Nearly 600 license plates missing from Detroit schools. What happened?

Jennifer Dixon | Detroit Free Press

As many as 560 license plates belonging to Michigan's largest school district have vanished — and there's finger-pointing all around.

The state-issued municipal plates — distinguishable by an “X” between two sets of numbers — could be a hot commodity: There are no annual renewal fees and they are not tied to a vehicle identification number.

Good luck tracking down a getaway car or reporting a reckless driver who has somehow gotten an unauthorized municipal plate.

It isn’t just theoretical. The Free Press recently spotted a municipal plate that once belonged to the Detroit Public Schools Community District on a car driving up Southfield Road in Lathrup Village.

The Michigan Secretary of State issues municipal plates to local governments, police departments, school districts, volunteer fire departments and other public agencies. As of mid-June, the department said 109,157 were in circulation across the state.

Municipal plates cost $13 each.

"Once the plates have been issued, it is the responsibility of the governmental agency to monitor their use," said Fred Woodhams, spokesman for the Secretary of State.

Where did the plates go?

But the Detroit school district struggled to explain what happened to 560 or so plates issued by the state for its fleet of vehicles and provided conflicting answers over several months to Free Press questions about the whereabouts of the plates. At one point during the newspaper’s investigation, a school district administrator told the Free Press, “Everything I’ve given you is wrong.”

Could other local government agencies also have a problem with missing municipal plates? Hard to tell, since state officials don’t monitor the plates once issued, and unlike other states there is no requirement that each tag be tied to a specific vehicle identification number.

But the Secretary of State's Office, which issues the plates, was not particularly interested in how widespread the problem of untracked plates may be, saying it doesn’t believe there is an issue, a Free Press investigation found. The official response was the department had higher priorities.

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Despite the apparent potential for fraud, Michigan State Police downplayed the risk.

First Lt. Mike Shaw, a spokesman, said he was not aware of problems with stolen or misused municipal plates. "We have no issues with municipal plates. We don't have any knowledge of a black market," Shaw said.

Chrystal Wilson, the school district spokeswoman, blamed an emergency manager for many of the missing municipal plates.

But Robert Bobb, the emergency manager who took control of the district from 2009-11 and oversaw the sale of 400-some buses, said it would be "an act of insanity" to sell a publicly owned vehicle without removing the plate.

"Those plates can get in the hands of the wrong people who are intent to commit some type of criminal activity," he said.

The finger-pointing and the search for the Detroit school district's plates started on an evening in March, when a Free Press reporter spotted a Chevy Cavalier traveling north on Southfield Road in Lathrup Village.

The little white car appeared to have a single occupant, a driver education sign on the roof — and a municipal plate.

Secretary of State records showed the plate belonged to the Detroit schools and that plate number 095X525 was one of 674 assigned to the district.

But a school district list of its vehicles, obtained by the Free Press under the state Freedom of Information Act, indicated the district had just 112 license plates in use and a total of 117 vehicles in its fleet. Five plates were assigned to two different vehicles, according to the records.

The district's list of license plates did not include the plate on the Chevy.

Changing explanations

Over a five-month period, as the Free Press sought to determine the status of the unaccounted-for plates, the district's explanations changed.

Wilson, who is assistant superintendent of communications and marketing, said the Chevy spotted on Southfield was sold in 2015 for $200, without keys and badly damaged. Wilson said it was possible that the district may have auctioned a vehicle with an old plate, "but that cannot be confirmed." She added: "We do not have a record of any plates being stolen and sold."

Of the other plates not on the district's list, Wilson said she believed some of them were in the district's possession and were stored in the office of transportation.

After the Free Press asked to see those plates, Wilson said she misspoke and that any unused plates would be stored at the transportation office in the future.

The Free Press asked her several times to see at least some of the plates. She initially said that would not be possible because it's summertime, staff are on vacation and school is out. She later said the Free Press couldn't see the plates because they were "all in different locations."

She said the district was doing an audit to determine how many plates it has. In late July, she said that effort was a "work in progress."

She said the Free Press' inquiries had "surfaced yet another example of a lack of systems and processes under emergency management." In the past, individual departments requested the plates and were responsible for decommissioning them.

"As such, plates were inconsistently recorded, used or stored," she said in a written statement. "Moving forward, one department will own the process to request plates and issue them to authorized vehicles. We will also develop clear policy and administrative guidelines regarding the process of using and returning authorized plates by departments."

The problem with the plates "occurred during emergency management and can be added to a long list of systemic failures that we are working to clean up," Wilson's boss, Superintendent Nikolai Vitti, said in an email. He declined an interview request.

The president of the district's board, Iris Taylor, agreed.

"The previous administrations, as they liquidated vehicles, did not have a process that included tracking where license plates went," Taylor said.

The district was under state-appointed emergency managers from 2009 until a newly elected board was installed in early 2017 and hired Vitti.

Bobb responds to criticism

Bobb, the district's first emergency manager, said the plates were taken off district buses when he sold them.

As someone who has managed cities around the country, Bobb said he has sold police cars, public works equipment and other vehicles and can't recall "anyone who works for me who sold municipal rolling stock without removing the license plate and reporting" the sale to state motor vehicle agencies.

"It's just not the right thing to do, period. It's a very bad idea," said Bobb, who runs a restructuring and turnaround consulting company, the Robert Bobb Group, in Washington, D.C.

Leon Glaster, who was one of Bobb's chief assistants in Detroit, said the district was dealing with a $300-million deficit when they privatized bus service to cut costs.

As part of the deal, the new transportation provider had to buy 400 rickety buses from the district, Glaster said. He said every bus was inspected by Michigan State Police, and every title was recorded with the Secretary of State.

"All those license plates were taken off and returned to Detroit schools, because they were government plates, a private company couldn't roll with government plates. They were all turned over to procurement to be recorded and stored," Glaster said. "Everything was in order."

Leslie Paige, vice president of policy and communications at Citizens Against Government Waste, a taxpayer watchdog in Washington, D.C., said the "possibilities for fraud are endless here."

"There's a huge temptation to use them inappropriately because no one even knew they were gone," Paige said.

At best, she said, the plates were misplaced, which suggests a lack of controls. At worst, the plates could have been used as "some sort of contraband or given away for nefarious purposes."

"The question now is how are they going to track them down and who's going to do it," said Paige, a metro Detroit native. "Who's holding themselves responsible?"

LaMar Lemmons, a member of the Detroit Board of Education for nine years, said he was shocked to learn so many plates had gone missing.

"Wow," he said. "Anything could be done under the district's name and we could be held responsible."

Lemmons called the plates a "valuable asset that belongs to the taxpayers of the City of Detroit."

After being contacted by the Free Press, Woodhams said the Secretary of State reached out to the school district in July to "encourage them to tell us which plates they are still using so whichever ones they're not can be canceled."

That process was ongoing, he said.

"The reasonable likelihood, if the district doesn't know where some of the plates are, is that they were thrown in the garbage ... and are not in use," Woodhams said.

"If anyone is using one of the plates, they're risking receiving a ticket at best and a felony charge for possessing a stolen plate at worst."

Michigan's laws on municipal plates

Michigan requires the owners of municipal plates to notify the Secretary of State when one of their plates is lost or destroyed, but Woodhams said there are no penalties for those who fail to do so.

He said applications for municipal plates are reviewed by staff to ensure that they are sold only to a qualified agency and that the source of payment is not from someone's personal bank account.

According to the American Association of Motor Vehicle Administrators, license plates serve one common purpose: to identify a motor vehicle.

But Michigan does not require that plates be assigned to a specific vehicle. So when the Free Press spotted the Chevy Cavalier on Southfield Road with the municipal plate and driver's ed sign, the Secretary of State's Office said the only way it could track ownership of the car was with a vehicle identification number. So, the identity of the owner of that car remains a mystery.

According to state law, X plates may be used on "any eligible vehicle titled to the applicant." But the municipalities and other agencies that have X plates are required to keep a written record stating the time the plate is used on a particular vehicle.

"The record shall be open to inspection by a law enforcement officer or a representative of the Secretary of State," according to the law.

So, when was the last time the Secretary of State asked to look at those logs? And how often does it examine them?

Woodham's response: "We are not aware of widespread problems with municipal plates. Because of that, we trust that our local government partners are using the plates consistent with their responsibilities so log checks have not been necessary.

"The department’s regulatory resources have been focused on inspecting auto dealerships and repair facilities due to the much larger potential for harm to Michigan residents. The harm from a municipal plate being unaccounted for or even misused is comparatively minimal."

He said the Secretary of State had no plans to investigate why its records and the district's records didn't match up.

Michigan's application form for a municipal plate is a single page; applications can be filed with any branch office, by mail or fax. Those who sign the application are certifying that the municipality or agency is eligible for the plates. The application asks for the agency name, address and phone number.

How other states handle government plates

Other states require that government plates be linked to a vehicle identification number, and those who sign the application are explicitly told that they are doing so under penalty of perjury.

For example, Indiana has a three-page application form that allows a municipality or other public agency to request up to four municipal license plates at a time. Applicants are required to provide the vehicle identification number, the year, make, model and color of the vehicle, the date it was purchased or leased, a description of how it will be used, the name of the agency's insurance company and the policy number.

Applicants must provide their job title and telephone number and are warned that they are swearing, under penalty of perjury, that the information they've provided is true and correct, that the entity requesting the plates owns or leases the vehicles, and that the vehicles will be used for official business.

The State of California requires that its exempt plates, which are issued to state and local government entities, be tied to a vehicle identification number, and those signing the application do so under penalty of perjury.

The State of Wisconsin's license plate application form requires a vehicle identification number, and the year, make and color of the vehicle.

Ohio's application for government plates also requires the vehicle's serial number, the date purchased, and the year, make, model and color of the vehicle. The person signing the application affirms "this vehicle will be used exclusively in the performance of the governmental" agency.

According to the American Association of Motor Vehicle Administrators, license plates play a central role in fighting crime. "Every day across North America, crimes are prevented or solved through the identification of a license plate."

Jennifer Dixon is a reporter on the Free Press Investigations Team. She has covered government, business and workplace issues in Detroit for two decades. Contact her at 313-223-4410 or jbdixon@freepress.com. Staff writer Gina Kaufman contributed to this report.