Audit Finds MDOT Study on Materials Was Corrupted

by Josh Colletta

Michigan’s Office of Auditor General has determined that a taxpayer-funded study on the availabilities of materials used to build highways is severely undermined by inappropriate practices that gave the gravel industry considerable influence over the outcomes.

According to the Associated Press, the Michigan Department of Transportation was found to have improperly split the study into two separate contracts, and did not take steps to ensure that the terms of the study were met. “Numerous deficiencies,” including poor project scoping, were found in the results of the roughly $100,000 study.

The audit comes after a Detroit Free Press report led to a complaint being filed in June. The newspaper’s report found that the Michigan Aggregates Association, an industry lobbying group, commissioned the study in 2016 and 2017. A similar internal audit conducted by MDOT came to the same conclusions three weeks ago.

The latest audit reviewed, among other things, e-mails and other documents showing former Transportation Director Kirk Steudle communicating with several industry officials regarding supplies.

Steudle also ordered staff to involve an “industry stakeholder” in a market study. That, according to the audit’s conclusions, “allowed industry stakeholders considerable influence in the commissioning and scoping of the study.” The document continues, ” This may have undermined the study’s credibility and usefulness to MDOT and policymakers because of the industry stakeholders’ previously disclosed position in favor of expanding permitted mining for aggregates in local communities.”

The division of the study raised red flags internally. According to the audit, the Phase 1 manager told M.A.A. President Doug Needham that he did not mention Phase 2 in his side’s project scope “since we cannot give the impression that we are attempting to circumvent the 50K max contract by splitting it up into two 50K scopes. Questionable whether this will even fly.”

Other managers were also unhappy with the study and believed it wouldn’t provide any worthwhile information.

Needham has, himself, used the study while giving testimony before the state legislature, notably to advocate legislation that would have restricted local government’s ability to deny mining permits. He cited “not-in-my-backyard” opposition to mining operations as a cause for keeping construction costs high. That legislation died last year, but a new bill with the same purpose is currently in front of the Senate Transportation and Infrastructure Committee.

M.A.A. Spokerperson John Sellek told the A.P. that the audit “vindicates” the aggregate industry because, he claims, there is “zero evidence” that the writers of the study’s findings were biased in their conclusions.

“All state departments rightly seek input from stakeholders but only they can decide how to use that input, as was the case here,” he said. “It is unfortunate for all taxpayers that internal MDOT disputes between its staff and management resulted in decisions which are now under fire.”

But Matt Resch of the Metamora Land Preservation Alliance vehemently disagrees. Opposing a proposed gravel pit east of Flint, he says the audit “finds the aggregates association corrupted the state contracting process to produce a flawed study to justify their self-interested and unnecessary legislative agenda. It is our hope that lawmakers don’t let them get away with it.”

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