Emergency Financial Managers, Michigan, Pontiac — June 9, 2011 at 10:18 am

BREAKING: Michigan EFM outsources water treatment to company facing 26 felony Clean Water Act violations


I have a new piece up today at A2Politico that shows just how far Michigan’s CPA-style Emergency Financial Managers (EFMs) will go to cut costs.

Michael Stampfler is Pontiac, Michigan’s EFM. He has the dubious distinction of being the first Michigan EFM to use new powers granted by Michigan Republicans to cancel a union contract. What went nearly unnoticed was that last week, he dissolved the Pontiac Planning Commission and replaced it with a smaller number of his own hand-picked, unelected members. But he also did another thing. He made a contract for water treatment services with United Water Services permanent, outsourcing the water treatment to them and laying off city water treatment officials.

This is big news. Why? Because United Water was indicted by the U.S. Department of Justice last December for violating the Clean Water Act.

United Water Services Inc., the former contract operator of the Gary Sanitary District wastewater treatment works in Gary, Ind., and two of its employees, were charged today with conspiracy and felony violations of the Clean Water Act in a 26-count indictment returned by a federal grand jury, the Justice Department announced today.

United Water Services Inc., and employees Dwain L. Bowie, and Gregory A. Ciaccio, have been charged with manipulating daily wastewater sampling methods by turning up disinfectant treatment levels shortly before sampling, then turning them down shortly after sampling.


According to the indictment, the defendants conspired to tamper with E. coli monitoring methods by turning up levels of disinfectant dosing prior to E. coli sampling. The indictment states that the defendants would avoid taking E. coli samples until disinfectants had reached elevated levels, which in turn were expected to lead to reduced E. coli levels. Immediately after sampling, the indictment alleges, the defendants turned down disinfectant levels, thus reducing the amount of treatment chemicals they used.


The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the Criminal Investigation Division of the U.S. Environmental Protection Agency, the FBI and the Indiana State Police. The case is being prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Justice Department’s Environmental Crimes Section.

From my A2P article:

As anyone who has read the news lately knows, E. coli can be quite dangerous, even deadly. The Clean Water Act specifically requires testing for this bacteria because it poses such a public health threat. United Water and several of its employees are accused of raising chlorine levels just prior to sample over 60 times over a five year period. This gave the impression that the levels of E. coli were lower than they actually were. The effluent from this water treatment plant is discharged into the Grand Calumet River, which empties into Lake Michigan with its recreation areas and swimming beaches. The potential for human contamination was significant.

United Water, in an arrogant display of heartless business-speak issued this statement:

The government’s claim is, at best, a disagreement about operating and monitoring methods, with no allegation of environmental harm. Trying to make a crime out of this disagreement is an abuse of prosecutorial discretion.”

An abuse of prosecutorial discretion? For busting a company for potentially putting the general public in grave danger? If there was never a risk of E. coli contamination, what would be the need for the increased levels just before sampling? Make no mistake, according to emails obtained in the investigation, officials at the company knew about the problem as far back as 2003.


Emergency Financial Managers are generally good at what they do. They are typically trained as accountants and business optimizers. They know how to trim and cut and lean out organizations to squeeze every last drop of profits out of them. Unfortunately for the residents of Michigan, things like parks, public safety and the protection of natural resources don’t produce profits and generally are presented as “costs”…When we begin to put a price tag on the very things that make our cities, society and state good, safe, livable and lovable, while putting CPA-like EFMs in charge, you can expect that these things will suffer in order to save money, even if it puts our citizens at risk.

And that is exactly what has happened in Pontiac, Michigan.

Much more with links and further documentation at A2Politico. Please share widely.

Grateful acknowledgement to surelyujest of Daily Kos for the connecting the dots and providing much of the research for this article.