Feds say Blight Removal Funding Easily Abused
A new report finds too few safeguards for federal funds used to fight blight, says program ripe for fraud, favoritism.
Federal officials are calling for tougher oversight of a government program that helps fund the removal of blighted buildings in Detroit.
Michigan receives more than $380 million to tear down blighted buildings from the U.S. Treasury Department’s Hardest Hit Fund.
The vast majority of that funding goes to Detroit.
But a new report from a federal special inspector general finds that a lack of safeguards is making the Hardest Hit Fund vulnerable to fraud and abuse, including steering contracts to certain companies and overcharging for demolition work.
The special inspector general says the requirements governing the Hardest Hit Fund could be strengthened by following rules used by the U.S. Housing and Urban Development Department, the only other federal agency overseeing a blight removal program.
Detroit officials and the FBI are investigating the city’s efforts to erase blight after reports surfaced that the cost of demolition had skyrocketed.
Detroit Mayor Mike Duggan says the city is fully cooperating with the investigations.
