City of Detroit yanks all 21 tow permits tied to police department

Tensions were high Thursday night at a Detroit Board of Police Commissioners meeting, one day after the City of Detroit yanked the towing permits of 21 companies that provide services for the police department.

"I am confused by the city law department saying we were not in compliance in terms of the towing situation and the approval of towing companies," said Commissioner Edgar Vann.

On Wednesday the City of Detroit corporation counsel sent a letter to the commissioners' attorney and Police Chief James Craig saying the board had no legal standing to approve permits from last year.

"The board did not have legal authority to approve the selection of any tow companies, nor did the board, or any representative of the board, have any authority to issue permits to such companies," Deputy Corporation Counsel Charles Raimi wrote.

At the meeting, commissioners expressed confusion over the news that the city did not believe protocol was correctly followed on the towing permits.

Additionally several towing companies showed up to the meeting — many of whom read the news today on Freep.com — to get a better understanding of what was going on.

"I am not nervous, I just wish I found out in a different way," said Aaron Smith of Executive Towing, who says his dad's company has been doing business with the Detroit Police Department for 41 years.

"I am confident that we won't be screwed over," he added.

The move comes two months after a deputy police chief resigned after top officials at the department learned she was under investigation by the FBI for her alleged ties to indicted towing titan Gasper Fiore.

Celia Washington served as the legal adviser to the police department and resigned June 8, one week after Fiore was indicted on bribery charges for allegedly paying cash bribes to win a towing contract in Clinton Township.

The company Fiore founded, Boulevard & Trumbull, also had a contract with Detroit police, which was suspended in June amid the probe.

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But according to Trumbull officials, Fiore hasn't been connected to the company for years. Fiore's daughter, Jessica Fiore, runs the company.

Washington — as DPD's legal adviser — oversaw Fiores' and others' towing rotations with the Detroit police. Last year, she recommended that DPD keep its towing rotation the same, which essentially saved Fiore a lot of business.

The department's towing rotation gets reviewed every five years and last year, all of the towing companies had to reapply.

Before the commissioners decided to table the topic until next week, Commissioner Reginald Crawford expressed dismay at the move being tied to Fiore and the federal investigation.

"We all know there is a criminal investigation involving two towing companies by the FBI," but it shouldn't reflect on other towing companies, he said. "None of the other towing companies, owners or employees should be used as pawns in some sort of game."

Raimi, who authored the letter, told commissioners that the Fiore ordeal brought the towing permits to their attention, but would not give any more details.

The move to potentially yank all 21 towing contracts has angered some tow owners, including Benny McGuire of H&B Land Towing, who has towed in the city for 50 years.

"These people have gone nuts," McGuire said in an interview with the Free Press. "I've been doing this 50 years and things have gotten more and more complicated. I don't understand none of it. It's gotten worse progressively. I can't believe this."

The letter, which was sent by the city's corporation counsel to Chief Craig on Wednesday, says that all of the permits signed by the chair of the police commissioners board are "null and void."

The city wants Chief Financial Officer John Hill through the office of the chief procurement officer to "immediately take steps" to obtain authorized towing services. In the meantime, the department has the right to continue the use of the services of some of the companies.

But McGuire said the uncertainty is unsettling.

"I’ve had contracts for years and years with the police department," McGuire said. "(My relationship,) I’m really good with the police department but I’m getting more disappointed with them daily because each day is another surprise. … It’s a continuous battle. I’m afraid to buy new trucks or equipment because I don’t know what they’re going to do next."

The letter, which was approved by Corporation Counsel Melvin Butch Hollowell, states that Michigan law requires all financial and budget activities of cities like Detroit with a population of more than 600,000 to be supervised by its chief financial officer.

Raimi argued that procurement of tow services is a financial activity required to be carried out by the city's finance department, according to the city charter.

"Contrary to city charter and state law, the office of the CFO was not involved in the selection of the tow companies that received the permits," Raimi wrote. "The permits were null and void ... and no tow company had or has any property right or interest in any purported permit."

But the immediate past chair of the police commissioner’s board, Willie Bell, said in years past, the board has approved permits.

"We have had the rights in the past and we feel we still have the right to address the issue," Bell said. "We’re looking forward to having further discussions dealing with this letter."

According to the letter, the city charter authorizes the board to establish rules and regulations in consultation with the chief and with approval of the mayor. The charter also allows the board to establish standards that tow companies must meet, but Raimi said it doesn't actually give the board authorization to qualify, select or issue permits.

Raimi said corporation counsel and City Council are required to approve all contracts "in which the city is concerned." Raimi wrote that they weren't approved by either entity.

Citing the city's exit from bankruptcy in December 2014, Raimi wrote that the city has been under oversight by Michigan's Financial Review Commission and is required to obtain its approval for all contracts that exceed two years. The permits are for a five-year term, according to the letter.

The decision comes weeks after Boulevard & Trumbull Towing filed a lawsuit in July against the city, the police department and the police commissioners, alleging the board improperly suspended its permit following a closed-door hearing.

Boulevard & Trumbull founder Fiore, 56, of Grosse Pointe Shores was indicted May 31 on bribery charges for allegedly paying $7,000 in cash to Clinton Township Trustee Dean Reynolds for help in securing a towing contract. Fiore was arraigned June 13. And Fiore allegedly used indicted trash hauler Chuck Rizzo Jr. to hand off the money.

Another towing company, Nationwide Recovery, in late July hit the Detroit with a federal lawsuit, claiming it yanked its permit with the police department with no fair warning or justification, costing it potentially millions of dollars in losses.

Contact Katrease Stafford: 313-223-4759 or kstafford@freepress.com. Staff writer Tresa Baldas contributed to this report.