Detroit school district leaders ignored signs of trouble

The Detroit Free Press reports:

Detroit Public Schools officials ignored signs that there could be problems in their risk-management operations years before an investigation into $46 million in wire transfers began this year, according to insurance and school officials who reviewed records in the case.

Records show that DPS insurance broker Marsh & McLennan Cos. and another vendor, Arthur J. Gallagher & Co., were investigated by attorneys general in other states for allegedly steering clients to certain insurers so the companies could reap bonuses the clients did not know about.


A law firm hired by DPS to investigate suspicions of fraud, overpayments and kickbacks in the district’s risk-management office identified these companies, six others and former DPS Executive Director Stephen Hill in an ongoing investigation.

The firm, Miller Johnson of Grand Rapids, determined that Hill approved millions of dollars in wire transfers to the companies — many owned by friends and former colleagues, according to a five-page summary of the investigation obtained by the Free Press.

Four sources familiar with the review, who asked not to be identified because the case is ongoing, said investigators are exploring whether Hill received more than $100,000 from contractor Long Insurance Services Inc.

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