Lies Exposed (And One Less City Secret)

I’m very happy that the city decided that honesty is the best policy – or at least they decided that honesty is the best policy after being caught red-handed hiding information from the public by Chet Pardee, arranging an elaborate scheme to conceal it, and lying about it at successive city council meetings, as discussed in the most recent Clarkston Secrets post:  “Someone Secretly Paid $10,000 To Help the City Out – What Did They Get In Return? (And Yes, It’s A Scandal),” which you can read here:

From the draft of the city council packet published on June 10, 2021:

City of the Village of Clarkston
City Manager Report
June 14, 2021

 Response Regarding Donation

After receiving a request from the Clarkston News to address negative comments regarding a $10,008 contribution to Howard & Howard to reduce the City’s legal fees in the Bisio Lawsuit, the following response was provided by the Michigan Municipal League: In an effort to lessen the financial impact of the Bisio lawsuit, the City requested of its insurer MMLLPP, in addition to paying a portion of the negotiated settlement amount with Susan Bisio’s retained law firm, contribution towards the legal fees of Howard & Howard for work Mark Peyser did to bring the Bisio matter to a conclusion. As a good will gesture, the MMLLPP agreed to contribute towards the Howard & Howard legal bills because the MMLLPP believed that the efforts of Mr. Peyser went above and beyond in bringing the Bisio matter to a conclusion. After the facilitation, Mr. Peyser, continued conversations with all the parties, including Ms. Bisio and her counsel Richard Bisio, and negotiated the terms and conditions of the final settlement agreement consistent with the facilitator’s recommended settlement amount.

Now that wasn’t so hard, was it?

The Michigan Municipal League Liability and Property Pool (MMLLPP) is the city’s insurer. It’s essentially liability self-insurance for all of the participating member communities in the state, including Clarkston. Who pays for that self-insurance coverage? Every taxpayer in each of those member communities, including you and me, and most communities in the state are members.

And yet, the MMLLPP apparently thinks it is entitled to make secret payments to retire city obligations. Let’s make something crystal clear – this was not in any way a “donation.” It was an additional payment toward legal expenses paid by the city’s insurer. That’s what insurers do.

Apparently, all that happened was the city asked the insurer to cough up some more money to pay the huge Peyser legal services bill that they’d run up. And why was that a secret exactly? Considering that the insurer was over-involved in the lawsuit based on the bills submitted by the attorney the MMLLPP hired to represent the city in the lawsuit, I actually think that it was a fair request. Insurers don’t usually receive copies of court papers or regularly consult with the attorney they hired to represent the insured (here, Clarkston), but we know that the MMLLPP did just that in my FOIA lawsuit. The relationship between the MMLLPP and the attorney they hired to represent the city was way too cozy, especially since Michigan law makes it crystal clear that the attorney hired by the insurer is supposed to represent the insured (Clarkston), not the insurer (MMLLPP).

This is the fourth freaking time that city officials thought they were entitled to keep secrets from us, and that’s just in the FOIA case! Let me remind you of the first three:

    • The city attorney testified at his deposition in the FOIA lawsuit that he promised confidentiality about his correspondence with an attorney that opposed Clarkston. This promise included keeping the information secret not only from me with regard to my FOIA request, it also included keeping the information secret from the city council and city officials. This was improper. I published all of the materials that I received in response to my FOIA request, more than five years after I asked for them, because the records belonged to the taxpayers, not the city attorney.
    • Following a secret, closed city council meeting, the city manager told taxpayers only that the city’s contribution toward the FOIA lawsuit settlement was $35,000. The city manager did not tell you that the total amount of the settlement was $160,000, which was illegally discussed and approved by the city council in the secret, closed meeting. The city manager later claimed that this huge, deliberate omission was because the city had promised confidentiality to the other entities that contributed to the settlement. The other contributors were the MMLLPP ($90,000) and our city attorney’s malpractice insurance carrier ($35,000). I published copies of their payment checks because this was not a secret the city was entitled to keep from anyone.
    • The city manager told taxpayers that the city couldn’t release the FOIA lawsuit settlement agreement that the city council members had illegally deliberated and voted on in yet another secret, closed meeting. The city has yet to publish that document, but I did.

In this latest secrecy attempt, not only did the city manager claim that the city had the authority to promise confidentiality to the insurer – whose premiums we pay for with our tax dollars – he wouldn’t tell us that it was actually $10,008 (as though that extra eight bucks made a difference somehow).

Going on to toss whatever credibility he had left into what was now a roaring dumpster fire, the city manager told us this payment was made by “a charitable organization or business.” In what universe is an insurer like the MMLLPP a “charitable organization”? It’s obviously not – and the city manager knew that no charitable organization was involved as the words were coming out of his mouth. That claim was nothing more than a straight up fabrication designed to mislead the public about the source of the payment.

When announcing settlement of the FOIA lawsuit, the city’s written statement said: “Of equal importance will be our mission to ensure government transparency. Residents or members of the public that have questions about City operations are strongly encouraged to visit or contact the City office, where the staff will openly share all available information on any topic.”

Empty words.

The city thought it could simply hide this new payment by arranging it so that there were no city records of the payment. No one would have known about it but for Chet Pardee’s persistent questions – in three city council meetings – about payment of the Peyser invoices. And then, when questioned, the city chose to lie about it. The city manager’s story at the May 10 meeting – that there were questions about some of Peyser’s charges and they wanted to make sure it was fully documented – was revealed as a lie when the city manager admitted at the May 24 meeting that the city knew the supposed “donation” was coming and that’s why the Peyser invoices were being manipulated. Then he lied about the nature and source of the payment, characterizing it as a “very generous donation” from a “charitable organization or business.” Insurance companies don’t make donations to their insureds. And they are not charitable organizations. It wasn’t until there was an inquiry from the Clarkston News that the city finally came clean and revealed the true nature of the payment.

So it took persistent questioning by an interested citizen and the threat of negative publicity for the city to fulfill its “mission to ensure government transparency.” Why did the city think this should be hidden from the taxpayers (whose money was used to make the payment)? Why, when the fact of the payment came out, did the city think it should conceal who made it? And why did the city think it was okay to lie about the payment at successive council meetings?


“Openly share all available information on any topic”?

Empty words.

Don’t hold your breath for an explanation of the city’s conduct here. The city has learned nothing from losing the FOIA lawsuit. It still thinks it can conduct its business and spend your money in secret.

Our elected officials, charter-appointed officers, appointees, and employees need to understand that they absolutely do not have the right to promise confidentiality to anyone when the matter concerns expenditures of tax dollars, conducting city business, or the payment of city obligations. Thanks to the Michigan Supreme Court, it should also now be clear to our city officials that they also have no right to hide records in off-site files and claim they aren’t public records either.

This continuing pattern of secrecy simply must stop – now.