MOTHER OF DAVONTAE SANFORD, SUPPORTERS DECRY PROS. WORTHY’S CONTINUED PERSECUTION OF HER SON

Taminko Sanford-Tilmon is interviewed at rally for her son Davontae outside Frank Murphy Hall June 29, 2010.

Taminko Sanford-Tilmon is interviewed at rally for her son Davontae outside Frank Murphy Hall June 29, 2010.

Listen To Legal Internet Radio Stations with Delaproser on BlogTalkRadio with delaproser on BlogTalkRadio
Click on http://www.blogtalkradio.com/delaproser/2013/12/22/free-davontae-sanford-taminko-sanford-speaks-out to hear interview on latest developments in Davontae Sanford case, featuring his mother Taminko Sanford-Tilmon, paralegal Robert0 Guzman, and Elish Delaproser of the UK.
Vincent Smothers (l) has confessed to killings for which Davontae Sanford, shown at the age of 14, is languishing in prison. Smothers has said in an affidavit that Davontae had nothing to do with the killings.

Vincent Smothers (l) has confessed to killings for which Davontae Sanford, shown at the age of 14, is languishing in prison. Smothers has said in an affidavit that Davontae had nothing to do with the killings.

Wayne County Prosecutor Kym Worthy has now appealed a ruling by an Appeals Court that Vincent Smothers must be allowed to testify on behalf of Davontae Sanford, to the Michigan Supreme Court.

Click on link above to hear an interview with Taminko Sanford-Tilmon, mother of Davontae Sanford, who languishes in prison more than five years after he was induced, at the age of 14, to give a false confession in the drug-house murders of four people. Another man, Vincent Smothers, a confessed professional hit man, admitted to the murders and is willing to testify in the case, but Wayne County Prosecutor Kym Worthy and Circuit Court Judge Brian Sullivan have fought his testimony every inch of the way. An appeals court ruled that the testimony of Smothers and his attorney must be allowed, and remanded the case to Sullivan, but the Prosecutor has now appealed that decision to the Michigan Supreme Court.

The interview includes original rap songs about Davontae’s case and the plight of other Black youth in Detroit and across the U.S.

Related articles:

http://voiceofdetroit.net/2013/10/22/families-demand-no-police-state-under-detroit-chief-craig-top-cops/

http://voiceofdetroit.net/2013/09/27/victory-for-davontae-sanford-in-appeal-of-conviction-at-age-14-for-four-murders/

http://voiceofdetroit.net/2013/08/10/davontae-sanfords-family-hopeful-after-appeals-court-hearing/

http://voiceofdetroit.net/2013/08/10/davontae-sanfords-family-hopeful-after-appeals-court-hearing/

http://voiceofdetroit.net/2012/04/28/free-davontae-and-charles-justice-for-aiyana-and-trayvon/

http://voiceofdetroit.net/2012/04/24/stop-the-war-on-our-youth-davontae-aiyana-and-dad-trayvon-kenny-snodgrass-production/

http://voiceofdetroit.net/2012/04/28/free-davontae-and-charles-justice-for-aiyana-and-trayvon/

http://voiceofdetroit.net/2012/04/24/sanfordjones-rally-receives-broad-coverage-hit-man-signs-affidavit-to-free-davontae/

http://voiceofdetroit.net/2012/03/25/davontae-innocent-being-tortured-in-prison-judge-refuses-to-allow-real-killers-confession/

http://voiceofdetroit.net/2012/02/07/ap-newsbreak-detroit-hit-man-says-davontae-sanford-is-innocent-will-testify/

http://voiceofdetroit.net/2011/08/02/witness-detroit-hit-man-vincent-smothers-said-convicted-teen-davontae-sanford-had-no-role-in-slayings/

http://voiceofdetroit.net/2011/07/19/davontae-sanford%e2%80%99s-innocence-v-detroit-police-and-prosecutors%e2%80%99-reputations/

http://voiceofdetroit.net/2011/01/15/free-davontae-sanford/

Davontae's family, including mother Taminko Sanford-Tilman and father at right, along with supporters at Appeals Court hearing Aug. 6, 2013. Paralegal Roberto Guzman, who has tirelessly fought for Davontae's freedom, is shown in center front.

Davontae’s family, including mother Taminko Sanford-Tilman and father at right, along with supporters at Appeals Court hearing Aug. 6, 2013. Paralegal Roberto Guzman, who has tirelessly fought for Davontae’s freedom, is shown in center front.


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THEODORE WAFER TO STAND TRIAL FOR 2ND-DEGREE MURDER, OTHER CHARGES, IN DEATH OF RENISHA MCBRIDE

Renisha McBride's mother Monica McBride (center) is consoled by the teen's friend after the verdict Dec. 19, 2013. Her father Walter Ray Simmons is at left.

Renisha McBride’s mother Monica McBride (center) is consoled by the teen’s friend after the verdict Dec. 19, 2013. Her father Walter Ray Simmons is at left.

Testimony at exam showed Detroit teen shotgunned in face, died instantly, as she stood on Dearborn Heights man’s porch 

Judge Turfe: “Could [the defendant] have not answered the door, called for help, or ran to another area of the house? Instead he chose to shoot.”

Aunt: “We need to be peaceful out here. Assess the facts. Don’t hurt each other.” 

By Diane Bukowski 

December 20, 2013

20th District Court Judge David Turfe

20th District Court Judge David Turfe

DEARBORN HEIGHTS – Twentieth District Court Judge David Turfe bound Theodore Wafer, 54, the admitted killer of 19-year Renisha McBride, over for trial on all counts of second-degree murder, manslaughter and felony firearms Dec. 19. Wafer, a white Dearborn Heights resident, admitted to blasting McBride in the face with a shotgun, killing her instantly as she stood on his front porch early during the morning of Nov. 2, 2013, allegedly seeking help after a car accident.

Theodore Paul Wafer at arraignment.

Theodore Paul Wafer at arraignment.

“Uh, yes, I just shot somebody on my front porch with a shotgun banging on my door,” Wafer said during a 911 call played during his preliminary exam. “I live at 16812 W. Outer Drive. Thank you.”  He hung up the phone after the dispatcher asked what city he was in.

McBride, who was Black, was wearing a blue hoodie at the time. The case has gained national notoriety and been compared to the Trayvon Martin killing by George Zimmerman in Florida last February.

“The testimony of the first witness, Carmen Beasley, summed it up in a nutshell,” Judge Turfe said during his ruling. McBride earlier ran into cars parked in front of Beasley’s house on Bramell in Detroit.

“[Mrs. Beasley] called 911 first,” the judge noted. “She thought first, then she acted. . .The evidence shows the defendant [Wafer] made a bad decision. There were other reasonable opportunities available. I believe the prosecution has met their burden of proof.”

Carmen Beasley

Carmen Beasley

Beasley testified that she only went outside after calling 911, observing the scene, and noting a young woman who appeared to be hurt and dazed. She said she tried to help McBride, asking her to remain until EMS came. But, she said, McBride kept repeating, “I just want to go home,” then eventually wandered off down Warren Ave.

McBride’s family, including her mother Monica McBride, father Walter Ray Simmons, and other relatives and friends who sat through the one-and-a-half day preliminary exam, reacted with a combination of joy and sorrow, hugging each other and weeping outside the courtroom.

Renisha McBride's mother Monica McBride (r) and sister after verdict.

Renisha McBride’s mother Monica McBride (r) and sister after verdict.

McBride’s aunt Bernita Spinks, acting as family spokesperson, thanked God. She repeated a slogan on blue hoodies worn by the family the first day of the exam.

“Don’t shoot, call 911,” Spinks said. “We need to be peaceful out here. Assess the facts like that young lady [Beasley] did. Don’t hurt each other.”

Renisha McBride funeral program

Renisha McBride funeral program

She told VOD earlier, “Renisha didn’t rip and run in the streets. She didn’t hang out at bars. She was a homebody, a sweetheart who stayed to herself. She was loving and kindhearted. While other people her age would be home sleeping, Renisha would be at her job [as a temporary Ford worker] at 4 a.m.”

McBride’s girl friend, subpoenaed by the defense, testified that the teen became intoxicated at the home where she lived with her grandmother. She said the two friends were playing cards and a game of “shots,” in which a player drinks a shot of liquor each time (s)he loses a draw. She said she left after McBride became somewhat argumentative, but said she was never combative or hostile that night or during the years she had known her.

Both she and a co-worker of McBride’s were subpoenaed to testify by the defense, which appeared to try to focus on McBride’s inebriation as the cause of her death. Cheryl Carpenter was heard telling the co-worker that he “better show up or face contempt of court” for the second day of the hearing.

Renisha's aunt Bernita Spinks

Renisha’s aunt Bernita Spinks

Wafer’s attorney Cheryl Carpenter said, “We are disappointed with the decision. We just wish all the evidence could have been presented. But a preliminary exam hearing just has to show probable cause, a different standard than at trial.”

During the exam, Carpenter tried to introduce videotaped testimony by Wafer, given to Dearborn Heights police at their station the night of the killing, before they released him without charges. Judge Turfe ruled that the videotape was inadmissible under Michigan Court Rules because Wafer could take the stand himself and be cross-examined.

“The defense argues Michigan’s Self-Defense Act,” Judge Turfe added. “Yes, if someone knocks or bangs on your door, a reasonable person might bring a shotgun to the door to either shoot, scare the person, or defend yourself. But could [the defendant] have not answered the door, called for help, or run to another area of the house? Instead he chose to shoot.”

Wafer attorneys Matt and Cheryl Carpenter.

Wafer attorneys Matt and Cheryl Carpenter.

Testimony showed that Wafer had to go to a back bedroom to get the shotgun, open the solid front door behind a screen door, and then pull the trigger to kill McBride. A firearms expert testified that the gun used, a 12 gauge Mossberg model 500A shotgun, requires 6.5 pounds of pressure to pull the trigger, after first loading it with shotgun shells, racking it, and taking the safety off.

The defense claimed variously that the shooting was in self-defense or accidental. At one point, attorney Cheryl Carpenter said it was possible that McBride held the screen door open and tried to grab the gun. Carpenter kept referring to “smudges” allegedly found on the side and front doors, claiming they showed McBride had banged on both doors with her fist or palm.

Asst. Prosecutor Danielle Hageman-Clark with Prosecutor Kym Worthy during announcement of charges against Wafer.

Asst. Prosecutor Danielle Hageman-Clark with Prosecutor Kym Worthy during announcement of charges against Wafer.

Wayne County Assistant Prosecutor Danielle Hagaman-Clark responded that there was no evidence the smudges were even caused by a human being.

“There was no evidence that supports a break-in,” Clark said. “There was no damage to the frame or the screen [other than the hole caused by the shotgun blast], or to the door behind it. There was no testimony that Ms. McBridge banged on the doors. But even if that was the case, you don’t pick up your phone to call 911? You’re so afraid of the folk(s) that are out there, that you open up your door to invite them into the home?”

Police also testified that there was no evidence of damage or attempted damage to door locks on either the front or side doors.

Renisha McBride's car at accident scene.

Renisha McBride’s car at accident scene.

The judge noted during his ruling that all witnesses who had contact with McBride earlier that night, including those at the scene of the accident, a co-worker and a friend, said that she was never belligerent or combative, despite the fact she had been drinking and smoking marijuana. Instead, she appeared dazed and confused after the accident, during which she may have hit her head on her car’s windshield.

A photo of McBride’s car showed severe damage to the passenger side and the hood, both of which were badly crumpled. Another photo showed a large “spider” crack in the windshield. The car’s airbag was also deployed.

Death house: Theodore Wafer's home at 16812 W. Outer Drive, Dearborn Heights.

Death house: Theodore Wafer’s home at 16812 W. Outer Drive, Dearborn Heights.

Wafer, who has two drunk driving arrests on his record, was not himself tested for the use of such substances by Dearborn Heights police, who released him after he made a videotaped statement.

Under orders from Wayne County Prosecutor Kym Worthy, Dearborn Heights police returned to Wafer’s home Nov. 11 to do a more thorough crime scene investigation, the officers said. There had obviously been ample opportunity for contamination of the scene.Their original investigation focused on whether McBride had been in the home or whether there was evidence she knew Wafer previously.

Close-up of storm door replacing screen door that Wafer shot through, which was not confiscated by police until nine days after McBride's death.

Close-up of storm door replacing screen door that Wafer shot through, which was not confiscated by police until nine days after McBride’s death.

On Nov. 11, an officer testified, there was no evidence of liquor or illegal substances in the home. They did find and confiscate a crucial piece of evidence, the screen door through which Wafer allegedly shot McBride, in his basement. He had replaced it with a glass storm door in the interim.

On the first day of the exam, Wayne County Assistant Medical Examiner McBride Medical Examiner Kilak Kesha was subjected to a lengthy, grueling cross exam on his credentials by the defense, including references to his education in his native India, but Judge Turfe qualified him as an expert witness.

Kesha testified that McBride died from a shotgun wound to the face and that he classified the manner of death as homicide.

A sketch of the wound showed it extending from her left eye downwards along her nose to her upper lip, approximately 3 inches long and 2 inches wide. He said there was no evidence of “close-range” firing such as stippling or soot, but estimated that she was likely three feet from the gun when she was shot, due to the limited pattern of shotgun pellet spread. He also said it was possible that the screen door may have prevented evidence of stippling.

Firearms expert demonstrates 12 gauge shotgun Wafer used to kill McBride.

Firearms expert demonstrates 12 gauge shotgun Wafer used to kill McBride.

“The [pellets] had passed through the soft tissue and bones of the face, and entered the brain,” Kesha said. “Also in this injury were skull fractures and bleeding around the brain. The wound trail was from front to back and left to right.”

He said that the pellets had “pulpified” her brain, including the frontal, parietal and occipital lobes, making it impossible to determine any possible previous brain injury from the car accident. He said if she had endured such an injury, it could have either caused aggressiveness or passivity, but there was no evidence to support either alternative.

He said there was blood scattered on her body, including in particular on her right palm, but that after washing the body, it was evident that there were no injuries other than that to her face.

He said there was no exit wound, and that he found from 10 to 20 “grossly deformed” lead slugs inside her head, along with plastic wadding and pieces from the shotgun round, although the autopsy report itself indicates only “multiple” lead pieces.

Renisha McBride's friends show one of many hoodies with different slogans that they have had made to demand justice.

Renisha McBride’s friends show one of many hoodies with different slogans that they have had made to demand justice.

“Death would have been immediate,” he said, “even if the EMS was at the scene at the time. . .she was likely shot straight on.”

Kesha testified that McBride’s blood alcohol count was 0.218, and that “if the time of death was at 4:30 a.m,” it could have been 0.28 to 0.29 at the time of the car accident around 1 a.m. He said there was evidence McBride had smoked marijuana, with an active count of 9.2 mg, but there was no way of knowing how recently.

Over the defense’s objection, Pesha testified that there was no evidence that alcohol or marijuana had contributed to her death. Judge Turfe said in his summation that Kesha also testified McBride’s body was wet when it entered the morgue. There has been unsubstantiated speculation that she had therefore been in a body of water and was dumped on the porch. However, Dearborn Heights police disputed that in a statement, saying she was killed on the porch.

An officer testified that a “light rain” was coming down when they arrived at the scene.

Map of short distance (half-mile) between accident scene and Wafer's home.

Map of short distance (half-mile) between accident scene and Wafer’s home.

There has also been speculation about the alleged interval of approximately three hours between the car accident and McBride’s reported death. However, the time of death appears to have been based on the time that Wafer reported the killing to 911.

A map shows that the distance from Bramell and Warren, the scene of the car accident, to Wafer’s home, was approximately one-half mile, which would have involved only a short walk. No evidence was introduced from neighbors or other witnesses who may have heard the shotgun blast itself, and at what time they heard it.

The possibility remains that Wafer may have killed McBride earlier than the time he reported it, and that she lay on his front porch for some time in the light rain, which would explain the wet condition of her body.

Wafer’s arraignment on the information will take place Wed. Jan. 15, 2014  in the Third Judicial Circuit Court (Frank Murphy hall) in downtown Detroit. Judge Turfe continued his bond, set earlier by another Judge. According to some legal experts, charges of second-degree murder generally result in remand, although it is not required.

Senior Pastor Willie Rideout of All God's People Chuch.

Senior Pastor Willie Rideout of All God’s People Chuch.

Senior Pastor Willie J. Rideout of “All God’s People Ministries” in Detroit, a
prominent civil rights activist, told VOD during a break in the hearing, “The bottom line is race does play a role. If that had been me killing a white American, right away from day one I would have been arrested. But because he is white in Dearborn Heights, he has never even seen the inside of a jail cell. This shows me we need to continue pushing for this man to be convicted on all three counts. This was nothing but a terrorist attack in the state of Michigan, in the U.S. It actually seems like premeditated murder to me. It seems like the family has grounds to sue not only Wafer, but the Dearborn Heights and Detroit Police as well.”

A witness at the scene of the car accident said it took both the Detroit Police and EMS an inordinately long time to arrive after two 911 calls. If they had arrived before McBride left the scene, they might have saved her life.

Attorney Gerald Thurswell, who is representing the family on the civil side, said, “I haven’t heard anything to give justification for him blowing Renisha’s head off.”

Renisha McBride’s friends said buttons supporting justice for her can be purchased at Lovejoy’s Printing at Seven Mile and Evergreen.


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CNN OPINION: WHAT BLED DETROIT DRY? IT’S NOT PENSIONS

Protest during bankruptcy hearing in Detroit as Mich. Gov. Rick Snyder testifies/ Photo: Cheryl Labash/WW

Protest during bankruptcy hearing in Detroit as Mich. Gov. Rick Snyder testifies/ Photo: Cheryl Labash/WW

Stripping Detroit’s workers of their modest pensions will kill middle class

Most pensions are $19,000 year; $30,000 a year for police and firefighters

Culprits are sky-high financial costs, corporate subsidies, tax loopholes

Detroit bankruptcy caused by same dynamics creating inequality in the nation

Ross Eisenbrey
Ross Eisenbrey

By Ross Eisenbrey

December 17, 2013

Editor’s note: Ross Eisenbrey is vice president of the Economic Policy Institute. His views are his alone. Photos inserted by VOD.

(CNN) — A judge’s ruling that the city of Detroit can move forward with bankruptcy and strip the city’s public workers of their modest pension benefits will have a devastating impact on Detroit’s middle class — many of whom are African-American — and the city’s ability to rebuild a strong and sustainable economy.

Wall Street bankers who testified at Senate hearing.
Wall Street bankers who testified at Senate hearing.

The largest municipal bankruptcy in our nation’s history, the Detroit decision charts a course where Wall Street banks and bondholders are at the front of the payment line while city residents, police officers, firefighters and other public employees are left at the rear, with only pennies

Kevyn Orr, Detroit’s unelected emergency manager, misled the public and succeeded in setting a dangerous precedent that will have ripple effects for other cities and states still struggling to get back on their feet in the post-recession economy.

Mich. Gov. Rick Snyder and Detroit EM Kevyn Orr announce bankruptcy filing July 19, 2013.
Mich. Gov. Rick Snyder and Detroit EM Kevyn Orr announce bankruptcy filing July 19, 2013.

Michigan Gov. Rick Snyder and Orr, a former corporate bankruptcy lawyer, frequently cited the figure of Detroit’s $18 billion in long-term debt as the reason the city must declare bankruptcy. According to a recent report, “The Detroit Bankruptcy,” written by former Goldman Sachs investment banker Wallace Turbeville, not only is $18 billion an inflated and inaccurate estimation of Detroit’s long-term debt, it is irrelevant. Unlike corporations, cities cannot be liquidated, therefore cash flow, as opposed to long-term debt, is what must be addressed.

Detroit has a cash-flow shortfall of $198 million. Despite the blame placed on public pensions, the truth is that Detroit’s path to insolvency had little or nothing to do with pensions, which average just $19,000 per year for most employees and $30,000 per year for police and firefighters, who are not eligible to receive Social Security. There were several drivers of Detroit’s downward spiral:

Homeless family waiting for assistance at agency.
Homeless family waiting for assistance at agency.

A depleted tax base: The city’s wealthier white population has declined by 1.4 million since the 1950s, leaving behind an almost entirely African-American and much poorer population. The remaining tax base continues to decline as unemployment stays stubbornly high: In 2008 alone, the number of working Detroit residents dropped by roughly one-quarter, further diminishing the city’s income tax receipts. Property tax revenue also dropped precipitously as home values went through the floor.

Skyrocketing financial costs: Wall Street banks saddled Detroit with $1.6 billion in loan deals that were highly profitable for Wall Street, but exposed the city to risk it could not afford to take. The banks have already extracted $300 million from Detroit to terminate these interest rate swaps, and are posed to collect another $300 million in additional windfalls.

Detroit's City Council gave a substantial tax break to developers who are displacing 127 elderly and disabled residents from Griswold Apartments in downtown Detroit, Nov. 19, 2013.
Detroit’s City Council gave a substantial tax break to developers who are displacing 127 elderly and disabled residents from Griswold Apartments in downtown Detroit, with the concurrence of Ted Phillips (r) of the non-profit United Community Housing Coalition, the agency who was supposed to be helping them. Nov. 19, 2013.

Corporate subsidies and tax loopholes: While public workers were laid off and had salaries cut, Detroit gave away millions of public revenue in tax loopholes and subsidies to big corporations. A wealth of research finds that tax breaks like these are ineffective and it is apparent they have done little to create good jobs for Detroit residents. These tax breaks should be on the table, just like other obligations of the city in resolving the cash-flow crisis.

The dynamics at play in Detroit are the same dynamics creating the growing wealth gap and keeping our economy from making a lasting and sustainable economic recovery. While Wall Street and corporations profit handsomely from a city’s decline, public workers—the city’s middle class—have sacrificed time and again.

AFSCME and CBTU members protest lay-offs at protest May 27, 2010.
AFSCME and CBTU members protest lay-offs May 27, 2010.

In recent years, thousands of public workers were laid off, and the remaining public employees accepted a 10% pay cut, health benefit reductions and a 40% cut in future pension benefits, saving Detroit $160 million. Not only is it immoral to force the working people to give up even more in the name of fiscal responsibility, but these cuts will only burden the effort to solve the city’s long-term challenges by depressing economic activity, pushing more residents into poverty, and making it difficult to retain and attract needed workers.

Instead, Detroit’s cash flow shortfall must be addressed by fixing the problems that caused it in the first place. Banks must be told that they have profited enough from interest rate swaps that helped create this mess and will receive no more. The state needs to collaborate by increasing available revenues. Corporate tax loopholes must be closed and ineffective subsidies ended.

Like other cities, Detroit can work its way back toward a healthy local economy with good jobs, quality public services and a robust tax base. But making that happen depends on honoring the promises made to workers and ensuring that Wall Street and big corporations pay their fair share.

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KEY WITNESSES TURBEVILLE AND MCPHAIL TO DISPUTE $2.8 BILLION POC DEBT AND SWAPS IN DETROIT BANKRUPTCY TRIAL

AL WILSON’S SONG “THE SNAKE” IN VIDEO ABOVE IS AN APT ALLEGORICAL REFERENCE TO WALL STREET BANKS’ ROLE IN DETROIT.

 $350 million loan from Barclay’s to pay off other criminal banks at issue

Former Councilwoman Sharon McPhail was present when POC debt shoved down city’s throat

Wallace Turbeville authored Demos report on Detroit bankruptcy

By Diane Bukowski 

Analysis 

December 17, 2013 

Barclays under fireDETROIT – A three-day trial in bankruptcy court to determine whether Detroit should borrow $350 million from one of the world’s top criminal banks, the UK-based Barclay’s, a chief actor in the LIBOR scandal, in order to pay off $230 million in interest-rate swaps to UBS AG and the Bank of America, also convicted of numerous financial crimes, began today before U.S. District Court Judge Steven Rhodes.

Objectors have criticized the “post-petition financing” because it ties up at least 20 percent of the city’s income tax revenues as well as casino taxes for 10 years to back up the debt. It also allows doubling of the interest rates involved, among other factors.

Jones Day Detroit team

Jones Day Detroit team

Today witnesses called by Jones Day, representing Detroit under Emergency Manager Kevyn Orr, testified on behalf of the deal. They claim it will involve an 18 percent cut on the swap termination amount and save the city money. Jones Day attorneys represent the banks cited in other cases across the globe, but the firm has claimed that does not hinder its objectivity as Detroit’s litigators in the bankruptcy proceedings, just as it claimed that working for its former employee Orr was not a conflict of interest.

Sharon McPhail/Photo WJBK Fox 2 News
Sharon McPhail/Photo WJBK Fox 2 News

Rhodes is to decide Wed. Dec. 18 at 9 a.m. whether former Detroit City Councilwoman Sharon McPhail will be allowed to testify regarding the origins of the swaps in 2005. Wallace Turbeville, Senior Fellow at the Demos Project and author of a scathing November report on the Detroit bankruptcy filing, has also been called as a witness. Both are to appear on behalf of retiree David Sole, a leader in the Detroit Debt Moratorium Coalition, who is represented by attorney Jerome Goldberg.

The swaps are part and parcel of what has become a $2.28 billion Pension Obligation Certificates (POC or COPs) loan foisted on the city by UBS AG and Siebert, Brandford and Shank, whose current COO is Sean Werdlow, Detroit’s CFO at the time of the original POC loan in 2005.  Also at the Council table in 2005 were representatives of Wall Street ratings agencies Standard & Poor’s and Fitch.

David Sole
David Sole

“Many tens of billions of dollars of taxable pension fund debt transac­tions tied with swaps have been entered into by states and municipalities in the last 20 years,” Turbeville wrote in his report. “They have been severely criticized as vehicles for price gouging by banks that underwrite the bond debt and provide the swaps. . . .”

Turbeville blasted the banks for taking advantage of the likely naivete of city officials to procure the loans. Detroit defaulted on the original POC debt in 2009, after the global economic crash of 2008.  To avoid a catastrophic payment of up to $400 million to the debt-holders, the city agreed to pay higher rates on the debt, and hand over its casino tax revenues to a trustee as collateral. Orr then deliberately refused to pay a POC debt due June 14, 2013, and last month declared he would not make payments on the city’s general obligation debt as well. Fitch, poponent of the POC’s,  has therefore downgraded the city’s debt rating to D, lowest in the country.

EM Orr himself cited the POC debt as one of the chief factors in the city’s crisis, saying in his June 14 Proposal for Creditors, ‘The City has identified certain issues related to the validity and/or enforceability of the COPS that may warrant further investigation.”

WALLACE TURBEVILLE OF DEMOS IN RT VIDEO ABOVE, ON BANKS.

Turbeville goes much further.

“The banks and insurance companies involved in this trans­action had a moral and possibly legal obligation to explain its embedded risks to the city and to make certain that the city and the public under­stood those risks. And even if they did explain the risks, they also had an overriding moral obligation to refuse to do the transaction since it was so imprudent. The circumstances of the Detroit pension swap transactions were so extreme that they clearly amounted to unconscionable behavior. A court can determine whether the moral obligation was also a legal one.”

Detroiters were not allowed to vote on $1.5 billion POC debt in 2005-06.
Detroiters were not allowed to vote on $1.5 billion POC debt in 2005-06.

Turbeville adds that further illegality was likely involved in using the POC deal through non-profit service corporations created for that purpose, instead of conventional general obligation bonds payable by the city.

“. . . .the instruments bought by investors generated cash as if they were conventional bonds,” he explains. “However, the city paid under a service contract rather than straightforwardly making payments on bonds. Since its obligations were under a service contract, the city did not comply with legal requirements governing the issuance of bonds. It appears that the COPs structure was used to avoid limitations on debt, such as voter approval of the transaction and legal limits on debt, that would have applied had the conventional general obligation bond been used.”

Protesters against JP Morgan Chase debt in Birmingham, Ala.
Protesters against JP Morgan Chase debt in Birmingham, Ala.

Turbeville asserts that Orr should use the likely illegality of the POC’s and swaps as leverage to drastically cut the debt involved. In the Montgomery County, Ala. bankruptcy plan of adjustment, JPMorgan Chase was forced to forego 75 percent of sewage bond debt due to its fraudulent lending practices, exposed in lawsuits filed against it by the county.

In an affidavit, McPhail recalls City Council meetings in early 2005 where she and Council members JoAnn Watson, Barbara Rose-Collins, and Maryann Mahaffey strongly opposed the loan. While Mahaffey was in the hospital, then Council President Ken Cockrel, Jr. called out the police to roust the other three members from their homes to force a quorum at one of the first discussions Jan. 31, 2005.

“I researched other cities that entered into similar pension obligation certificates and . . . . were already encountering financial difficulties as a result,” McPhail says. “I recall representatives of the banking institutions, their law firms and representatives of the ratings agencies appearing before Council. To the best of my recollection, Fitch and Standard and Poor’s appeared before Council.

(L to r) Sean Werdlow, then Detroit CFO, Bill Doherty of Siebert, Jim O'Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor's, and then Deputy Mayor Anthony Adams push Council to approve $1.5 billion POC debt Jan. 31, 2005. Photo by Diane Bukowski

(L to r) Sean Werdlow, then Detroit CFO, Bill Doherty of Siebert, Joe O’Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor’s, and then Deputy Mayor Anthony Adams push Council to approve $1.5 billion POC debt Jan. 31, 2005. Photo by Diane Bukowski

“The debate between me and them related to the risk . . . associated with the potential for a financial downturn, and in light of Detroit’s precarious financial situation that had existed for years. All of the representatives of the banks continually assured Council members that there would be no risk associated with the City adopting these financial instruments.”

She goes on to state that she remembers Detroit CFO Sean Werdlow strongly pushing the loan, which was the largest of its kind in the country.

Occupy Detroit and Moratorium NOW rally to stop foreclosure at Detroit woman's home Dec. 6, 2011.
Occupy Detroit and Moratorium NOW rally to stop foreclosure at Detroit woman’s home Dec. 6, 2011.

“After this process was over, CFO Werdlow was given a lucrative job with one of the financial institutions involved in the Pension Obligation Certificates,” she says.

McPhail adds, “This process reminded me of mortgage predatory lending, where unsophisticated homeowners were placed in exotic mortgage loans, ensured there was no risk involved, and then lost their homes when the housing bubble burst [in 2008].”

In an article for The Michigan Citizen, this reporter quoted McPhail at the council table Feb. 4, 2005, telling former Mayor Kwame Kilpatrick, “This is a very risky transaction. Your own people at your economic forum called this one of the seven deadly sins of municipal finance. If the deal doesn’t do what is expected, we could face receivership under the local government Fiscal Responsibility Act. If the stock market does well, that $1.2 billion in unfunded pension liability could go away, but we’d still owe it in bonds.”

Standard and Poor's bit Detroit with downgrade after selling POC debt.
Standard and Poor’s bit Detroit with downgrade after selling POC debt.

Under pressure from the mainstream media, Wall Street and the Kilpatrick administration, which threatened downgrades of the city’s debt ratings and massive lay-offs, the Council finally caved and agreed to the deal.  At the end of 2005, however, “you knew I was a snake” Standard and Poor’s downgraded the city’s debt rating to BBB-, one step above juke level.

This reporter wrote at the time, “Despite Kilpatrick’s lay-offs of 1,396 city workers since June and recently disclosed plans to close most of the city’s recreation centers, S&P said, “The administration’s hesitancy to cut positions, as well as the inability to adjust union contracts to gain savings, has deepened the budget gap for fiscal 2006.” The agency went on to demand that city workers and retirees pay even more for their health care, although they have already shouldered increasing health care co-pays.”

UBS CEO Sergio Ermatti
UBS CEO Sergio Ermatti

In his affidavit for the court hearing, Turbeville explains, “The pension swaps were subject to termination if the city suffered a credit rating downgrade from its then current level or if an emergency manager was appointed, or if the city missed a payment, all of which happened.”

He says that UBS AG and Bank of America/Merrill Lynch had already profited from the POC swaps to the tune of $250 million from 2008-2012 alone, and should not now be demanding more.

“The emergency manager’s plan to pay the swap termination fees . . . .should be abandoned. . . .” he says. “The bank counterparties should be made to bear the  consequences of the original swap transactions . . . The alternative is to litigate these matters in the bankruptcy proceeding where they could be subject to being disallowed because of the banks’ (counterparties) unclean hands.”

Detroit retirees protest outside bankruptcy hearing.
Detroit retirees protest outside bankruptcy hearing.

Nearly all of the bankruptcy’s corporate objectors are also opposed to the Barclay’s loan, largely because it lessens their share of the pie. If the loan goes through, it will also affect funds available for the city to pay its retirees. Orr has already ceased paying anything into the pension systems.

Although he will not testify on other portions of his report in court due to the limited topic, Turbeville says adamantly that neither pension funding nor employee health care are not responsible for the city’s crisis and in fact are in line with amounts paid in other cities of comparable size. He notes that Orr’s consultants Milliman Inc. have used questionable methods to come up with a headline-grabbing amount of $3.5 billion in pension underfunding, while the actual amount is likely closer to the $800 million estimated by the pension funds actuaries.

Milliman officials in wealthy Dubai, where they have set up shop.

Milliman officials in wealthy Dubai, where they have set up shop.

He says Milliman, in its national report on public pensions, used more acceptable methods to calculate underfunding in cities other than Detroit. Both Charles Moore of Conway McKenzie and former State Treasurer Andy Dillon testified during the eligibility trial that Milliman had never given a final documented report on the city’s pension underfunding rate. Turbeville notes Orr’s likely motive in using the $3.5 billion figure is a takeover of the pension funds.

Turbeville also opposes the sale of the city’s Water and Sewerage Department, and any further cutbacks in city workers and wages, saying those actions will do nothing to increase city revenues. Turbeville says all that is needed to get the city out of bankruptcy is a mere $198 million in revenue infusion. He calls on the state of Michigan to supply those funds, since it deliberately cut Detroit’s revenue-sharing funds in order to reach a state budget surplus and get high bond ratings from Wall Street.

Related documents:

Demos Detroit bankruptcy report highlighted

DB McPhail 12 16 13 (McPhail affidavit)

Related articles:

http://voiceofdetroit.net/2013/12/11/stop-more-giveaways-to-the-banks-dec-17-9-a-m-in-detroit-banks-involved-in-citys-bankruptcy-just-dodged-4-3-billion-in-eu-fines-for-fraud-others-got-hit/ 

http://voiceofdetroit.net/2013/12/04/detroit-bankruptcy-eligibility-decision-unprecedented-worst-in-the-country/  

http://voiceofdetroit.net/2013/12/01/as-detroit-bankruptcy-decision-looms-tomorrow-still-no-criminal-investigation-of-citys-2-8-billion-poc-debt/ 

http://voiceofdetroit.net/2013/11/05/detroit-bankruptcy-testimony-retirees-get-16-cents-wall-street-gets-billions-assets-stolen/ 

http://voiceofdetroit.net/2013/11/02/back-off-city-pensions-detroit-pension-fund-at-77-wayne-co-at-46-michigan-at-65-5/ 

http://voiceofdetroit.net/2013/10/27/a-thousand-take-streets-to-stop-detroit-bankruptcy-repeat-action-mon-oct-29-12-n-as-snyder-testifies-rhodes-should-recuse-self-led-pro-em-forum/ 

http://voiceofdetroit.net/2013/10/27/jpmorgan-said-to-reach-13-billion-u-s-settlement-on-mortgage-bond-sales/ 

http://voiceofdetroit.net/2013/10/22/a-grand-heist-detroit-city-council-people-say-no-to-banks-em-barclays/  

http://voiceofdetroit.net/2013/10/09/constitutional-civil-human-rights-before-detroit-bankruptcy-groups-say-protest-tues-oct-15-10-am/ 

http://voiceofdetroit.net/2013/09/28/nan-to-protest-detroit-bankruptcy-filing-tues-oct-15-10-am-fights-police-brutality-in-ohio/ 

http://voiceofdetroit.net/2013/09/23/detroit-retirees-residents-committee-blast-bankruptcy-filing-at-court-hearings/ 

http://voiceofdetroit.net/2013/09/17/official-retirees-committee-in-detroit-bankruptcy-blasts-em-orr-gov-snyder-asks-for-stay-pending-higher-court-ruling-what-will-judge-rhodes-do-sept-19/ 

http://voiceofdetroit.net/2013/09/11/dennis-archer-former-consultant-to-detroit-lender-ubs-ag-meets-with-top-obama-aides-execs/

http://voiceofdetroit.net/2013/09/09/illitch-plans-881-million-red-wings-stadium-project-with-public-funds-despite-detroit-bankruptcy-filing/ 

http://voiceofdetroit.net/2013/09/09/detroit-bankruptcy-filing-slows-michigan-bond-sales-84-high-interest-rates-cited/ 

http://voiceofdetroit.net/2013/08/27/secrecy-of-detroit-bankruptcy-docs-release-of-casino-taxes-swaps-retirees-committee-at-issue/ 

http://voiceofdetroit.net/2013/08/20/detroit-bankruptcy-objections-raise-possible-bank-crimes-related-to-poc-debt-and-casino-tax-deal-hundreds-protest-banks-in-downtown-detroit/ 

http://voiceofdetroit.net/2013/08/20/detroit-schools-set-to-pay-hefty-rates-on-92-million-bond-due-to-city-bankruptcy-filing/ 

http://voiceofdetroit.net/2013/08/16/state-stays-lawsuits-vs-em-law-pa-436-citing-detroit-chapter-9-bankruptcy-filing/ 

http://voiceofdetroit.net/2013/08/16/no-banker-left-behind-in-detroit-bankruptcy-case/ 

http://voiceofdetroit.net/2013/08/12/rush-to-detroit-bankruptcy-judge-sides-with-em-orr-aug-2-approves-retirees-committee-prematurely-sets-breakneck-deadlines/ 

http://voiceofdetroit.net/2013/07/29/war-retirees-workers-residents-v-wall-street-in-detroit-bankruptcy-judge-throws-out-state-claims/ 

http://voiceofdetroit.net/2013/07/23/detroit-bankruptcy-snyder-orr-want-retirees-suits-dumped-while-creditor-ubs-announces-high-profits-hearing-wed-july-24-10-a-m-judge-rhodes/


Posted in Uncategorized | 3 Comments

CITY COUNCIL, STATE, FEDS, NON-PROFITS IN BED WITH DEVELOPERS DESTROYING BLACK DETROIT

DAN GILBERT'S DEVELOPERS DISPLACING GRISWOLD APT. TENANTS GRIN AS TED PHILLIPS OF UCHC SUPPORTS A TAX ABATEMENT FOR THEM.

REPRESENTATIVES OF 1214 GRISWOLD, LLC, (L) WHO HAVE SEPARATE TIES TO DAN GILBERT, ARE DISPLACING GRISWOLD APT. TENANTS.THEY GRIN AS TED PHILLIPS OF UCHC (R) SUPPORTS A TAX ABATEMENT FOR THEM AT CITY COUNCIL TABLE. PHILLIPS SAID, “WE ARE THANKFUL THAT THIS IS NOT A SITUATION WHERE LOW-INCOME TENANTS ARE BRINGING DOWN PROFITS FOR BUSINESSES.”

Hearing Dec. 20 on Illitch stadium DDA approval; project 61% public $$

Tax abatement for developers in Griswold evictions, separately tied to Gilbert

Hearings on closures of historic Oakman, Davis Aerospace schools not set 

By Diane Bukowski 

December 15, 2013 

Editor’s note Dec. 16: Paula Silver, spokesman for Dan Gilbert of Quicken Loans, once again called to complain about the original version of this story, which said the 1214 Griswold developers are Dan Gilbert’s. The story has been revised to exclude that reference, although the story still maintains that Gilbert is partners with James Ketai in Bedrock Real Estate, which Silver denied is connected to the Griswold Apartments. She was asked to provide a list of the actual partners in 1214 Griswold, LLC, but has not yet done so.

1215 Griswold and Bedrock Letter/ Photo Chris and Michelle Gerard Curbed Detroit
1215 Griswold and Bedrock Letter/ Photo Chris and Michelle Gerard Curbed Detroit

Editor’s note Dec. 17: Now Rebecca Amboy of Sachse and Broder, a real estate firm whose principals are also officers in Sachse Construction, doing a major part of the renovation on Gilbert’s newly acquired buildings downtown, has called. She says the owners are 1214 Griswold Apartments LLC, whose agent is Richard Broder. A check of state records for 1214 Griswold, LLC suddenly shows that THAT entity TODAY filed an amendment to its Articles stating that as of today, that company no longer exists. Ms. Amboy has been requested to provide an actual deed or purchase document showing who the OWNER, not the agent of 1214 Griswold is. Also, who the individual who signed his name as W on the MOU for 1214 Griswold is (see 1214 Griswold MOU 2.)

An article in Curbed Detroit at http://detroit.curbed.com/archives/2013/11/gilbert.php#more says Gilbert’s Bedrock Real Estate is definitely connected to 1215 Griswold, opining “Ketai is likely Gilbert’s straw buyer, a strategy previously used to buy buildings near the Bates Garage without attracting too much attention.”

Plan to expand DDA to include Illitch Red Wings stadium and upscale residential/retail area.
Plan to expand DDA to include Illitch Red Wings stadium and upscale residential/retail area.

DETROIT – Despite their winter recess, the Detroit City Council has set two perfunctory “public” hearings on the expansion of the Downtown Development Authority (DDA) area to include a large area north of I-75. Mogul Mike Illitch plans to build his new Red Wings stadium and an upscale residential/retail development there. The total cost is $881 million, of which 61 percent is set to come from state and federal tax funds.

The hearings are scheduled for Friday, Dec. 20 at 9 a.m. and 9:05 a.m.

Art Papapanos of DDA/DEGC campaigns for billionaire Mike Illitch project.
Art Papapanos of DDA/DEGC campaigns for billionaire Mike Illitch project.

Detroit City Council President Saunteel Jenkins acceded to DDA/Detroit Economic Growth Corporation (DEGC) leader Art Papapanos’ demands at a Council hearing Nov. 19 that the approval take place by the end of the year to ensure new tax dividends for 2014. The hearings had been “inadvertently” omitted from earlier Council discussion. (See previous VOD story at http://voiceofdetroit.net/2013/09/09/illitch-plans-881-million-red-wings-stadium-project-with-public-funds-despite-detroit-bankruptcy-filing/.)

The Nov. 19 council session was a triumph for Illitch, his downtown co-czar Dan Gilbert, and Detroit Public Schools emergency manager Jack Martin and his boss, Michigan Gov. Rick Snyder. Not one Council member dissented from the corporate agenda set forth at the meeting.

Locally, Quicken Loans founder Dan Gilbert is Michigan's third wealthiest with a net worth of $3.5 billion. Pizza mogul Mike Ilitch and his family rank sixth with a net worth of $2.7 billion. -- Forbes
Quicken Loans founder Dan Gilbert is Michigan’s third wealthiest with a net worth of $3.5 billion. Pizza mogul Mike Ilitch and his family rank sixth with a net worth of $2.7 billion. — Forbes

No hearing was set as requested by many in the audience, including Elder Helen MoorE of the Keep the Vote No Takeover Coalition, on the closures of the historic Oakman Elementary School for special needs students and Davis Aerospace High School.

GRISWOLD APARTMENTS 

Representatives of 1214 Griswold, LLC, whose agent has ties to Illitch’s co-czar Dan Gilbert, left the meeting with a hefty tax abatement for their re-development of the Griswold Apartments, and eviction of up to 127 low-income senior and disabled tenants, many of whom have lived there for decades. It was unanimously approved by the Council with the apparent blessing of Attorney Ted Phillips, Executive Director of the non-profit United Community Housing Coalition. The Council had no authority to vote on the sale itself, only on a “Commercial Rehabilitation Act” tax exemption for up to ten years.

UCHC is working with the Neighborhood Service Organization (NSO), the actual signatory to the new owners’ tenant agreement, which did not show up at either Council session. UCHC’s task under a $480,000 HUD “Tenant Resource Network” grant is to find and inspect other housing for the low-income Section 8 Griswold residents, as well as residents of 17 other developments across southeastern Michigan that are opting out of federal Section 8 contracts. Such affordable housing is becoming increasingly scarce, but it does not appear that non-profits are fighting to keep it instead of scattering its residents.

James Ketai (l) with Todd Sachse, also a partner in 1214 Griswold, at gala event. Photo from Hour Magazine, which also photographed UCHC's Annual Dinner last month.
James Ketai (l) with Todd Sachse, also a partner in 1214 Griswold, at gala event. Photo from Hour Magazine, which also photographed UCHC’s Annual Dinner last month.

Although Gilbert denied involvement in the purchase of the Griswold Apartments, state records show that the agent for the newly-formed 1214 Griswold, LLC is James Ketai, a partner in Bedrock Real Estate.

“Created by Dan Gilbert, Quicken Loans’ visionary founder and Chairman, and veteran real estate entrepreneur, Jim Ketai, Bedrock is on a mission,” says that company’s brochure, posted on its website. “The company’s sole focus is to revitalize Detroit and other promising urban centers to create jobs, excitement and opportunity.”

Regarding the new owners’ planned evictions of up to 127 senior and disabled long-term residents, most of them African-American, to make way for an upscale white-dominated Capitol Park region, Councilman James Tate said, “The new developers have done a tremendous job in working with the residents who live there.”

Griswold tenants leave Council hearing Nov. 19, 2013.
Griswold tenants leave Council hearing Nov. 19, 2013.

He and Councilwoman JoAnn Watson praised the new owners’ agreement to allow 10 instead of five residents to remain on one-year “extended” HUD vouchers, which means HUD will pay almost all their new base rent of $1213. There is no guarantee they will remain after that first year.

Phillips sat at the Council table across from the developers, who smiled as he spoke.

Dan Gilbert's vision for Capitol Park, where Griswold Apartments are located.

Dan Gilbert’s vision for Capitol Park, where Griswold Apartments are located at right.

“We reached a Memorandum of Understanding which was brought to the group last week,” Phillips said. “It was signed to attach to the abatement request. There are lots of good benefits. They have moved from five to 10 tenants allowed to stay there, for the oldest residents. Their security deposits remain. The owners have met with the residents, UCHC and NSO a number of times. We have met with all who wish to stay.”

James McNeal, who has lived at Griswold Apts. for 20 years, and his friend Esther Hardy, who has lived there 30 years.
James McNeal, who has lived at Griswold Apts. for 20 years, and his friend Esther Hardy, who has lived there 30 years.

Phillips added later, “We are thankful that this is not a situation where low-income tenants are bringing down profits for businesses.”

Residents who attended the hearing largely were silent. One thanked Councilwoman Watson and another, Esther Harding, said she wanted all the residents to remain.

Afterwards, Harding, who is 92 and has lived in the building for 30 years, told VOD, “I’m not happy with it but there’s nothing I can do about it. I want as many residents as possible to remain. We are like family here.”

Her friend and co-resident James McNeal said he has lived in the building for 20 years and is retaining his own attorney due to his dissatisfaction with the agreement.

Griswold apartments map“We [the residents] have been through thick and thin,” McNeal said. “We’ve had three different managements and different security agencies. Some of the people don’t know what’s going on. There are some in convalescent homes who don’t know if they’ll be able to come back. This is nothing but discrimination. The people have been in this city and have served this city for years. But now that they want to re-do the area, they are booting the residents out. This is unfair to all of us.”

OAKMAN SCHOOL FOR SPECIAL NEEDS STUDENTS AND DAVIS AEROSPACE

Despite an audience packed with advocates for Oakman Elementary and Davis Aerospace schools, no special hearing was set to save those schools, as was done for Illitch’s project.

Elder Helen Moore took the mike first and demanded more time to speak on behalf of all the people she has represented for years. Councilman Andre Spivey, who chaired for an hour because Jenkins was late, adamantly denied her request. She was almost removed by Council police.

CC 11 17 13 HM cop
Elder Helen Moore asks for special session on school closings as Council cop approaches to remove her at Councilman Andre Spivey’s direction.

Moore then asked the Council to set a special session to deal with the schools, a request which Spivey put off for Jenkins to decide.

“Oakman Elementary was built in 1929 to serve special needs students,” Russ Bellant, president of the Detroit Library Commission,” testified. “These children are being greatly harmed by what the EM [formerly Roy Roberts, currently Jack Martin] is doing. Many of the students are blind or in wheelchairs or must use walkers. It’s clear that the city of Detroit is in the hands of the bankers.”

Aliya Moore, president of the Oakman Parents Group, told the Council, “Our children are being blatantly disrespected. We took a bus to Lansing to protest the closing at the State Board of Education. Your voice on our behalf means a lot.”

Aliya Moore, Pres. of Oakman Parents Group, at protest Aug. 28, 2013.
Aliya Moore, Pres. of Oakman Parents Group, at protest Aug. 28, 2013.

Others testified that the school is in the process of being demolished, while many of its former students are no longer attending school because school officials cannot find appropriate buildings. Architect Bill Dickens called the demolition an “outrage.”

“That school is absolutely beautiful,” Dickens testified. “It is a school that worked. It was named in honor of Dr. Charles Oakman, a visionary who championed the cause of public health in Detroit.”

Rev. Bill Wylie-Kellerman said, “The systematic destruction of Oakman is like the hundreds of other schools destroyed, while we are still paying the bonds on those schools for years to come.”

City Councilman Kenneth Cockrel, Jr. contended that the Council has no jurisdiction over DPS. But Denise Chatman of the Council’s Historic Designation Advisory Board said, “Oakman is on the National Register of Historic Places and is eligible for local designation. It is the only school remaining for children with special needs.”

Lt. Colonel Milburn of Tuskegee Airmen testifies for Davis Aerospace School
Lt. Colonel Milburn of Tuskegee Airmen testifies for Davis Aerospace School

Lt. Colonel Lawrence Milburn of the Tuskegee Airmen, in uniform, testified on behalf of keeping Davis Aerospace High School open to provide opportunities for Detroit youth to learn to become proficient in that lucrative area of employment. School officials said the Airmen, a contingent of Black pilots including the late Mayor Coleman Young who fought in World War II, give freely of their time to assist the students.

Jenkins did not set a special Council session to save the two schools, despite setting the Dec. 20 hearing for Illitch’s Red Wings project.

Related article:

http://voiceofdetroit.net/2013/11/18/developers-hud-non-profits-collude-to-move-detroit-seniors-disabled-out-of-downtown-griswold-apts/

 


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CARIBBEAN NATIONS CALL FOR REPARATIONS FROM EUROPE; REPARATIONS FOR DETROIT AND BLACKS IN U.S. ALSO NEEDED

Is Europe Ready For Reparations? CARICOM Is!
December 11, 2013

The idea of reparations for slavery has been circulating in the Caribbean for some time. But now activists are trying to put some critical mass to it by calling formally on former colonizers from United Kingdom, France, The Netherlands, and other countries to apologize and pay compensation for the colonial period. Kalilah Enriquez of CEEN News reports on a meeting held in Jamaica yesterday (see video above).

VOD: Of course, this relates directly to the struggle in the United States for reparations for the descendants of Africans here, as seen in the article by Dr. Ron Daniels below. Additionally, REPARATIONS FROM THE BANKS AND CORPORATIONS WHICH HAVE LAID WASTE TO THE NATION’S LARGEST BLACK MAJORITY CITY, AND ITS POOREST, DETROIT, MUST ALSO BE THE ORDER OF THE DAY, NOT FURTHER AUSTERITY UNDER BANKRUPTCY!

Reparations for Detroit, not bankruptcy.

Reparations for Detroit, not bankruptcy.

Revitalizing the U.S. Reparations Movement

CARICOM Initiative Could Provide the Spark
Revitalizing the U.S. Reparations Movement

[For publication the Week of October 7, 2012]

By Dr. Ron Daniels

Dr. Ron Daniels
Dr. Ron Daniels

A few days before this year’s Congressional Black Caucus Foundation, Inc. Annual Legislative Conference (CBCINC-ALC), I received a call to ask my opinion as to whether the Reparations Issues Forum should be on the agenda. The Forum has been standard fare every year as a way of promoting HR-40, the Reparation’s Study bill, championed by Congressman John Conyers, Jr., and as a vehicle to discuss strategies for the coming year. The question was understandable given the relatively moribund state of the Reparations movement in the U.S.; a reality that is the consequence of the passing/transition of some of the key leaders of the movement, the decline of reparations advocacy organizations and the difficulty of gaining traction on the issue with the first African American President in the White House.

Child in U.S. demands reparations.
Child in U.S. demands reparations.

However, none of these factors negate the validity and relevance of the issue. Therefore, I answered in the affirmative but strongly suggested that the Forum highlight events or developments that might provide a new spark to the U.S. Reparations Movement. In the past State Senator Bill Owen’s proposal that the Massachusetts legislature pay reparations to African Americans in that state; Deadria Farmer-Paellmann’s legal campaign against U.S. corporations that benefitted from slavery; the National Black United Front’s “We Charge Genocide” Petition Campaign; December 12th Movement’s Millions Reparations March; Randall Robinson’s highly acclaimed book The Debt; and, The National Coalition for Reparations for African Americans’ (N’COBRA) Reparations Legal Team are examples of actions and events that breathed life into the movement and gave it momentum at particular moments. Unfortunately, in recent years there has been no significant action or event to keep reparations on the front burner of the discourse about Black interests and aspirations. Indeed, the election of the first African American President has likely had a chilling effect in terms of advancing the issue.

Dr. Ralph Gonsalves
Dr. Ralph Gonsalves

But, as I informed the conveners of the Forum, recent developments in the Caribbean have the potential for dramatically changing the tide in the U.S. and Pan African World. Spearheaded by Dr. Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines, in July Caribbean Community (CARICOM) leaders “agreed to the formation of a region-wide Reparations Commission to seek compensation from Europe for native genocide and enslavement of Africans during colonisation.” Subsequent to this historic resolution, PM Gonsalves convened a major Reparations Conference, September 15-17th in St. Vincent. The delegates agreed to form Reparation Commissions in each Caribbean nation. In addition, PM Gonsalves and several Caribbean leaders utilized the annual convening of the U.N. General Assembly as a platform to boldly incorporate the demand for reparations into their speeches. The CARICOM Reparations Initiative is a historic development, a potential game changer, not only in terms of the potential impact on the Reparations Movement in this country, but the prospect of a resurgent progressive Pan-Africanism, with a renewed focus on the root causes of the “underdevelopment” of people of African descent on the continent and in the Diaspora.

Another development which could spark a renewed interest in the U.S. Reparations Movement is the discovery of a little known speech by Dr. Martin Luther King, Jr. that addresses the issue. On the morning of the Reparations Issues Forum, I received an urgent email and voicemail message from SIRIUS/XM Radio Talk Show Host Mark Thompson, urging me to listen to an excerpt of a speech by Dr. King. Mark obviously felt it would be relevant to the subject. He was absolutely correct. In the space of two minutes, Dr. King recounts a range of benefits provided to European immigrants and White farmers like the Homestead Act that were systematically denied to the formerly enslaved Africans. In so doing, he emphatically lays out the equivalent of a rationale for reparations and concludes by proclaiming, when we come to Washington …we’re coming to get our check.” When we played the clip the audience was stunned and exhilarated. Never before had the participants heard such a ringing rationale for reparations, coming from the lips of the world’s most revered civil rights leader! Everyone instantly recognized that these words from Dr. King could be invaluable in providing legitimacy to the righteous demand for reparations.

reparations2I was delighted to moderate the Reparations Issues Forum this year because the developments above could well breathe new life into the quest for Africans in America to achieve a yet unfulfilled aspiration – reparations to repair the cultural, psychological, spiritual and physical damage to our people as a direct consequence of the holocaust of enslavement. Moreover, with the input of a Panel consisting of City Councilwoman JoAnn Watson of Detroit, Dr. Julianne Malveaux, Black America’s leading political-economist and Attorney Nkechi Taifa, Senior Policy Analyst, Open Society Foundations, an action agenda to revitalize the U.S. Reparations Movement was devised.

The late "Reparations Ray" Jenkins of Detroit, the father of the modern U.S. reparations movement.
The late “Reparations Ray” Jenkins of Detroit, the father of the modern U.S. reparations movement.

The action agenda includes: the widespread circulation of Dr. King’s speech which provides a rationale for reparations; an Open Letter to President Barack Obama from Congressman John Conyers, Jr. requesting that the President support HR-40, the Reparations Study Bill; a series of four community-based regional hearings on HR-40, chaired by Congressman Conyers with a stellar Panel of Resource People like Dr. Claud Anderson, Dr. Ray Winbush, Dr. Julianne Malveaux, Professor Charles Ogletree, Dr. Iva Carruthers, Attorney Nkechi Taifa and Councilwoman JoAnn Watson to mention a few; utilizing Dr. King’s assessment as a framework, the convening of a Special Hearing in Selma, Alabama with Black farmers, many of whom still feel aggrieved despite the settlement with the Department of Agriculture; an invitation extended by Congressman John Conyers, Jr. to Dr. Ralph Gonsalves to be a Special Guest and Keynote Speaker for the 2014 CBCINC-ALC Reparations Issues Forum; finally, the Institute of the Black World 21st Century (IBW) will contribute to the process by establishing a Reparations Resource Center on its website www.ibw21.org where interested parties can access important articles, documents, speeches and other relevant materials that might be useful for education, advocacy and organizing

The late Venezuelan Pres. Hugo Chavez, Cuban leader Fidel Castro, and Bolivian President Evo Morales are shown in Havana. Pres. Morales confronted a European Union conference with a stunning demand for reparations. (See link to his speech below.)

The late Venezuelan Pres. Hugo Chavez, Cuban leader Fidel Castro, and Bolivian President Evo Morales are shown in Havana.
Pres. Morales confronted a European Union conference with a stunning demand for reparations. (See link to his speech below.)

Inspired by the incredible developments noted above and armed with a feasible action agenda, we have an opportunity to revitalize the Reparations Movement in the U.S. In remembrance of our ancestors, a luta continua … the struggle continues!

Dr. Ron Daniels is President of the Institute of the Black World 21st Century and Distinguished Lecturer at York College City University of New York. His articles and essays also appear on the IBW website www.ibw21.org and www.northstarnews.com . To send a message, arrange media interviews or speaking engagements, Dr. Daniels can be reached via email at info@ibw21.org

– See more at: http://ibw21.org/vantage-point/revitalizing-the-u-s-reparations-movement/#sthash.5bmfQTQy.dpuf

http://theblacklistpub.ning.com/group/obituaries/forum/topics/remember-ray-jenkins-the

http://voiceofdetroit.net/2013/09/01/i-too-can-demand-repayment-evo-morales-pres-bolivia/


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MANDELA’S LEGACY EXTENDS FROM SOUTH AFRICA, THE CONTINENT, TO THE WORLD

Nelson Mandela and Fidel Castro meet in Durban in 1998 for Non-Aligned Movement Summit.

Nelson Mandela and Fidel Castro meet in
Durban in 1998 for Non-Aligned Movement Summit.

By Abayomi Azikiwe

(Photos and videos below added by Diane Bukowski and Kenny Snodgrass of Voice of Detroit.)

December 11, 2013

workers world logoNelson Mandela’s death has drawn responses from throughout the U.S. and the world. To oppressed and working people, Mandela was a symbol and example of self-sacrifice and lifelong commitment to revolutionary change.

Placing his legacy in a revolutionary perspective is important in countering the corporate media view, which attempts to strip away the actual history of collective struggle in South Africa and its influence on the international movements against racism, imperialism and class exploitation.

The young Nelson Mandela was an athlete and boxer.

The young Nelson Mandela was an athlete and boxer.

The struggle for freedom and liberation in South Africa began in 1652, when the Dutch settler Jan Van Riebeeck landed at the Cape of Good Hope already accompanied by enslaved Africans from other regions of the continent.

Mandela was born on July 18, 1918, in the Eastern Cape region of South Africa at Mvezo in Umtatu, and would grow up in the village of Qunu. He came from a traditional Xhosa royal lineage among the Thembu people but sought to expand his horizons and went to live in Johannesburg, the commercial and industrial center of the white-dominated settler state.

Mandela was an athlete and became a boxer. He would study law and later join the African National Congress with the aegis of his lifelong friend Walter Sisulu. In subsequent years he became a leading member of the South African Communist Party (SACP), serving on its central executive committee.

Winnie and Nelson Mandela with South African Communist Party President Joe Slovo.

Winnie and Nelson Mandela with South African Communist Party President Joe Slovo.

During the 1940s, the ANC formed the Youth League, which advanced a “Program of Action” calling for the transformation of the organization into a mass national liberation movement seeking to directly confront the system of racism and class oppression. The ANC had been formed in 1912 in the Free State province of South Africa in an effort to bring all of the African nationalities into one organization to more effectively fight colonial domination.

Earlier in 1910, the Union of South Africa had been formed. This represented a compromise between the English and the Dutch descendants, the Boers, who had fought a bloody three-year war from 1899 to 1902 over which European oppressor nation would control this vast agricultural and mineral-rich land. The Union of South Africa represented an unholy alliance of the white settlers who sought to further rationalize a system of land confiscation, mineral extraction and the exploitation of the labor of the majority African population.

Zulu warriors valiantly fought British and French troops in the 19th century, many times triumphing. Here, the Prince Imperial, son of Napoleon, is killed in 1879.

Zulu warriors valiantly fought British and French troops in the 19th century, many times triumphing. Here, the Prince Imperial, son of Napoleon, is killed in 1879.

The ANC drew upon the legacy of struggle waged by various African nationalities such as the Basotho, Zulu and Xhosa during the 19th and early 20th centuries, fusing the legacy of these wars of resistance and liberation into a unified national movement.

Under the Union, the British became dominant in government. However, after World War II, the Nationalist Party of the Boers took power in 1948, codifying the system of racism, national oppression and class exploitation as “apartheid.” Many within the Afrikaner (Dutch descendants, or Boers) population had supported the Nazis.

The ANC was representative of the awakening of all Africans throughout the continent from the ravages of slavery and colonialism over the course of the 20th century. In the immediate aftermath of World War II, the mass determination of the African people grew more militant. Independence movements were formed all throughout the region, from Egypt and Algeria in the North; through Ghana, Guinea, Mali and others in the West; all through Central Africa, including Congo; across to the East, with uprisings in Kenya and Tanzania; and down to the South, where Angola, Mozambique, Zimbabwe, Namibia, South Africa and others would arouse hundreds of millions in the mass, labor and armed struggles aimed at national liberation.

The armed phase of the African revolution

Defiance Against Unjust Laws Campaign, South Africa, 1952

Defiance Against Unjust Laws Campaign, South Africa, 1952

Some states in Africa gained their independence through mass political resistance absent of an organized armed struggle. Nonetheless, many others were forced to take up arms and fight the colonialists and their allies for national liberation.

A wave of repression swept South Africa in response to the “Defiance of Unjust Laws Campaign” from 1952 to 1956. The top leaders of the ANC, the SACP, the Congress of Democrats, the Colored People’s Congress, the Federation of South African Women, the South African Indian Congress and the South African Congress of Trade Unions were charged with treason. A show trial, staged by the apartheid regime, lasted from 1956 to 1960. This treason trial, involving 156 organizers, collapsed in 1960 with the acquittals of Mandela and many other leaders.

Sharpeville massacre of 69 peaceful protesters against pass laws, by South African military in 1960 (Photo: ANC archives)

Sharpeville massacre of 69 peaceful protesters against pass laws, by South African military in 1960 (Photo: ANC archives)

After the Sharpeville massacre of March 21, 1960, prompted the banning of the ANC, the Pan-Africanist Congress and others, Mandela and his comrades decided to organize Um Khonto We Sizwe (Spear of the Nation), a guerrilla unit that would attack power stations, government buildings, rail lines and other symbols of white-minority rule.

Poster from ANC archives.

Poster from ANC archives.

In May 1961, amid a general strike, in an interview with a British news reporter at an undisclosed location in South Africa, Mandela announced that “it is futile to continue talking nonviolence to an enemy” only concerned with maintaining control through violence.

Mandela left the country secretly while under banishment in South Africa and traveled to other parts of the continent, as well as England. He studied guerrilla warfare and military affairs in Ethiopia and at an Algerian National Liberation Front (FLN) training camp in Oujda, Morocco. In Ethiopia, Mandela addressed the Conference of the Pan-African Freedom Movement of East and Central Africa in January 1962.

During the PAFMECA Conference, Mandela, representing the ANC, told the delegates: “During the past 10 months I moved up and down my country and spoke to peasants in the countryside, to workers in the cities, to students and professional people. It dawned on me quite clearly that the situation had become explosive.”

He continued: “It was not surprising therefore when one morning in October last year [1961] we woke up to read press reports of widespread sabotage involving the cutting of telephone wires and the blowing up of power pylons. The government remained unshaken and white South Africa tried to dismiss it as the work of criminals.

Johannesburg, Dec. 16, 1961: Umkkonto we Sizwe launches urban guerilla warfare.

Johannesburg, Dec. 16, 1961: Umkkonto we Sizwe launches urban guerilla warfare.

“Then on the night of 16 December last year the whole of South Africa vibrated under the heavy blows of Umkhonto we Sizwe. Government buildings were blasted with explosives in Johannesburg, the industrial heart of South Africa; in Port Elizabeth; and in Durban. It was now clear that this was a political demonstration of a formidable kind, and the press announced the beginning of planned acts of sabotage in the country.

“It was still a small beginning because a government as strong and as aggressive as that of South Africa can never be induced to part with political power by bomb explosions in one night and in three cities only. But in a country where freedom fighters frequently pay with their very lives and at a time when the most elaborate military preparations are being made to crush the people’s struggles, planned acts of sabotage against government installations introduce a new phase in the political situation and are a demonstration of the people’s unshakeable determination to win freedom whatever the cost may be. The government is preparing to strike viciously at political leaders and freedom fighters. But the people will not take these blows sitting down.” 

Demonstration against guilty verdict at Rivonia treason trial.

Demonstration against guilty verdict at Rivonia treason trial.

Mandela later re-entered South Africa and was captured in August 1962. He would reveal during the Rivonia Treason Trial of 1964 that “in Africa I was promised support by such men … [as] Ben Bella, now President of Algeria. … It was Ben Bella who invited me to visit Oujda, the Headquarters of the Algerian Army of National Liberation, the visit which is described in my diary, one of the Exhibits.”

What has not been mentioned by corporate television networks that have lavished praise on Mandela in his death is that the U.S. Central Intelligence Agency is said to have played a critical role in the ANC leader’s capture. This claim has been reported in numerous sources even within the South African press.

Open the CIA files on MandelaIn a June 10, 1990, article published in the New York Times on the eve of a visit by Mandela to the U.S., just four months after his release from 27 years in prison, David Johnston wrote that a report from the Cox news service revealed that “the intelligence service, using an agent inside the African National Congress, provided South African security officials with precise information about Mr. Mandela’s activities that enabled the police to arrest him.” http://www.nytimes.com/1990/06/10/world/cia-tie-reported-in-mandela-arrest.html.

The article noted that “the report, scheduled for publication on Sunday, quoted an unidentified retired official who said that a senior CIA officer told him shortly after Mr. Mandela’s arrest: ‘We have turned Mandela over to the South African Security branch. We gave them every detail, what he would be wearing, the time of day, just where he would be.’”

Protester demands end to U.S. investment in South Africa.

Protester demands end to U.S. investment in South Africa.

Johnston also wrote that “Mark Mansfield, a spokesman for the agency, declined to comment on the news-service report. ‘As a matter of policy, we do not discuss allegations of intelligence activities.’”

This collaboration between the racist apartheid regime and U.S. intelligence was replicated in the economic sphere. At the height of the apartheid system, nearly 400 corporations inside the U.S. had direct investments in racist South Africa and its colony of Namibia, which gained independence in 1990.

Isolating apartheid domestically and internationally

The investments of U.S. imperialism and its allies in the West became a major focus of the ANC and its supporters both inside and outside of South Africa. In support of the mass movement for national liberation, millions inside the U.S. and around the world joined the various campaigns for the divestment from apartheid and the release of its political prisoners. Nelson Mandela became a household word during the mid-1980s as a symbol of resistance by the South African people against national oppression.

It was the combined efforts of the armed, mass and labor struggles inside South Africa, in conjunction with the international movement of solidarity, that proved to be decisive in the unbanning of the ANC, the SACP and other organizations, the release of political prisoners, the return of exiles from outside the country and the eventual negotiations for the holding of democratic elections. Those elections resulted in the ascendancy of the ANC to state power in April-May 1994.

Another decisive factor in the total liberation of Southern Africa was the defeat of the racist South African Defense Forces in southern Angola during 1987-1988. Popular Movement for the Liberation of Angola leader Dr. Agostino Neto had asked Cuba to intervene in Angola in November 1975, when the independence of the former Portuguese colony, newly won through armed struggle, was imperiled.

Cuban troops support the MPLA in Angola.

Cuban troops support the MPLA in Angola.

In late 1975, Cuba deployed 55,000 of its own troops, which fought alongside the MPLA military forces and others to defeat the SADF for the first time. Cuban internationalist forces would remain in Angola for 13 years, until the apartheid army was defeated by the combined forces of Cuban President Fidel Castro’s army, the Angolan military, the armed wing of the South West Africa People’s Organization, the People’s Liberation Army of Namibia and Um Khonto We Sizwe, which had bases inside Angola. Some 350,000 Cubans would serve in Angola between 1975 and 1989, making a monumental contribution to the African Revolution.

Mandela as ANC President of South Africa

Nelson Mandela supported Muammar Gadhafi's Libya from the U.S. bombing of his home and murder of his daughter in 1987 through the U.S.-NATO invasion of recent years. Gadhafi, like Mandela, believed in providing for the needs of the people across the African continent, but both were thwarted by U.S. economic and military intervention, including the demise of the socialist countries which had supported the ANC, under pressure from the U.S.

Nelson Mandela supported Muammar Gadhafi’s Libya from the U.S. bombing of his home and murder of his daughter in 1986 through the vicious, racist U.S.-NATO invasion of recent years. Gadhafi, like Mandela, believed in providing for the needs of the people across the African continent, but both were thwarted by U.S. economic and military intervention, including the demise of the socialist countries which had supported the ANC, under pressure from the U.S.

Mandela would serve one five-year term as president of the Republic of South Africa, from 1994 to 1999. His administration built homes for 2 million South Africans, provided electricity and running water to millions more, opened up the health care system to Africans, instituted affirmative action programs to empower the African majority and developed a constitution that outlawed the death penalty as well as racial and gender discrimination.

Mandela PalestineUnder Mandela, South Africa would serve as an example to all oppressed and struggling peoples throughout the world. The country continues today to be in solidarity with the liberation movement of the Palestinians and the people of the Western Sahara, and maintains positions in support of African unity and economic integration.

Today the chair of the African Union Commission is a South African woman, Dr. Nkosazana Dlamini-Zuma. South Africa plays a leading role within the African Union, is a member of the BRICS Summit (Brazil, Russia, India, China and South Africa), and occupies a leading role in the regional Southern African Development Community and other international bodies.

Although the struggle inside South Africa and throughout the region is by no means complete, the legacy of Mandela through the ANC, SACP, COSATU and other affiliated organizations will live on. The neocolonial phase of post-independence Africa will also pass as the contradictions within world capitalism become more pronounced and unbearable, as did apartheid.

A Tribute To The Honorable Nelson Rolihlahla Mandela – – A No Struggle, No Development Production!

By Kenny Snodgrass

Kenneth Snodgrass, VOD videojournalist.

Kenneth Snodgrass, VOD videojournalist.

Activist, Photographer, Videographer, Author of
1} From Victimization To Empowerment… www.trafford.com/07-0913 eBook available at www.ebookstore.sony.com
2} The World As I’ve Seen It! My Greatest Experience!
{Photo Book}
YouTube: I have over 486 Video’s, 346 Subscribers, over 222,000 hits, now averaging 10,000 monthly on my YouTube channel @ www.YouTube.com/KennySnod

 

Statement of the South African Communist Party on Nelson Mandela

Che GuevaraThe true revolutionary is guided by great feelings of love.— Che Guevara

Last night, the millions of the people of South Africa, majority of whom the working class and poor, and the billions of the rest of the people the world over, lost a true revolutionary, President Nelson Rolihlahla Mandela, Tata Madiba.

The South African Communist Party joins the people of South Africa and the world in expressing its most sincere condolences to Ms. Graca Machel and the entire Mandela family on the loss of what President Zuma correctly described as South Africa’s greatest son, Comrade Mandela.

We also wish to use this opportunity to express our solidarity with the African National Congress, an organisation that produced him and that he also served with distinction, as well as all his colleagues and comrades in our broader liberation movement. As Tata Madiba said, “It is not the kings and generals that make history but the masses of the people, the workers, the peasants. …”

Tribute from East African country.

Tribute from East African country.

The passing away of Comrade Mandela marks an end to the life of one of the greatest revolutionaries of the 20th century, who fought for freedom and against all forms of oppression in both their countries and globally. As part of the masses that make history, Comrade Mandela’s contribution in the struggle for freedom was located and steeled in the collective membership and leadership of our revolutionary national liberation movement as led by the ANC — for he was not an island. In Comrade Mandela we had a brave and courageous soldier, patriot and internationalist who, to borrow from Che Guevara, was a true revolutionary guided by great feelings of love for his people, an outstanding feature of all genuine people’s revolutionaries.

At his arrest in August 1962, Nelson Mandela was not only a member of the then underground South African Communist Party, but was also a member of our Party’s Central Committee. To us as South African communists, Comrade Mandela shall forever symbolise the monumental contribution of the SACP in our liberation struggle. The contribution of communists in the struggle to achieve the South African freedom has very few parallels in the history of our country. After his release from prison in 1990, Comrade Madiba became a great and close friend of the communists till his last days.

Venezuela's Vice-President Jorge Arreaza pays his respects at the coffin of former South African President Mandela, as Mandela lies in state at the Union Buildings in Pretoria. REUTERS/Yves Herman

Venezuela’s Vice-President Jorge Arreaza pays his respects at the coffin of former South African President Mandela, as Mandela lies in state at the Union Buildings in Pretoria. REUTERS/Yves Herman

The one major lesson we need to learn from Mandela and his generation of leaders was their commitment to principled unity within each of our Alliance formations as well as the unity of our Alliance as a whole and that of the entire mass democratic movement. Their generation struggled to build and cement the unity of our Alliance, and we therefore owe it to the memory of Comrade Madiba to preserve the unity of our Alliance. Let those who do not understand the extent to which blood was spilt in pursuance of Alliance unity be reminded not to throw mud at the legacy and memory of the likes of Madiba by being reckless and gambling with the unity of our Alliance.

The SACP supported Madiba’s championing of national reconciliation. But national reconciliation for him never meant avoiding tackling the class and other social inequalities in our society, as some would like to make us believe today. For Madiba, national reconciliation was a platform to pursue the objective of building a more egalitarian South African society free of the scourge of racism, patriarchy and gross inequalities. And true national reconciliation shall never be achieved in a society still characterized by the yawning gap of inequalities and capitalist exploitation.

In honour of this gallant fighter, the SACP will intensify the struggle against all forms of inequality, including intensifying the struggle for socialism, as the only political and economic solution to the problems facing humanity.

For the SACP, the passing away of Madiba must give all those South Africans who had not fully embraced a democratic South Africa, and who still in one way or the other hanker to the era of white domination, a second chance to come to terms with a democratic South Africa founded on the principle of majority rule.

We call upon all South Africans to emulate his example of selflessness, sacrifice, commitment and service to his people.

The SACP says, “Hamba kahle Mkhonto!” [“Go well, brave warrior!”]

Umkhonto we Sizwe ANC Choir seventies

Also see from the pages of Workers World

  1. Tributes to South African hero, Nelson Mandela
  2. Tributes to South African hero, Nelson Mandela, at 95
  3. Mandela: ‘Great loss for struggle of Palestinian people’
  4. Tribute from the Congress of South African Trade Unions (COSATU) to Nelson Mandela
  5. Conditions that led to South Africa massacre

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STOP MORE GIVEAWAYS TO THE BANKS DEC. 17 9 A.M IN DETROIT; BANKS INVOLVED IN CITY’S BANKRUPTCY JUST DODGED 4.3 BILLION IN EU FINES FOR FRAUD; OTHERS GOT HIT

Dec 17 flier

UBS, BARCLAYS DODGE 4.3 BILLION EU FINES FOR RATE-RIGGING

By Elena Logutenkova

Dec 4, 2013 7:59 AM ET

UBS 1(VOD editor: UBS is a chief perpetrator of the predatory and likely criminal  $2.28 billion Pension Obligation Certificates loan foisted on Detroit in 2005-06. Neither EM Kevyn Orr nor U.S. Bankruptcy Judge Steven Rhodes have ordered an investigation of the validity of this debt, despite language in the EM law PA 436 which mandates investigations of possible criminal activity leading to a city’s economic crisis.

Barclays on King Street, London.

Barclays on King Street, London.

Barclays wants to loan $350 million to Detroit so the city can pay off UBS and Bank of America for interest-rate swaps related to the debt. The pay-off would tie up 20 percent of Detroit’s income and casino taxes for the next 10 years. The trial before U.S. Bankruptcy Judge Steven W. Rhodes to determine if that loan will be allowed under bankruptcy begins Dec. 17, 2013 at the Federal Courthouse at 231 W. Lafayette.)

Bloomberg NewsUBS AG (UBSN), Switzerland’s biggest bank, and Britain’s Barclays Plc (BARC) escaped $4.3 billion in European Union antitrust penalties by being first to inform the watchdog of collusion to rig benchmark interest rates.

UBS, based in Zurich, dodged a 2.5 billion-euro ($3.4 billion) fine, while London-based Barclays avoided a 690 million-euro penalty, the European Commission said in a statement today. It fined six companies a record 1.7 billion euros for rigging euro and yen interest rate derivatives.

Regulators around the world have been probing whether more than a dozen firms, including JPMorgan Chase & Co. (JPM) and Deutsche Bank AG, colluded to manipulate benchmark interest rates to mask their true cost of borrowing. UBS paid about $1.5 billion to the U.S., U.K. and Swiss regulators last year for trying to rig the London interbank offered rate, while Barclays agreed to pay 290 million pounds ($474.6 million) to resolve the U.S. and U.K. probes into the matter. Barclays’s Chairman Marcus Agius and Chief Executive Officer Robert Diamond left in the wake of the penalty.

Global banks involved in destruction of Detroit.

Global banks involved in destruction of Detroit.

The leniency program is the “main and most effective tool to detect illegal cartels,” the Brussels-based European Commission said in a separate statement today.

Barclays said in a statement it voluntarily reported the Euribor conduct to the commission and fully cooperated with the investigation.

UBS fell 0.5 percent to 16.62 Swiss francs by 1:53 p.m. in Zurich trading, trimming its gain this year to 17 percent. Barclays declined 2.3 percent in London to 260.10 pence.

Citigroup Cooperation

Banks slide 1UBS revealed the existence of cartels in yen interest rate derivatives, such as yen Libor and the Euroyen Tokyo interbank offered rate, or Tibor. The Swiss bank received full immunity for its participation in five of seven infringements the EU uncovered in the period from 2007 to 2010, the commission said. The company declined to comment on the settlement.

Citigroup Inc. (C), based in New York, avoided an extra 55 million-euro penalty for cooperating on one of the yen infringements in which it participated, the commission said. The bank was fined 70 million euros for two other instances.

The cartel on euro interest rate derivatives, such as the euro interbank offered rate, or Euribor, operated between September 2005 and May 2008, the commission said. Barclays received immunity for revealing the existence of the cartel, in which it participated for 32 months, according to the statement.

Barclays said in a statement it voluntarily reported the Euribor conduct to the commission and fully cooperated with the investigation.

http://www.bloomberg.com/news/2013-12-04/ubs-barclays-dodge-4-3billion-eu-fines-for-rate-rigging.html

DEUTSCHE BANK TO RBS FINED BY EU FOR RATE RIGGING

Sandra Pierce chairs Financial Advisory Board meeting Nov. 12, 2012.

Sandra Pierce chairs Financial Advisory Board meeting Nov. 12, 2012.

(VOD editor: Deutsche Bank and others listed here are also among Detroit creditors seeking to get paid while retirees get their pensions slashed.

RBS is the parent company of Charter One Michigan. Sandra Pierce, chair of the Financial Advisory Board (FAB), previously was CEO of Charter One.)

The FAB was  foisted on Detroit under the PA 4 consent agreement approved by the City Council April 4, 2012, which handed over most powers of the Mayor and City Council to the FAB and other state appointed officials, and finally to Michigan Gov. Rick Snyder and Treasurer Andy Dillon.) oversee and approve all Detroit’s financial dealings.)

Deutsche Bank HQ in Frankfort Germany.
Deutsche Bank HQ in Frankfort Germany. Photographer: Krisztian Bocsi/Bloomberg

By Gaspard Sebag and Aoife WhiteDec 4, 2013 7:12 AM ET

Bloomberg NewsDeutsche Bank AG (DBK) and Royal Bank of Scotland Group Plc (RBS) are among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union for rigging interest rates linked to Libor.

Deutsche Bank was fined 725 million euros, the biggest single penalty. Societe Generale SA (GLE) was fined 446 million euros and RBS must pay 391 million euros, the EU said in a statement in Brussels. The combined fines for manipulating the yen London interbank offered rate and Euribor are the largest-ever EU cartel penalties.

Joaquin Almunia

Joaquin Almunia

While global fines for rate-rigging reached $6 billion today, the cost to banks may climb as they face more investigations and lawsuits worldwide. EU Competition Commissioner Joaquin Almunia said the penalties won’t be “the end of the story” as regulators continue to probe additional cases linked to Libor and currency trading.

“It is only a question of time until the banks pay more,” said Alex Koagne, an analyst with Natixis SA in Paris who has a buy recommendation on Deutsche Bank. “Everybody wants this to end. Investors want to be able to analyze the underlying performance of the banks’ business while the management teams at the banks want to focus on improving that performance.”

Citigroup Inc. (C) has a 70 million-euro penalty and RP Martin Holdings Ltd. was fined 247,000 euros.

Immunity Applicants

Protesters in Birmingham, Ala. call for cuts to JP Morgan Chase debt, not increases in sewer rates, as part of bankruptcy proceedings for Montgomery County, ALA. The Plan of Adjustment involves both a 75 percent cut in Chase's debt as well as increased sewer rates.

Protesters in Birmingham, Ala. call for cuts to JP Morgan Chase debt, not increases in sewer rates, as part of bankruptcy proceedings for Montgomery County, ALA. The Plan of Adjustment involves both a 75 percent cut in Chase’s debt as well as increased sewer rates.

Zurich-based UBS AG and London-based Barclays Plc (BARC) weren’t fined because they were the first to inform the EU of the cartels. UBS avoided a potential 2.5 billion-euro fine and Barclays escaped a 690 million-euro penalty. Citigroup also avoided an extra 55 million-euro fine for blowing the whistle on one part of the cartel, the commission said. An EU accord includes a finding of liability that can be used in civil cases.

JPMorgan Chase & Co. (JPM), London-based HSBC Holdings Plc and Credit Agricole SA pulled out of the Euribor settlement and ICAP Plc withdrew from the Libor negotiations. All four companies continue to face an antitrust investigation, the EU said.

“JPMorgan Chase has cooperated fully with the European Commission throughout its investigation and does not believe that the firm engaged in wrongdoing with respect to the Euribor benchmark,” the New York-based bank said in a statement.

Yen Libor

Tom Hayes, Chase trader tied to LIBOR yen rate-rigging in Tokyo,

Tom Hayes, Chase trader tied to LIBOR yen rate-rigging in Tokyo,

JPMorgan will separately pay 80 million euros to settle the yen Libor case “regarding the conduct of two former traders during a one-month period in early 2007,” it said. The settlement doesn’t determine whether the bank’s management knew of or was involved in the rate fixing or whether the traders’ actions had any impact on JPMorgan’s Libor submissions or the published rate.

Deutsche Bank, based in Frankfurt, said the fine “reflects, in particular, the high market share held by Deutsche Bank in the markets investigated.” The levy will be covered by the bank’s existing provisions, it said. It set aside an extra 1.2 billion euros in October to cover legal costs, later increasing its reserves to 4.1 billion euros.

“The settlement relates to past practices of individuals which were in gross violation of Deutsche Bank’s values and beliefs,” Juergen Fitschen and Anshu Jain, co-chief executive officers, said in an e-mailed statement.

Deutsche Bank’s fine is still topped by the EU’s highest-ever cartel penalty for a single company when Cie. de Saint Gobain SA was ordered to pay 880 million euros for plotting with rivals to fix the price of windows sold to car manufacturers.

Previous Record

Protester smashes windown at RBS branch in London during mass uprising against austerity measures there.

Protester smashes windown at RBS branch in London during mass uprising against austerity measures there.

The combined fines set a record, exceeding 1.47 billion euros levied last year on Royal Philips Electronics NV and nine others for a TV parts cartel.

RBS, which paid $612 million in a settlement with U.S. and U.K. regulators, said today’s fines “are covered by provisions already made” and management has strengthened oversight of how the bank submits information to Libor and other trading rates.

Citigroup is “pleased to resolve this matter with the European Commission and to put this investigation behind us,” the New York-based bank said in an e-mailed statement. Andrew Honnor, a spokesman for RP Martin, declined to comment.

ICAP and Societe Generale didn’t immediately respond to calls for comment.

LIBOR crime sceneLibor probes could cost global investment banks $46 billion and investigations into manipulating currencies could trigger another $26 billion, said analysts at KBW, a unit of Stifel Financial Corp., in a report last month. Libor manipulation has also resulted in civil suits, including a U.S. lawsuit by Fannie Mae, the U.S. government-owned mortgage-financing company, alleging that nine banks’ rigging cost it about $800 million.

The London interbank offered rate, or Libor, is calculated by a poll carried out daily on behalf of the British Bankers’ Association that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies. The top and bottom quartiles of quotes are excluded, and those left are averaged and published for individual currencies before noon in London.


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DETROIT BANKRUPTCY ELIGIBILITY DECISION UNPRECEDENTED: ‘WORST IN THE COUNTRY’

Detroit Residents Say No To Bankruptcy! Federal Judge Rhodes Say Yes! – – A No Struggle, No Development Production!  Published Dec. 3, 2o13

Kenneth Snodgrass, Voice of Detroit videojournalist

Kenneth Snodgrass, Voice of Detroit videojournalist

By Kenny Snodgrass, Activist, Photographer, Videographer, Author of

1} From Victimization To Empowerment… www.trafford.com/07-0913  eBook available at www.ebookstore.sony.com

2} The World As I’ve Seen It! My Greatest Experience! {Photo Book}

YouTube: I have over 486 Video’s, 343 Subscribers, over 219,000 hits, now averaging 10,000 monthly on my YouTube channel @   www.YouTube.com/KennySnod  

 

Protesters rally outside federal courthouse Oct. 23, 2013 at start of eligibility trial (AP Photo/Paul Sancya)

Protesters rally outside federal courthouse Oct. 23, 2013 at start of eligibility trial (AP Photo/Paul Sancya)

Judge Rhodes hits pension rights, declares EM law PA 436 constitutional

Retirees, residents, workers stunned; cities across U.S. in danger

Pension systems, unions request immediate appeal to 6th Circuit Court

Detroit Debt Moratorium calls for mobilization in the streets

December 7, 2013

Analysis

 By Diane Bukowski 

U.S. Bankruptcy Judge Steven Rhodes at Oct. 10, 2012 forum on Chapter 9 bankruptcy and EM's, dominated by pro-EM speakers including Charles Moore of Conway McKenzie, chief witness at eligibility trial.

U.S. Bankruptcy Judge Steven Rhodes at Oct. 10, 2012 forum on Chapter 9 bankruptcy and EM’s, dominated by pro-EM speakers including Charles Moore of Conway McKenzie, chief witness at eligibility trial. Rhodes refused to recuse himself despite clear conflict of interest.

DETROIT – Detroiters reacted with horror and outrage to U.S. Bankruptcy Court Judge Steven W. Rhodes’ ruling on the city’s eligibility for Chapter 9 bankruptcy, handed down orally Dec. 3 and in writing Dec. 5. In his opinion, Rhodes for the first time nationally threw a dagger directly into the heart of state-protected workers’ pension rights. 

He also upheld the constitutionality of Public Act 436, the state’s hated “emergency manager” (EM) law, arrogating to himself what objectors have said belongs in the realm of U.S. District and other higher level courts. 

His ruling was so severe that even the city’s mainstream newspaper, The Detroit Free Press, published an editorial, “Snyder Must Uphold State Constitutional Protection of Pensions.” 

1961–1962 Constitutional Convention—The Michigan Constitution we live under today was written at the Lansing Civic Arena. The Michigan Legal Milestone plaque was first dedicated in 1989, at the Arena at the corner of Walnut and Washtenaw streets.
The 1963 Michigan Constitution was written at the Lansing Civic Arena. This Michigan Legal Milestone plaque was first dedicated in 1989.

“The City of Detroit made promises to its workers, promises it can no longer keep,” wrote the Freep’s editorial board. “And in 1963, the residents of Michigan chose to approve a constitution that protected pensions. Gov. Rick Snyder took an oath to uphold that constitution. And now he must. That’s the thing about oaths. You have to keep them, even when it’s difficult, or inconvenient. Or not politically expedient.” http://www.freep.com/apps/pbcs.dll/article?AID=2013312050030

The Freep even called on Snyder to “pick up the tab for the pension debt” if Michigan Attorney General Bill Schuette fails in his appeal of the ruling. 

RHODES: ‘FOREGONE CONCLUSION’

The ruling was the direct outcome of a years-long conspiracy among the banks holding Detroit’s debt, the U.S. government, Michigan Gov. Rick Snyder, and Detroit EM Kevyn Orr, with Judge Rhodes himself a key plotter. 

Banks UBS AG and Siebert Brandford and Shank, with help of (l to r) former Detrot CFO Sean Werdlow, Joe O'Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor's, and former Deputy Mayor Anthony Adams foist disastrous $1.44 billion POC loan on City Council Jan. 31, 2005. Werdlow then joined Siebert as top manager in Novf. 2005. Cancel the criminal debt!

Banks UBS AG and Siebert Brandford and Shank, with help of (l to r) former Detrot CFO Sean Werdlow, Joe O’Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor’s, and former Deputy Mayor Anthony Adams foist disastrous $1.44 billion POC loan on City Council Jan. 31, 2005. Werdlow then joined Siebert as top manager in Nov. 2005. The debt later ballooned to $2.28 billion after 2008 global economic crash. Cancel the criminal debt!

“Was the city’s bankruptcy filing a foregone conclusion?” Rhodes asked during his oral summary. “Yes it was, for a long period of time. . . .The Court must conclude that the bankruptcy filing by the City of Detroit was a foregone conclusion during all of 2013.” (See article below with key elements from Rhodes’ decision and related factors he failed to cite.) 

In his opinion, Rhodes overruled an objection requesting an investigation of apparent blatant criminal fraud by global banks involving the city’s $2.28 billion Pension Obligation Certificates (POC or COPS) debt. He earlier refused to recuse himself for chairing an Oct. 2012 forum on Chapter 9 and Emergency Managers. All but one of the forum’s six speakers were active supporters of the state’s EM laws. They included accountant Charles Moore of Conway McKenzie, a chief witness for Orr during the trial. No one from Detroit’s pension systems, unions, or community-at-large spoke.

Forum on Ch 9 and EM's Oct. 10, 2012:  Frederick Headen of state treasury, participant in dozens of takeovers; Atty. Edward Plawecki, Judge Rhodes, Attys. Douglas Bernstein and Judy ONeill, both EM trainers, with O'Neill a co-author of PA 4, Accountant Charles Moore of Conway McKenzie, a chief witness for Orr at the eligibility trial who admitted that his claim of $3.5 billion pension  underfunding was never finalized.

Forum on Ch 9 and EM’s Oct. 10, 2012: Frederick Headen of state treasury, participant in dozens of takeovers; Atty. Edward Plawecki, Judge Rhodes, Attys. Douglas Bernstein and Judy ONeill, both EM trainers, with O’Neill a co-author of PA 4, Accountant Charles Moore of Conway McKenzie, a chief witness for Orr at the eligibility trial who admitted that his claim of $3.5 billion pension underfunding was never finalized.

“This is the worst decision in the country,” said Attorney Jerome Goldberg, who represents city water department retiree and objector David Sole, a leader of the Detroit Debt Moratorium Coalition. 

Atty. Jerome Goldberg

Atty. Jerome Goldberg

“It gives the green light for municipalities all over the U.S. to take similar actions,” Goldberg explained. “Judge Rhodes bought the arguments of Jones Day attorneys [hired under state control to represent the city] lock, stock and barrel. He made no mention of the global banks’ role in the destruction of Detroit. He summed up the malevolent character of his decision at its end, where he said that retirees, who have worked all their lives for their pensions, should now look to charitable institutions and social services to survive.” 

The cities of Stockton and San Bernadino CA, which have so far preserved California Public Employees Retirement Systems (CalPERS) pensions in their plans of adjustment due to state constitutional protections similar to those of Michigan’s, may now re-consider. The judges in those cases did not make a ruling on pension rights in their eligibility decisions, leaving that to be worked out in the plan of adjustment. 

Protester outside Detroit Mayor Dave Bing's State of the City address. Bing tried three years ago to take over the city's pension funds.

Protester outside Detroit Mayor Dave Bing’s State of the City address. Bing tried three years ago to take over the city’s pension funds.

“Even though Stockton left its CalPERS payments untouched and made debt-restructuring deals with most of its other creditors in October, the city still hasn’t reached agreement with one major lender, Franklin Templeton,” the Sacramento Bee reported. “The Detroit decision could give the Franklin firm an opening to demand that Stockton officials treat CalPERS like every other creditor . . .” 

For a plan of adjustment to be approved under bankruptcy, the majority of creditors must agree, or the bankruptcy judge can exercise the so-called “cram-down” provisions of  Chapter 9 to force a resolution. 

Goldberg, who told VOD earlier that he thought Rhodes would not rule on the pension issue until the “plan of adjustment” phase of the bankruptcy proceedings, said it is clear that the battle for retirees and for the city of Detroit itself will have to be fought in the streets. 

“The rights of working and poor people have never been determined in the courts,” Goldberg added. “The struggle isn’t over. It’s time for mass mobilization.” 

Darrell Freeman is Captain of Engine 59 (Active) of the Detroit Fire Department and President of the Phoenix, which represents Black city firefighters. He is 49 and has been a firefighter for 29 years. 

Detroit firefighters protest outside court during bankruptcy hearings. AP ohoto

Detroit firefighters protest outside court during bankruptcy hearings. AP ohoto

“We pretty much knew that the bankruptcy was going to happen,” Freeman said. “But we weren’t expecting the Judge’s ruling on our pensions or his statement upholding the Emergency Manager Act. Nobody is looking at how firefighters have given their lives for the city. I have put in 29 years and still to this day we are keeping our part of the bargain by doing our job, even though health care benefits have been eliminated for anyone who retires before the age of 55. We don’t get Social Security when we retire—what about our future, our families, our kids? It seems like no one cares about us.  Hopefully the U.S. Supreme Court will see things differently.” 

The Emergency Medical Services unit of the Fire Department includes Emergency Medical Technicians (EMT’s) and Paramedics. 

Chokwe Lumumba (l), famed Detroit revolutionary activist, now Mayor of Birmingham, Ala, with Cornell Squires (r) at court hearing.

Chokwe Lumumba (l), famed Detroit revolutionary activist, now Mayor of Birmingham, Ala, with Cornell Squires (r) at court hearing.

Cornell Squires began working there in 1981 as an EMT. He was forced to take a leave due severe stress in 1993, in part related to retaliation for reporting inadequate EMS trucks and equipment. He is still fighting for his vested pension, after being denied duty disability retirement three times and then denied non-duty disability. 

“EMS technicians and paramedics suffer more injuries and heart attacks from stress than any other classification I know of,” Squires said. “Many die before they are even eligible to retire. I myself know more than ten who have died before retirement, including Kenny Parker, who hired on with me.” 

Parker was a union steward with the International Union of Operating Engineers Local 547 and a co-founder of the Coalition to Stop Privatization and Save Our City in the 1990’s. Another co-founder of that Coalition, Al Phillips, President of AFSCME Local 457 (Detroit Health Department) died of a heart attack at the age of 57 in 1994 while fighting privatization there.


REACTION OF AFSCME ATTORNEY SHARON LEVINE  TO RHODES RULING

A Detroit WXYZ TV report in August featured William Hardman, who suffered a heart attack taking a heart attack patient to the hospital, and survived only because he himself was at the hospital. EMS worker Lee Hardy testified on behalf of the prosecution at the trial of police officers Walter Budzyn and Larry Nevers after they beat Black Detroiter Malice Green to death in 1992. He was constantly harassed by police afterwards and eventually left the job as well. 

Detroit casino workers are worried about their jobs since retirees make up a large portion of casino customers.

Detroit casino workers are worried about their jobs since retirees make up a large portion of casino customers.

“Others have had heart attacks in their 40’s,” Squires, himself a heart attack victim since he left the job, said. “Two workers I know had to have their knees replaced. Getting more trucks is all well and good, but after all these years saving people’s lives, who’s going to save our lives?” 

Casino workers discussing the ruling as they waited in line at a downtown credit union expressed concern for their jobs as well, saying retirees from the city and elsewhere spend a large amount at Detroit’s three casinos. Other residents pointed out that a loss of pension benefits to those living in the city will result in an increase in home foreclosures, evictions, poverty and crime. A state Secretary of State worker said workers there are fearful as well. 

Attorneys for AFSCME, which represents the majority of city workers, and the pension funds, among others, have filed motions for leave to appeal the eligibility ruling directly to the Sixth Circuit Court of Appeals, arguing that a speedy appeals process would benefit both sides. 

Protest at start of eligibility trial Oct. 23, 2013.

Protest at start of eligibility trial Oct. 23, 2013.

“The Court held that the City of Detroit is eligible to be a Chapter 9 debtor and can seek to discharge accrued pension benefits in a plan of adjustment,” wrote Attorney Robert Gordon of Clark Hill on behalf of the retirement systems. 

Robert Gordon of Clark Hill, attorney for retirement systems

Robert Gordon of Clark Hill, attorney for retirement systems

 “The Court’s eligibility ruling is exceptionally important and warrants certification for a direct appeal to the Sixth Circuit. . . Swift resolution of whether the City may proceed in Chapter 9 bankruptcy is of paramount importance to the City, the State, the public, and those municipal employees and retirees whose livelihoods depend on the accrued pension benefits that they earned and that the City seeks to discharge in bankruptcy.” 

Judge Rhodes has not yet ruled on whether he will authorize certification to the Sixth Circuit Court.

The path to Detroit’s bankruptcy began years before, with a report on the coming necessity for municipal Chapter 9 filings written by Jones Day partners in 2010. (Click on Jones Day white paper on Chapter 9.) Following is a broad timeline showing the introduction and role of its key planners.

Note that Detroit’s Chapter 9 filing would not have been possible without the intervention of an Emergency Manager, which is why Jones Day worked with Miller Buckfire and the state as early as March, 2012 to ensure the passage of PA 436 in the event PA 4 was defeated in the Nov. 2012 referendum, as it indeed was. Emails showed that Jones Day raised the idea of including an appropriations clause to ensure that PA 436 would be referendum-proof.

Other cities and entities which have filed, including Stockton, CA and Montgomery County, ALA, have so far left pensions intact. In Stockton, some corporate creditors have taken up to 50 percent cuts in debt payments; in Montgomery County, which earlier sued Chase Bank over fraudulent loans to its water system, Chase was forced to forego payment of 75 percent of its debt.

Bankruptcy chart

RHODES’ DETROIT BANKRUPTCY RULING: KEY ELEMENTS V. REALITY

By Diane Bukowski

December 7, 2013

(Click on DB eligibility ruling 12 5 13 to read 150-page written opinion.)

DETROIT’S ECONOMIC DECLINE

Protest demanding that the banks and corporations pay for city services, cancellation of debt May 9, 2012 in downtown Detroit.

Protest demanding that the banks and corporations pay for city services, cancellation of debt May 9, 2012 in downtown Detroit.

RHODES: Population 1.85 million in 1952, building half the world’s cars. Since then, dwindling population, employment, revenues, decaying infrastructure, excessive borrowing, mounting crime rates, spreading blight. No basic police, fire EMS services; government wasteful and inefficient.

REALITY: The auto companies’ abandonment of the city; privatization of public services and profiteering by contractors; state destruction of school system; state revenue sharing slashed; corporate tax bills not paid estimated at over $800 million; corporate tax abatements. Role of banks: massive predatory lending and illegal foreclosures destroying neighborhoods; predatory lending to city itself accompanied by Wall Street ratings agencies’ debt downgrades, which have allowed banks to charge progressively higher interest rates on money city borrow.

Wallace Turbeville, Senior Fellow at Demos
Wallace Turbeville, Senior Fellow at Demos

 

WALLACE TURBEVILLE, SENIOR FELLOW AT DEMOS IN NOV. REPORT:The City of Detroit’s bankruptcy was driven by a severe decline in revenues (and, importantly, not an increase in obligations to fund pensions). Depopulation and long-term unemployment caused Detroit’s property and income tax revenues to plummet. The state of Michigan exacerbated the problems by slashing revenue it shared with the city. . . . In addition, Wall Street sold risky derivatives financial deals to the city, which now threaten the resolution of this crisis.” (Turbeville is to testify at Dec. 17 trial on Barclay’s loan, at the invitation of objector David Sole and his attorney Jerome Goldberg. See Demos report at Demos Detroit bankruptcy report.)

THE CITY’S DEBT

RHODES: City claims $18 billion debt: $3.5 billion in unfunded pension obligations; $5.7 billion retiree health benefits; $1.43 billion “for certificates of participation (COPS) related to pensions;” $346.6 million for swaps related to COPS; $651 million general obligation bonds; $300 million in worker-related expenses and lawsuits.

Objectors say much lower pension underfunding amount [under $100 million] No proof submitted. Unnecessary to resolve pension issues because any figure in range plus other liabilities would make city eligible for Ch. 9. . . .

Morningstar, independent  investment research firm, says Detroit retirement systems are 91.4 percent funded, second highest level in country.

Morningstar, independent investment research firm, says Detroit retirement systems are 91.4 percent funded, second highest level in country.

RHODES ON COPs (PENSION OBLIGATION CERTIFICATES) DEBT
. . . . the City estimates that as of June 30, 2013, the following amounts were outstanding: $480,300,000 in outstanding principal amount of $640,000,000 Certificates of
Participation Series 2005 A maturing June 15, 2013 through 2025; and
$948,540,000 in outstanding principal amount of $948,540,000 Certificates of
Participation Series 2006 A and B maturing June 15, 2019 through 2035. (Rhodes left out interest amount owed, which brings POC debt to $2.28 billion.)

REALITY:

Former State Treasurer Andy Dillon, who helped engineer takeover of Detroit, testified that he has no final figures to counter retirement systems' actuarial reports.

Former State Treasurer Andy Dillon, who helped engineer takeover of Detroit, testified that he has no final figures to counter retirement systems’ actuarial reports.

Charles Moore of Conway McKenzie, chair of the shadowy “Pension Task Force,” and former State Treasurer Andy Dillon testified there has been no final determination by anyone other than the pension plans’ actuaries Gabriel, Roeder and Smith (GRS), including outside consultant Milliman, Inc., of any amount of pension underfunding. Proof WAS submitted: GRS 2012 reports are part of trial record. Additionally, the 2013 report released by independent investment research analyst Morningstar finds that Detroit pension plans are 91.4 percent funded overall, with $643.75 million Unfunded Acrued Actuarial Liabilities (UAAL). Of twenty top cities, Detroit has the second highest level of funding, exceeded only by Washington, D.C. (Click on Morningstar cities pension 1311 for full report; see page 11 for Detroit figures.)

2005-06 COPS, with interest now figuring in at $2.28 billion since 2008 global economic crash, are NOT tied to pensions;  retirement systems were not underfunded at the time, Wall Street simply tricked the city into making a risky bet for its own profit by borrowing 30 years of pension obligations at one fell swoop, at a fixed lower-than-market interest rate. During the 2008 crash, however, rates crashed far below that figure, and the city lost the bet.

Joe O'Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor's finagle the City Council into approving pension obligation certificates loan in 2005.

Joe O’Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor’s finagle the City Council into approving pension obligation certificates loan in 2005.

Loans of questionable legality were not set up by pension systems, but secured by separate “Service Corporations” set up for that purpose. They were vehemently opposed by pension boards, unions, retirees. Even Kevyn Orr in his “Report to Creditors of June 14, 2013” says ‘The City has identified certain issues related to the validity and/or enforceability of the COPS that may warrant further investigation.”

Lenders were UBS AG, global bank facing billions in fines and criminal charges for interest-rate rigging, and Siebert, Brandford & Shank. Detroit CFO Sean Werdlow, point man in the deal made in Feb. 2005, hired by Siebert in Nov. 2005, still there. In a highly unusual move deserving of legal scrutiny, Wall Street ratings agencies Fitch Ratings and Standard and Poor’s abetted Werdlow at the Council. VOD editor Diane Bukowski filed an objection calling for a criminal investigation. Rhodes did not respond to this objection in his opinion. In a footnote, he said, “Nevertheless, the Court is satisfied that this opinion does address every argument that is worthy of serious consideration. To the extent an argument is not addressed in this opinion, it is overruled.”

Debt amount invalidly includes DWSD: Rhodes additionally does not address objectors’ contention that $5.7 billion of the debt as cited by the city belongs to the Detroit Water & Sewerage Department, an enterprise agency. It is revenue-backed and does not constitute a debt of the city.

TURBEVILLE: Turbeville says that the main issue in Detroit’s eligibility for bankruptcy is not the purported $18 billion in debt, a figure he considers inflated, but simply a $198 million cash flow shortfall.

Interest rate "drop" resulted from global predatory lending meltdown of 2008. Chase just paid $13 BILLION to the USDOJ, admitting its guilt in the catastrophe. The banks owe Detroit far more.

Interest rate “drop” resulted from global predatory lending meltdown of 2008. Chase just paid $13 BILLION to the USDOJ, admitting its guilt in the catastrophe. The banks owe Detroit far more.

RHODES ON SWAPS: Some of the COPs paid a floating interest rate. To protect the Service Corporations from the risk of increasing interest rates, they entered into hedge arrangements with UBS A.G. and SBS Financial [Siebert, Brandford and Shank] converting the floating interest rates into a fixed payment up to a certain amount. . . .In the event of a default by the City, the Swap Counterparties could demand a potentially enormous termination payment. In 2008, interest rates dropped dramatically. As a result, the City lost on the swaps bet. Actually, it lost catastrophically . . . . The bet could cost the City hundreds of millions of dollars. The City estimates that the damage will be approximately $45,000,000 per year for the next ten years.

REALITY: The 2008 drop in interest rates was a direct result of the global economic meltdown which began with the collapse of Lehman Brothers and was directly due to long-time predatory mortgage lending by banks in the U.S. and globally. Ernst & Young (E&Y) the accounting firm which handled Lehman Brothers’ books, faces lawsuits by the states of New York and New Jersey over their losses in the crash. However, E & Y was retained by the city of Detroit in 2011, when it met in secret session with the City Council and ended up declaring the city would run out of cash by the end of that fiscal year. Gustav Mulhatra of E & Y was a chief witness at the eligibility trial. Rhodes admitted his testimony on the city’s economic state and that of Charles Moore of Conway McKenzie and Kenneth Miller of Miller Buckfire, all city consultants. Rhodes admitted they did not qualify as “expert” witnesses.

BANKS INCLUDING BARCLAY'S AND UBS AG RAKED IN ILLEGAL PROFITS BY INTEREST-RATE RIGGING INVOLVING $800 TRILLION IN LOANS AND SECURITIES.

BANKS INCLUDING BARCLAY’S AND UBS AG RAKED IN ILLEGAL PROFITS BY INTEREST-RATE RIGGING INVOLVING $800 TRILLION IN LOANS AND SECURITIES.

Trial on Orr’s proposal to borrow $3.46 million in “post-petition financing” from UK-based Barclay’s to pay off the swaps, committing 20 percent of Detroit’s revenues from income and casino taxes for the next ten years, is set for Dec. 17, 2013. Barclay’s is one of the chief perpetrators in the global LIBOR scandal, involving interest-rate rigging by the banks sitting on the London-Interbank Offered Rate board since at least 1991. (See story to come.)

RHODES:

Rhodes declares himself judge over all, including higher state and federal courts.

Rhodes declares himself judge over all, including higher state and federal courts.

• THE BANKRUPTCY COURT HAS THE AUTHORITY TO DETERMINE THE CONSTITUTIONALITY OF CHAPTER 9 OF THE BANKRUPTCY CODE AND PUBLIC ACT 436;
• CHAPTER 9 DOES NOT VIOLATE THE U.S. CONSTITUTION
• PUBLIC ACT 436 DOES NOT VIOLATE THE MICHIGAN CONSTITUTION

Several objecting parties challenge the constitutionality of chapter 9 of the bankruptcy
code under the United States Constitution. Citing the Supreme Court’s decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), these parties also assert that this Court does not have the authority to determine the constitutionality of chapter 9.

Several objecting parties also challenge the constitutionality of P.A. 436 under the
Michigan Constitution. Some of these parties also assert that this Court does not have the authority to determine the constitutionality of P.A. 436.

The Official Committee of Retirees filed a motion to withdraw the reference on the
grounds that this Court does not have the authority to determine the constitutionality of chapter 9 or P.A. 436. It also filed a motion for stay of the eligibility proceedings pending the district court’s resolution of that motion. In this Court’s denial of the stay motion, it concluded that the Committee was unlikely to succeed on its arguments regarding this Court’s lack of authority under Stern. In re City of Detroit, Mich., 498 B.R. 776, 781-87 (Bankr. E.D. Mich. 2013).

REALITY

Gail Wilson (second from left), a member of the Retirees Committee, with son Leamon E. Wilson, leave funeral of their husband and father, longtime militant  AFSCME Local 312 president Leamon Wilson.

Gail Wilson (second from left), a member of the Retirees Committee, with son Leamon E. Wilson, leave funeral of their husband and father, longtime militant AFSCME Local 312 president Leamon Wilson.

EM Kevyn Orr requested the establishment of the Official Committee of Retirees, despite the existence of the city’s elected pension boards and unions which represent the retirees. However, the committee as represented by Dentons LLP and other law firms turned around and adamantly opposed Rhodes’ right as a l0wer-level bankruptcy judge to decide the matters cited above. It did not challenge the constitutionality of the Chapter 9 bankruptcy code as such. It said “. . . if Chapter 9 is as broad as the Emergency Manager [Kevyn Orr] contends, then Chapter 9 is unconstitutional and the City cannot be a debtor in Chapter 9.” In his opinion, Rhodes several times sets out his presumptions as to how the Michigan State Supreme Court and higher level federal courts would rule on the constitutional questions, while holding city retirees and residents captive in his lower level court.

Two federal lawsuits pending in front of U.S. District Judge George Caram Steeh, filed by Phillips et al (parties from across the state) and the NAACP were stayed by Rhodes’ order. He then granted the Phillips motion for relief from stay if they excluded Detroit since it was in bankruptcy court; the plaintiffs did so, indicating that once arguments on PA 436 were fully played out in Steeh’s court, a separate motion could be filed in Rhodes court regarding Detroit’s situation. Snyder et al appealed even that decision, saying that no lawsuit against Gov. Snyder or other state officials should be brought on behalf of ANY residents of Michigan as long as the Detroit bankruptcy case is pending. 

THE TENTH AMENDMENT CHALLENGES TO CHAPTER 9 ARE RIPE FOR DECISION AND THE OBJECTING PARTIES HAVE STANDING

Tenth AmendmentRHODES:  The United States argues that the creditors who assert that chapter 9 violates the Tenth Amendment as applied in this case lack standing and that this challenge is not ripe for adjudication at this stage in the case. 19 The Court concludes that the objecting parties do have standing and that their challenge is now ripe for determination.

REALITY: Rhodes invited the U.S.  in to testify about the constitutionality of Chapter 9, which was never contested as a whole by the objectors. Here he overrides their opinion that the issue of the right to public pensions under state law, which the Tenth Amendment to the Constitution in turn protects, is not ripe until a move has actually been made to cut pensions. Setting himself above even the federal government itself, Rhodes was clearly anxious to make a name for himself by being the first Chapter 9 bankruptcy judge to declare pensions fair game during the eligibility phase.


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AS DETROIT BANKRUPTCY DECISION LOOMS TOMORROW, STILL NO CRIMINAL INVESTIGATION OF CITY’s $2.8 BILLION POC DEBT

Likely partners in crime: (l to r) former Detroit CFO Sean Werdlow, Bill Doherty of SBS, Joe O'Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor's, and former Detroit Deputy Mayor Anthony Adams press disastrous POC deal on City Council Jan. 31, 2005.

Likely partners in crime: (l to r) former Detroit CFO Sean Werdlow, Bill Doherty of SBS, Joe O’Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor’s, and former Detroit Deputy Mayor Anthony Adams press disastrous POC deal on City Council Jan. 31, 2005.

Kilpatrick’s CFO Sean Werdlow engineered deal, then hired by lender SBS, recently promoted to SBS COO

EM Orr cited deal as key factor in city’s crisis

Detroit defaulted after 2008 economic crash

Kilpatrick in prison, why not Werdlow, UBS, SBS, Fitch, S&P, others?

THE_GAVEL_WILL_COME_DOWN_ON-page0001-process-s600x776

 December 2, 2013

DETROIT — On the eve of U.S. Bankruptcy Court Judge Steven Rhodes’ decision on Detroit’s eligibility for bankruptcy, there has still been no criminal investigation of a predatory $2.8 billion Pension Obligation Certificate (POC) deal, cited by Emergency Manager Kevyn Orr as a key factor in the city’s alleged debt crisis. 

Under Public Act 436, Michigan’s “emergency manager” (EM) law, Orr is obliged to investigate possible criminal dealings which may have helped cause the crisis. 

Sean Werdlow on cover of Ticker magazine in 2008, prior to the fall of Mayor Kwame Kilpatrick.

Sean Werdlow on cover of Ticker magazine in 2008, prior to the fall of Mayor Kwame Kilpatrick.

The deal’s point man, Sean Werdlow, Detroit’s Chief Financial Officer at the time, spoke at a Wayne State University Law School symposium about the disastrous deal Nov. 21, according to a Detroit Free Press article. He blamed it not on himself, hired by one of the POC lenders after the deal in a clear conflict of interest, but on the pension boards, which vehemently opposed the loan in 2005. 

The loan was not taken out by the pension boards, but by two “non-profit” corporations formed at the time of the loan. The legality of that situation has also been challenged. 

“Werdlow said the 2005 deal was prompted by a ‘rogue’ pension system and that without the deal Detroit city government would have gone bankrupt years ago,” Freep business reporter John Gallagher wrote.  He quoted Werdlow, “We would have been having this discussion in this auditorium back in 2005 but for that transaction.” 

First protest demanding cancellation of Detroit debt to criminal banks May 9, 2012.

First protest demanding cancellation of Detroit debt to criminal banks May 9, 2012.

Gallagher said further, “when. . . . the financial industry collapsed [in 2008] . . . . the city’s debt stemming from the pension deal swelled to $2.8 billion for principal, interest and insurance payments over the next 22 years.” 

SBS just promoted Werdlow to Chief Operating Officer (COO) and Managing Director (“coincidentally,” according to Gallagher), although he has only a bachelor’s degree in corporate finance. Neither he nor the SBS public relations firm Butler and Associates had responded to a request for comment on this story before press time. 

“The current GRS Board has made decisions that have resulted in a top quartile performance for the last several years,” Tina Bassett, spokesperson for the Detroit General Retirement System, said. “In fact, today, Detroit pension funding levels are among the top three cities of the top 25 cities in the USA.” 

Her statement along with the following explanation was sent to Gallagher at his request, but he barely cited it in his article. 

City retirees protest at federal court Aug. 19, 2013.

City retirees protest at federal court Aug. 19, 2013.

“First and foremost, the mandate of the GRS Board of Trustees of the City of Detroit is to best serve the interests of its members and beneficiaries,” Bassett explained. “The benefits provided and authorized by the Board must be consistent with the approved Plan benefit provisions adopted by the City and various unions. The Board of Trustees does not negotiate benefits or have the discretionary authority to grant benefits not authorized by the retirement plan.  Simply, the Board administers the approved Plan benefits. 

“GRS Board members adhere to the Boards’ Trustee Education Policy of achieving and maintaining proficiency for prudent administration of the retirement system and investment of funds through professional educational programs and conferences throughout the year.”  

Former CEO of UBS during POC deal, Sergio Ermatt.

Former CEO of UBS during POC deal, Sergio Ermatt.

Werdlow had said of the boards, “They don’t take orders. They don’t listen to the City Council. They don’t listen to the mayor. They’re completely on their own.” 

VOD, and earlier, the Michigan Citizen, have published dozens of articles regarding blatant and likely criminal conflicts of interest involved in the POC deal. They included Werdlow’s hiring by the loan’s junior partner Siebert Brandford and Shank (SBS) nine months after he and Wall Street representatives got the Detroit City Council to approve the original loan of $1.44 billion in Feb. 2005. 

The chief POC lender was UBS AG, which faces charges globally over fraudulent lending practices on a mammoth scale. Several of its agents from Japan and New York City have been criminally convicted. It has also paid the U.S. Department of Justice a $1.5 billion fine. 

(l to r) Vickie Thomas of WWJ Radio, Diane Bukowski of VOD, and other reporters question Orr after Proposal to Creditors meeting at Airport June 14, 2013..

(l to r) Vickie Thomas of WWJ Radio, Diane Bukowski of VOD, and other reporters question Orr after Proposal to Creditors meeting at Airport June 14, 2013..

VOD has repeatedly questioned Orr about the POC deal at press conferences, and reported it to the U.S. Department of Justice. VOD editor Diane Bukowski gave explicit testimony in writing and verbally before Judge Rhodes as an official eligibility objector. 

This writer was at the City Council, reporting for the Michigan Citizen, during heated discussions on the loan in 2005.  Councilwoman JoAnn Watson asked Stephen Murphy of Standard & Poor’s, “If the transaction is approved but the stock market goes south in the following years, what would that do to the city’s bond rating?” 

Detroit City Councilwoman JoAnn Watson at Moratorium NOW! rally against banks May 4, 2013.

Detroit City Councilwoman JoAnn Watson at Moratorium NOW! rally against banks May 4, 2013.

She cited negative influences on the economy, including competition from automakers in China, and the war in Iraq.

“That would be a significant problem,” Murphy said. He said that for the deal to succeed, the pension boards would have to resist demands for better retiree benefits and distribution of excess profits (the “13th check” city retirees used to receive, which Gallagher cites as a negligent practice of the pension boards in his article). 

“This is a very risky transaction,” then Councilwoman Sharon McPhail, who sat on the Detroit Police and Fire Retirement Board, told Mayor Kilpatrick during a follow-up session Feb. 4, 2005. “Your own people at your economic forum called this one of the seven deadly sins of municipal finance. If the deal doesn’t do what is expected, we could face receivership under the local government Fiscal Responsibility Act. If the stock market does well, that $1.2 billion in unfunded pension liability could go away, but we’d still owe it in bonds.”

Detroit bankruptcy advisor Ernst & Young, bookkeeper for Lehman Brothers, was sued in their collapse for cooking their books. The collapse  triggered the 2008 economic crach

Detroit bankruptcy advisor Ernst & Young, bookkeeper for Lehman Brothers, was sued in their collapse for cooking their books. The collapse triggered the 2008 economic crach

But Werdlow told the WSU audience, “Nobody anticipated you would have a financial meltdown,” referring to the global 2008 economic crash that began with the collapse of Lehman Brothers. (Ernst & Young, the bookkeepers for Lehman Brothers and currently one of EM Orr’s chief advisors on the bankruptcy, was later sued by the states of New York and New Jersey for losses they suffered as a result of the collapse.) 

Murphy and Joe O’Keefe of Fitch Ratings were at the Council table in 2005 at Werdlow’s invitation. Werdlow told the Council regarding the highly unusual practice of ratings agencies advocating for a bank during municipal government proceedings, “It took a lot to get them here.” 

Former Councilwoman Barbara Rose Collins.

Former Councilwoman Barbara Rose Collins.

In fact, then Council President Ken Cockrel, Jr. ordered the Detroit police to roust recalcitrant council members boycotting the vote from their homes. Councilwoman Barbara Rose-Collins came to the table in a wheelchair. 

The Council eventually caved, without a clear explanation from its previous opponents, and agreed to the deal. 

Of hundreds of other debt documents obtained by the Detroit Debt Moratorium Coalition through a Freedom of Information Act request, a large number involve Siebert, Brandford and Shank, leading to the question of the firm’s further involvement in predatory lending to the City of Detroit. The documents are online at http://detroitdebtmoratorium.org/

A 2007 magazine cover from Ticker featured Werdlow, calling him “Mr. Bond.” According to the article, he and SBS partners Suzanne Shank and Napoleon Brandford also formed another company to manage municipal funds in partnership with Ambassador Capital. The new company was known as BSW Partners. 

“We want to make Detroit more of a major financial cen­ter,” Werdlow told the writer, R.J. King. King said Werdlow “chooses his words wisely. Case in point: Mayor Kwame Kil­patrick once dubbed Werdlow the ‘Grim Reaper’ for his abil­ity to deal forthrightly with bad financial news.”

Related articles:

Ex-Detroit official defends 2005 pension deal blamed in city’s downfall http://www.freep.com/apps/pbcs.dll/article?AID=2013311210149

DETROIT POC DEAL STORIES FROM MICHIGAN CITIZEN BY DIANE BUKOWSKI, BANKOLE THOMPSON

http://voiceofdetroit.net/2013/11/05/detroit-bankruptcy-testimony-retirees-get-16-cents-wall-street-gets-billions-assets-stolen/

http://voiceofdetroit.net/2013/10/27/a-thousand-take-streets-to-stop-detroit-bankruptcy-repeat-action-mon-oct-29-12-n-as-snyder-testifies-rhodes-should-recuse-self-led-pro-em-forum/

http://voiceofdetroit.net/2013/10/09/constitutional-civil-human-rights-before-detroit-bankruptcy-groups-say-protest-tues-oct-15-10-am/

http://voiceofdetroit.net/2013/09/23/detroit-retirees-residents-committee-blast-bankruptcy-filing-at-court-hearings/

http://voiceofdetroit.net/2013/09/17/official-retirees-committee-in-detroit-bankruptcy-blasts-em-orr-gov-snyder-asks-for-stay-pending-higher-court-ruling-what-will-judge-rhodes-do-sept-19/

http://voiceofdetroit.net/2013/08/20/detroit-bankruptcy-objections-raise-possible-bank-crimes-related-to-poc-debt-and-casino-tax-deal-hundreds-protest-banks-in-downtown-detroit/

http://voiceofdetroit.net/2013/07/03/sign-petition-to-request-us-doj-fraud-investigation-of-ubs-re-predatory-1-5-billion-detroit-loan/

JUDGE TO RULE ON DETROIT BANKRUPTCY PETITION TUES. DEC. 3, 10 AM

U.S. Bankruptcy Judge Steven W. Rhodes (center with red tie) with participants in Oct. 10, 2012 forum on Chapter 9 and Emergency Managers (l to r) State Treasury official Frederick Headen who has participated in the state takeovers of numerous majority-Black cities and school districts, Edward Plawecki, Douglas Bernstein and Judy O'Neill, who trained EM's, with O'Neill co-authoring Detroit's original EM law  PA 4, and Charles Moore of consultant Conway McKenzie, a major witness for Detroit EM Kevyn Orr during the bankruptcy trial.
U.S. Bankruptcy Judge Steven W. Rhodes (center with red tie) with participants in Oct. 10, 2012 forum on Chapter 9 and Emergency Managers (l to r) State Treasury official Frederick Headen who has participated in the state takeovers of numerous majority-Black cities and school districts, Edward Plawecki, Douglas Bernstein and Judy O’Neill, who trained EM’s, with O’Neill co-authoring Detroit’s original EM law PA 4, and Charles Moore of consultant Conway McKenzie, a major witness for Detroit EM Kevyn Orr during the bankruptcy trial. No representatives of pension systems, retirees, unions, or Detroit residents were on the panel.

 

By Joseph Lichterman

Nov 25, 2013 5:56pm EST

DETROIT (Reuters) – The judge overseeing Detroit’s historic bankruptcy petition set December 3 as the date for issuing his decision on whether the cash-strapped city qualifies as bankrupt under federal law, according to a court filing posted Monday.

U.S. Judge Steven Rhodes will hand down his ruling in federal bankruptcy court in Detroit at 10 a.m. EST on that day. [VOD: time is per updated notice from court.] A written decision will be available shortly afterward, the court filing said.

Rhodes evidently makes a strong point at EM/Ch 9 forum, despite his assertion that he only chaired and did not actively participate in the discussion.

Rhodes evidently makes a strong point at EM/Ch 9 forum, despite his assertion that he only chaired and did not actively participate in the discussion.

No matter how Rhodes rules, it is expected that his decision will be appealed. Rhodes also is considering a request from one of the objectors, the American Federation of State, County and Municipal Employees, Detroit’s largest union, which asked the judge earlier this month to allow any appeal to go directly to the U.S. 6th Circuit Court of Appeals, bypassing the U.S. District Court in Detroit.

Rhodes’ ruling will cap months of anticipation, since Detroit filed its bankruptcy petition on July 18. During a nine-day trial that wrapped up on November 8, Detroit sought to prove that it is bankrupt.

Under Chapter 9 of the federal bankruptcy code, it is Detroit’s burden to prove it is insolvent, it had proper approval to file for bankruptcy and that it negotiated in good faith with creditors or that negotiations were impractical.

City retirees and their supporters protest outside federal court in downtown Detroit during bankruptcy hearing Aug. 19, 2013.

City retirees and their supporters protest outside federal court in downtown Detroit during bankruptcy hearing Aug. 19, 2013.

The city’s unions, public-sector retirees and two pension funds have objected to Detroit’s bankruptcy filing, arguing that Kevyn Orr, Detroit’s state-appointed emergency manager, purposely drove the city into bankruptcy court and did not negotiate with creditors for an out-of-court settlement.

The trial included a rare appearance from a sitting governor on the witness stand as Michigan Governor Rick Snyder, who approved the city’s bankruptcy filing, testified. Orr also testified along with a long line of other government officials, consultants and union leaders.

Mich. Gov. Rick Snyder and Detroit EM Kevyn Orr discuss bankruptcy filing July 19, 2013.

Mich. Gov. Rick Snyder and Detroit EM Kevyn Orr discuss bankruptcy filing July 19, 2013.

City lawyers argued during the eligibility trial that Detroit acted in good faith prior to the bankruptcy filing, but that negotiations were impractical because of the large number of creditors and an unwillingness on the part of union, retiree and pension fund negotiators to make concessions.

Bruce Bennett, one of the city’s lead bankruptcy attorneys, said in his closing arguments earlier this month that the city recognized it would be nearly impossible to negotiate with creditors, but decided to try anyway.

“You absolutely can believe in your head that this is never going to work, but try anyway,” he said. “And I think that is the situation in this case.”

With $18.5 billion in debt and liabilities, Detroit is the largest U.S. city to file for bankruptcy. Its liabilities include $5.7 billion for healthcare and other obligations, and $3.5 billion involving pensions, the city says.

[See report from the national think tank Demos which strongly disputes the figures above and will be cited in tomorrow’s VOD articles at Demos Detroit bankruptcy report.] 

Stockton bankruptcy in California resulted in no cuts to public pensions due to strong state law  like Michigan's. Elected officials there and in other cities have agreed to preserve pensions, unlike the unelected EM Orr.

Stockton bankruptcy in California resulted in no cuts to public pensions due to strong state law like Michigan’s. Elected officials there and in other cities have agreed to preserve pensions, unlike the unelected EM Orr.

The unions, retirees and pension funds have argued that Michigan’s constitution protects city pensions from being cut, but Orr has said pensions are likely to be reduced as part of the city’s restructuring.

Bankruptcy opponents also argued Detroit rushed into court without providing enough time or information to facilitate negotiations between the city’s release of its initial proposal to creditors on June 14 and when it filed for bankruptcy in July.

(Reporting by Karen Pierog; writing by Dan Burns; editing by James Dalgleish and Matthew Lewis

Related Reuters article on Stockton CA bankruptcy results, which protected pensions and exacted 50 percent debt cuts from some corporate creditors, while enacting a regressive sales tax on residents, at http://www.reuters.com/article/2013/11/04/stockton-bankruptcy-idUSL2N0IP1UZ20131104.


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