Detroit’s inspector general is deciding whether to investigate a matter involving about $685,000 stolen from Detroit Public Library in 2020 and 2021, $407,000 of which is still missing, a spokesperson told Outlier Media on Monday.
A former library official publicly shared information on this loss on Jan. 10 at the first City Council meeting of the year. This was the first public acknowledgment of this matter, though library and city officials have known about it since 2021.
The incident was briefly mentioned in a 2021 independent auditor’s report on DPL’s financial statements. It was listed as a special item of an estimated $407,000 loss due to fraudulent wire transfers.
More than $685,000 was stolen when the theft occurred, but about $277,000 was recovered by the bank, according to the Office of the Chief Financial Officer (OCFO).
The remaining money has not yet been recovered and library officials want answers. The Office of the Inspector General did not receive any requests to investigate the stolen money from library officials or City Council. However, they decided to look into the matter last week after media and other inquiries, a spokesperson said.
Russ Bellant, who was a member of the Detroit Public Library Commission until January, says the fraud was carried out by a City of Detroit employee.
“We want the city to pay the library, regardless of where the money went, and the city should seek prosecution to get the money from the criminals,” he told Outlier Media.
Bellant told Outlier he feels freer to address this matter publicly now because his term with the library officially ended. He said the library — which has had a contentious relationship with the Duggan administration — was forced to suffer this loss without any repayment.
He spoke about the matter as a public commenter at the City Council meeting on Jan. 10.
“The library lost half a million dollars … through criminal actions of two employees,” Bellant told the City Council during public comment at the meeting. “The city severed their employment, but refused to prosecute them.”
Stephanie Davis, spokesperson for the city’s OCFO, told Outlier that law enforcement was involved in the matter and has identified an individual they believe to be involved, but did not share any additional information.
“To our knowledge, no city employee has been named, involved or fired in this matter,” Davis said.
Outlier submitted a request to the Detroit Police Department last week but has not yet received any police records related to this investigation.
Bellant said the city is not taking the theft from the library seriously and that it adds insult to injury. He objects to tax revenue that would be allocated to the library going instead to the Downtown Development Authority from annual tax captures.
The library system has faced financial distress in recent years. It shut down most of its branches for about two years because of the pandemic, and reopened 10 of them this summer. This reopening, as well as building maintenance, cost DPL millions of dollars, which forced it to borrow from its “rainy day fund.”
On Thursday, the city’s Legislative Policy Division shared a 10-year financial review of DPL and determined that the library system needs financial assistance. If the 2026 millage doesn’t pass, the library will “eventually be forced to shut down.”
Davis said the city has been willing to resume discussions regarding DPL’s loss due to fraud.
“The OCFO engaged in discussions with the DPL administration about sharing liability for the loss and reached an agreement … but the library commission objected,” Davis said.
Current DPL Commission Secretary Franklin Jackson told Outlier that an agreement wasn’t reached with the city because the city wanted to share responsibility for this loss when the city is responsible for managing the library’s accounts.
Outlier was unable to confirm who discovered the fraud, but Jackson said the commission was notified by the bank in 2021. He said he didn’t talk publicly about this matter because he was hoping the city was working on getting DPL’s money back.
“We didn’t cause this loss,” Jackson said. “The city caused this loss. They never came back and offered to pay that money back. In fact, their attitude, their verbiage was, ‘no, you’re not gonna get that money back.’ So our $400,000 of public money is just gone.”
Reach MALAK SILMI, the Report for America Corps Member for Outlier Media, at malak@outliermedia.org or 734-985-0377.