Real estate scandal alleged in DPS

DETROIT - Detroit Public Schools may have overspent millions of taxpayer dollars in real estate purchases and management services related to Cass Technical High School, the Detroit School of Arts and the Fisher Building, a new inquiry shows, according to The Detroit News.

The district's inspector general, John Bell, said his investigation showed that the district used money from a 1994 $1.5 billion bond issue to purchase land and buildings at allegedly inflated prices as well as paying management fees that were 10 times what would be expected, The News reported. In most cases the real estate passed through the hands of several agents before being purchased or rented by the district.

Bell indicated that questions remain as to who benefited from the business deals, according to The News. Robert Bobb, the district's emergency financial manager, said he will open evidentiary hearings on the matter in October. Bobb is asking voters to approve a new $500 million building and renovation bond in November.

The Detroit News, "Inquiry shows DPS overpaid millions in real estate deals," Sept. 24, 2009

Michigan Education Digest, "Audit: Millions in waste at DPS," Aug. 6, 2009

Mackinac Center for Public Policy, "DPS Building Scandal Highlights Need for Transparency," Sept. 24, 2009