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Troy City Council holds off on cement contract pending audit

By: Terry Oparka | Troy Times | Published May 8, 2019


TROY — Saying it was a deal they could refuse — for now — the Troy City Council voted unanimously to postpone consideration of a cement contract with DiLisio Contracting Inc., of Clinton Township, the low bidder.

City Councilman David Hamilton asked that the one-year, $2.4 million contract for concrete slab replacement be removed from the consent agenda for discussion at an April 22 meeting.

Approval of standard purchasing resolutions are routinely handled as consent agenda items.

Hamilton noted that DiLisio was named in the federal court sentencing documents for former City Manager Brian Kischnick.

Kischnick was sentenced to serve 30 months in prison and two years of probation after he pleaded guilty to bribery in August.

A Jan. 18 sentencing memorandum by Assistant U.S. Attorney Dawn Ison states that Kischnick “did not follow the rules, sought to champion his own interests, hired someone with whom he was having a romantic relationship, lived the high life on another man’s dime, and served as a poster child for abuse of power and the public trust.”

The memorandum states that Kischnick used his city office to solicit bribes and other things of value. This included demanding bribes from DiLisio Contracting. Kischnick was ordered to pay $4,500 in restitution.

DiLisio sent Kischnick a $3,500 invoice for costs and labor for a driveway at his home, including tree removal by the city arborist, which he never paid, according to the sentencing memorandum.

DiLisio, acting under the direction of the FBI, arranged a Christmas lunch at a Troy restaurant in December 2017 with city employees invited by Kischnick. DiLisio paid the $1,287 tab and gave Kischnick $1,000 in exchange for his support of the renewal of the city’s contract for concrete slab replacement services, according to the memorandum.

On Jan. 22, 2018, based on Kischnick’s recommendation, the Troy City Council awarded DiLisio a one-year contract to provide concrete slab replacement services, with an option to renew for one additional year.

On March 6, 2018, under the direction of the FBI, DiLisio offered and Kischnick accepted a $2,000 bribe, according to the sentencing memorandum.

The Troy City Council terminated Kischnick’s employment on March 11, 2018, following a March 9 domestic assault charge in Clawson, to which he pleaded no contest.

DiLisio Contracting attorney John Freeman, in a Jan. 21 prepared statement, said that DiLisio Contracting “became a victim of Kischnick’s exploitation of (his) position for his own personal gain. During the course of the FBI’s investigation into Kischnick’s corruption, DiLisio Contracting cooperated with the government, which included giving things of value to Kischnick, at the direction and with the approval of the FBI and Department of Justice.”

Freeman provided this email response April 24: “DiLisio Contracting respects the Troy City Council’s decision to postpone awarding the low bid contract for concrete slab replacement until after the forensic audit is completed and presented to the City Council and the public. DiLisio Contracting is confident that the audit will not show any improprieties, and that the council will proceed with the award. DiLisio Contracting looks forward to continuing to serve the people of Troy now and in the future.”


Forensic audit is pending
Mayor Dane Slater made a motion to postpone approval of the contract.

“It would be important to me to know what’s in that report before I vote on this,” he said, referring to the pending forensic audit that independent CPA firm Plante Moran is conducting at the city’s request.

Troy City Attorney Lori Grigg Bluhm said she expects Plante Moran to complete the audit in the near future.

Troy City Manager Mark Miller said the current contract with DiLisio expires June 30.

“We do have a little time, but not a lot,” he said. He added that the council has the discretion of which bidder to award a contract to.

“You do not need to award the contract to DiLisio, although they are the lowest bidder,” Grigg Bluhm said. “There is no right to have a contract with the city.”

She said that is not to say a contractor wouldn’t bring a lawsuit against the city — in response to a question from City Councilman Dave Henderson on what could happen if a contract is not awarded to the bidder that city management recommends. She noted that a defense could be “negative history. The city has a very defensible position.”

Henderson posed this question: “How did DiLisio get into a situation where they cooperated with the FBI to pay the former city manager any kind of money? If that answer is that they were uneasy about not being paid for the driveway, I have no problem with that. If there was some other compelling reason out there, that they got in hot water with the feds and then were put into a position where they were forced to try and turn another guy — that I have a problem with.”

“We don’t have any of those answers for you, I’m sorry,” Grigg Bluhm replied.

Miller told C & G Newspapers that the FBI continues to investigate. He said that in general, he is acting with the belief that “we need to do what’s best for Troy, not overthink things. We don’t need to consider what the FBI is doing. We need to make decisions on what we think is in the best interest of Troy.”

“They’ve done some great work for a lot of years,” Henderson said of DiLisio. “From that standpoint alone, they’re a good vendor.”