Nonprofit linked to Detroit Councilman Scott Benson made $14,000 in payments to his chief

A nonprofit with ties to Detroit City Councilman Scott Benson paid out more than $14,000 in unspecified reimbursements and $4,000 in campaign wages to Benson’s chief of staff, Carol Banks, during a 2016 ballot-issue campaign.

The nonprofit, Save Detroit Jobs, raised $105,000 that year to support a proposed community benefits ordinance before Detroit voters. In addition to payments to Banks, Save Detroit Jobs paid other members of Benson’s staff to distribute literature during the campaign.

It was unclear if Banks was working for Benson at the time of the payments. She began work for Benson in January 2014 and remains on his staff today. But it was  not immediately known whether she may have taken a leave during the ballot-issue campaign.

Benson and Banks are among a handful of Detroit public officials connected to an ongoing public corruption investigation that escalated last month when the FBI searched Benson’s home, his downtown council office, Banks’ home and other locations.

Benson and Banks have not been charged with any crime. At the same time, federal agents also searched the homes of City Councilwoman Janeé Ayers and her chief of staff, Ricardo Silva, neither of whom has  been charged with a crime.

Next week, however, Councilman Andre Spivey, who has been charged with conspiracy to commit bribery, is scheduled to appear in federal court. Federal prosecutors allege Spivey and a still-unnamed member of his staff accepted more than $35,000 in bribes between 2016 and 2020, including $1,000 that Spivey took in 2018 from an undercover FBI agent.

Although the FBI has not publicly specified the investigation’s focus, the search warrant for Benson’s office shows that agents were looking for campaign finance documents and information about nonprofits with a tax-exempt structure similar to that of Save Detroit Jobs.

“Records containing information regarding 501(c)(4) social welfare organizations, committees to elect, and campaign financing, including bank records, check stubs, ledgers, letters, receipts, and campaign literature” were among the types of records that the FBI had probable cause to seize, according to a copy of the search warrant for Benson’s office, which the Free Press obtained through a public records request.

Benson’s attorney, Steve Fishman, declined to comment Wednesday about Save Detroit Jobs, Benson’s role with the nonprofit and its payments to Banks, the councilman’s chief of staff.

Benson's name does not appear on registration paperwork for Save Detroit Jobs. But Banks is listed as a point of contact in the paperwork filed with Wayne County's campaign finance office. The nonprofit's address was a suite in a community center on Detroit's east side that also houses one of Benson's council offices.

In all, Banks received nearly 70 separate reimbursements from Save Detroit Jobs in November 2016. Most were small reimbursements between $100 and $200. There was one reimbursement for $6,486. Altogether, Banks received $14,279, according to Save Detroit Jobs’ campaign finance filings.

The campaign statements do not provide information about what Banks was being reimbursed for.

When reached by telephone on Wednesday, Banks said,  "No comment, goodbye." She then hung up.

The FBI declined to comment.

More: Detroit City Council aides tied to FBI corruption probe: What we know

More: FBI raids homes of Detroit Councilmembers Janee Ayers, Scott Benson, Benson chief of staff

The Internal Revenue Service last year granted Save Detroit Jobs retroactive tax-exempt status, effective in September 2016, as a 501(c)(4) organization.

The IRS defines such nonprofits as social welfare organizations that “must operate primarily to further the common good and general welfare of the people of the community.” Political activity is permitted, but it cannot be the organization’s primary activity.

Simon Schuster, executive director of the Michigan Campaign Finance Network, said it unusual for organizations to be registered both as nonprofits and political action committees.

"To see, evidently from these records, this PAC act as one-in-the-same is highly unusual,” Schuster said. "That said, though, ballot question committees in Michigan are so loosely regulated that it can more or less accept funding from all the sources a nonprofit can — that is to say unlimited money from corporate donors.”

Unspecified campaign reimbursements are common in Michigan, Schuster said.

“Unfortunately, all too often in Michigan campaign finance records, candidates and PACs essentially cut individuals, or oftentimes themselves, a check for reimbursements — leaving the public to wonder what they’re being paid for,” he said.

Allowing campaigns to pay out reimbursements without any descriptive information is essentially a campaign-finance loophole, he said.

“The importance of our campaign finance laws is so the public can see how politicians are raising and spending their money,” Schuster said. "We don’t know what Carol Banks was being paid for.”

Most of Save Detroit Jobs' campaign contributions in 2016 came from the business community.

Donors include Blue Cross Blue Shield of Michigan, which gave $25,000; Paradise Valley Real Estate Holdings, of Detroit, which donated $10,000, and Jenkins Construction, which gave $4,000.

In addition to reimbursements to Banks, Save Detroit Jobs paid  nearly $9,000 in legal fees to the law firm Dykema Gossett and spent nearly $23,000 on literature distribution, campaign finance records show.

At least two of Benson's City Council staffers, Terry Catchings and Kerwin Wimberley, each received money for literature distribution, records show. Catchings received $3,155 and Wimberley received $1,453, records show. Catchings and Wimberley could not be reached for comment on Wednesday.

The ballot issue that Save Detroit Jobs supported, Proposal B, was one of two proposed community benefits ordinances put before Detroit voters in the fall of 2016. The dueling proposals provided voters different options for an ordinance to provide community benefits when developers seek tax breaks from Detroit.

It was a contentious campaign.

While the ballot measures were similar, most of the campaigning revolved around Proposal A. Business interests and Mayor Mike Duggan urged a no vote. City Council President Brenda Jones and others supported Proposal A.

Proposal B applied to fewer development projects because its thresholds to trigger community involvement were higher than Proposal A.

Former state Sen. Coleman A. Young II, in October 2016, called a campaign flyer funded by Save Detroit Jobs dirty politics and "an act of corruption."

The flyer promoted Proposal B and featured an image of former Mayor Coleman A. Young.

"My father's rolling over in his grave right now," Young said at the time. "You didn't get permission from me, and you didn't get permission from the family. Shame on you. It's disrespectful. It's wrong, and we're going to beat you come November."

Save Detroit Jobs issued a news  release in response to the criticism. It included comments from Benson.

"I remain focused on bringing jobs and accountability to the people of Detroit," Benson was quoted as saying in Save Detroit Jobs'  news release. "In fact, the process we outline in Prop B brought commitments of 600 jobs to Detroit last week alone. It creates economic opportunity now and ensures smart growth in the future. This is the picture we need to focus on.”

The following November, on Election Day, Proposal B passed by a 53-47 margin. The other community benefits proposal, Proposal A, failed.

Detroit Free Press reporter Dana Afana contributed to this report.

Contact Joe Guillen: jguillen@freepress.com.