FLINT, MI - Gov. Rick Snyder, high ranking former members of his staff and others are the target of a new federal racketeering lawsuit over the city's water crisis. The lawsuit also targets the city of Flint.
A group of 15 citizens filed the civil lawsuit seeking financial compensation for property damage, loss of business and financial losses attributed to the city's water crisis; as well as compensatory damages for future medical care and punitive damages.
Attorneys declined to put a specific dollar figure on the potential damages.
The lawsuit, filed Wednesday, April 6, in Flint U.S. District Court, alleges Snyder, his former Chief of Staff Dennis Muchmore and others attempted to balance the Flint city budget through a pattern of racketeering activity.
"He wants to run the state like a business," attorney Marc J. Bern said of Snyder. "Well. The citizens of Flint, as shareholders in the corporation of the state of Michigan, I don't think they were treated in an appropriate way."
The lawsuit alleges that officials misrepresented the suitability of the Flint River water as the city's drinking water source for roughly two years and billed Flint residents at rates that were the highest in the nation for water that was unusable, resulting in the city's budget deficit being reversed.
Ultimately, the lawsuit claims the actions resulted in a $3.3 million surplus for the city.
The complaint names Snyder, Muchmore, the Michigan Department of Environmental Quality and multiple members of its staff, the Michigan Department of Health and Human Services and members of its staff, the City of Flint and members of its public works department, multiple engineering companies that were hired to evaluate the city's water system, former Mayor Dayne Walling and three of the city's former emergency managers.
Snyder's spokesman Ari Adler, DEQ spokeswoman Mel Brown and MDHHS spokeswoman Jennifer Eisner declined to comment on the lawsuit.
A spokesman from Lockwood, Andrews & Newnam said the company was asked to provide a limited scope of engineering services to address specific components of the existing water treatment plant not the overall water quality.
"Plaintiffs here are really overreaching to suggest that private firms somehow conspired with the City and State when all they did was to provide advice on limited issues as provided for in their contracts," said a statement issued by a LAN spokesman. "Accordingly, we will vigorously contest these allegations and all others in this lawsuit."
A spokesman for Veolia North America, another engineering firm named in the lawsuit, said their work with the city did not involve potential lead issues.
"Veolia was hired by the City of Flint, Mich., for a one-time, one-month contract to conduct an analysis of the residual effects of the city's chlorination process in February 2015," a statement from the company says. "Veolia's role involved no testing or sampling of water and was unrelated to the current lead issues reported in Flint."
Representatives for the other individuals named in the lawsuit could not immediately be reached for comment.
Attorneys for multiple city residents claim state officials opted to appoint an emergency manager for Flint rather than declare bankruptcy in a "fiscal scheme to balance the budget at all costs in conscious disregard of the health, property, and prosperity" of Flint residents.
The suit claims officials committed mail fraud by continuing to mail water bills to Flint residents, which they allege fraudulently misrepresent that the city is providing safe, clean water to its residents.
They further allege officials continued to make statements claiming the water was safe despite being aware of growing concerns over the quality of the water.
The lawsuit also alleges the defendants committed wire fraud by allowing residents to pay their water bills online or with credit cards despite knowing the water was toxic.
A RICO lawsuit requires attorneys to prove that the wrongdoing was part of an ongoing enterprise. If successful, the law allows triple the amount of damages to be paid.
The case is the first time the RICO Act has been used in a lawsuit regarding the city's water crisis.
The RICO act, most notably used to take on the mafia in criminal cases, has targeted everything from the Gambino Family to the Hells Angels. However, it can also be used civilly by citizens to try and recoup damages for wrongdoing.
The city is in the national spotlight after elevated blood lead levels were discovered in some Flint children after the city changed its water source from Lake Huron water purchased from the Detroit water system to the Flint River in April 2014, a decision made while the city was being run by a state-appointed emergency manager pending the city's joining the Karegnondi Water Authority.
State regulators never required that the river water be treated to make it less corrosive, causing lead from plumbing and pipes to leach into the water supply.
Even though the city reconnected to the Detroit water system in October, local and state officials have warned pregnant women and young children against using the water unless it has been tested because lead levels continue to exceed what can be handled by a filter.
Attorneys representing the Flint residents include Bern and Chet Kern from New York-based Bern Ripka, Ari Kresch from Southfield-based 1-800-LAW-FIRM and Solomon Radner from Southfield-based Excolo Law.
Bern, who worked on litigation stemming from health issues first responders had following the Sept. 11 attacks, said the situation in Flint pales in comparison to what he dealt with following the collapse of the World Trade Center.
"We haven't been attacked by foreign people," Bern said. "We've been attacked by those who are here in Michigan."