DETROIT (WXYZ) - Top executives of Detroit’s Public Lighting Authority (PLA) have been cashing out with secret severance deals that appear to buy their silence in exchange for staggering amounts of cash. A 7 Action News investigation found more than a half million dollars was paid to five former officials since early 2015, including a $250,000 goodbye present to former CEO Odis Jones.
Documents obtained from the PLA through the Freedom of Information Act reveal Jones was granted the money on Feb. 3, 2016, the day he resigned from the authority to “pursue other opportunities” – after less than three years on the job. He also received 12 months of healthcare coverage. Jones’s employment contract promised no severance if he resigned.
As part of the deal, Jones and the PLA promised to never sue each other – and not publicly reveal “the terms and conditions of this Agreement.”
The terms were similar for Sandra Hughes O’Brien, an attorney and member of the Wayne State Board of Governors, who served as the PLA’s general counsel for 15 months. She received a severance of $123,000 when she left in October 2015. Her departure came just two days before Dana Harvey, the PLA’s senior vice president for government and community affairs, cashed out. She departed with a $77,000 severance after 20 months of service.
Two executives who spent even less time at PLA were also paid handsomely. After only six months as senior vice president of construction & engineering, Katrina Crawley walked away with a payout of $32,500. And Adam Troy, who served as chief operating officer for 11 months, received a golden parachute of $58,333.33.
7 Action News tried repeatedly to reach all five former PLA executives. None would talk, with their lawyers citing confidentiality agreements.
“Why are people being paid large amounts of money to leave the Public Lighting Authority? What is behind that? This is unusual,” said noted employment attorney Deborah Gordon, a past president of the Labor & Employment Council of the State Bar of Michigan.
Gordon reviewed the PLA documents for 7 Action News and couldn’t believe public employees would get such deals.
“Generous severance packages are hard to come by in the private sector, generally speaking, especially for employees that have not been there for years," she said.
Taxpayers in Detroit are footing the $540,833.33 severance bill. While the PLA is an independent agency, it’s funded by bonds that were sold on Wall Street. And those bonds are paid back with $12.5 million per year from the City Utility User Tax.
In a 2014 presentation on the PLA’s lighting plan, Detroit Mayor Mike Duggan made it clear every dollar counted, especially since the $12.5 million was diverted from the police department.
"As I said to the Lighting Authority when the (board) members agreed to serve, this is a huge public trust,” Duggan said. “They’re taking public safety money and they have to make sure it is being used to the maximum benefit.”
In an interview with 7 Action News, PLA Board Chair Dr. Lorna Thomas repeatedly refused to discuss specifics of the severance agreements.
“When you are doing anything from the beginning, you have people coming in and perhaps didn’t expect what they found. People came and went,” she said.
Eventually, she dismissed the severance packages as a cost of doing business.
“It’s part of the operating expense that you incur when you have turnover in an organization as large as this," Thomas added.
The most likely explanation, according employment attorney Gordon, is “it’s very likely that there was some concern about some litigation being brought against the Public Lighting Authority, by these people. It’s an exchange for giving up your rights to file a lawsuit and to ask you, to insist, that you remain quiet.”
Regardless, it could violate the law, said Wayne State Constitutional Law Professor Justin Long.
“The constitution of Michigan prohibits public entities from paying or otherwise compensating employees for work they didn’t do and didn’t have as part of their agreement to do work with the public entity,” he said.
Severance packages could “violate the constitution if it wasn’t something the employee agreed with the employer in advance as part of the compensation package.”
7 Action News could find no advance agreements that would have provided for the payments.
For Gordon, the biggest deal is the one that raises the biggest questions: $250,000 for former CEO Odis Jones. She points to the fact his contract made no provision for a payout, he stated his departure was voluntary, and PLA Board Chair Dr. Thomas said in a press release “we regret” his decision to leave.
“The whole idea here is that if this a true resignation, there is no reason to pay him any severance,” she said. “If you ‘regret’ his decision, why are you paying him $250,000? Let him go on his way. Save the taxpayers some money.”
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