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BLACK IS BACK: REVOLUTION IS THE ONLY SOLUTION FOR MIKE BROWN AND MILLIONS OF VICTIMS OF RACIST SYSTEM
$44.8 Million in new debt (e.g. principal PLUS interest)
Detroit-Windsor Tunnel, Grand Circus Garage PLUS REVENUES
Syncora clarifies reports: it’s the whole damn POC deal, not just swaps
(VOD: See interview with former Detroit mayoral candidate Tom Barrow in post below this regarding the role of Syncora, racism and the banks in stealing Black Detroit. After we obtain today’s court filing, VOD will follow up.)
Detroit bankruptcy holdout Syncora Guarantee Inc. (SYCRF) will recover about 14 percent on what it’s owed in a deal that includes $44.8 million in new debt, as creditor Financial Guaranty Insurance Co. seeks more time to fight the city’s debt-cutting plan.
Syncora has claimed it’s owed more than $333 million. Under its agreement with Detroit, the bond insurer will get two sets of notes, a lease to operate a tunnel to Canada, land near the tunnel and the option for a long-term lease to operate a parking structure.
The deal is a “very favorable one to the city,” David Heiman of Jones Day, a lawyer for Detroit, told U.S. Bankruptcy Judge Steven Rhodes at a hearing today after he disclosed the accord and Syncora’s estimated recovery. The parties have “laid down their swords,” he said.
While the settlement with Syncora may help speed Detroit’s record municipal bankruptcy to completion, FGIC remains a significant obstacle, as it faces claims on about $1.1 billion in pension debt it insured. The city planned to almost wipe out that debt, offering holders only about 10 cents on the dollar.
Should investors in the pension debt take losses, FGIC may be forced to pay them. Cutting the pension debt is part of the city’s plan to eliminate more than $7 billion in liabilities while shoring up its retirement system with money from the state and private donors.
Syncora Guarantee insures more than $300 million of the pension debt and also holds some of the debt directly. The company also insured some tax-backed bonds. Shares of parent Syncora Holdings Ltd. fell as much as 1.8 percent to $2.16 today.
FGIC today asked Rhodes to halt the trial over the city’s plan later this week so the company can adjust its strategy to fight it in light of the Syncora settlement. The judge last week put the proceeding on hold to give Syncora and Detroit time to iron out the details of their agreement.
Rhodes asked FGIC and the city to talk later today to come up with a schedule that would give the New York-based company time to collect information about the Syncora deal and hire an expert to testify against it. The trial, in which the judge is considering the feasibility and fairness of Detroit’s plan, then continued with the testimony of a pension expert.
Detroit, a city of about 700,000, filed an $18 billion municipal bankruptcy last year, saying decades of decline left it unable to provide basic services and still meet financial obligations. Since then, Detroit Emergency Manager Kevyn Orr has cut deals with city unions, retired workers and some bondholders to pay them less than they are owed.
Under its pact, New York-based Syncora will get two series of notes from the city. The B notes will be worth about $23.5 million, while a series of C notes will be worth $21.3 million and bear a 5 percent interest rate.
The C notes will be tied to parking revenue. The company will also have the option to take over and develop additional parcels for development that will be disclosed in the next few days, lawyers for the city said today at the hearing.
Ryan Bennett of Kirkland & Ellis, an attorney for Syncora, told the judge his client planned to withdraw its objections to the city’s debt-reduction plan.
“This is a big day for Syncora and a big day for the city of Detroit,” Bennett told Rhodes.
Detroit’s bankruptcy plan hinges on a bargain with philanthropic foundations and the state government, who agreed to contribute more than $800 million to the city’s public pension system (VOD: while the city said it would not contribute to the system for at least 10 more years.) In exchange, Detroit pledged not to use its art collection to pay debts.
FGIC has said the city could use the collection to boost payments to creditors whose claims the insurer may otherwise be forced to cover.
The case is In re City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).
Syncora Holdings Issues Statement Correcting Reports of Detroit Settlement
NEW YORK, Sept. 11, 2014 /PRNewswire/ — Syncora Holdings Ltd. (“Syncora”) today issued a statement correcting certain reports in the media concerning the City of Detroit (the “City”) bankruptcy and the status of settlement discussions with, and recoveries to be received by, its wholly owned New York financial guarantee insurance subsidiaries, Syncora Guarantee Inc. and Syncora Capital Assurance Inc. (the “Companies”).
The Companies and the City have reached tentative settlements of the Companies’ claims in the Detroit bankruptcy proceedings, subject to certain contingencies. Resolution involves settlement of the Companies’ Class 9 claims in connection with the Pension Obligation Certificates of Participation (valued at approximately 13 cents on the dollar) and a settlement of swaps-related and other litigation.
Separately, Pike Pointe Holdings LLC (“Pike Pointe”), a subsidiary of Syncora Guarantee Inc., is advancing development agreements with the City of Detroit and the City of Windsor with respect to the Detroit Windsor Tunnel and related or adjacent properties. Pike Pointe is a holding company for investment in and operation of infrastructure assets (including toll assets and parking, among others) through its American Roads and Detroit Windsor Tunnel LLC subsidiaries (both based in Detroit), which include a lease to operate the U.S. portion of the Detroit Windsor Tunnel. Under the development agreements, Pike Pointe will solidify its long-term business in Detroit by agreeing to invest in and develop assets in the City of Detroit, pending related due diligence.
About Syncora Holdings Ltd.
Syncora Holdings Ltd. (OTC: SYCRF) is a Bermuda-domiciled holding company. Each of Syncora Guarantee Inc., Syncora Capital Assurance Inc. and Pike Pointe Holdings LLC are wholly owned subsidiaries of Syncora Holdings Ltd. For more information, please visit www.syncora.com.
Investor and Media Contact: Michael Corbally +1 212-478-3400 firstname.lastname@example.org
BARROW SAYS RACISM, BANKS BEHIND DETROIT BANKRUPTCY, CITING SYNCORA DEAL; HEARING MON. SEPT. 15 8:30 AM
(VOD: Syncora insured part of the 2005 predatory $1.5 billion Certificates of Participation loan from UBS AG and SBS Financial, pushed by ratings agencies Fitch and Standard and Poor’s. The economy tanked in 2008 due to Wall Street’s predatory lending practices, and the deal cost Detroit dearly. In a detailed lawsuit filed Jan. 17, 2014, Emergency Manager Kevyn Orr called the deal “void ab initio, illegal and unenforceable.” Bankrutpcy Judge Steven Rhodes has not held a hearing on the lawsuit; instead Orr is proposing to hand over the Detroit-Windsor tunnel, and the Grand Circus Park parking garage, and their revenues for years to come, to Syncora in a bid to end the bankruptcy. Judge Rhodes will hear details of the Syncora giveaway Monday, Sept. 15, 2014 at 8:30 a.m.in bankruptcy court.)
Sep 11th, 2014 by progressiveradionetwork
The nation today marks the 13th anniversary of a national tragedy. For Detroiters, it’s the day after yet another tragedy hit home. The federal judge they were hoping would agree that the city’s declared bankruptcy was contrived and that its $18-billion debt claim is superinflated instead appears to be going along with the plan to “re-imagine” Detroit.
Judge Steven Rhodes yesterday announced a delay in the trial until Monday so that bond insurer Syncora Guarantee, one of the city’s largest creditors, could work out a sweet deal with the state-imposed city manager, Kevyn Orr. The deal would significantly reduce opposition to Orr’s draconian bankruptcy-exit plan and encourage approval by the court.
Tom Barrow, former chairman of Michigan’s State Board of Accountancy and CEO of the largest minority-owned firm in the Midwest, was among the first to publicly raise questions about Orr’s debt calculations and his insistence, endorsed by the state, that bankruptcy was Detroit’s only way out.
He joins Leid Stories today with “a heavy heart,” he says, about what’s happening to Detroit. Judge Rhodes’ action is a harbinger of more unwarranted miseries to come, he says.
VOD: Listen to excellent, profound interview with Tom Barrow below (click on Leid Stories 9 11 14 and it will take you to their page where it will play.)
September 12, 2014 at 12:12 pm
(VOD: Detroit city retirees have been warning for a long time during the city’s bankruptcy proceedings that a takeover is coming to YOU next. Well, it looks like Detroit News editors, columnists and reporters who have been busy crowing about the “success” of the bankruptcy may be on the unemployment and social service lines next. Interesting that global bank UBS, which sold a predatory $1.5 billion Certificates of Participation loan to Detroit, is also involved in these proceedings. WATCH OUT FOR THE BANKSTERS! Note links to articles on lay-offs under Digital Media auspices below their article. To News reporters who have NOT been celebrating the demise of Detroit, VOD’s sympathies go out to you. )
New York – Digital First Media, owner of dozens of media properties including The Detroit News and detroitnews.com, announced Friday that it will “evaluate and consider strategic alternatives” that could lead to the sale of some or all of the company.
Digital First CEO John Paton said the company has retained UBS Securities to review a full range of alternatives — including selling the entire company, selling regional clusters or doing nothing.
“We believe we have many options available to us to maximize the value of our businesses for our stockholders and the board of directors has therefore decided to assess the full range of these opportunities,” Paton said.
In a statement the company said there are no assurances that the process will result in a transaction or transactions or on the timing of any decisions. The company also said that it will not disclose developments in the process until the board decides how it will proceed.
Digital First, based in New York, was formed in December 2013 with the merger of MediaNews Group and the former Journal Register Company. It is the nation’s second-largest newspaper company, based on circulation, operating in 15 states, with 800 multi-platform news and information products, including 76 daily and Sunday newspapers and 160 weeklies. The company said it serves 75 million customers monthly.
The company is controlled by the hedge fund Alden Global Capital.
The Detroit News is published by the Detroit Media Partnership under a joint operating agreement with Gannett Co., which exercises majority control of DMP.
The Digital First announcement follows actions by several media companies to separate their newspaper assets from their broadcasting and other businesses.
Media analysts have speculated since last spring about Digital First’s future after the company shut down its experimental, centralized digital newsroom, called Project Thunderdome. Paton said Friday’s action is unrelated to Thunderdome, which was one of many digital experiments the company has undertaken under his leadership.
“The news information industry in America is undergoing a period of seismic change, defined by the need to consolidate to rapidly compete in a digital world,” Paton said.
“The companies that will succeed are those which have meaningful scale and digital expertise. By anticipating the rapid revolution in our industry and responding to stay ahead of the curve, DFM has clearly emerged as a leading player, based on the high quality of our assets and the extensive work we have done to transform them into multi-platform products….”
Digital First’s largest properties include the San Jose Mercury News, the Denver Post, the Los Angeles Daily News, the New Haven Register, the St. Paul Pioneer Press, and the Salt Lake Tribune.
Related articles on DFM layoffs:
City retirees demand plan go on ballot for vote of the people
DWSD gets annual $50 million lease payments for 40 years, in exchange for GLWA control of multi-billion dollar six-county system
Detroit Water & Sewerage Dept. consigned to city limits
Banks, suburban pols profit from bonds, contracts; Wall Street celebrates
New regional water “affordability” plan will not bar shut-offs or lower rates for low-income households
By Diane Bukowski
September 9, 2014
DETROIT – The all-white quartet of Detroit Mayor Mike Duggan and County Executives L. Brooks Patterson, Robert Ficano, and Mark Hackel today proposed the creation of a regional “Great Lakes Water Authority” (GLWA), to be up and running within “200 days.” They announced they had just signed a Memorandum of Understanding. Also signing were Emergency Manager Kevyn Orr and Michigan Governor Rick Snyder.
The GLWA would divest the City of Detroit, the largest major Black-majority city in the U.S., of its largest and most lucrative asset, the 150 year old, six-county Water and Sewerage Department (DWSD), the third largest in the U.S. In exchange, DWSD would receive $50 million a year “lease” payments for an initial period of the next 40 years, “extendable to at least match the terms of any outstanding bonds of the Authority.”
(Click on GLWA plan for packet given to media, and on http://www.dwsd.org/downloads_n/announcements/general_announcements/ga2014-09-09_regional_authority_MOU_executed.pdf to read full MOU.)
The lease payments would be used for “Detroit local system infrastructure improvements, debt service associated with such improvements, or the City’s share of the cost of common-to-all improvements.”
Under terms of the MOU, only DWSD, not the GLWA, would have “liability . . . for funding the City’s frozen General Retirement System (GRS) pension plan . . . and the City’s settlement of claims associated with the swaps for its Pension Obligation Certifications, and for payments relating to debt service on DWSD’s allocated share of liability on the new B Notes attributable to the GRS VEBA [employee health plan] and Pension Obligation Certificates.”
The officials at the press conference had claimed that the lease payments would go to the DWSD, not the city’s general fund as had been originally proposed, but it is clear from the above clause in the MOU that they would go largely to Wall Street.
Duggan said Detroit’s infrastructure will see immediate improvements under the GLWA, but neglected to mention the following proviso in the MOU:
“The Authority will finance Detroit local system improvements through the issuance of Authority bonds under the Revenue Bond Act, with the debt service to be allocated solely to Detroit local system ratepayers.”
Although all four of the officials denied there is any plan to privatize the GLWA or the DWSD, the actual MOU says the GLWA board could adopt a procurement policy “which will include the terms on which any aspect of the operations of either system may be privatized.” The world’s second largest water privatizer, Veolia, Inc., has already been hired by DWSD, allegedly as a consultant.
Wall Street celebrated the plan, according to Bloomberg.
“After the announcement, Detroit’s 5.75 percent sewer bonds due in 2031 climbed more than 5 percent to 111.7 cents on the dollar, according to data compiled by Bloomberg,” the newspaper wrote.
Wall Street ratings agencies had been steadily downgrading DWSD bond ratings, citing the enterprise agency’s association with the City of Detroit and the bankruptcy filing. Such downgrades increased interest rates on DWSD bonds. However, DWSD for years had AAA ratings.
Despite DWSD’s technical dissociation from Detroit’s general fund, the GLWA proposal resulted from months of mediation ordered by U.S. Bankruptcy Judge Steven Rhodes, who assigned U.S. District Court Chief Judge Gerald Rosen as mediator.
Rosen later brought in U.S. District Judge Sean Cox. Cox earlier handed over “supermajority” control of the Board of Water Commissioners, including awarding of contracts and setting rates, to the Counties in 2011. Both Rosen and Cox are members of the ultraconservative Federalist Society.
Duggan said the yearly lease payments would allow Detroit to repair water main breaks, which numbered 2,000 last year. According to a proposal summary, however, the money could also be used to buy up to $800 million in bonds for system-wide repairs.
“Somebody needs to go to jail, and somebody needs to go to hell,” reacted outraged city retirees, barred from attending the press conference at the Federal courthouse in downtown Detroit.
“The people of Detroit should demand their right to vote on this, guaranteed in the City Charter,” said Bill Davis, who retired as Wastewater Treatment Plant (WWTP) shift supervisor after 34 years.
“The counties are buying into something they know nothing about, a system that because of Kevyn Orr’s mismanagement is operating with non-functional main sewage pumps, causing last month’s massive flooding. They claim they don’t have the money for repairs, well get it from the banks who are robbing us.”
Orr’s recently announced DWSD debt “restructuring” includes full payment to the banks of $2.2 billion that had originally been considered “impaired,” with the city asking the banks to settle for less. Much DWSD debt is the result of predatory lending, including $537 million in illegal swaps.
“The money used to unwind the swaps would almost cover the utility’s $571.7 million in planned capital spending for the five years through June 2016, according to bond documents.” said a 2012 Bloomberg News article titled, “Detroit Debt Shows Wall Street Never Loses on Bad Swaps.”
“Or it would be enough for the sewer system’s $519.8 million fiscal 2013 budget, with millions to spare.”
The swaps involved JPMorgan Chase, which Jefferson County, Alabama forced to take a 75 percent cut in its debt payments as part of their bankruptcy case. The County had filed suit previously due to evidence of bribery in sewerage contract awards. Sewerage rates, however, still increased dramatically.
“This ends 40 years of conflict between the city and the suburbs,” Duggan said.
“It was a pretty remarkable accomplishment that we all came together in support of Governor Rick Snyder and Emergency Manager Kevyn Orr’s plan. The department has been under federal oversight since 1977, but it did not work. We have 2,000 water main breaks a year and constant rate hikes.”
Duggan lived in suburban Livonia until he moved to Detroit, a couple weeks short of the deadline for filing. He was barred from running by the Court of Appeals, but conducted a write-in campaign which the Court did not overturn.
He said Snyder’s top aide, Richard Baird, and U.S. District Court Judge Sean Cox, who succeeded Judge John Feikens as DWSD overseer, initiating suburban control of the Board of Water Commissioners, played major roles in brokering the deal.
The twelve-point proposal would be incorporated into yet another amended Plan of Adjustment for U.S. Bankruptcy Judge Steven Rhodes’ final okay, after the Detroit City Council and the County Commissions approve it, Duggan said.
“Detroit keeps exclusive control of the local water and sewer system in DWSD, under the authority of the Mayor and City Council,” the plan says. “The Detroit local system is made up of 3,400 miles of local water mains serving the neighborhoods of Detroit.”
DWSD would thus be carved down into a system that exists only within city boundaries. But even the department’s assets within those boundaries, including its wastewater and freshwater treatment plants, and its major water mains, would operate under the Authority’s control, as shown in the diagram above. The red lines indicate GLWA operated plants and mains.
Nine hundred of 1400 DWSD workers would become GLWA workers, including those at the Detroit Wastewater Treatment Plant, with their union contracts transferred under successor clauses. Duggan said he met with union leaders at 7:30 a.m. about the proposal, and planned to meet with Wastewater Treatment Plant workers themselves later today.
Lakita Thomas, secretary-treasurer of AFSCME Local 207, which originally represented most WWTP workers, said Duggan refused to negotiate with them at the 7:30 a.m. meeting.
“They’re giving the Department away, and the GLWA will maintain control of the money,” Thomas said. “DWSD takes in billions a month. [DWSD director] Sue McCormick has been designing it to fail. They’ve been having contractors repair water main breaks and piping, but they don’t know what they’re doing and our people have to come after them to fix things. The contractors are the ones causing the sinkholes. We get no raises, but the contractors get six and seven-figure amounts. They’ve been suspending our people and writing them up on dumb charges, and they threaten them if they expose the real problems.”
Under McCormick, the Board of Water Commissioners hired EMA, Inc., a consultant which recommended the elimination of 81 percent of the DWSD workforce. According to Local 207 Vice-President Mike Mulholland, EMA now runs the WWTP and is largely responsible for the lack of maintenance of the crucial sewage pumps. He earlier said that not only has WWTP deterioration caused the recent floods in Detroit, the outflow of raw sewage into the Detroit River also contributed to the contamination of Lake Erie, which resulted in last month’s water emergency in Toledo.
“As a Detroiter, I’m against giving anything more to the suburbs flat out,” Mulholland told VOD.
“They’re calling it a lease, but we’ve lost control. From my standpoint as a long-time DWSD worker and senior union officer, this further breaks up DWSD, disempowers the workers, and sets it up for privatization. Veolia is already here, ready to take over. They’re doing this under the political cover of bankruptcy; they don’t legally have to do it. But what is currently legal is wrong. Anything we do now to fight for the workers, especially Black workers and residents, will be illegal, but we must stand up and fight back.”
Duggan claimed that new repairs to Detroit’s DWSD infrastructure will provide “thousands of jobs” for Detroiters, but Davis estimated that 90 percent of the contractors working on street mains and other repairs are suburban whites. The MOU says only, “The Authority shall make every effort to employ individuals and contract with vendors from throughout the service areas,” in other words the entire six-county region.
Thomas said that during the session, the union refused to drop a Michigan Council 25 lawsuit against Cox’s Nov. 2011 order, which essentially wrested control of the Board of Water Commissioners and the Department away from Detroit, and outlined blanket attacks against union contracts and protections. That lawsuit is still pending before the Sixth Circuit Court of Appeals, having been filed two years before Orr petitioned for bankruptcy. (Click on Cox-Co-25-motion-to-intervene-11-14-11 to read lawsuit.)
It therefore holds out some hope for counteracting the GLWA takeover. AFSCME and the UAW earlier pledged to give up other appeals of Judge Rhodes’ bankruptcy eligibility decision pending at the Sixth Circuit if the city’s Plan of Adjustment is confirmed with the “Grand Bargain” in place.
City retirees picketed outside AFSCME Council 25’s headquarters in Detroit when they discovered the monumental sell-out.
“It’s happening to thousands and thousands of workers everywhere,” one protester said. “Where is our union leadership’s compassion, why aren’t they fighting? How are the unions even going to survive if they don’t stand up? Do they suddenly have a ‘new purpose’ for existing?”
The GLWA would essentially be controlled by the Governor’s office. It would be run by a six-member board, with a five member super-majority required to approve contracts, rates, budgets, and other financial matters. Two members would be appointed by Detroit’s mayor, one by the governor, and one each by the three county executives.
However, if a county commission does not buy into the authority, the Governor would appoint someone to occupy that position.
Macomb County Executive Mark Hackel said there is some reluctance on the part of his officials to agree to the plan, and that he does not like the provision regarding Snyder’s appointment powers. All three counties had filed objections to the Plan of Adjustment, but Ficano and Patterson said they would withdraw their counties’ objections if their commissions approve the GLWA.
“It took 15 months of intense bargaining and negotiations resulting in the Memorandum of Understanding which we signed this morning,” Patterson said. “It goes against my DNA, but many Oakland County residents looked at DWSD as a cash cow for the City of Detroit because revenues from the department’s rates were being used for the city’s general fund.”
Patterson’s statement on that was a blatant falsehood. As an enterprise agency, DWSD revenues by law are mandated to benefit only DWSD, not Detroit’s general fund. An original proposal for the $50 million a year to go to Detroit’s general fund to aid in the bankruptcy case was apparently a sticking point at least for Patterson. Under the GLWA, however, all revenues go for water and sewerage purposes, leaving open the question of why it should even be involved in bankruptcy discussions.
Patterson also said he feared that Judge Rhodes would “cram down” terms of the deal if it was not agreed to by the parties, and would not be as “conscious” as they are.
The reference to his “DNA” was ironic. Several years ago, he likened Black women members of the Detroit City Council to “monkeys in a zoo.” He also represented anti-school busing Ku Klux Klan members, arrested in the early 1970’s after they attacked protesters against Irene McCabe, another anti-busing agitator, in Oakland County.
The proposal sets a 10-year limit on rate increases of four percent, but Patterson made clear that customers’ bills could increase far beyond that if the local communities involved attach additional charges, a situation which has always existed.
Generally, suburban officials have ignored that reality when criticizing Detroit’s control of DWSD, using rate increases to whip up their constituents’ hostility toward the city.
As for Ficano, tied to numerous corruption cases involving his officials, he expressed support for the plan, not surprisingly, since many aspects derive from EMA, Inc. proposals to cut 81 percent of DWSD staff and cross-train the others.
Wayne County under the Ficano machine first hired EMA, Inc. in 2008, in a contract involving Downriver Wastewater Treatment Facilities Operation and Management, despite EMA’s known history of sabotaging sewerage operations in Toronto, where understaffing caused massive flooding in 2012, and in New York City, according to county worker Jackson Anderson.
“Ficano’s people are running the City’s Water Department (James Fausone, water board chair, Matthew Schenk, DWSD COO, Woolfson, etc.),” Anderson said in an earlier VOD commentary. “How can you justify a $48 million NO-BID CONTRACT to EMA based on a 90-day self-serving review?”
The GLWA proposal creates a $4.5 million Water Residential Affordability Program (WRAP), not only for Detroit residents but for the entire region covered by the GLWA. It does not include a moratorium on water shut-offs, or a true “water affordability” program that would set rates according to a household’s income.
Duggan compared the WRAP to the $200,000 which the City of Detroit has collected in donations so far for its “Water Affordability Plan,” but neglected to mention that WRAP covers a much larger area.
Judge Rhodes is still to rule on a lawsuit asking for a temporary restraining order on water shut-offs in Detroit, after a hearing set for Sept. 17. He ordered mediation on that matter in addition to the DWSD mediation.
If the results of the DWSD mediation are any indication, the shut-offs mediation cannot be expected to yield any more than the plan the City of Detroit has already put in place. It does not bar shut-offs, although in the United Kingdom and other countries, water shut-offs are outlawed as a threat to public health and safety.
(The statement below from the People’s Water Board is being republished here; it does not mean their organization necessarily supports all the contents of the story above.)
PEOPLE’S WATER BOARD STATEMENT ON CREATION OF REGIONAL WATER AUTHORITY
People’s Water Board Coalition Calls Regional Water Authority an Assault Against Democracy and the Human Right to Water
Community calls for protection and representation for all region’s residents
Detroit, Mich. – The People’s Water Board decried Mayor Mike Duggan’s plan to create a regional water authority as undemocratic and a threat to the human right to water for many in the region. We have access to the largest body of surface freshwater in the world, so it would seem abundance and access should not be an issue. However the manner of governing this valuable resource as responsible environmental stewards for the world has left many communities without trust.
The deal was negotiated behind closed doors without any input from the public and is the next step on the pathway to privatization. It takes away the rights of both the Detroit City Council and the citizens of Detroit to have input on big decisions impacting the system.
“Suburban customers should not be fooled into thinking that this deal gives them more control or influence over the water system,” said Lynna Kaucheck of the People’s Water Board. “The new authority will be made up of unelected officials who are accountable to no one. People need to know that this deal doesn’t take privatization off the table.”
Veolia Water North America, the largest private water company operating in the United States, has been hired to evaluate the management of the system and clearly has a vested interest in privatization. Privatization typically results in skyrocketing rates, decreased service quality and the loss of jobs. In fact, corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs, and a lack of competition and poor negotiation skills can leave local governments with expensive contracts.
In the Great Lakes region, large private water companies charge more than twice as much as cities charge for household water service. This is not the solution for Detroit or the region.
“The regionalization plan is unacceptable. We need a system that is accountable and transparent and that works for all its customers,” said Tawana Petty of the People’s Water Board. “We want an elected board of water commissioners. We want to reduce costs for the region through bulk purchasing and resource sharing. And we want to implement the Affordability Plan as passed by Detroit City Council in 2005. Detroit and suburban leaders need to protect residents and democratize the system.”
The People’s Water Board advocates for access, protection, and conservation of water, and promotes awareness of the interconnectedness of all people and resources.
The People’s Water Board includes: AFSCME Local 207, Baxter’s Beat Back the Bullies Brigade, Detroit Black Community Food Security Network, Detroit Green Party, Detroit People’s Platform, Detroiters Resisting Emergency Management, East Michigan Environmental Action Council, Food & Water Watch, FLOW, Great Lakes Bioneers Detroit, Matrix Theater, Michigan Coalition for Human Rights, Michigan Emergency Committee Against War & Injustice, Michigan Welfare Rights Organization, Rosa and Raymond Parks Institute, Sierra Club, Sisters of Mercy, Voices for Earth Justice and We the People of Detroit. September 10, 2014 Contact: Lynna Kaucheck, Food & Water Watch, (586) 556-8805 Tawana Petty, People’s Water Board, (313) 433-9882
Some recent and previous articles related to this story:
Case like no other in country; strips assets of largest Black city in U.S.
Hearing a battle between Orr/Jones Day and Syncora as union, retiree leaders vacate field, endorse Plan of Adjustment
Under plan, banks get at least $8.5 billion, private corporations get assets, while retirees lose $4.5 billion
By Diane Bukowski
Sept. 5, 2014
DETROIT – Not with a bang but a whimper, the plan confirmation phase of Detroit’s bankruptcy trial kicked off Sept. 2, 2014, a little more than a year after Detroit Emergency Manager Kevyn Orr filed the petition on July 17, 2013.
It is no mistake that San Bernadino and Stockton, California declared bankruptcy a year before Detroit, but hearings there have not yet reached the confirmation stage.
Just as Ferguson, MO police officer Darren Wilson assassinated Michael Brown, Jr. on Aug. 9, Detroit as the largest Black majority city in the U.S. is about to face assassination as well, at the hands of an unelected dictator and his Wall Street cronies.
The assassination has been coldly calculated for over two years, in a fashion as cruel as the way Ferguson police let Michael Brown’s body lie in the street for four hours as his agonized family and neighbors watched the long stream of blood from his wounds congeal and turn black. Now banksters and government officials are watching gleefully as the City of Detroit slowly dies under their onslaught.
“Judge Steven Rhodes should be removed from office, he’s a crook,” Bill Davis, a city Water and Sewerage Dept. retiree, said as protesters marched outside the courthouse Sept. 2. “Kevyn Orr is doing worse than anything Kilpatrick ever did. If the City of Detroit has a cash flow problem, we shouldn’t be spending hundreds of millions on crooked financial institutions.”
Kilpatrick was sentenced to 28 years in prison for 24 counts of bid-rigging, extortion, bribery, and tax evasion, in violation of the federal RICO act. The total monetary amount involved that allegedly went directly into his pocket? About $112,500.
What prison sentence is therefore appropriate for those who are stealing the entire city of Detroit, also in violation of RICO?
How much time should by served by Rhodes, who chaired a forum advocating Chapter 9 bankruptcy and Emergency Management in 2012, Orr who is only a mouthpiece for his former employer, the law firm Jones Day which authored the game plan for the Detroit takeover in a white paper in 2010, and Michigan Governor Rick Snyder, creator of Public Act 436, which has disenfranchised the majority of the state’s Black citizens? What about the crooked banks and corporations who stand to gain at least $8.5 billion under the plan, plus profits from Water Department contracts and other privatization?
How much time should they serve for stealing at least $4.5 billion from retirees, plus water, land, public utilities, homes and jobs from over 700,000 residents, at least 82 percent of whom are African-American?
UBS AG, Bank of America, Chase, and numerous mortgage companies have been sanctioned by the U.S. Justice Department with multi-billion settlements related to their criminal activities, but no criminal charges have been brought. Too bad this is not Vietnam or China, where criminal bankers who took advantage of the decay of communism in those countries are being sentenced to death.
Who should really be on trial in Detroit?
“It’s not the City of Detroit, Rhodes is hearing from Jones Day, the third largest law firm in the world representing the banks that have the city in a death grip, who triggered the financial crisis,” Rev. Bill Wylie-Kellerman told protesters.
Wylie-Kellerman stood up at an earlier bankruptcy hearing and loudly declared that Jones Day is not the city of Detroit, whereupon Judge Rhodes fled the bench, evidently expecting a larger display of the people’s wrath akin to that in Ferguson. Wylie-Kellerman has also led two blockades of the Homrich facility on East Grand Blvd. to stop water shut-offs, with participants sustaining about 20 arrests.
“The court hearing gives an appearance of legitimacy to privatizing public assets, dismantling resources, extracting money,” Wylie-Kellerman pointed out. “Put Kevyn Orr and Homrich [the private contractor being paid $6.8 million to shut water off] on trial, put the process on trial, challenge the false legitimacy.”
At the Sept. 2 hearing, attorney Alice Jennings revealed that of 19,000 city households who had their water shut off beginning in March, 5,500 still do not have water. She told protesters that another 1,000 households have been shut-off since a temporary pause in shut-offs ended August 25, with more on the way.
“We have made our argument for the people,” Jennings told the protesters after the hearing. “We must have a temporary restraining order on all shut-offs. They create sanitation problems and pandemic disease processes. What about people with feeding tubes, and those who use nebulizers for asthma [as well as households with children, who stand to be kidnapped by the state’s Child Protective Services]. Through a Freedom of Act request, we found out that the city failed to bill Detroiters the higher sewerage rates for six years, so dumped them on the last billing.”
Many countries including the United Kingdom outlaw water shut-offs altogether.
At the insistence of suburban forces, Detroiters are penalized with the higher rates because of delinquency rates on bill payments, in a city where 38 percent of the population lives below the federal poverty level, and 27 percent above the poverty level cannot afford the daily necessities of living, according to a recent report by the United Way Foundations of Michigan.
Rhodes has ordered “mediation” of the matter, with a subsequent hearing Sept. 17. If the mediation is anything like that going on about the ownership and management of DWSD, his order does not carry much hope.
What about the leaders of the unions and retirement systems, who have ceded the floor for any opposition to the POA to Syncora and FGIC? They have filed briefs agreeing to a plan that will impoverish retirees, eventually dismantle the $6 billion pension fund as more and more workers are forced out of city employment, and lay waste to the future of Detroit’s youth.
Their briefs contradict hundreds of objections filed by retirees and city residents themselves. Jones Day has cited their briefs as evidence the objections should be denied, in an omnibus motion filed Sept. 5.
Shouldn’t these mis-leaders join their co-conspirators in prison for using their own members’ union dues and retiree contributions against them?
Michigan AFSCME Council 25, the International UAW, and others told the Sixth Circuit Court of Appeals that they will withdraw their appeals of the city’s bankruptcy eligibility if the plan is confirmed including the so-called “Grand Bargain.” The “Grand Theft,” as it is popularly known, provides a measly $816 million, allegedly for retirees, in exchange for the city relinquishing it’s ownership of the multi-billion DIA art collections.
It allegedly makes up for the loss of at least $4.5 BILLION in city pension contributions and payouts, an AVERAGE loss of $27,000 per retiree in annuity savings plus 6.75 percent interest, a loss of COLA amounting to $33,500 per retiree, and phony VEBA health care plans that do not guarantee the provision of health care to retirees.
In a monumental sell-out, the unions also said they will give up all other rights to appeal the POA, agree to negate Art. 9, Sec. 24 of the Michigan Constitution which protects public pensions, and cease their opposition to PA 436, the Emergency Manager Act. Ironically, that Act declares that any EM must live up to Art. 9, Section 24!
AFSCME Local 207, representing Detroit Water and Sewerage workers, was one of only two city locals that urged members to vote down the Plan of Adjustment.
“Privatization at DWSD is happening at a rapid pace,” Local 207 President Mike Mulholland said at the rally. “They are poised in this bankruptcy to give it away entirely—either to the suburbs or by handing the actual management to Veolia, the second largest water privatizer in the world. They had to bring in EMA, Inc. to dismantle the Wastewater Treatment Plant, causing the recent floods and the Toledo water emergency. Now we have to get another overseer to oversee the overseer, thanks to Orr. AFSCME Council 25 has left us hanging. They are punishing our local for striking against the DWSD takeover by stripping our membership to 150 workers.”
Mulholland said earlier that the Teamsters and Operating Engineers are in line to take over representation of the other DWSD workers, who now total 700 instead of the 1100 in unionized ranks before EMA took over. Current DWSD workers must also reapply for their jobs.
Detroit is the only city facing such massive losses under Chapter 9 of the Bankruptcy Code, which bars creditors from demanding liquidation of assets, “unless the debtor agrees.”
Orr, having been crowned as the debtor by Judge Rhodes early on, is not only agreeing but playing a proactive role in destroying Detroit.
He ordered “restructuring” of the Detroit Water and Sewerage Department’s bond debt, a restructuring that provides for $2.2 billion of that debt which was considered impaired under the Plan of Adjustment, to be paid in full.
He approved the establishment of a regional Public Lighting Authority to replace Detroit’s Public Lighting Department. Plans for the PLA include REMOVAL of 40 percent of street lighting in the city, to coincide with the removal of other city services from large swaths of neighborhoods.
He ordered the privatization of the Detroit Public Works Department, which handles garbage pick-up, beginning March 1. Current workers must re-apply for their jobs.
Rizzo Environmental Services, headquartered in Sterling Heights, and Advance Disposal Services, will take over. They plan to dispose of Detroit’s trash at Detroit Renewable Energy, LLC, the notorious Detroit incinerator which has been subject to constant protests over the years about its pollution of the surrounding poor and Black neighborhoods.
Crain’s Detroit Business said of Rizzo, “Its parent company, Rizzo Group, is co-owned by father and son along with CEO Michael Ferrantino Jr. of EQ – The Environmental Quality Co. in Wayne; New York City-based private equity firm Kinderhook Industries; and Habib Mamou, president of V&M Corp., doing business as Royal Oak Recycling.”
Orr has also ordered changes to demolition requirements for “blight removal” (read “Black removal”) projects, allowing contractors to partially fill excavation sites with chopped up parts of the existing structure, despite hazardous materials like lead and asbestos that may be present, then top it off with “clean fill.”
Baxter Jones, Jr. encouraged protesters to continue fighting back with every beat of their hearts.
“The reason we don’t see a lot more people out here is that they’ve been beat down so long they got used to it,” Jones, who was arrested in his wheelchair at both Homrich blockades, said.
“Beat the bullies back with your heartbeat,” Jones cried out. “Even the bankers and wealthy people have to die, they can’t take their things with them. Think about the young people at the Oakman School. The DPS EM Jack Martin closed it down because he didn’t care about their challenges and limitations, and sent kids to other schools with no sensibility.”
Speakers Elena Herrada and Helen Moore also pointed out the devastation emergency management and the breakway Educational Achievement Authority have meant for Detroit schools, most of which are now closed down.
In a recent interview with Rochelle Riley of the Detroit Free Press, Orr endorsed a plan for Detroit schools like those in New Orleans and Washington, D.C. He and illegally-elected Mayor Mike Duggan, the first white mayor of 82 percent Black Detroit since 1974, are proposing mayoral control of the schools to facilitate this.
There is no more public school system in New Orleans subsequent to Hurricane Katrina; privately-run charter schools, most for-profit have taken over completely. Washington, D.C. is well on its way. Charter profiteers and organizations like the Broad Foundation have targeted primarily majority-Black cities like Detroit, New Orleans and Washington D.C. for their ill-gotten gains.
Herrada announced that on Oct. 2 at the Fisher Building, a protest will take place subsequent to the hearing of a lawsuit filed by the elected, in-exile Detroit Board of Education against the EAA.
Abiyomi Azikiwe of Moratorium NOW! summed up the effects the bankruptcy will have on Detroit during the Sept. 2 protest.
“Make the banks pay, they owe us for the destruction of our city through massive illegal oreclosures,” he said. “We are opposed to the sixth, or is it the seventh, Plan of Adjustment put together by the agents of Wall Street. Even if they rubber stamp this, the City of Detroit will still experience massive poverty, unemployment, and dislocation. Since Kevyn Orr took over, the streets, lighting, EMS, bus transportation all have worsened. He has driven the city further into the ground.”
He added, “A few months from now, the plan can be readjusted again. They have blamed the city’s situation on working people, residents, and retirees. But the bankruptcy has been engineered for the past two years [by Wall Street banks and corporations in league with Michigan Gov. Rick Snyder, Jones Day and Kevyn Orr].”
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By Diane Bukowski
Sept. 4, 2014
DETROIT – Dozens of fast food workers, nearly all Black youth, were arrested today, after blocking the east-side intersection of Mack and Moran next to a McDonald’s restaurant to demand a $15/hr. wage with benefits, and a union. They were supported by large rallies on both sides of the streets, including home care workers, as part of a national day of civil disobedience against poverty-level wages.
“Hey, hey, ho, ho, $8.15 has got to go,” they chanted. As a result of national actions since 2012, some fast food wages have increased a dollar an hour, but the workers said that was not enough. In a recent victory, the Service Employees International Union (SEIU) won a ruling from the National Labor Relations Board that McDonald’s workers are employees of the $200 billion global giant, not of individual franchises, strengthening their position.
Coming on the heels of the two-week youth uprising against Michael Brown’s murder by police officer Darren Wilson in Ferguson, MO, actions in Detroit and across the U.S. infused more power into a growing youth movement that has not been seen since the 1960’s.
In Detroit particularly, arrests and harassment of Black youth are epidemic. Fully aware of this, the young protesters nonetheless sat down in proud defiance as dozens of police cars roared up. Then they stood up to be handcuffed, joy in the struggle and wariness of police treatment reflected in their faces at the same time.
“I want to take care of my 6 month old baby and be able to pay my bills,” Nakisha Mosley, 20, a McDonald’s worker, told VOD. She was part of a small group of protesters that retook part of the street after the main arrests.
“Fifteen dollars is just a start,” said Nathaniel Johnson, 26, who has worked at a fast food restaurant for the last nine years.
“I want better wages and dignity, to be able to buy shoes for my kids and have a future for them,” home care worker Tarence Carter said. “I don’t want them to still be making the same wage when they grow up. That’s why we’re teaming up with the fast food workers.”
Rev. Charles Williams II, head of the Michigan chapter of the National Action Network, told the protesters, “You have decided to sit down in the spirit of Rosa Parks and Fannie Lou Hamer. We will continue to fight until we get $15. We’re willing to go to jail to fight these slave wages.”
Police estimated arrests at around 30, but Pastor Willie Rideout of All God’s People Ministries in Detroit, an organizer of the protest, said he thought one hundred were arrested.
Police at the scene said the arrestees were being taken to the Mound Road Detroit Detention Facility (DDF). An officer in charge at the DDF told this reporter that only four protesters had been brought in there. He said most were being checked for warrants and other outstanding matters by the arresting officers, and then ticketed and released instead of being brought to the DDF.
Detroit police at the scene had varying attitudes as they arrested the protesters. One Black officer told a young woman, as numerous media took photos of her, that she would be all over the newspapers. But as the arrests wound down,VOD heard a white officer telling other white officers resentfully, “Every shitbag on the east side knows that we’re out here, and I wonder what they’re doing right now.”
After the arrests, officers pushed sidewalk protesters from the Home Care Workers and other groups holding banners back across Mack and told everyone to get on the sidewalk near McDonald’s and begin dispersing. This reporter was threatened with arrest despite showing her media badge.
Over 1300 low-wage workers met at a national convention in Chicago in July to plan for today’s actions.
SIGN THE PETITION TO SUPPORT FAST FOOD AND LOW-WAGE WORKERS
Low Pay is not OK is also circulating a national petition. Jeanina Jenkins of Low Pay is not OK said in an email,
Today, fast-food workers and allies in more than 100 U.S. cities will take to the streets to demand underpaid fast-food workers get the fair wages they deserve. Workers are calling it #StrikeFastFood, and they plan to make good on their resolution to do “whatever it takes” to win, including engaging in non-violent civil disobedience in select cities.
Fast-food workers across the country are on strike. We’re striking because no one who works for a living should be forced to live in poverty, not when we work for hugely profitable corporations. We’re striking because McDonald’s and the other fast-food giants continue to dismiss us, and refuse to give us the respect that any human being deserves. We aren’t just striking for better pay and respect, though, we’re striking to survive and we have no other choice. We’re willing to do whatever it takes to win $15 an hour and the right to form a union without intimidation. Stand with us by adding your name to our petition, and share it far and wide after you have.
“I support the striking fast-food workers. It’s time to stop hiding behind your franchises and stop making excuses. It’s time to pay your workers $15 an hour so they can support their families without relying on public assistance.”
Click on http://strikefastfood.org/ for coverage of strikes across the U.S., and local contact information.
UN Committee cites recent killings of Jordan Davis, Eric Garner, Michael Brown, other excessive force incidents
By Sonya Eskridge
The United Nations is calling on the United States to stop the inequitable use of excessive force on African-American people.
It’s been an eye-opening summer as the U.S. law enforcement system has come under fire for the deaths of several innocent black men across the country. Eric Garner’s passing earlier this summer got people upset, but Michael Brown’s shooting death made people riot in the streets of Ferguson, Missouri.
Tensions were further strained by instances of police using excessive force in situations that didn’t apparently call for it, like an incident where one NYPD put a pregnant black woman in a chokehold for using a barbecue in front of her home.
Reuters reports that the U.N.’s anti-racism board, U.N. Committee on the Elimination of Racial Discrimination (CERD), has said that disproportionate police brutality against black people is a problem the world can no longer afford to ignore. It’s just one thing among other forms of discrimination that black people face in America.
CERD committee vice chairman Noureddine Amir said in a statement, “Racial and ethnic discrimination remains a serious and persistent problem in all areas of life from de facto school segregation, access to health care and housing.” The committee is made up of 18 independent experts, and on August 13, they questioned several U.S. ambassadors about the prevalent discrimination against minorities.
Keith Harper, a senior U.S. delegate, admits that the country has a lot further to go in its mission to eliminate racial discrimination. However, he defended the U.S. in arguing that the nation has made progress in its treatment of minorities.
In CERD’s opinion, the U.S. hasn’t done enough yet to combat the issue.
“The excessive use of force by law enforcement officials against racial and ethnic minorities is an ongoing issue of concern and particularly in light of the shooting of Michael Brown,” Noureddin said in a news release.
“This is not an isolated event,” he added, “and illustrates a bigger problem in the United States, such as racial bias among law enforcement officials, the lack of proper implementation of rules and regulations governing the use of force, and the inadequacy of training of law enforcement officials.”
(VOD: a major story on State Police brutality in Detroit –not Belle Isle) that took place yesterday will be out shortly.)
Workers from McDonald’s, Burger King and other chains to hold walkout protest on Thursday Sept. 4, 2014 as battle to unionize escalates
Civil disobedience planned
By Dominic Rushe in New York
September 1, 2014
America’s fast food workers are planning their biggest strike to date this Thursday, with a nationwide walkout in protest at low wages and poor healthcare.
The strike is the latest in a series of increasingly heated confrontations between fast food firms and their workers. Pressure is also mounting on McDonald’s, the largest fast food company, over its relations with its workers and franchisees.
Workers from McDonald’s, Burger King, Pizza Hut and other large chains will strike on Thursday and are planning protests outside stores nationwide, in states including California, Missouri, Wisconsin and New York.
The day of disruption is being coordinated by local coalitions and Fast Food Forward and Fight for 15, union-backed pressure groups which have called for the raising of the minimum wage to $15 an hour for the nation’s four million fast-food workers.
Dana Wittman, 38, works for Pizza Hut in Kansas City, Missouri, and will join the strike on Thursday. She makes $9 an hour working night shifts and said she takes home about $600 a week. Her rent is $650 and she is reliant on government subsidies to make up the shortfall. Last month her electricity was cut off for a week when she could not pay the bill.
Wittman was recently promoted from chef to shift leader and given a raise from $7.50. Her new responsibilities include organising deliveries, customer service, paperwork and making sure the restaurant is cleaned up and closed down at the end of her shift, which can be as late as 2am.
“The company should pay me more. I am worth more,” she said. “They make billions a year and I don’t even get health insurance. The CEO gets health insurance.
“I intend to do whatever it takes to make this company pay a wage that lets me pay my bills without having to go to the government. I don’t think that right now these corporations are listening. They think we will just shut up eventually and go away, but they are wrong.”
Thursday’s strike will be the seventh since fast food workers in New York walked out on their jobs in November 2012. Each walkout has been bigger than the last and have been credited with spurring President Barack Obama to focus on an increase in the minimum wage.
In July more than 1,300 low-wage employees gathered in Chicago, at a convention to coordinate their calls for higher wages and better working conditions. The convention, held a few miles from McDonald’s headquarters, was organised by Service Employees International Union (SEIU), one of the US’s largest unions with two million members. SEIU’s traditional base has been hospital workers, home care aides and janitors but it has become increasingly focused on recruiting food service workers.
At the convention, the workers voted to intensify their efforts for higher pay and union membership by using nonviolent civil disobedience. Rally organisers declined to comment on their plans for Thursday.
Terrence Wise, a Burger King worker, member of Stand up KC, and member of the national organizing committee of Fight for 15, said: “Thirteen-hundred workers unanimously adopted a resolution at our convention in July to do whatever it takes to win $15 an hour and union rights, including participating in non-violent, peaceful protests in the tradition of the civil rights movement.
“On Thursday, we are prepared to take arrests to show our commitment to the growing Fight for $15.”
The rally comes after the National Labor Relations Board defined McDonald’s as a joint employer of the restaurants run by its franchisees. The decision came after the SEIU brought several cases against the company, alleging it acted as an employer.
The decision, which is being heavily challenged, could bring McDonald’s to the negotiation table over wages and benefits. The company has insisted, and continues to insist, that its franchisees, not the corporation, are responsible for wages.
Should the NLRB’s decision be ratified, SEIU would be able to unionise McDonald’s operations on a larger scale, rather than targeting a few franchises at a time.
To download this flier, click on City retirees demand vote on DWSD 2.
To download this flier, click on Protest Bankruptcy/