Wayne County Prosecutor Kym Worthy last week handed down four felony counts and one misdemeanor count against Art Blackwell, former Highland Park Emergency Financial Manager (EFM). Blackwell, who served as EFM from 2005 to 2009, is accused of misusing his office by writing $264,000 in checks to himself after pledging to work as EFM for $1 annually.
In this exclusive interview with editor Bankole Thommpson, Blackwell, who was a campaign strategist for former Detroit Mayor Kwame Kilpatrick, dismissed the charges which he called “political” and added that Gov. Jennifer Granholm, who appointed him, may have to testify, if necessary, at his trial.
Following are excerpts from that lengthy interview.
Michigan Chronicle: Are you surprised at these charges against you?
Art Blackwell: I’m surprised that the prosecutor was investigating this issue at all, since it had been investigated at the state. But once it was taken up by the people involved, I wasn’t surprised.
MC: Why shouldn’t the prosecutor have investigated?
Blackwell: Basically, we have a state that has very limited resources. The attorney general is the top prosecutor in the state and he investigated this for five months. I was a state contractor so he had all the facts. He’s the lawyer for the governor and for all the departments.
MC: Attorney General Mike Cox sued you in court, right?
Blackwell: Well, actually, the loan board requested it. So the AG has two roles. Number one, he has to follow the direction of a particular board or department as their lawyer, or they can bring it on their own. Before they made this request, he had not brought anything and it was our understanding that criminal charges weren’t ever going to come, based on the facts.
MC: Prosecutor Kym Worthy laid out a list of counts you have been charged with. When you were first hired as emergency financial manager, you were working for $1, right?
Blackwell: Yes.
MC: But you said at a meeting in Highland Park you were not going to work for $1 when you took that position. What happened?
Blackwell: I was expected to be paid but when I got in and the state gave me the books, there was no money. There was $8,000 in the city’s checking account. It took them four months to hire me, and in that four-month period, people had paid themselves hundreds of thousands of dollars on the way out the door. Why was there never any real scrutiny of what went on before me?
And when I got in, I saw the condition because my contract — and you can get a copy that clearly says the previous EFM had accomplished everything assigned to her — that I was coming in with a specific focus on economic development and everything else pretty much in shape. Couldn’t have been further from the truth. It was a very misleading thing that I assumed that basically I’m going to focused on trying to bring housing and development when these other things were horrendous: $16 million deficit; pension system was under-funded by $28 to $30 million; no money in the account; no economic development; roads were in disrepair.
It was the worst situation you could find. Based on what they tell me it ain’t that bad, just focus on this. So we went in and I agreed. I’m from there, the governor’s an ally, I want to help, I’ll go the first year for a dollar.
MC: So you agreed to work for $1?
Blackwell: Yes. I suggested it. So everyone knows I was going to be offered a salary less than the previous EFM, but still a salary.
MC: So when you suggested it, was it just for the year, or for throughout the time you were serving?
Blackwell: Nobody knows if they’re going to be EFM six months or a year. You can’t say pay me $1 for the next five years. I wouldn’t do that. My thing with the city when the city got on its feet, I actually started before the year saying it’s time to pay me. I borrowed $1 million on behalf of the city four or five months into my tenure because the city didn’t’ have enough money to make payroll.
Now normally if you’re sent by the state, the state gives you resources to help transition the city during this process. My predecessor got $9 million from the state to help them with. I come in and get $0. I go to my custodial bank, who has Highland Park’s account. They tell me, no, we won’t loan you a penny. The city is broke. We’re not going to give any money. So I ended up going to a Black bank, borrowing $1 million under something we call tax anticipation notes.
That had never been done. They did it. We paid them back in four months with interest. So that’s how the city averted shutting down. On our efforts, not with the efforts of the state. I wasn’t the mayor; I was a state contractor. So it should have been the state that should have said here are the resources Art needs to at least get off and running. They gave me nothing. So I’m going to work for $1? With my predecessor, three people were eliminated that did the same job that I did.
She had a deputy EFM and the city administrator. Those three people in four years, which was the same time I served. They served the first four, I served the second four. They made $1.5 million in salaries in four years. I made $370,000 in the same four years. And they want me to pay $270,000 of that back, so which means I would make $100,000 for four years vs. a $1.5 million.
MC: When you were appointed, was there anything on paper saying you were not receiving salary, or that you’d be receiving salary at some point?
Blackwell: When I first got appointed, there was an offer sent to me which I turned down, $6,000–
MC: A month?
Blackwell: Yeah. Which was offensive because it was less than what every EFM made everywhere. Like three fifths of what the other people make. But it wasn’t that I would or would not have accepted. The issue was the city couldn’t afford to pay me. I’m from there. I went back to do a service. People should understand I had just sold stock in the casino. The last thing I was thinking about in my life was going back to Highland Park to work 60 hours a week. Wasn’t even in my mind.
My daddy was in failing health and people in the community, a couple of council people, started writing the state saying the other people have got to go and here’s why. And they actually wrote letters to the state, to the attorney general, because of the ungodly sums of money these people were being paid. And no results. It wasn’t like that when I came in that the deficit was retired. The deficit existed. I retired the deficit. I funded the pension system.
Now people are still trying to figure out how can he borrow that much money to fund a pension system in the poorest city in Michigan? I said get a millage passed. I got a 71 percent yes vote. That’s unheard of in a millage election.
And then I got rid of the sheriff’s department, which was costing us $3 million a year, and I told the sheriff at that time that we could not afford to pay that, and that they needed to cut it. They said they couldn’t cut it. I brought our police department back. Everyone thought it was going to fail. It was a total success. And it saved us about $900,000 to $1 million a year. p>
MC: The prosecutor said you allegedly misused your position and cost $264,000 in checks to be issued to yourself from the City of Highland Park funds. What do you make of that?
Blackwell: It’s amazing what contract they’re reading. Because what they’re saying is Highland Park shouldn’t have paid me any money. It should have just been from the state. So that means when you read my contract, the opening lines the city shall pay directly-
MC: That’s what your contract says?
Blackwell: Yeah, so how can you just dismiss what that says? Even if you don’t agree with the number. That’s why the Attorney General’s Office has a contract issue. But then it goes on further to say the city is indirectly responsible for all my payment. And the state shall facilitate payment, which means the state shall advance cash if the city doesn’t have the cash flow. Whatever the state advanced me, it took it back from the city’s revenue sharing.
MC: Why did you say you were going to work for $1?
Blackwell: If you come to the Chronicle to say I want to help out, this used to be my family’s business or whatever, and they’re going to pay you and you get in and it’s broke and about to go bankrupt and you say okay, I’m going to help out, where’s the disconnect? I didn’t go in there intending to…why would I go somewhere to work for $1? I looked at the condition and offered that. Now for some reason there’s something sinister that I offered to work for $1. Others do it all the time. Edsel Ford did it. Mike Duggan did. But when I do it it’s sinister, because there’s something gotta be wrong. Well, I had a little money, but I wasn’t trying to subsidize or save Highland Park based on other people taking the money that they took. At the end of the first year if they had not paid me is when I would have stepped down.
MC: Did the governor recommend that you be paid after the first year?
Blackwell: I got it on tape. She said at the end of the first year, she directed the loan board to pay me a reasonable salary.
MC: And what was the reasonable salary that was agreed on?
Blackwell: That was in 2006. I’m calling every three months. Where’s my money? I’m working. Six months go by, nine months, a year. Two more years went by. I still haven’t been paid. Now I’m figuring when I finally get my check…
MC: That’s when you started writing the checks?
Blackwell: No, no, no. First of all, I don’t write checks. This is very important. I’m the signer on every check that goes out of Highland Park. No check has ever gone out of Highland Park without two signatures on it. Either me and the finance director and me and the treasurer. It goes through a complete process. This is no starter checkbook that I got in my pocket that I’m writing checks from.
Ramona Henderson got $262,000 from the State of Michigan. She got another $200,000 from Highland Park. She signed every check that she got. She’s the signer. The EFM is the responsible party. So whether I paid a cop or to fix a fire truck, I had to sign a check. Unless I directed the treasurer and the finance director could sign it in my stead. But I had to give them authority to do that.
The last thing I would do would be having someone else sign a check for me like I was trying to hide something. Ain’t nothing to hide.
MC: Is the governor going to be a witness in this case?
Blackwell: If necessary. I There was an editorial written by one of the people that don’t like me that said she should testify and that he did say that after one year he’d paid a reasonable salary. He wants to know what reasonable is.
MC: Have you talked to the governor since?
Blackwell: No. The last time I talked to the governor was my dad’s funeral. She spoke at the funeral. And this whole thing started because a guy named Robert Davis filed a lawsuit against the state’s contractors. He said their contract was done as not a part of the Open Meetings Act and all that. It’s signed by the treasurer, two members of the loan board and me. I’m a contractor. They didn’t tell me to come to meetings, so they signed it and I signed it.
MC: Isn’t Robert Davis justified in inquiring about this since it’s in the public interest?
Blackwell: This thing that this guy’s an activist, I’d like to know what his activist credentials are. I know that he’s cost his own school system close to $100,000 just suing up the board members. I know the school system is in shambles. Go interview 100 people. Say what’s the shape of the school system under his leadership and what’s the shape of the city under my leadership and see what the response is.
But the issue is he ran against my son for county commissioner and got beat. So he’s been an antagonist to the Blackwell family from day one. And he also ran against Bill McConico for state rep and got beat. He’s never won any election, except school board. It is important to say that his case was dismissed. People forget that.
MC: You served as a campaign manager for the former mayor. Is that a coincidence?
Blackwell: I don’t know if it’s a coincidence or not. But Robert Davis is a friend of Kym Worthy’s. So is that an issue? The fact that he threw a fundraiser for her, is that an issue? I mean I haven’t made it an issue, because I don’t think it is an issue. But when you start raising these things, then you should raise them for everybody.
MC: Do you think the charges the prosecutor brought out are political?
Blackwell: My issue is legally those charges are questionable.
MC: Why then would she bring those charges? She’s a top prosecutor who does what she does well.
Blackwell: So you’re saying why would the federal government bring charges against anybody and lose? Why would the state bring charges and lose? You think she’s won every case she’s brought to trial?
MC: No.
Blackwell: Okay, so you know we know Rudy Guliani and others. DAs and prosecutors are elected officials that have ambition. So how do they get known?
MC: So she’s doing this for higher political office?
Blackwell: No, no. I’m not saying she’s doing this for higher political office, but it’s interesting that her office has a few challenges right now. That she needs to probably focus on them, but more importantly, what’s the real job of a prosecutor? It’s to make sure she upholds the law wherever it is.
MC: Are you disappointed with the governor?
Blackwell: I’m disappointed with the governor allowing her staff to isolate her from the truth. The governor and the prosecutor have big offices so they rely on staff. People should know staff has agendas. The staff always wants to move up as well or go with you when you move.
MC: Are you stressed by all this?
Blackwell: Oh, absolutely there’s stress. There’s stress on my family. Stress on my mother, my 13-year-old daughter.
MC: Do you believe you will be vindicated?
Blackwell: Absolutely.