An Ingham County prosecutor has declined to pursue an Open Meeting’s Act violation case against Augusta Township Trustee Kathy Jackson and former Treasurer Bill Babut.

Michigan State Police investigated an alleged OMA violation in connection with a deal then-supervisor Jackson cut with a developer in 2004. That deal may have cost the township utility department more than $400,000 in fees it would have collected.

The complaint was filed by Trustee Bill Tobler and Clerk Kathy Giszczak in January. In a letter to Washtenaw County Prosecutor Brian Mackie, the Michigan State Police and Michigan Attorney General’s Office, Tobler asked them to investigate potential wrongdoing, which included “an obvious Open Meetings Act violation."

Following the State Police investigation, the case was forwarded to the Ingham County Prosecutor’s Office because Washtenaw County Commissioner Ken Schwartz was listed as part of the probe. 

Ingham County Assistant Prosecutor Catherine Emerson said that there was insufficient evidence of an OMA violation and no proof it was intentional if it was violated. Therefore, she said, a warrant was denied.

Michigan State Police Detective Dale Smith, who conducted the investigation, said it has been his experience that prosecutors rarely take OMA cases.

“An OMA is extremely hard to prove, you have to have a smoking gun basically,” Smith said.

The complaint was filed following an AnnArbor.com story on the deal. The story showed Jackson, then township attorney Schwartz and Babut allowed developer Dale LaClair, CEO of LaClair Builders, to pay $407,000 less than township ordinances called for in water and sewer connection fees for the subdivision LaClair was developing.

Several board members at the time said they were unaware of the deal. In return, LaClair donated $33,000 to the Augusta Township Fire Department. Audio recordings and e-mails between Jackson and other parties involved obtained by AnnArbor.com detailed the deal.

According the State Police report sent to the Ingham County Prosecutor’s Office, Jackson admitted to Smith that she made the deal. She said the fees for connecting the water and sewer and taps, which had risen over time from $1,500 to $7,000, were unfair.

On the advice of Schwartz and Babut, and to avoid a civil lawsuit, Jackson allowed LaClair to pay $1,500 each instead of $7,000 tap fees, Jackson told Smith. Jackson said LaClair paid “more than his share” for utility work in the development, and it was “a good decision then and a good decision now," according to the report.

Jackson also told Smith she advised LaClair to make a $33,000 donation to the fire department since they were giving him a break on the tap fees.

Jackson contended the deal was not a secret and didn't violate the OMA.

According to the report, Jackson said Tobler and Giszczak were "wasting time with things that were before their time and should focus on current events affecting the township."

Babut also told Smith the deal was "the fair thing to do."

At the time of the investigation earlier this year, the township utility department had a $1.8 million operating deficit.

Jackson didn't respond to requests for comment from AnnArbor.com.

Tobler said he was dissatisfied with several aspects of the investigation. He questioned why the police report didn't alert the prosecutor that Jackson explained the deal in the audio recordings and e-mails.

Smith said a disc with the audio recordings and e-mails was forwarded to Emerson, though the report only states the disc contained documents provided by Tobler. Emerson said she read several e-mails, but didn't know whether she had listened to a recording.

Tobler argued that regardless of the OMA violation, there was no evidence to show the deal was done properly. The price of the tap fees is set by city ordinance and can only legally be changed with a board vote, Tobler said.

“The State Police were supposed to investigate whether or not this was done legally or legitimately, and I see nowhere that there was a conscientious investigation performed and provided to the county prosecutor,” he said.

Smith said he remained objective throughout his investigation and found nothing that indicated criminal activity. He said Jackson “was merely doing for a businessman what she thought the right thing” because LaClair had already helped out township. He added that the case is more likely a civil matter.

Jackson was defeated in the August primary by Susan Burek, who has taken positions on the issues similar to those of Giszczak and Tobler.

Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at news@annarbor.com or 734-623-2530.