorship by the Wayne State University Chinese Students and Scholar Association, or CSSA.

The law firm contends it received surveillance photos showing Jingming Liang depositing $16,800 in cash into an account held by the CSSA, accompanied by a Wayne State student, who was described in the report as reluctant to provide testimony about the incident.

The money was withdrawn from the account an hour and a half later by Jingming Liang in the form of a cashier's check for Youngs Travel, the report said, with Huntington Bank records linking the CSSA deposit to International Village.

The report alleges Ernat deleted emails indicating trip or funding information came from Foster and drafted the scholarship letter from the CSSA, but failed to mention that during testimony provided Oct. 11 during a city council meeting.

During that testimony, Ernat was asked whether she considered it suspicious that an offer by the CSSA was made despite the group not being approached by the city and if she inquired about how the scholarships were funded.

"I have not previously investigated grant sources," she said. "It did not strike me as odd or concerning."

Ernat and Edmonds said in October they believed the funding source was through the Chinese consulate.

Testimony provided by Edmonds at the same meeting was also questionable, the report said, because she was aware of the connection between the International Village developer and Global Capital Group, the company they allege provided the scholarship funds for the CSSA.

Plato's opinion, detailed in the report, is that Edmonds would have been aware of the unethical funding of the China trip if she had been more diligent.

"While there appears to be insufficient evidence that the Mayor intentionally used her public office for private gain, it does appear, in our opinion, that she was careless, neglectful and lax in carrying out the fiduciary duties of her public office," the report said.

The law firm's report also noted gifts from Foster to city officials, including a jade bracelet given to Ernat that the report claims was never returned despite instruction from McClary to do so and alleged attempts by multiple parties to halt or manipulate the investigation.

"Both Jingming Liang and Amy Foster tried to prevent or at least discourage our investigation by telling witnesses that they did not need to cooperate with us or provide interviews," the report alleges.

The report also includes a timeline summary of documents and testimony related to the investigation, noting obstacles including costs associated with translating some information and interviews.

Ypsilanti Timeline Summary Final by Jessica Haynes on Scribd

The report says Foster became interested in developing International Village in Ypsilanti because her son attended Eastern Michigan University, though the project was originally considered for Troy and Madison Heights.

The project has since fallen through, despite a purchase agreement for the 36-acre property signed in September, as the investigation progressed and city officials questioned Foster's ability to develop such a large-scale project in Ypsilanti.

The report is critical of Ernat's ability to decipher possible ethical issues stemming from funding offers from the CSSA through Global Capital Group and the Chinese American Business Association of Detroit.

The most recent entry on the timeline assembled by Plato was a Feb. 19 meeting attended by Foster and Ernat, which was related to the investigation into the funding of the trip and a future meeting with a Chinese investor planning to visit Ypsilanti.

Edmonds has since announced she will not run for re-election as mayor, and fellow Councilmember Beth Bashert has said she plans to run for the office.

In her emailed statement, Edmonds said that city officials need to get back to moving the city forward and cited recent actions related to economic development and housing affordability.

"I look forward while serving out my term through this fall to supporting these and other important dialogues, opportunities for engagement, and translation of our values and priorities into policy that benefits our residents and all of our community stakeholders," Edmonds wrote. "And, since I am not running for a second term, I look forward to welcoming my successor as Mayor of Ypsilanti."