Michigan Gov. Rick Snyder and Detroit EM Kevyn Orr discuss Detroit's bankruptcy filing July 19, 2013/Photo Diane Bukowski

Michigan Gov. Rick Snyder and Detroit EM Kevyn Orr discuss Detroit’s bankruptcy filing July 19, 2013/Photo Diane Bukowski


Bloomberg NewsBy Brian Chappatta

September 9, 2013

The smallest amount of municipal-bond issuance in Michigan in 10 years is threatening to derail the state’s economic comeback, showing how Gov. Rick Snyder underestimated the fallout from Detroit’s bankruptcy filing.

Bond sales dwindled to $71.5 million in August, the slowest month in the state since at least February 2003, data compiled by Bloomberg show. At least three Michigan localities — Genesee and Saginaw counties and Battle Creek — postponed a combined $131 million of issuance last month after Detroit’s July 18 Chapter 9 filing because interest rates were too high. Oakland County delayed a $350 million deal last week.

Michigan county map

Detroit bankruptcy derails Snyder’s “Comeback State”

Detroit Emergency Manager Kevyn Orr has proposed imposing losses on general-obligation bondholders, drawing scrutiny to debt backed by a local government’s full faith and credit. Frankenmuth, northwest of Detroit in Saginaw County, is offering $1.75 million of limited-tax general obligations Tuesday in one of two long-term sales planned in the state this week.

“At some point, the cities need the money and will have to borrow, but it’s going to be more expensive and that’s bad for the Michigan economy,” said Erik Gordon, who teaches at the University of Michigan’s Ross School of Business in Ann Arbor. “Money that’s paid in excess interest is money that’s flowing out of the state with nothing coming back in return.”

The postponed projects and higher borrowing costs threaten to halt economic gains that have led Snyder to call Michigan the Comeback State. Since the 18-month recession ended in June 2009, Michigan has had the second-best economic growth among U.S. states, trailing only North Dakota, according to the Bloomberg Economic Evaluation of States.

Interest rates on Michigan bonds higher than Cali bonds, despite bankruptcy filings there.

Interest rates on Michigan bonds higher than Cali bonds, despite bankruptcy filings there.

Moody’s Investors Service and Standard & Poor’s raised their outlook on the state’s credit to positive this year, citing growing reserves and balanced budgets. Thanks in part to the federal bailout of the auto industry, Michigan’s unemployment rate has declined to 8.8 percent from as high as 14.2 percent in 2009, Labor Department data show.

The extra yield investors demand to hold Michigan general obligations relative to benchmark munis tells a different story. The eighth-most-populous state’s 0.55 percentage point yield spread over top-rated debt is second-most among 17 states tracked by Bloomberg, behind Illinois. Michigan pays more to borrow than California, even with an S&P rating two levels higher.

“It’s a healthy reaction by the municipal market to take a pause and reassess the risk” in Michigan, said Robert Amodeo, head of munis in New York at Western Asset Management Co., which oversees about $30 billion of local debt. “There’s a lack of appetite at the moment.” Continue reading

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IPA Oct 5 and 6 part 1IPA Oct 5 and 6 part 2

                    TO DOWNLOAD FLIER, CLICK ON IPA-Detroit-Oct 5-6 color

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CC Illitch hearing

                      DOWNLOAD FLIER AT CC Illitch hearing 9 5 13.

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Some of the supporters of Oakman Orthopedic who ralled to save the school and stop school closings nationally on Aug. 28, 2013.

Some of the supporters of Oakman Orthopedic who ralled to save the school and stop school closings nationally on Aug. 28, 2013.

Detroiters join national call for moratorium on school closings

Demand Oakman Orthopedic remain open

Parents, students rise up as Detroit School of the Arts cutbacks announced

30.6% of school aid to banks; Detroit bankruptcy raised rates on DPS bond 

By Diane Bukowski 

August 31, 2013 

State School Board member Marianne Yared McGuire (l) with others at rally to stop school closings Aug. 28, 2013.

State School Board member Marianne Yared McGuire (l) with others at rally to stop school closings Aug. 28, 2013.

DETROIT – As outrage swells across the country about massive school closings and cutbacks, the Detroit Public School (DPS) system, the first to begin its own tidal wave of closings in 2006 with the shut-down of 50 schools, continues to wield a wide-swinging hatchet under “emergency” dictatorship.

Dozens turned out in front of DPS headquarters at the Fisher Building Aug. 28 to join other cities in a national call for a moratorium on school closings. They advocated  in particular for the state-of-the-art Oakman Orthopedic School, built to accommodate the needs of uniquely disadvantaged children. 

“Save our Orthopedic School, save our neighborhood schools,” protesters chanted, adding, “Hit the road, Jack and don’t you come back no more!” referring to Michigan Gov. Rick Snyder’s newly-appointed DPS Emergency Manager (EM) Jack Martin. A cacophony of car horns greeted their chants. 

DSA students approach stage angrily during meeting with DPS EM Jack Martin and others Aug. 28, 2013.

DSA students approach stage angrily during meeting with DPS EM Jack Martin and others Aug. 28, 2013.

Martin has refused to meet with parents at Oakman, but that evening, parents and students at another state-of-the-art institution, the Detroit School of the Arts (DSA), forced him and DSA officers off the stage briefly. The large crowd erupted in outrage at the proposed lay-offs of skilled teachers, arts curriculum cutbacks, and the appointment of a new young white male principal in place of the Black women who previously held that job at DSA. 

Parent Qiana Lynum told Fox 2 News, which was barred from entering the meeting, “This is a crown jewel—the only school of its kind in the country. I moved here from Atlanta just so my daughter could attend DSA.” 

DPS plans to close 28 more schools, pay 30.6% of state aid to the banks 

The DPS Deficit Elimination Plan for 2013-14, signed by former DPS EM Roy Roberts, says the district plans to close 28 more schools from 2014 to 2016. DPS has been decimated by closures for nearly a decade now, with state per-pupil aid siphoned off to charter schools, 13 schools in the state-created Education Achievement Authority, and the district’s debt to the banks. 

Aliya Moore, president of Oakman Tiger Parents Club.

Aliya Moore, president of Oakman Tiger Parents Club. Keep the Vote No Takeover leader Helen Moore is in background.

During the 2013-14 school year, DPS set aside $107,261,000 for that debt, taken out of $350,285,000 in state per-pupil aid, according to a letter DPS sent Aug. 15 to the Bank of New York, which oversees the payments. See DPS Set aside requirements 8 15 13.

Aliya Moore, President of the Oakman Tiger Parents Association, told VOD that Martin has refused to keep Oakman open despite recommendations by both the Detroit and Michigan Boards of Education. Forty percent of Oakman’s 300 children have severe disabilities which the school was built to accommodate, with accessible entrances, a single floor layout, rooms for diaper changes and catheterizations, and a wheelchair accessible greenhouse and playground. 

“There is no other school like Oakman in Michigan,” Moore said. “But they are forcing our children to go to Nolan and Henderson schools this fall. We attended very phony open houses for both these schools, where most of the buildings were taped off, making us stay in small areas. They have some of Oakman’s staff at Noble assigned to a gym. A special ed therapist said none of her equipment has been moved to Noble and that there is no sink in the nursing station there.” 

Oakman Orthopedic School.

Oakman Orthopedic School.

Moore said cosmetic changes to the grounds at the schools such as shrubbery and flowers have been added, but that parents fear the Oakman building is being “tampered with.” 

“First they told us there were $900,000 worth of repairs needed at Oakman, now it’s $3 million,” Moore said. “We haven’t been able to go inside there since Aug. 13, and then they only allowed us in one hallway and stood outside the bathroom when we used it to make sure we didn’t try to go anyplace else.” 

“No child should have to go to a school like that.” 

Photos of conditions at Noble are displayed during protest.

Photos of conditions at Noble are displayed during protest.

Marianne Yared McGuire of the State Board of Education attended the protest, standing next to a woman with a poster plastered with photos showing deplorable conditions at Nolan. 

“No child should have to go to a school like that,” McGuire said, “let alone those going to Oakman. “Eleanor White, the head of Special Education for the Michigan Department of Education (MDE), said everything would be ready by the start of the school year at Nolan and Henderson.” 

Sixty Oakman parents and children traveled to Lansing to meet with the MDE last month, according to another protester, but personnel there told them no one was available when they arrived. She said the MDE never called them back or sent an email. 

“They’re supposed to serve us because special ed is totally supported with state and federal tax dollars,” she declared angrily. 

Helen Moore rallies protesters.

Helen Moore rallies protesters.

Lamar Lemmons is president of the Detroit Board of Education, which the state has stripped of most of its powers. 

“This is taxation without representation,” he told the crowd. “It’s enough to start a revolution. The board has voted continuously against the closure of Oakman and other schools. Oakman was working, and now we’re being punished for our success. They closed the Detroit Day School for the Deaf and a school for pregnant and parenting teens before this. They go after the most vulnerable. We demand that the state reimburse DPS for all the money it owes us. There are hundreds of millions in funds that the state has refused to take because it would mean they would have to get rid of the Emergency Managers.” 

More protesters kept coming. Cynthia Lowe and Marguerite Maddox are at center.

More protesters kept coming. Cynthia Lowe and Marguerite Maddox (with helper dog)are at left.

Board member Elena Herrada added, “They go after the low-hanging fruit in order to gentrify so rich whites can move in. They closed Southwestern High School, and now it’s Oakman and the Detroit School of the Arts. It’s very strategic. The parents are overwhelmed because they have no alternatives.” 

For more information from Journey for Justice, which sponsored the national day of protest against school closings, go to Journey for Justice fact sheet. Also see



At DSA, parents and students at a packed meeting erupted in anger when officials announced that the only discussion of proposed cuts would come from questions submitted on cards. The officials said only six questions from the cards would be addressed. The school’s new principal, Robert Harvey, showed slides and claimed that DSA is running a $5 million deficit due to decreased student enrollment. Lay-offs and cutbacks in the arts curriculum were abruptly announced the week before schools opened. 

DPS Superintendent Karen Ridgeway speaks as DPS EM Jack Martin (next left) listens approvingly.

DPS Superintendent Karen Ridgeway speaks as DPS EM Jack Martin (next left) listens approvingly.

As EM Jack Martin sat by, smiling in approval, Superintendent of Academics Karen Ridgeway claimed that DSA had previously been allowed to have 30 teachers although its student enrollment of 500 qualified it for only 21. She said the school must return to its previous enrollment of 750 to 800 students to regain staff, and announced that applications were being handed out.

Eight teachers were slated for lay-offs, with the band and music tech programs among others cut. 

A student called out, “We don’t have enough teachers already. The classes are overcrowded. How can we have a School of the Arts without arts teachers?” 

Audience members at DSA meeting begin rising in protest.

Audience members at DSA meeting begin rising in protest.

In Dec. 2012, DSA staff reported in a letter, “It is the 12th week of school, yet there are still 45 classes that are oversized to the capacity of anywhere between 39 students to 54 students. We have been told we can’t hire more teachers because it is not in the budget, the one that we still do not have.”

The minutes of the DSA Governing Council for April 15, 2013, state that the “Governing council was told that budget for next year would not change. They were also promised no ‘sweeping layoffs.’”  Go to DSA 2013 4-15 Minutes_Approved_FINAL for full minutes.

Martin and other DPS officials rush off stage as crowd gets angrier.

Martin and other DPS officials rush off stage as crowd gets angrier.

The staff letter says that, “Doug Ross’ office, the Office of Innovation and Charter Schools, receives 3 percent of our operating budget,” and says the school can never get assistance for its needs from that office. It says Ross has been siphoning funds meant for DSA to charter schools. Ross is a long-time advocate and founder of charter schools in Detroit. (Go to DSA Staff Statement Opposing Self Governance to read full letter.)

Helen Moore challenges Martin and DPS officials during DSA meeting Aug. 28, 2013.

Helen Moore challenges Martin and DPS officials during DSA meeting Aug. 28, 2013.

Also, City of Detroit Emergency Manager Kevyn Orr declared bankruptcy in July. The Wall Street Journal later reported in August, “Detroit’s public-school system is expected to pay a hefty yield premium as it looks to sell $92 million in debt Tuesday, about a month after the city sent shock waves through the municipal-bond market with its record bankruptcy filing.” 

The article estimated investors in the $92 million bond would earn 4.5 percent instead of the normal 0.18 percent, meaning millions more siphoned off to the banks from the DPS budget.  

After return to stage, DSA Principal bends down to hear students' protests.

After return to stage, DSA Principal bends down to hear students’ protests.

DSA is one of nine “self-governing small high schools,” with 2,800 students, according to the district’s 2013-14 Deficit Elimination Plan. Go to DEP DPS 2013 14.

“Decisions related to curriculum, staffing, budgeting and operations will be determined at the school level enabling the individual Governing Councils to maintain autonomy in their educational programs,” says the plan. “This will allow them to make decisions that best meet the individual needs of their students, shifting authority under this education model.” 

Members of the Governing Councils are appointed. During the meeting, parents and advocates said the governing council is virtually non-functional and demanded that it be disbanded and the school be returned to regular DPS status. They asked that all lay-offs and curriculum changes be canceled immediately.

Natasha Baker read off questions from the cards, each of which elicited loud applause from the audience. 

DSA Principal refused to talk to VOD at end of meeting.
DSA Principal Robert Harvey (r) refused to talk to VOD at end of meeting.

“Why was a new principal chosen and no one else interviewed,” asked one individual. Ridgeway claimed there were interviews, but an audience member declared that a lie. 

“What is going to happen to our talented staff?” asked another individual. Ridgeway replied that they are being transferred to other schools. 

Anger from parents and students in the meeting continued to rise. 

Helen Moore, co-founder of Keep the Vote No Takeover, stood and declared, “This is our school, our meeting. You are not answering the parents’ questions. You are not allowing the parents to be in charge.” 

Shortly afterwards, Martin, who had been silent, and other officials left the stage briefly while a parent of their choice, Cheryl Valentine, took over. She asked the audience to work with the EM and take applications for more students. She asked parents to sign up with the Detroit Parent Network, an organization set up by private organizations including the Skillman Foundation. 

Parent Christal Bonner addresses audience as former speaker, Karen Valentine, listens from stage.

Parent Christal Bonner addresses audience as former speaker, Karen Valentine, listens from stage. Bonner is pointing to principal and others cowering in a corner of the stage.

Parent Christal Bonner then took the mike. 

“I am a parent of six children, one just graduated from DSA in June, and another is supposed to be coming here in September for the band program,” Bonner said. “I am very concerned because I want DSA to be a full-functioning fine arts school. The kids here support each other, and there has been an artistic, friendly family environment. This school used to be called the School of the Fine and Performing Arts. We shouldn’t be forced to go out and sell chicken dinners to support arts in our schools.”

DSA students and parents flock around Christal Bonner to sign petitions demanding no lay-offs, no curriculum changes, return to DPS regular status.

DSA students and parents flock around Christal Bonner to sign petitions demanding no lay-offs, no curriculum changes, return to DPS regular status.

Parents and students flocked around her to sign petitions based on demands she presented, including restoration of all teachers and a full arts program, and return to regular DPS status instead of the “self-governing” model.  She and Moore called on the audience to attend rallies at DPS headquarters Aug. 29 and 30 to present the petitions to Martin. 

Bonner said the DSA format was based on that of the Booker  T. Washington School of the Fine and Performing Arts in Dallas, Texas, the only other school of its kind in the country, except for Interlochen in Michigan. 

“They don’t want too many of US there, and it’s a private school,” Bonner declared. 

DPS EM Jack Martin, guarded by police and staff, kneels to listen to parent.

DPS EM Jack Martin, guarded by police and staff, kneels to talk to parent.

Sharetta Strong, parent of a DSA graduate, told VOD, “I’m very concerned. We’ve been working with them all year, and have been told nothing about a $5 million budget gap.”

Charlene Ward, parent of a DSA 11th grader, said, “The self-governing board has been all but dissolved. This is the first time most of the parents have seen those numbers over the course of the school year. This was supposed to be a partnership. What kind of partners let you go belly under? They feel they can do the same thing over and over. We can only take so much. We have an EM over the city, and an EM over the schools. They do not really understand what we need. We need arts at a performing arts school. My son was so excited to be in the vocal jazz program. We know what the school needs. To yank it just as the school year begins is not right.” 

DPS under EM Jack Martin later issued the following statement to Fox 2 News (it is not posted on the DPS website): 

Parent Christal Bonner (r) and Helen Moore (center) gather petition signatures and talk to audience members

Parent Christal Bonner (r) and Helen Moore (center) gather petition signatures and talk to audience members

“The decision to make changes to the number of instructional positions at Detroit School of Arts is being reviewed by Detroit Public Schools Academic Leadership and Emergency Manager. It is anticipated that, going forward, staff changes of this nature will also be reviewed with representatives of the school’s Governing Council. Detroit Public Schools remains committed to supporting not only the Detroit School of Arts, but also adding arts/music enrichment back to all of our elementary and middle schools for the 2013-14 school year.

DSA Principal shows charts showing alleged enrollment and achievement drops.

DSA Principal shows charts showing alleged enrollment and achievement drops.

However, we must also remain vigilant in operating our school system in a fiscally responsible manner so that the District can be sustainable for future generations of Detroit students. In recent years, DSA has consistently operated at a deficit that the District can no longer afford to cover, therefore consideration is being given to eliminating some instructional positions and having DSA’s newly restructured leadership team perform both their administrative work and take on some instructional responsibility based on proven models. All of these administrators are licensed and qualified in the respective areas of instruction which they may take on. Further, the District’s ongoing enrollment drive shows hopeful signs of future growth for the school, with approximately 50 new students having enrolled this summer. The district is also actively seeking supplemental funding to assist in instructional areas where budgetary constraints might cause programs to be affected.” 


Arts help stimulate the soul. When the arts are diminished in schools, one shreds part of the souls of children. -Dr. Denise Davis-Cotton, Founder and First Principal, Detroit School of Arts 

Dr. Denise Davis-Cotton, DSA founder and first Principal

Dr. Denise Davis-Cotton, DSA founder and first Principal

Detroit School of Arts (DSA) was designed to provide enriched academic arts opportunities for students under the tutelage of high quality academic arts instructors. DSA was founded on the principles of leadership integrity and community engagement.  These two qualities helped advance DSA into national and international acclaim.

It is difficult and painful to learn about the disruption of DSA’s educational attainment, which began by removing the school from under the auspices of the Detroit Public Schools and forcing her to exist in an unwarranted aggressively inadequate autocratic governance structure. Regretfully, providing a high quality education to DSA’s students was replaced with a regressive ideology of immobilizing educational advancement. 

DSA Orchestra

DSA Orchestra

It is disconcerting to learn about the educational bureaucratic practices and processes that silenced the community’s voices by denying them democratic participation in selecting the school’s leadership. DSA’s positive school climate and culture suddenly became a cesspool for incompetent competents imposing a villainous will on students, parents, teachers, and staff.

DSA student violinist.

DSA student violinist.

The most pejorative act to DSA’s academic integrity is the recent displacement of stellar teachers with impeccable professional records. There is no sound or appropriate rationale to justify these displacements.  Detroit Public Schools is in a position to correct a wrong that resulted in harming DSA, which is held hostage under a depreciatory governance structure, unqualified school leadership, and an amputation of first-rate arts instructors; specifically, N. Burrell, M. Malabad, and  C. Malabed.

The demise of the DSA’s educational programs and removal of exceptional instructors is unjustifiable and reprehensible.  The current autocratic school governance structure appears to produce despondently inept and deceptive leadership decisions that fail to advance DSA’s mission and vision.

Award-winning DSA singers and teachers Dec. 17, 2008

Award-winning DSA singers and teachers Dec. 17, 2008

To reconcile these issues, it is of paramount importance and urgency to begin to restore DSA’s credibility by re-instating DSA to the Detroit Public Schools and re-instating the displaced teachers. DPS can support DSA by acting immediately to remove the school from an existing ineffective, unqualified, disorganized, despotic governance and school leadership structure that has diminished and harmed DSA’s school community and paralyzed thriving programs. Furthermore, DPS can immediately re-call the displaced teachers.

DSA musicians

DSA jazz musicians

The ramifications and repercussions of ignoring the requests of DSA’s school community could continue to impair the learning experience for students and impede DSA’s growth. Support is needed (at this time) to save not only the institution but the future of the citizens of Detroit. One only need to be reminded that there are four things that help construct a society: laws, education, religion, and the arts. Failure to save DSA, an institution that has proven to instill arts within the Detroit community, will be judged historically as another step in the genocide of Detroit’s culture.

For more information on the fight against school closings and cutbacks, (for Oakman), contact Helen Moore (313)-934-7721 and; Aliya Moore (313)-758-8552 and
Maulana Tolbert (313)-341-5929 and

For more information on DSA situation, contact Christal Bonner @ (313)350-2393 or . She is also asking that concerned parents, students and supporters start calling and emailing the following:

Jack Martin, EM- (313)870-3772 ;

Karen Ridgeway, Supt (313)873-4493;

Natasha Baker, Innovator (313)873-3485 ;

Willie McAllister, Music Supr (313)873-7706;

Robert Harvey, Principal DSA; (313)494-6000;

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Hugo Chavez, the late president of Venezuela, Fidel Castro of Cuba, and Evo Morales, President of Bolivia, in Havana, Cuba. LA LUCHA CONTINUA!

Hugo Chavez, the late president of Venezuela, Fidel Castro of Cuba, and Evo Morales, President of Bolivia, in Havana, Cuba. LA LUCHA CONTINUA!

By Evo Morales Ayma
President of Bolivia

March 2010 meeting of the European Council.

March 2010 meeting of the European Council.

Statement of President Evo Morales Ayma to the gathering of Heads of State of the European Community, (06/30/2013). With simple words, simultaneously translated, President Morales spoke to more than one hundred Heads of State and dignitaries of the European Community

Indigena boliviano.

Indigena boliviano.

Well, here am I, Evo Morales. I have come to meet those who celebrate the encounter.

Well, here am I, a descendant of those who populated America forty thousand years ago. I have come to meet with those who discovered her only 500 years ago.

Well then, here are we all.

We know who we are, and that is a lot.

We will never have anything else.

Bolivia's indigneous people march to stop construction of highway through their ancestral lands.

Bolivia’s indigneous people march to stop construction of highway through their ancestral lands.

A European brother, a customs officer, asks me for a written paper with a visa to be able to discover those who discovered me.

A European brother, a usurer, asks me for payment of a debt contracted by Judas, whom I never authorized to sell me.

The European brother pettifogger explains to me that all debts are to be paid with interest, even when human beings and whole countries are sold without asking for their consent.

I am discovering you now.

I, too, can demand repayment, and can also demand interest.

Wanted Christopher ColumbusIn the Archives of Indies, there is written, page after page, receipt after receipt, signature after signature, that between the years of 1503 and 1660 alone,185,000 kilograms of gold and 16 million kilograms of silver were brought from America to


I will not believe that!

Because that would mean thinking that the Christian brothers betrayed their Seventh Commandment.


Save me Tanatzin, from supposing that the Europeans, like Cain, would kill, and deny the blood of their brother!


Bartolomeo de Casas.

Bartolomeo de Casas.

That would mean to credit the slanderers, such as Bartolome de las Casas, who define the encounter as the destruction of the Indies, or to extremists such as Arturo Uslar Pietri, who affirms that capitalism and the present European civilization derive from the flood of precious metals!


Those 185,000 kilograms of gold and 16 million kilograms of silver must be considered as the first of many friendly loans from America, destined for the development of Europe.

To say otherwise would be to assume the existence of war crimes, which would give us the right not simply to demand their immediate return, but also indemnification for damages.

I, Evo Morales, prefer to opt for the least offensive of these hypotheses.

Such fabulous exportation of capital was nothing more than the beginning of a “MARSHALLTESUMA” plan to guarantee the reconstruction of barbarian Europe, ruined by her deplorable wars against the learned Moslems, who had created algebra, polygamy, daily baths, and other superior advances of civilization.

This is why, celebrating the Fifth Centenary of the Loan, we can ask ourselves: Have our European brothers made a rational, responsible, or at least a productive use of the funds so generously advanced to them by the International Indo-American Fund?

We hate saying no. Continue reading

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Protesters condemn U.S. War on Syria during Pres. Barack Obama's speech Aug. 28, 2013.

Protesters condemn U.S. War on Syria during Pres. Barack Obama’s speech Aug. 28, 2013.

Coast-to-coast protests

workers world logoAug. 27 — Without presenting even a hint of proof of Washington’s allegations that Syria has used poison gas, Secretary of State John Kerry has announced that a rocket attack on the sovereign state of Syria from four U.S. destroyers in the eastern Mediterranean is imminent.

Each destroyer deploys 90 cruise missiles, so even a time-limited attack would cause enormous damage.

This blatant and illegal threat, supported only by Washington’s co-criminals in London and Paris — the former colonial powers in the Middle East — drew an immediate angry reaction from anti-war organizations around the world and in the U.S. itself.

Syria Obama AssadThe International Action Center, the United National Antiwar Coalition and the Answer Coalition issued statements condemning U.S. war moves and calling for protest demonstrations to stop the missile attack, plus others to be held on the “day of” or “day after” the attack. The Antiwar Committee in Chicago, Arab Americans for Syria in LA, Syrian American Forum of New Jersey, Women Against Military Madness in Minneapolis, are moving.

Code Pink has called a protest during Obama’s MLK Aug. 28 speech, gathering at 10 a.m. at 12th & Constitution. Protests have already been set for New York, Chicago, Los Angeles, Dearborn, Mich. and some Florida cities.

Kerry’s announcement sounded like words of the Queen in “Alice in Wonderland”: sentence first, verdict afterwards. He completely dismissed the Syrian government’s cooperation with the United Nations investigation team on the ground there that was proceeding to examine the facts, saying it was “too little, too late.”

To the anti-war forces in the U.S., Kerry’s haste is just another sign that the imperialist powers had already decided to wage war on Syria. Last week’s alleged “nerve gas” attack on the outskirts of Damascus gives every indication of being an operation by the imperialists and their agents in the Syrian opposition. President Barack Obama’s statement a year ago that a nerve gas attack would be “a red line in the sand” for a U.S. intervention made it clear what those looking for a pretext for intervention had to do.

Few believe the imperialists

Protest against war on Syria in Times Square, NYC.

Protest against war on Syria in Times Square, NYC.

Despite the imperialist media’s knee-jerk reaction of rallying around the flag, a majority of the U.S. population — 60 percent in a recent Reuters-Ipsos poll — opposes intervention in Syria and 89 percent opposes arming the “rebels.” There is even some debate among imperialist analysts. In addition, Russia, Iran, China and other countries’ governments have spoken out against a new aggressive attack. This one doesn’t even have the acquiescence of the United Nations Security Council.

The anti-war groups in the U.S. say they are certain that the imperialist establishment is again lying. Why? Because they have lied so often before — and have been caught at it. (See editorial, page 6.)

For the 1999 air war on Yugoslavia, the 2003 invasion of Iraq and the 2011 air war on Libya, wild charges of genocide and weapons of mass destruction — all later proved false — were raised as pretexts for imperialist intervention, say the war opponents.

Instead of quietly accepting yet another U.S. aggression in the interests of the profit-hungry corporations and banks, the IAC-Solidarity Center in Baltimore has called a meeting to plan protest actions in Baltimore, Columbia and Frederick, Md., and a regional demonstration in Washington, D.C.

Follow developments in the D.C. region on Facebook at In New York, the IAC has called a demonstration for Times Square at 6 p.m. on Thursday, Aug. 29. Follow the IAC at

Follow UNAC at for a listing of all actions.

Also see:

Stop U.S. aggression on Syria!

A good move on Syria

Syria resisting economic and military attacks

Obama escalates U.S. role in Syria

Turkey uses false pretext to attack Syria

Find more like this: Around the world, In the U.S. , Chicago, IAC, Syria, Times Square

U.S. Destroyers

U.S. Destroyers


BAR logo 2by BAR editor and senior columnist Margaret Kimberley

The White House says that United Nations inspectors in Syria are too late to investigate the chemical weapons claims and must be ignored.”

William Kristol called Barack Obama a “born again neo-con” after the president sought his advice when making the case for the over throw of the Libyan government in 2011. Kristol certainly ought to know who his compatriots are but the statement isn’t quite true.

No one becomes president who isn’t a true believer in the American empire of money and murder. They are all neo-cons, despite what they may say about immigration or gay marriage or health care. The differences at the top are small. The pinnacle of power is reserved for people who are aligned with the ruling 1% and who will use American power to dominate the world economically and militarily.

President Barack Obama and former Presidents George W. Bush and Bill Clinton have all waged imperialist wars.

President Barack Obama and former Presidents George W. Bush and Bill Clinton have all waged imperialist wars.

America has brought destruction on a mass scale to many parts of the world. In the past two decades that hell has been almost constant. Bush the elder and Bush the younger are both responsible for at least 1 million deaths in Iraq alone. When not sending United States troops to fight on the ground they instigated proxy wars such as between Somalia and Ethiopia. Bill Clinton bombed the former Yugoslavia, enacted deadly sanctions against the Iraqi people and backed the killers in Africa who have brought so much death to the Congo.

The pinnacle of power is reserved for people who are aligned with the ruling 1% and who will use American power to dominate the world economically and militarily.

Barack Obama is smarter than them all and that means the world is in very grave danger from the United States. He knows that domestic opposition to aggression is lessened if there are no American soldiers in danger. In the age of drone warfare and so-called surgical strikes, he can quiet all but those absolutely committed to peace and non-intervention. The recent claim that the Syrian government used chemical weapons against civilians is just the latest in a long line of lies used as pretexts for war by American presidents. The Gulf of Tonkin, WMD, and incubator babies stories all played pivotal roles in getting an uninformed populace to say yes to wholesale slaughter.

Syrian President Bashar al-Assad

Syrian President Bashar al-Assad

It is very hard to believe that the Bashar al-Assad government in Syria would commit a chemical weapons attack when it is winning the war fomented by the United States, NATO, Israel, Saudi Arabia and other gulf monarchies. President Obama went on record to say that the use of chemical weapons would draw a “red line” and trigger military action. Assad has hung on in the face of terrible odds and would be a fool to risk war when he has the advantage before peace talks are held. The talks have been delayed for months by the United States in an effort to buy time for their “rebel” allies. Assad wanted and needed these meetings to take place and wouldn’t have done anything that would give his enemies an excuse to walk away from the table. It would also be very bad timing on the eve of the next G20 summit which will be hosted by Russia, Syria’s strongest ally.

So once again we have the United States doing its usual dirty work with the help of their hand maidens in the corporate media. Just as they did in 2002 and 2003 the television networks and major newspapers repeat as gospel truth every assertion coming out of the White House. The Obama administration is taking its cues from the bad old days of George W. Bush. The White House says that United Nations inspectors in Syria are too late to investigate the chemical weapons claims and must be ignored. Without a hint of irony or mention of its previous shameful behavior the New York Times tells its readers why this must be so.

Images of Iraqi babies with two heads or no heads are also gut wrenching and Kerry is one of the people responsible for making that moral obscenity take place.”

Photo from 2012 World Health Organization report on surge in birth defects in Iraq.

Photo from 2012 World Health Organization report on surge in birth defects in Iraq.

Also without shame or irony, Secretary of State John Kerry, made a statement which made words like propaganda seem quaint. “Let me be clear. The indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons is a moral obscenity.” Kerry was among the senators who voted to approve the invasion of Iraq. That invasion included the use of depleted uranium and white phosphorus against civilian populations. These weapons are still causing horrific birth defects in Iraqi children years after they were used. Kerry said that images of victims were “gut wrenching” and that he couldn’t forget seeing a father holding his dead child. Images of Iraqi babies with two heads or no heads are also gut wrenching and Kerry is one of the people responsible for making that moral obscenity take place.

The United States supported Saddam Hussein when he used chemical weapons to attack Iran in 1988. Apparently Kerry doesn’t find the recent government created carnage in Egypt very gut wrenching, nor the continued American created chaos in Somalia which has killed many babies and grieving parents. Our president brags about his personal role in determining who will be on the assassination kill list. This country is in no position to take the moral high ground about Syria or any other country.

Every claim for humanitarian intervention and responsibility to protect are based on lies meant to obscure America’s true and very base motivations. The world can only hope that Syria’s allies are able to make Obama and his friends think twice. There is no deterrent for a war mongering nation except the fear of defeat.

Margaret Kimberley’s Freedom Rider column appears weekly in BAR, and is widely reprinted elsewhere. She maintains a frequently updated blog as well as at Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)


No smoking gun’ evidence that Syria used chemical weapons

• Israel the source for current charges of sarin gas use by Assad

By Michael Collins Piper

American Free Press  

Lawrence WilkersonOne of America’s most respected military figures charged publicly that long-standing allegations about the Syrian government’s use of chemical weapons may have been, in his words, “an Israeli false flag operation” calculated to stir up opposition to Syrian President Bashar al-Assad, long perceived by Israel as a threat to its geopolitical agenda. And now that the United States seems poised to attack Syria on the basis of new claims about the use of such weapons, what former Army Col. Lawrence Wilkerson told Current TV on May 3 bears noting.  

A longtime military intimate of Gen. Colin Powell, and later his chief of staff when Powell was secretary of state under “W” Bush, Wilkerson said his intelligence sources dismissed claims at that time that Assad’s military had used chemical weapons against terrorist forces. Having loomed over Assad for months, that charge has been reinvigorated and the media revels in the possibility the U.S. will now attack Syria. 

Protesters outside White House Aug. 29.

Protesters outside White House Aug. 29.

However, The Los Angeles Times reported Aug. 27 that Germany’s Focus magazine—citing a former Israeli intelligence official—said Israel was the primary source for current charges about Syria’s alleged use of chemical warfare.  

Noting “U.S. intelligence sources long have relied on Israel to help provide intelligence about Syria” the Times didn’t mention it was also Israel that previously supplied the Bush administration much of the false data about supposed weapons of mass destruction in Iraq, which provided the pretext for the invasion of that Arab republic. The media carefully suppresses the fact that—as demanded by the Israeli lobby in Washington—U.S. tax dollars (underwriting Israeli covert expertise) instigated the rebellion against Assad that led to the civil war that U.S. blood and treasure are now expected to resolve in a manner satisfactory to Israel.  

Although the media suggests the Pentagon is eager for war on Syria, the fact is that—just as before the Iraq war when multiple military leaders were warning of the dangers of such a venture—top brass are likewise urging restraint vis-à-vis Syria.  

Even Joint Chiefs of Staff Chairman Gen. Martin Dempsey recently told Congress that U.S. intervention in Syria would not be in America’s interests.Yet, despite widespread public opposition to war, many Republicans and Democrats alike—bankrolled by pro-Israel campaign–are clamoring for action.

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Youth in San Bernadino protest Trayvon Martin verdict July 19, 2013.

Youth in San Bernadino protest Trayvon Martin verdict July 19, 2013.

Wed, Aug 28 2013

By Tim Reid

RIVERSIDE, California (Reuters) – A U.S. federal judge on Wednesday granted bankruptcy protection to the California city of San Bernardino, paving the way for a precedent-setting battle between bondholders and California’s giant public pension system.

The case is being closely watched by other U.S. cities, including Detroit, which declared the biggest U.S. municipal bankruptcy last month, where budgets are burdened by soaring pension costs.

San Bernadino City Hall.

San Bernadino City Hall.

Judge Meredith Jury of the U.S. Bankruptcy Court for the Central District of California ruled that San Bernardino was eligible for Chapter 9 bankruptcy protection despite opposition by the California Public Employees’ Retirement System, or Calpers. The $260 billion pension fund is the city’s biggest creditor and America’s largest pension fund.

“I am ruling as a matter of law that the city is eligible,” Jury said. “I don’t think anyone in this courtroom seriously thought the city was anything but insolvent.”

A city must be insolvent and have proof to have negotiated in good faith with creditors to be eligible for Chapter 9 municipal bankruptcy.

Michael Gearing, an attorney appearing for Calpers, called Jury’s decision a “dangerous precedent” that will encourage other cities to “create a crisis because they have a large number of creditors.”

CalPERSAmy Norris, a Calpers spokeswoman, said in an emailed statement: “Calpers is considering its options for appeals.”

San Bernardino, a city of 210,000 located 60 miles east of Los Angeles, filed for bankruptcy protection in August 2012, citing a $46 million deficit and arguing that it had effectively run out of cash to meet its daily obligations.

The city must negotiate with its creditors and produce a final bankruptcy plan on which the judge will ultimately have to rule. Whether pension and other debt payments, including to holders of $50 million in pension obligation bonds, will have to be treated equally or not will remain a key issue – one that could eventually reach the U.S. Supreme Court.


Calpers argues that it should not be treated like other creditors and must be paid in full because California state law says the fund must always be fully paid, even in a bankruptcy. Bondholders argue that federal bankruptcy law trumps state statutes and say Calpers should be forced to fight with other creditors over how much they are paid under an exit plan.

Stockton, CA City Hall.

Stockton, CA City Hall.

Another California city, Stockton, which was also found eligible for municipal bankruptcy protection in April, is expected to present an exit plan in September. Creditors will be asked to vote on the plan.

The judge overseeing that case said dealing with Stockton’s obligations to Calpers will probably be unavoidable under an exit plan.

In an unprecedented move, San Bernardino stopped paying its $1.2 million bimonthly employer payments to Calpers for a year after declaring bankruptcy, the first California city to halt payments to the fund.

It resumed paying Calpers last month but continues to renege on payments to other creditors, including holders of $50 million in pension obligation bonds.

Calpers said the city still owes the fund $14.3 million in arrears and that it will “aggressively pursue all past due contributions, resulting interest and penalties.”

“These payments are statutorily required and necessary to deliver on the pension benefits promised to San Bernardino employees as a form of deferred compensation,” the powerful pension system said.

But the judge questioned who will provide for those payments.

“If Calpers gets all the money they want, under what they say is their statutory right, who isn’t going to get paid? All the employees? How is that going to help Calpers?” she said.

The case is In re San Bernardino, 12-bk-28006, U.S. Bankruptcy Court, Central District of California (Riverside).

(Reporting by Tim Reid; Editing by Tiziana Barghini, Dan Grebler and Stacey Joyce)

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Longshore workers from across the Pacific Northwest have come to the aid of locked out grain handlers in ILWU Local 4 and Local 8. Source: ILWU.

Longshore workers from across the Pacific Northwest have come to the aid of locked out grain handlers in ILWU Local 4 and Local 8. Source: ILWU.

August 31, 2013 / Mark Brenner

Labor Notes logoIn a surprise move, the 40,000-member International Longshore and Warehouse Union announced its disaffiliation from the AFL-CIO yesterday. The news comes just a week before the federation is set to hold its national convention in Los Angeles, the nation’s biggest port and an ILWU stronghold.

The ILWU, known for its militant traditions and progressive politics, has been drawn into turf wars with other unions in recent years—particularly in the grain export terminals of the Pacific Northwest, where longshore workers have been locked in a high-stakes battle over master contract standards since 2011.

ILWU Pres. Robert McEllrath (center).

ILWU Pres. Robert McEllrath (center).

In an August 29 letter to AFL-CIO President Richard Trumka, ILWU President Robert McEllrath cited these ongoing juristictional battles as part of the union’s decision to disaffiliate. The skirmishes hit close to home: McEllrath comes out of Vancouver, Washington’s Local 4, where members of rival unions are crossing ILWU picket lines, and debate over the disputes was squelched at this summer’s state labor convention.

The letter also cited the federation’s compromised positions on health care and immigration reform. Invoking the union’s radical and independent history, McEllrath noted the ILWU did not join the AFL-CIO until 1988—after being kicked out of the CIO during the McCarthy era for being “too red.”

Lockstep with Obama

“[The AFL-CIO] wants to organize these big conventions, and rally to pat themselves on the back, doing nothing to promote the working-class,” said ILWU Coast Committeeman, Leal Sundet, who supported the union’s decision to disaffiliate.

ILWU supports single-payer health care plan, not Obamacare.

ILWU supports single-payer health care plan, not Obamacare.

The ILWU supports a national single-payer health care system, while the AFL-CIO is “in lockstep with Obama,” Sundet said. He criticized the federation for being unwilling to discuss the shortcomings of the Affordable Care Act, which discriminates against union Taft-Hartley benefit plans and will impose a so-called “Cadillac tax” on generous benefit plans.

Sundet also chided the federation’s position on immigration reform. The AFL-CIO is backing a bill that he contends will only make things harder for working-class immigrants, because it is “designed to give [only] highly-paid workers a real path to citizenship.”

It’s clear, however, that the overriding factor in the break is fallout from the ILWU’s ongoing struggle to maintain its longstanding contract standards—and jurisdiction—for 3,000 longshore workers who handle grain along the Puget Sound and Columbia River. Sundet is in the middle of the storm, heading up grain negotiations for the union.

Grain Strain

Longshore workers in the region move nearly 30 percent of all U.S. grain exports, including half the nation’s wheat shipments.

After talks broke down in December between the ILWU and the Pacific Northwest Grain Handlers Association, two of the four employers—United Grain and Columbia Grain—imposed their “last, best, and final offer,” in hopes of provoking a strike. Meanwhile the union hammered out a separate deal with TEMCO, a joint venture between global agribusiness companies CHS and Cargill.

In February, United Grain locked out ILWU Local 4 members in Vancouver, Washington. In May, Columbia Grain did likewise with ILWU Local 8 members in Portland, Oregon.

defend ilwu lockout 1305

In both cases ILWU members have been rankled by Electrical Workers (IBEW) and other union members crossing their picket lines, escorted in by the company’s private security forces. Adding insult to injury, the IBEW has initiated internal AFL-CIO procedures to contest ILWU jurisdiction over maintenance and repair work in multiple ports in the region.

The lockouts follow on the heels of a pitched battle over 25 jobs in Longview, Washington, in 2011. ILWU members squared off with grain giant EGT after the company announced it would operate its new state-of-the-art terminal with the more compliant Operating Engineers (IUOE) union. After months of picketing and direct action—including occupation of the grain terminal, a blockaded train shipment, and scores of arrests—the ILWU finally reached an agreement.

Despite the militancy, the EGT contract loosened work rules and staffing standards compared to the master grain contract.

The solo agreement with TEMCO mirrored some of these concessions. But the employer holdouts are banking that they can spread more of the concessions EGT got, such as regular 12-hour shifts, bypassing seniority, and greater flexibility to use supervisors for bargaining unit work.

Solidarity Divided

ILWU members see the turf battles with rival unions as an additional, unwelcome hurdle to surmount, in an already difficult employer battle.

Several hundred ILWU members and supporters marched to Mitsui-United Grain’s Vancouver headquarters on March 8, 2013, led by International President Robert McEllrath and International Vice President Ray Familathe. Photo by Jared Moultrie, ILWU Local 4.

Several hundred ILWU members and supporters marched to Mitsui-United Grain’s Vancouver headquarters on March 8, 2013, led by International President Robert McEllrath and International Vice President Ray Familathe. Photo by Jared Moultrie, ILWU Local 4.

Attempts to bridge the divisions using the machinery of the AFL-CIO have sputtered, according to Cager Clabaugh, president of ILWU Local 4. One particularly galling example for Clabaugh, a former state fed vice president, was a move to scuttle discussion of the conflicts at the Washington state AFL-CIO convention in July.

“We’re at the state labor convention for three days, a half-mile from the picket line of my membership where we’ve been locked out for five months, and nobody’s even brought up our lockout, not once,” Clabaugh said. “Our resolution gets shot down, not even considered. We can’t even talk about labor inside the house of labor, and that’s wrong.

“It made me sick watching these big unions play politics instead of figure out a way to support solidarity.” Clabaugh said. “If only as much focus and effort was put on trying to figure out a way to let their members do the right thing, or even educate members on why we don’t cross picket lines, why it’s important.” Continue reading

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 VOD: Last year, the Michigan Supreme Court upheld the common law right to resist unlawful police conduct and arrests in the Moreno case. Go to to read about this case, which hopefully these two brothers are citing in their defense.  

Full Video Brawl Black Students Fight White Police At Granny’s Restaurant In Detroit.

Brainfood videosFrom Brainfood Videos on YouTube;  submitted to VOD by Fige Bornu

August 29, 2o13

After a brawl with the police, two brothers are charged with assaulting officers but they say they’re the real victims and have the proof to prove it: the whole fight was caught on video. It all started when 20-year-old Tywonn Mitchell and Naybon Moore, 26, were driving to Grandy’s Coney Island back in May. They say that’s when Detroit Police began profiling them, tailing their car. The brothers pulled into the restaurant and the police car backed away, so they thought everything was fine.

But then the officers followed them into the Coney Island, and asked to see their IDs. The brothers asked to know what they had done wrong, (as you can hear in the video), both of them aware of their rights. One is studying criminal justice and the other is studying law. That’s when one of the brothers flipped his hands, and it turned into a full-on brawl. The brothers were taken into custody. Fast forward three months now, and they are charged with assault and battery on a police officer, obstruction of justice, and resisting arrest. But they claim, they are the real victims here.

Detroit Police Department tells us, when the incident happened the officers admitted they used force and a command level investigation was conducted.

The officers say when they were investigating inside the Coney Island, one of the officers extended his hand and asked one of the brothers to step back, but he slapped the officers hand in return. At that point the police officer responded with force. The use of force was deemed appropriate and reasonable after intensive review of the video and interviewing the brothers.

Additional VOD comment: Police officers have no legal right to ask to see your ID unless you are driving at the time. They CANNOT just stop you on foot and demand to see it.


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City retirees join protest called by AFSCME Council 25 Aug. 19, 2013

City retirees join protest called by AFSCME Council 25 Aug. 19, 2013

Objectors say not only casino taxes, but city’s swap payments should be released during bankruptcy case 

Depositions of EM Kevyn Orr, others ordered

Judge elicits agreement from Robert Davis not to challenge Orr appointment in separate OMA lawsuit

Retirees’ committee includes no one from elected pension boards

By Diane Bukowski 

August 26, 2013 

(Updated article from Bloomberg News on Judge Steven Rhodes order filed after this story was written, is at

Milliman execs stayed in "the world's most expensive hotel" for this conference; now Milliman has established an office in wealth capital Dubai.

Milliman execs stayed in “the world’s most expensive hotel” for this conference; now Milliman has established an office in wealth capital Dubai.

DETROIT – In response to U.S. Bankruptcy Judge Steven Rhodes’ demand that city consultant Milliman, Inc. appear in court Aug. 28 to defend its secrecy requirement on negative pension fund liabilities reports, Detroit Emergency Manager Kevyn Orr said that Milliman has withdrawn that requirement, in a “Motion for a Protective Order” filed Aug. 23. 

“There have been releases or information provided by the city about those reports, but they are not actual actuarial statements,” Atty. Robert Gordon, representing the retirement systems, told Judge Rhodes during the last bankruptcy hearing Aug. 21. 

The retirement systems have objected that the Milliman reports, which claim the systems are $3.5 billion under-funded, are based on admitted “guesstimates.” A recent report by Morningstar, a major investment research firm, says the systems’ own actuarial reports, which show them to be in good shape, are in line with accepted practice in the industry. 

“Since the August 21, 2013 hearing, the City has taken steps to ensure that all interested parties have appropriate, unrestricted access to the materials in the data room,” Orr’s motion says. “Moreover, the City has approached Milliman about the limitations on access to its materials, and Milliman has agreed to amend its contract with the City to eliminate access restrictions. Those having access to the data room will no longer be required to sign a non-disclosure agreement with Milliman.” 

Detroit EM Kevyn Orr.

Detroit EM Kevyn Orr.

The Milliman reports are among 70,000 pages of bankruptcy-related documents in a city “data room,” which have also been subject to a general NDA requirement. 

Jones Day attorney Gregory Shumaker told Judge Rhodes that Orr wants to keep secret “cash projections related to the city’s financial future.” He said different scenarios might develop, and that not all the information in the room is relevant to the case. 

U.S. Bankruptcy Judge Steven Rhodes.

U.S. Bankruptcy Judge Steven Rhodes.

“Doesn’t the city want every one of its citizens to see what city’s financial future is projected to look like?” Judge Rhodes asked. “Generally speaking speculation and conjecture are not the basis for confidentiality . . . .this is bankruptcy: what’s not relevant?” 

Despite backing down from his original position, Orr still wants Judge Rhodes to grant a protective order on the documents. 

He is asking Rhodes to rule that “The Debtor may redact personally identifiable information of the City and third parties contained in any and all documents and materials that it provides to interested parties. Personally identifiable information shall include names, physical and electronic  addresses, telephone numbers, social security numbers, financial account numbers, and any other information whose disclosure would create an undue risk of identity theft or other unlawful injury.” 

He does not explain what “other unlawful injury” might include. The motion also argues, “Although Fed. R. Civ. P. Rule 26(b)(1) and Fed. R. Bankr. P. Rule 7026 generally permit broad discovery of any non-privileged and relevant matter, the Court ‘may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.'”

Former Detroit CFO Sean Werdlow with Fitch Ratings' Joe O'Keefe during City Council session Jan. 31, 2005

Former Detroit CFO Sean Werdlow with Fitch Ratings’ Joe O’Keefe during City Council session Jan. 31, 2005

For example, Sean Werdlow, who was Detroit’s Chief Financial Officer during negotiations over the $1.5 billion “Pension Obligation Certificate” (POC) loans from UBS AG and SBS Financial in 2005 and 2006, promptly took a top management position with SBS after the deal was solidified. 

Names relevant to the POC loan would also include Wall Street ratings agency representatives Stephen Murphy of Standard and Poor’s, and Joe O’Keefe of Fitch Ratings, who lobbied for the loan with the Detroit City Council during its session Jan. 31, 2005, a highly unusual and possibly collusive action. 

The motion is to be argued during the next bankruptcy hearing Wed. Aug. 28 at 10 a.m., among other matters. 

Former UBS AG banker Peter Ghavami  leaves the Manhattan Federal Court in New York July 24, 2013. He and two other UBS traders were given prison terms for fraud related to municipal bonds.  REUTERS Eduardo Munoz

Former UBS AG banker Peter Ghavami leaves the Manhattan Federal Court in New York July 24, 2013. He and two other UBS traders were given prison terms for fraud related to municipal bonds. REUTERS Eduardo Munoz

Rhodes also ordered Orr and two other city witnesses to subject themselves to six hours of depositions by objectors to a “Forbearance Agreement.” That agreement would allow the city to continue paying UBS AG, SBS, Bank of America and Citigroup on costly “swap agreements” connected to the POC loan during the pendency of the bankruptcy, although at a 25 percent discount. 

A hearing on the agreement itself is to be held Monday, Sept. 9 at 10 a.m. 

Meanwhile, Judge Rhodes is also expected to rule on swap insurer Syncora, Inc.’s objection to release of casino taxes held hostage to ensure payment on the POC loan and related swaps, by Aug. 28. 

Orr previously obtained a “Temporary Restraining Order” against Syncora which forced it to release the funds, which amount to about $178 million a year. Extensive arguments were put forward on both sides of the issue Aug. 21. 

Protest against EM Orr's "public meeting" June 10, 2013. David Sole is second from left.

Protest against EM Orr’s “public meeting” June 10, 2013. David Sole is second from left.

Two objectors to the Forbearance Agreement, Attorney Jerome Goldberg representing city retiree David Sole, and Attorney Gordon representing the pension systems, argued that not only should the casino taxes be released, but that the city should cease payment on the swaps as well. 

Jones Day attorneys repeatedly said Aug. 21 that the city has continued to pay on the swaps despite the bankruptcy stay,  arguing that this allows the release of the casino taxes. Orr ceased payment on the POC loan itself on June 14, prior to the bankruptcy filing. 

“We feel this whole issue is major,” Goldberg said during the hearing. “Tons of money are involved. It goes to the efficacy of the forbearance agreement, and the fact that less funds will be available for city workers’ pensions because of money going to the banks. We have raised valid arguments on whether the automatic stay does apply [to the swap payments themselves.]” 

Gordon expressed concurrence with Goldberg’s arguments. 

Objectors want not only casino taxes released, but an end to payment on swaps.

Objectors want not only casino taxes released, but an end to payment on swaps.

In the Sole motion against the forbearance agreement, Goldberg addressed the issue of the swaps and the casino taxes. Goldberg agreed with Jones Day attorneys that the casino taxes do not constitute “special revenues” that can be exempted from the bankruptcy stay. 

“ . . .pursuant to both Michigan law and City of Detroit ordinances which incorporate the law, casino tax revenues are for general public purposes, and specifically are not to be appropriated for the payment of Interest Rate Swaps,” his objection reads. 

The full objection asserts that “ . . . [T]here are numerous issues that must be examined, based on (1) the criminal indictments of several UBS and Bank of America executives who dealt in the banks’ municipal bond departments; (2) issues concerning potential fraud with regard to calculations of interest using the Libor as an index as well as the “ISDA fix” with regard to the setting of termination fees; (3) the huge differential the banks are netting from the City of Detroit relative to the meager interest rate actually being paid on the bonds; and (4) the role the banks played in issuing massive quantities of subprime mortgages to Detroit’s population which created the current financial crisis, that at least rate examination by the Court before it okays a forbearance agreement that removes the POCs and connected Interest Rate Swaps from the bankruptcy proceedings. 

Protesters demand the banks pay for Detroit's crisis, outside BOA offices in the Guardian Building Aug 19, 2013.

Protesters demand the banks pay for Detroit’s crisis, outside BOA offices in the Guardian Building Aug 19, 2013.

“The potential exists that this honorable Court may find the claims by UBS and Bank of America ripe for disallowance or equitable subordination. The potential that this could occur, especially in light of the cost to the City of Detroit of hundreds of millions of dollars in payments to the banks for doing what amounts to nothing, and thus depriving pensioners, city workers and community residents of compensation for the years of labor and years of paying taxes, should weigh heavily in favor of the Court denying the City of Detroit’s Motion for Approval of the Forbearance Agreement and allowing the interest rate swaps to remain part of the bankruptcy.” 

In his Proposal for Creditors issued June 14, Orr himself noted obscurely,  ‘The City has identified certain issues related to the validity and/or enforceability of the COPS that may warrant further investigation.” He has not done so

Robert Davis

Robert Davis

In other matters before Judge Rhodes Aug. 21, Attorney Andrew Paterson agreed, in response to Rhodes’ repeated insistence, that his client Robert Davis will not challenge Orr’s right to hold office as Emergency Manager.  In exchange, the city was to withdraw its contention that Davis’ Open Meetings Act lawsuit against Gov. Rick Snyder, State Treasurer Andy Dillon, and the Emergency Financial Loan Board, violated Rhodes’ extended stay. That OMA lawsuit contended that the defendants operated secretly in appointing Orr.

At the conclusion of the hearing, Judge Rhodes held a session closed to the public and the media, and not recorded, with the parties directly related to the casino tax issue.

U. S. Trustee Daniel M. McDermott/Facebook

U. S. Trustee Daniel M. McDermott/Facebook

Meanwhile, U.S. Trustee Daniel M. McDermott appointed a so-called “Retirees Committee” over objections that it was premature under Chapter 9 law, because no bankruptcy eligibility determination has yet been made. A hearing on that is not set until Oct. 23. McDermott’s office never responded to an email inquiry from VOD about the legitimacy of the committee.

Members of the Committee are:

  • Edward McNeil, representing members of the Detroit, Michigan Retiree Sub-Chapter 98 of AFSCME
  • Michael J. Karwoski, a retired city attorney who asked for broad notice to all retirees of bankruptcy proceedings during an earlier hearing
    Ed McNeil, exec. assistant to Al Garrett, pres. AFSCME Co. 25, testifies against PA 4 consent agreement April 2, 2012 at City Council.
    Ed McNeil, exec. assistant to Al Garrett, pres. AFSCME Co. 25, testifies against PA 4 consent agreement April 2, 2012 at City Council.
  • Shirley Lightsey of Southfield, president of the Detroit Retired City Employees Association (DRCEA)
  • Donald Taylor, a retired police officer and president of the Retired Detroit Police & Fire Fighters Association
  • Wendy Fields-Jacobs of the UAW.
  • Lawyer Terri Renshaw of Onsted.
  • Gail Wilson Turner, a former deputy police chief.
  • Gail Wilson, an attorney previously with Southfield Public Schools and the Legal Aid and Defender Association.
  • Robert Shinske, of Dearborn, treasurer for the Detroit Fire Fighters Association.

No one is on the committee representing the boards of the Detroit General Retirement System and/or the Detroit Police and Fire Retirement System, whose 23,500 members elect the majority of their trustees. Instead of using those systems to contact retirees, as Karwoski suggested, Rhodes contracted “claims and noticing” functions to a California firm, Kurtzman Carlson.

Susan Glaser, DGRS president and long-time pension board trustee.

Susan Glaser, DGRS president and long-time pension board trustee.

No general notice went out to all retirees that they could apply for the committee. Notices are posted on the bankruptcy court and city websites, but all retirees do not have access to a computer or even general awareness of what it happening. Kurtzman Carlson did send out a “Notice of Commencement of Case Under Chapter 9,” to retirees’ home addresses, indicating that it has obtained those addresses independently of the pension systems, without retirees’ consent.

McDermott’s notice of the committee formation gave the committee “fiduciary” responsibilities, although the Retirement Systems hold all retiree-related assets. 

The Detroit Free Press reported, “Committee members have a fiduciary duty to negotiate with Detroit emergency manager Kevyn Orr’s team about any future changes to retiree pensions, health care and benefits included in the restructuring plan Orr says he will propose by the end of the year. The committee would make recommendations for the retirees, who would have the final vote on any plan that changes their benefits.”

The Free Press reported inaccurately that the DRCEA and the RDPFFA represent all 23,500 city retirees. In fact, DRCEA Pres. Shirley Lightsey said in a letter to EM Orr that their membership is 6500. RDFFFA Pres. Don Taylor told the Freep itself in a videotaped interview (see below) that his organization also has 6500 members.

The Freep quoted the associations’ attorney saying thay they want a “third opinion” on the funding levels of the pension systems, other that of Gabriel, Roeder and Smith, the official actuaries for the retirement systems and city consultant Milliman, Inc.

No details have been provided on how a vote by 23,500 geographically scattered retirees will take place, and how information about any negotiations will be disseminated to retirees. The only parties with full lists of retirees’ names and addresses are the retirement systems themselves and the City of Detroit. Since the city is the debtor in the case, and retirees are creditors, it would be inappropriate for the city to mail any voting notices.

Numerous objections to Detroit’s eligibility for bankruptcy have been filed, citing protections in the Michigan State Constitution for public pensions. The legitimacy of any “vote” contrary to those protections will likely be hotly disputed by the retirement systems. 

Related documents:

DB protective order motion by debtor 8 23

DB Objection to forebearance DSole JG

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