GARY | Federal authorities have reopened a long-running investigation into the operations and finances of the Gary Sanitary District.
Investigators are examining why the district has loaned $16 million to Gary's general fund, while still discharging too many pollutants into the Grand Calumet River in violation of a federal consent decree, former District Attorney James Meyer said.
Assistant U.S. Attorney Wayne Ault confirmed that his office has requested numerous records from the district and the city of Gary "for the purpose of allowing us to explore matters of compliance with the consent decree."
The district treats residential and commercial waste for Gary and several surrounding communities. In the 1970s, millions in federal grants were spent to update the district's equipment and decrease the pollutants it releases into the river, which is a tributary of Lake Michigan.
But recently the district has begun racking up self-reported permit violations for river discharges, primarily for suspended solids and ammonia, Meyer said. At the same time, city officials have drained the district's cash reserves instead of spending the money on the district's equipment.
The district is required to make payments into an equipment maintenance fund to pay for repairs and long-term upgrades to the plant, in part using income from Gary and communities that have contracts with the district.
Former Mayor Scott King borrowed $5 million out of the fund, and left the outstanding "loan" on the books for Rudy Clay, who was elected by the city's precinct organization after King's resignation in 2006, Meyer said.
Since then, Clay's administration has borrowed another $11 million out of the equipment fund and the district's general fund, repaying just a fraction of that amount.
City Attorney Hamilton Carmouche didn't return calls for comment Friday.
Court records say Ault was leery of turning the district's management over to Clay in 2006, but federal officials grudgingly agreed to hand the agency over after a search for a new administrator yielded no results.
The federal inquiry comes at a time when the district finds itself at odds with some of its former employees.
Two former members of the Sanitary District's Board of Commissioners, Silas Wilkerson and Ophelia Woodson, are suing Clay in federal court for forcing them off the board in February without adequate hearings or explanation.
The lawsuits say Clay declared that he was "taking a new direction with the Sanitation District" and fired them.
