EM ORR’S DETROIT BANKRUPTCY TESTIMONY: BANKS COULD OWE CITY BILLIONS RELATED TO FRAUDULENT “COPS,” “SWAPS”

Detroit EM Kevyn Orr, Jones Day, global banks conspire to dismantle nation's largest Black majority city while profiting from billions in debt.

Detroit EM Kevyn Orr, Jones Day, global banks dismantle nation’s largest Black majority city while profiting from billions in debt. Clockwise l to r: Rec. Dept., D-DOT, Public Lighting, retirees’ pensions, Water and Sewerage Department, Belle Isle

COPS “A ticking time bomb” 

Orr claims litigation “too lengthy and costly” 

Tries to gloss over evident bribery by UBS AG/SBS of former city CFO Sean Werdlow, Kilpatrick administration 

By Diane Bukowski 

ANALYSIS 

January 12, 2014 

DETROIT – The city could recover over $2.8 billion from the banks involved in the mammoth “Pension Obligation Certificates” (COPS) deal of 2005-06, and more on a related swaps deal, if it pursued litigation challenging what Detroit Emergency Manager Kevyn Orr admitted Jan. 3 were likely unlawful and fraudulent transactions.

Detroit youth demand cancellation of Detroit's debt to the banks.
Detroit youth demand cancellation of Detroit’s debt to the banks.

“They were a ticking time bomb,” Orr testified that day during a special bankruptcy trial hearing. For the first time, he admitted that the $1.44 billion COPS, foisted on the city in 2005-06, with the related swaps totaling $475 million, were likely scams which exposed Detroit to tremendous financial risk. He admitted that the banks and Wall Street ratings agencies pushing them were duty-bound to explain their risks to city officials, but said they did not do so. The COPS, with related interest and other fees, now amount to at least $2.8 billion.

At the trial, which is set to wrap up tomorrow, U.S. Bankruptcy Judge Steven W. Rhodes is considering whether to approve a modified proposal to borrow $165 million from Barclays, a UK-based bank, to pay Swiss-based UBS AG and the Bank of America to terminate only the swaps at a discounted rate, ignoring the COPS.

All the banks involved have been charged in global venues with criminal and civil transgressions related to the LIBOR and ISDAfix rates, predatory lending, and other mammoth white-collar scams.

"Jones Day is not the City of Detroit" -- Rev. Bill Wylie-Kellerman

“Jones Day is not the City of Detroit” — Rev. Bill Wylie-Kellerman; part of Jones Day Detroit bankruptcy team.

Orr said Jones Day, as the city’s attorneys under Public Act 436, along with the city’s PA 436 investment banker Miller Buckfire, drafted possible litigation against the banks involved, which was shown to the mediators, to get the banks to back down slightly on their demands for termination payments. He also claimed that he spoke with the Securities and Exchange Commission about a possible criminal investigation of the deal, with unknown results.

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

Orr testified regarding the possible outcomes of litigation against the COPS and swaps.

“The upsides were as great as invalidating the entire transaction, recovering all payments made over the years, even recovering damages, invalidating the swaps,” he said. “It perhaps would have allowed the city to recover the millions or hundreds of millions of dollars it had paid over the years. The downside was that if we did not prevail, the swap contract would have been validated, the city would have had [to pay] hundreds of millions to the swap counterparties, and incur out of pocket litigation expense, also possibly that of the counterparties.”

VOD has questioned Orr repeatedly about the COPS transactions since the day of his appointment.  VOD editor Diane Bukowski, who has covered the COPS deal since Jan. 2005 beginning at the City Council table, filed an amended objection on the COPS with Rhodes. Rhodes later expressly threw it out by refusing to address it.

(L to r) Jounalists Vickie Thomas of WWJ and Diane Bukowski of Voice of Detroit question Kevyn Orr after meeting with creditors June 14, 2013.
(L to r) Jounalists Vickie Thomas of WWJ and Diane Bukowski of Voice of Detroit question Kevyn Orr after meeting with creditors June 14, 2013.

Rhodes and Orr appear to be conspiring to bury the COPS question in a rush to carry out plans by the Jones Day law firm to use Chapter 9 to savage public pensions and city assets. Orr said litigation on the COPS and swaps would be “too lengthy” and costly, ignoring the huge sums already spent on Jones Day and other city “consultants.”  He said success was debatable because city officials and attorneys had approved the deals after extensive legal analyses, debate, and passage of city ordinances. He also contended that the city initially profited from the deals, prior to the global economic crash of 2008.

Orr did not explain what “legal analysis” allowed Detroit’s former Chief Financial Officer Sean Werdlow to take a top level management job with Siebert, Brandford and Shank (SBS), UBS’ partner in the COPS deal, nine months after Council approved the deal in 2005. Werdlow was in that position in 2006 when the deal was re-negotiated to cover 30 instead of 14 years, and is now COO of SBS.

Former Detroit CFO Sean Werdlow and former Mayor Kwame Kilpatrick accept Bond Buyer award for POC deal.
Former Detroit CFO Sean Werdlow and former Mayor Kwame Kilpatrick accept Bond Buyer award for POC deal.

U.S. Bankruptcy Court Judge Steven W. Rhodes’ head popped up as Orr attempted to gloss over the CFO issue, failing to name Werdlow. Rhodes demanded his name. It will be enlightening to see how Rhodes rules after eliciting this apparently undisputable evidence of bribery of a city official. Such bribery similarly led to a 75 percent cut in Montgomery County, Alabama’s debt payments to JPMorgan Chase on water department bonds in that government’s bankruptcy case.

“There were theories that both the underlying COPS and swaps were void ab initio for different periods, fraudulently produced,” Orr testified. “It was my understanding that the city did not have the authority to enter into the underlying COPS of 2005-06 because state law prohibited further indebtedness. . . .[and that the casino] revenue stream was an improper way to pay the swaps.”

2008 global economic crash.
2008 global economic crash.

Detroit defaulted on the COPS and swaps after the global economic crash of 2008, caused primarily by predatory and fraudulent mortgage loans. It faced a termination event that would have cost $400 million, so then Detroit Mayor Kenneth Cockrel, Jr. and Auditor General Joe Harris cut a deal with Wall Street. They agreed to turn over the city’s casino revenues to a trustee, the U.S. Bank of North America, which has been paid a fee to set aside $4 million a month to ensure payment of the debt. It is that deal which is being challenged during this portion of the bankruptcy trial.

Void ab initio“The Revised Municipal Finance Act 34 of 2001 was violated because the city [used] an end run around that law by interposing service corporations and service contracts [to effectuate the POC loan],” Orr said. “My understanding was that that under Act 34, the city had reached its debt limit. It could not do [more] borrowing, so it created a structure whereby the service corporations were put between city and borrowers. The issue was whether the service corporations were independent, whether they insulated the city from Act 34—or whether they were an instrumentality of the city. If they were not acting legitimately, the city was the borrower. Therefore the whole structure fell. The underlying COPS were of no effect, void ab initio.”

Orr contended on the other hand that such service corporations have been used by other cities and that they were approved by the city’s legal analysts and the City Council.

Wallace Turbeville, senior analyst at Demos, who Judge Rhodes barred from testifying at the trial, raised the service corporation issue in a special report on the Detroit bankruptcy in November, 2013. Turbeville also noted that the POC’s were used as a substitute for voter-approved bonds, constituting an end run around the right of the city’s residents to decide its level of indebtedness.

Wallace Turbeville, author of Demos report on Detroit bankruptcy.
Wallace Turbeville, author of Demos report on Detroit bankruptcy.

Rhodes said he barred Turbeville, a former Wall Street banker, from testifying because he wanted to wrap up the trial by Jan. 6, saying he (Rhodes) “would not be available” after that day. Meanwhile, the major cold vortex and snowstorms which hit the Midwest intervened, shutting down the courts for the rest of that week. So Rhodes has now scheduled final arguments for Mon. Jan. 13, still not allowing Turbeville’s testimony, as requested by Attorney Jerome Goldberg on behalf of city retiree David Sole.

Orr testified regarding claims that fraud was involved in the deals.

“There were a number of legal theories,” Orr said. “The general basis was that the counterparties to the swaps had superior knowledge to the city, that they represented to the city that [the deal was] low-risk, beneficial, when they knew or should have known that it was potentially volatile. They designed more or less a ticking time bomb, by designing the termination fee to be linked to credit ratings.”

Snake oil salesmen: Joe O'Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor's sell Detroit City Council on POC deal Jan. 31, 2005/Photo Diane Bukowski
Snake oil salesmen: Joe O’Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor’s sell Detroit City Council on POC deal Jan. 31, 2005/Photo Diane Bukowski

In December, 2005, Standard and Poor’s, which had advocated for the POC loan under threat of further debt ratings downgrades, downgraded the city’s debt anyway, and thousands of city workers were laid off despite former Mayor Kwame Kilpatrick’s assurances that approval of the COPS deal would forestall such actions. Further downgrades since then have left Detroit with the lowest debt rating of any major city in the country.

Orr admitted that the banks involved have been charged globally with massive civil and criminal transgressions.

“It is fairly well publicized about LIBOR, that UBS AG reached a multi-country settlement with the United States Justice Department,” Orr said. That settlement was for $1.5 billion. The Securities and Exchange Commission has sued UBS AG separately for $5 billlion.

Detroit's MGM Grand Casino.
Detroit’s MGM Grand Casino.

Orr said fraud claims would also involve “costly and expensive litigation,” amounting to “millions or tens of millions,” including likely trips overseas.

He said fraud claims also arose with regard to the use of the city’s casino revenues under the state’s Gaming Act, which limited the revenues to services like public safety, education, and improvements in the quality of life, not as collateral for an unrelated debt. He said, however, that both the city’s legal department and the State Gaming Board found no problems with such use of the revenues, and that the state said the parties did not have to apply for a license.

He said the City Council earlier classified casino revenue as excise taxes, making it “special revenue” protected by bankruptcy law.

Go to war against the banks.
Go to war against the banks.

In the end, Orr said, if litigation were to be pursued, the “single largest most secure source of revenue for city would have been imperiled, we would have not had stability in the city’s finances and ability to plan strategically for the city or in any other matter. Someone said about war that the best laid plans go to hell. Litigation sometimes takes on a life of its own. Part of the risk I was trying to assess—if we pursued it, what was the probability that we were going to be able to stabilize city’s finances during the course of litigation.”

Meanwhile, in just the short period since Orr took dictatorial control of Detroit in May, 2013, he has “stabilized” the city’s finances in the fashion desired by the banks. The country’s largest Black majority city is being dismantled, divested of  its most valued asset, the Detroit Water and Sewerage Department, the third largest in the country, its beautiful Belle Isle, the largest urban island park in the country, its public workforce, the chief opportunity for the future of the city’s youth, and the livelihood of its retirees, who face the possibility of devastating cuts in their pensions, and have already been subjected to the loss of substantially all their health care benefits.

It is time not for “stabilization,” but a massive uprising by the people of Detroit and their supporters across the world.

Greek protest against banks' austerity demands.

Greek protest against banks’ austerity demands.

RECENT RELATED STORIES;

http://voiceofdetroit.net/2014/01/12/peoples-attorney-goldberg-questions-em-orr-on-detroit-bankruptcy-giveaway-to-ubs-boa/

 http://voiceofdetroit.net/2014/01/12/detroit-pastor-removed-from-bankruptcy-trial-jones-day-is-not-the-city-of-detroit/

 http://voiceofdetroit.net/2014/01/12/city-bankruptcy-one-of-many-attacks-on-detroiters/

http://voiceofdetroit.net/2014/01/03/recuse-detroit-bankruptcy-judge-rhodes-mediator-rosen-em-orr-from-the-citys-future-abolish-the-em-law/

Related document:

Demos Detroit bankruptcy report highlighted

 


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PEOPLE’S ATTORNEY GOLDBERG QUESTIONS EM ORR ON DETROIT BANKRUPTCY GIVEAWAY TO UBS, BOA; PACK BANKRUPTCY COURT MON. JAN 13 9 A.M.

Detroit EM Kevyn Orr (r) appointed by Michigan Gov. Rick Snyder (l) under PA 436, discusses bankruptcy filing at press conference July 19, 2013. Photo by Diane Bukowski
Detroit EM Kevyn Orr (r) appointed by Michigan Gov. Rick Snyder (l) under PA 436, discusses bankruptcy filing at press conference July 19, 2013. Photo by Diane Bukowski

 A coalition of organizations is asking Detroiters and their supporters to pack U.S. Bankruptcy Court at 231 W. Fort Mon. Jan 13, at 9 a.m., for the closing arguments on the swaps giveaway to Bank of America, UBS. For further info: https://www.facebook.com/#!/events/503611456421560/

Jerome Goldberg questions EM Kevyn Orr over giveaway to Bank of America, UBS, on Jan. 3, 2014

(VOD story on Orr’s direct testimony coming shortly. This transcript is from http://detroitdebtmoratorium.org/jerome-goldberg-questions-em-kevyn-orr-over-giveaway-to-bank-of-america-ubs-on-jan-3-2014/)

January 6, 2014

Attorney Jerome Goldberg, appearing on behalf of City of Detroit retiree David Sole, questions Emergency Manager Kevyn Orr regarding the interest rate swaps deal, viewed by many as another gift to the very banks that destroyed Detroit’s neighborhoods using subprime mortgages and that have been charged and convicted of fraud of all sorts.

audio-waves-microphone

Click on image to launch audio

Unofficial transcript:
Orr trial cross by JG.01032014
Unofficial transcript from audio file by KH

Attorney Jerome Goldberg, who represents city retiree David Sole in bankruptcy hearings.  March 26, 2012 Photo by Diane Bukowski
Attorney Jerome Goldberg, who represents city retiree David Sole in bankruptcy hearings. March 26, 2012 Photo by Diane Bukowski

Jerome Goldberg appearing for Interested Party David Sole.

JG: For the court ordered mediation for December 23 and 24, isn’t it true that Judge Rosen mandated that the parties have individuals there with settlement authority?

KO: Yes.

JG: And isn’t it true that you testified in your deposition that in fact Judge Rosen informed you that the banks did not have anyone there with settlement authority on December 23rd?

KO: Yes, at least one of them, yes.

JG: And that he had threatened to hold them in contempt of court just to get them to agree to this settlement, is that not true?

KO: He threatened to enter a default judgment.

Barclays under fire
Barclays and UBS AG, one of the original lenders in the Detroit $1.5 billion Pension Obligation Certificates predatory loan of 2005-06 and in related swaps, have both been charged with massive fraud in numerous venues globally, related to manipulation of the London-Interbank-Offered Rate (LIBOR) interest rates.

JG: I apologize. A default judgment. Just to be clear, this $165 million termination loan with Barclays, was subject to similar terms to the original swap termination loan?

KO: Yes.

JG: So the interest rate would be anywhere from 5.5 to 8.5 percent?

KO: Yes, whatever was on the chart. Yes.

JG: Once bankruptcy is over and the loan becomes due the interest rate goes up an extra 2 percent, right?

KO: well there’s a mechanism by which the interest rate can go up, yes.

JG: So it can go up from 5.5 up to 8.5 percent, right?

KO: Yes if that’s the math, right.

JG: And the loan is secured against income tax revenue?

KO: Yes.

JG: And that amounts to about $4 million per year, correct?

KO: Yes.

Protesters rally against swap deal outside Coleman A. Young Municipal Center Oct. 21, 2013. The City Council then voted not to approve the deal.

Protesters rally against swap deal outside Coleman A. Young Municipal Center Oct. 21, 2013. The City Council then voted not to approve the deal.

JG: And do you recall that in the city’s motion, the city’s income tax revenue for this year, pledge secured against income tax revenue and in fact that amounts to $48 million per year, $4 million per month times 12, right?

KO: Yes.

JG: Do you recall that in the city’s motion it said the city’s income this year was approximately $232 million?

KO: If that was in the motion, I’ll stand by it, yes.

JG: So what we’re taking about basically is that for the next four years about 20 percent of income tax revenue will go to pay off this deal with UBS and Bank of America through Barclays, is that not correct?

KO: Roughly, yes.

Attorney Goldberg represents city retiree David Sole of the Moratorium Now Coalition.
Attorney Goldberg represents city retiree David Sole of the Moratorium Now Coalition.

JG: And in fact $165 million at 8.5 percent interest would be approximately $30 million in interest, up to $195 million over the next four years and city tax revenues will be diverted to pay off Bank of America and UBS through Barclays?

KO: It could, yes.

JG: OK. And in fact, those payments will be going on long after you’re done as emergency manager and have left Detroit, is that not true?

KO: There’s an expectation that there would be an exit facility financed.

JG: But as of now there’s no exit facility in place.

KO: That is correct.

JG: In contrast, I believe the testimony in both depositions was that the swap payments, the hedging payments from 2008 to 2012 totaled $247 million?

KO: Approximately that amount of money.

JG: I could show you the deposition, but we’re in the ballpark?

KO: Yes, mmhmm.

JG: And 2013 would be about another $45 million to $50 million. Is that a fair statement?

KO: That’s a fair statement.

Protester at bankruptcy court Oct. 28, 2013

Protester at bankruptcy court Oct. 28, 2013

JG: So we’re talking about $300 million having been paid to UBS and Bank of America since 2008 on the hedging derivatives, on the interest rate swaps.

KO: Since when?

JG: Since 2008.

KO: Roughly that amount.

JG: And in addition to that, if the City was successful in its litigation, in recovering, in getting the swaps declared void ab initio as you testified, potentially that amount could be recovered, correct?

KO: Yes.

JG: And in fact any termination amounts moving forward, in the neighborhood of $200 million, could be eliminated?

KO: Yes.

JG: So rather than paying $165 million, we could be recovering up to $300 million?

KO: Yes.

JG: I want to go into a little bit, and you testified quite well, about the claims the city is making. One of them is fraud based on problems with the Libor as documented relative to UBS, is that not correct?

KO: Yes.

$1.5 billion UBS/SBS POC debt pushed on Detroit City Council Jan. 31, 2005 by (l to r) former Detroit CFO Sean Werdlow, now COO of SBS, Bill Doherty of SBS, Joe O-Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor's, and former Deputy Mayor Anthony Adams, during Kilpatrick administration. Photo: Diane Bukowski

$1.5 billion UBS/SBS POC debt pushed on Detroit City Council Jan. 31, 2005 by (l to r) former Detroit CFO Sean Werdlow, now COO of SBS, Bill Doherty of SBS, Joe O-Keefe of Fitch Ratings, Stephen Murphy of Standard and Poor’s, and former Deputy Mayor Anthony Adams, during Kilpatrick administration. Photo: Diane Bukowski

JG: Another one was that the counterparties, and I’m talking about the equitable claims, about fraud, breach of contract based on implied breach of the fair dealing, and unjust enrichment claims. And another that the counterparties had superior knowledge to the city when they entered into this complex financial transaction with the city and had a duty to make it clear to the city?

KO: Yes.

JG: That they misrepresented that there was a low risk of default and termination in connection with swaps?

KO: Yes.

JG: That they did not explain to the city the potential dangers that a termination event would mean for the city, that they could have called in tens of millions or hundreds of millions in interest payments, correct?

KO: Interest payments and the termination fee, yes, correct.

JG: And the city was a ticking bomb, as you described it, based on a lowering of the city’s bond rating based on the city’s financial history?

KO: Yes.

JG: Are you aware that representatives of Fitch rating service and Standard & Poors were at the table when the swaps were being voted on or being debated in city council?

KO: I didn’t know it was Fitch and S&P but I know the ratings agencies were present.

JG: And that they encouraged the city, they were supportive of the transactions?

KO: I don’t know that.

JG: And in fact it was these same ratings agencies that triggered the default in 2009 by the lowering of the city’s bond rating, correct?

KO: I know the ratings were lowered. I don’t know if it was S&P and Fitch.

JG: OK. You testified earlier that the CFO of the city Sean Werdlow took a job with SBS and that was approximately five months after the swaps were completed?

KO: Yes.

JG: And you testified that that raises a red flag, correct?

KO: It raises concern, yes.

JG: You testified that you spoke with the SEC about their involvement in investigating these matters and I believe in your deposition you said they were willing to have further discussions. Is that correct?

KO: Yes. Continue reading


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DETROIT PASTOR REMOVED FROM BANKRUPTCY TRIAL: “JONES DAY IS NOT THE CITY OF DETROIT!”

CC 4 16 13 arrest BWK

Pastor Bill Wylie Kellerman is shown here being removed along with Detroit School Board member Elena Herrada from City Council meeting April 16, 2013, protesting vote for renewed contract with Jones Day.

“Jones Day is not the City of Detroit!”

By Frank and Karen Hammer

fkhammer@ameritech.net

January 8, 2014

DETROIT — Detroit activist pastor Rev. William Wylie-Kellerman was removed from the Detroit bankruptcy court trial yesterday by security for speaking truth to power.

The incident occurred at about 11:30 am on Friday, January 3, 2014, the first day of resumed trial proceedings before Judge Steven Rhodes, on the December 24 settlement proposal to pay Bank of America/Merrill Lynch and UBS bank $165 million, borrowed from Barclays bank, to settle claims over dubious interest rate ‘swaps.’

Judge Steven W. Rhodes "chairs" one-sided forum on EM's and Chapter 9 bankruptcy Oct. 10, 2012. Participants included two EM trainers, one PA 4 co-author, and Charles Moore of Conway McKenzie, a chief witness for Jones Day at the bankruptcy trial.
Judge Steven W. Rhodes “chairs” one-sided forum on EM’s and Chapter 9 bankruptcy Oct. 10, 2012. Participants included two EM trainers, one PA 4 co-author, and Charles Moore of Conway McKenzie, a chief witness for Jones Day at the bankruptcy trial.

Judge Rhodes denied a creditor motion by attorney Caroline English of Ambac Assurance Corp. to compel production of attorney/client privileged documents relied on by Emergency Manager Kevyn Orr, regarding the evaluation of Detroit’s legal claims against these ‘counterparties.’

At that point, Rev. Wylie-Kellerman addressed the court directly from his seat at the back of the room: “Judge Rhodes, even without these documents it’s clear that Bank of America should be sued and prosecuted, not compensated. Jones Day is not the City of Detroit!” he added as he was physically removed from the room by court security. Judge Rhodes immediately ran from the bench out of the court, and the proceedings were briefly halted.

Rev. Wylie-Kellerman, of St. Peter’s Episcopal Church on the southeast corner of Michigan and Trumbull in Detroit, left the building with a few others shortly after the incident. He explained his non-violent direct action:

Brogan Orr vulture“For the people of Detroit by throwing its authority behind Kevyn Orr, this court has the same legitimacy as the Emergency Manager and Jones Day: None. The filing is illegitimate, unconstitutional, immoral and against the will of the people. The court has become an instrument of direct corporate rule. The Barclays loan is the ‘swap’ of one theft for another. In a legitimate court, Bank of America would be prosecuted for such a predatory scheme, not compensated.”

Rev. Wylie-Kellerman and Detroit School Board in exile member Elena Herrada face misdemeanor charges in 36th District Court on January 27, 2014, for disrupting the Detroit City Council vote on the Jones Day contract with Detroit in April 2013. They have repeatedly demanded a jury trial on those charges, but Detroit – governed by former Jones Day partner and Emergency Manager Kevyn Orr, has repeatedly refused to proceed with the prosecution. Jones Day also represents the counterparties – Bank of America/Merrill Lynch and UBS – to be paid in the deal at issue.

FOR FURTHER COMMENT AND INFORMATION:
Rev. Bill Wylie-Kellerman (313) 433-1967 or bill@scupe.com


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CITY BANKRUPTCY ONE OF MANY ATTACKS ON DETROITERS

Detroit youth on Belle Isle, which is now run by the state. Youth like these will be at peril from state troopers.

Detroit youth on Belle Isle, which is now run by the state. Youth like these will be at peril from state troopers.

First white mayor in 40 years sworn in

State takes Belle Isle

Trash and recycling collections privatized

Birth and Death Records given to Wayne County

PLD privatized as “Public Lighting Authority”

By Cheryl LaBash

 (Cheryl LaBash is a City of Detroit retiree and a member of Stop Theft of Our Pensions Committee, S.T.O.P.)

January 9, 2014

Detroit EM Kevyn Orr, ally Mike Duggan, Detroit's first white mayor in 40 years.
Detroit EM Kevyn Orr, ally Mike Duggan, Detroit’s first white mayor in 40 years.

DETROIT — The new year began with the swearing in of Detroit’s first white mayor in 40 years and a city council elected in geographical districts. What is notable about Mayor Mike Duggan is how quickly he came to a working agreement with Kevyn Orr, the city’s appointed emergency manager, and how thoroughly and openly his write-in campaign was financed and engineered by the wealthy, who hope to retake and remake Detroit and erase its militant, working-class history.

While the Detroit municipal bankruptcy case continues in court, the EM’s plan for bankers’ restructuring is expected to be revealed soon. But even before Orr was appointed EM by Michigan’s reactionary Republican governor, Rick Snyder, elected city officials raced to avoid formal bankruptcy by carrying out the same program that the bankruptcy court is now being asked to accelerate.

Here are some examples of this looting of Detroit by privatization and other means that have already occurred:

• Trash and recycling collections have been contracted out as of March 1. Current drivers are required to reapply for their jobs.

• The landmark island park, Belle Isle, a traditional venue for family reunions, summer picnics and community gatherings, is now under state authority and an $11 annual auto fee is required.

Herman Kiefer Health Complex, where Vital Records used to be provided to Detroiters by Detroiters.

Herman Kiefer Health Complex, where Vital Records used to be provided to Detroiters by Detroiters.

• Birth and death recording and certificate sales were transferred to Wayne County. This revenue-generating function is the last part of the Detroit Health Department to be privatized. The only direct City of Detroit employees remaining are the public health director, deputy director and medical director, positions required for Detroit to maintain its legal public health authority.

• The Detroit convention center — Cobo Hall — was turned over to an authority, after corporate auto giants threatened to move the North American International Auto Show from the venue.

•The Public Lighting Department was morphed into the Public Lighting Autho­r­ity so that part of Detroit’s unique “utility tax” could be used as collateral for yet more bonds to revitalize street lights.

Workers at Detroit's Wastewater Treatment Plant, part of six-county system built and paid for by Detroiters, struck Sept. 30, 2012 in an effort to stop the takeover of the department, the third largest in the country.
Workers at Detroit’s Wastewater Treatment Plant, part of six-county system built and paid for by Detroiters, struck Sept. 30, 2012 in an effort to stop the takeover of the department, the third largest in the country.

Deals are being discussed to protect the Detroit Institute of Arts by removing it from city ownership. The disposition of the Detroit Water and Sewerage Department, which provides clean water and sewage treatment for all of southeastern Michigan, is being decided in mediation far from Detroit, at the New York law offices of Jones Day. The cost of this vital service is expected to rise.

The ‘emergency manager’ strategy

The now infamous “swap” agreements were foisted on elected officials in Detroit and around the country by Wall Street predators. This paved the way for the emergency manager and the bankruptcy court to remove any semblance of bourgeois democracy through a direct, imposed financial dictatorship on the city.

The jobs of 5,600 workers — virtually everything except police and firefighters — will be eliminated from the public workforce according to union sources. City contributions to the pension funds for those workers will no longer be required.

Protesters rally outside Detroit Public Schools headquarters Aug. 27, 2013 to save Oakman Orthopedic School for special needs children.

Protesters rally outside Detroit Public Schools headquarters Aug. 27, 2013 to save Oakman Orthopedic School for special needs children.

An earlier takeover of Detroit Public Schools honed the “emergency manager” strategy. When an ongoing struggle of nearly a decade finally won the right for an elected school board, the state appointees had squandered $1.5 billion in school construction bonds used in facilities that were closed, torn down or given away. Yet another appointed EM continued closing schools — most notoriously schools for deaf children and Oakman School. These schools had special facilities to serve children with disabilities while incorporating them within general education, to the enrichment of all.

During the 1990s through the early years of the 21st century, strong mobilizations by workers and community members blocked piecemeal moves to privatize various city services, including the water department. Officials elected by this majority African-American working-class city, even though constrained by working within the capitalist system, responded to protests and even enacted an anti-privatization ordinance.

Workers from UAW Local 3 fought the closure of the historic Dodge Main Plant in the 1970's, aided by Angela Davis and workers from Detroit General Hospital. They warned the closure and privatization of the two facilities would result in a domino effect. Today, virtually all auto plants in Detroit are gone, and little is left of city and schools public services.
Workers from UAW Local 3 fought the closure of the historic Dodge Main Plant in the 1970’s, aided by Angela Davis and workers from Detroit General Hospital. They warned the closure and privatization of the two facilities would result in a domino effect. Today, virtually all auto plants in Detroit are gone, and little is left of city and schools public services.

Racist “downsizing” by the corporations in the 1970s and 1980s stripped away jobs, closing virtually dozens of auto and auto-related assembly and stamping plants, parts suppliers and small businesses that served tens of thousands of workers and their dependents. Only two highly automated assembly facilities remain in Detroit.

The now notorious big banks concocted a method to separate loan initiation fees from the ability to repay mortgages. Racist redlining practices by the banks had denied credit to the African-American people of the city and now predatory lenders opened the cash spigot to a credit-starved population. This was the subprime mortgage crisis that disproportionately targeted people of color and women in Detroit and throughout the U.S.

This article also appeared Workers World, workers.org


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NEW BILLS WOULD HELP MICHIGAN PAROLEES LAND JOBS, CUT RECIDIVSM

Ex-offenders at Houston, Texas job fair for those with felony convictions.

Ex-offenders at Houston, Texas job fair for those with felony convictions, held in 2010.

January 12, 2014

AP logoLANSING — New legislation in Lansing is designed to help inmates find a job when they leave prison.

The bills would let Michigan certify felons’ skills and character to help them during the job application process. The “certificate of employability” could go to parolees based on their criminal history, institutional behavioral record, and vocational and educational training.

Republicans and a Democrat launched the initiative last week alongside business leaders and ex-felons at an Ionia prison. Lawmakers hope to encourage the business community to give parolees a chance because they might end up behind bars again without a job.

The legislation would let businesses use the certificate as evidence of due care in hiring and give them immunity in lawsuits alleging negligent hiring. Sponsors of the bills are hoping for a hearing within weeks.

State Rep. Joe Haveman and Andy Ribbens, president of Premier Finishing in Grand Rapids, look over some of the products created by prisoners in the machines shop at the Richard Handlon Correctional Facility. A press conference was held at the facility Wednesday to discuss bills aimed at reducing the state's 78-percent employment rate for parolees.

State Rep. Joe Haveman and Andy Ribbens, president of Premier Finishing in Grand Rapids, look over some of the products created by prisoners in the machines shop at the Richard Handlon Correctional Facility. A press conference was held at the facility Wednesday to discuss bills aimed at reducing the state’s 78-percent employment rate for parolees.

Lawmakers: Decrease recidivism by hiring parolees

Ionia Sentinel StandardBills would provide offenders with ‘certificate of employability,’ employers with reduced liability

By Karen Bota
karen.bota@sentinel-standard.com
Posted Jan. 9, 2014 @ 9:33 pm

IONIA, Mich.

The woodworking shop at the Richard Handlon Correctional Facility on Bluewater Highway was more crowded than usual Wednesday, as state lawmakers, Michigan Department of Corrections staff, Grand Rapids area business representatives and former prisoners gathered for a press conference to discuss efforts to reduce the state’s 78 percent unemployment rate for parolees.

Mich. State Rep. Lisa Posthumus-Lyons.
Mich. State Rep. Lisa Posthumus-Lyons.

 

Addressing corrections issues is something the current state legislature takes seriously, said State Rep. Lisa Posthumus Lyons, R-Alto. Michigan has a “fairly low” recidivism rate of 31 percent, which is already low compared with national standards, she said, and legislators want to reduce it even further.

“Studies have shown when parolees re-enter society after a stay in prison, if they have a steady job, if they are employed and going to work every day, they’re much less likely to become repeat offenders and end up back in the corrections system,” Lyons said. “It’s one of those issues where we want to make sure everybody has the opportunity for a job, but when it comes to the corrections system, we believe that if parolees have the opportunity for a job, it reduces the risk of their recidivism and, we hope, will make our communities safer, as well as lessen the burden on the corrections system and taxpayers.”

Youth at alternative prison woodworking shop in Germany.
Youth at alternative prison woodworking shop in Germany.

 

Facilities like Handlon have “great programs to teach labor skills that are highly marketable,” Lyons said. What is needed is a way to take those skilled but unemployed parolees and match them with jobs.

The package of bills unveiled during the press conference, House Bills 5216-18, would give the Department of Corrections the ability to ensure offenders leave prison with a “certificate of employability,” which showcases the skills learned during their sentence and requires licensing boards to consider the certificate if they consider an offender’s criminal record during the hiring process.

The bills also stipulate that employers who hire parolees in good faith based on their certification will have reduced liability for tort claims based upon negligent hiring.

“We’ve introduced the passage of bills to help encourage employees to seek out parolees for some of their job openings,” said Lyons.

Certificate of EmployabilityThe certificate of employability tells a potential employer that the parolee is a “suitable candidate” for employment and that the Department of Corrections believes he is employable and a law-abiding citizen upon re-entry into society, Lyons said. “It gives employers the comfort to know these people have been working to hone a trade, a craft or a skill, and allows employers to know if they hire someone with a certificate, it will help mitigate liability issues and provide immunity from claims based on hiring an individual who is a parolee.”

The Department of Corrections can revoke certification if the prisoner has any misconduct before being released or commits a subsequent crime after release, she added.

Representatives from Cascade Engineering and Butterball Farms, both of Grand Rapids, spoke at Wednesday’s press conference about their positive outcomes in hiring parolees – graduates of the Handlon facility’s vocational education training programs – who have left prison ready and willing to work, with impressive skill sets and character traits.

Read more: http://www.sentinel-standard.com/article/20140109/NEWS/140109227#ixzz2qBjsEltW

Bills and Sponsors

HB 5216 at Parolees jobs 2014-HIB-5216: Corrections; parole; issuance by department of corrections of certificate of employability to certain prisoners; allow. Amends 1953 PA 232 (MCL 791.201791.285) by adding sec. 34d.

HB 5217 at Parolees jobs 2014-HIB-5217: Labor; other; limited liability for employers that employ individuals issued a certificate of employability; provide for. Amends 1961 PA 236 (MCL 600.101 – 600.9947) by adding sec. 2956a.

HB 5218 at Parolees jobs 2014-HIB-5218: Occupations; individual licensing and regulation; prerequisite of “good moral character”; eliminate for occupational licensing purposes. Amends sec. 2 of 1974 PA 381 (MCL 338.42).

All bills have been referred to the House Committee on Commerce. No hearing yet scheduled. To be notified of date of hearing on these bills, sign up at:

http://www.legislature.mi.gov/(Ssla45fncn5xrp5buqfkighjf))/mileg.aspx?page=listserverSignup.

Related article on State Rep. Rose Mary Robinson at http://www.detroitnews.com/section/OPINION0304


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RECUSE DETROIT BANKRUPTCY JUDGE RHODES, MEDIATOR ROSEN, EM ORR FROM THE CITY’S FUTURE! ABOLISH THE EM LAW!

First demonstration demanding cancellation of Detroit's debt to the banks, held in downtown Detroit May 9, 2012. Significantly, the protesters also opposed an emergency manager for Detroit.

First demonstration demanding cancellation of Detroit’s debt to the banks, held in downtown Detroit May 9, 2012. Significantly, the protesters also opposed an emergency manager for Detroit.

NAACP constitutional case challenging PA 436 now in U.S. District Court

Detroit is the only Chapter 9 case under unelected official

Not only pensions, but key assets like Water Dept. at stake; DWSD bondholders in mediation sessions in NYC Jan. 6 and 7

By Diane Bukowski 

Analysis 

January 2, 2014

Bankruptcy protester targets EM law PA 436.

Bankruptcy protester targets EM law PA 436.

DETROIT – In a key development in the Detroit Chapter 9 bankruptcy case, the Michigan and Detroit NAACP plaintiffs succeeded Dec. 30 in moving their appeal of U.S. Bankruptcy Judge Steven Rhodes’ earlier order barring their constitutional challenge to the state’s Emergency Manager law, PA 436, into U.S. District Court.

U.S. District Court Senior Judge Bernard Friedman has been assigned to the case. No hearing date has yet been set. The appeal is key because Detroit is the only municipality in the country where a Chapter 9 bankruptcy is taking place under an unelected official, EM Kevyn Orr.

The NAACP et al appeal asks among other issues, “Whether the Bankruptcy Court had the jurisdiction to address a strictly constitutional law claim, not in any way intertwined with bankruptcy law or the Bankruptcy Code?, and . . . Whether the Bankruptcy Court abused its discretion when it used subjective reasoning and speculation as to the Petitioners’ intentions and determined what is best for the City, over and above fundamental constitutional issues, such as voting rights?”

NAACP plaintiffs hold press conference May, 2013 announcing their challenge to PA 436. Attorney Melvin "Butch" Hollowell is at podium, with Attorney Nabih Ayad to his right. Plaintiffs are the Detroit Branch of the NAACP, the Michigan State Conference of the NAACP, Donnell R. White, State Reps. Thomas Stallworth III,  and Rashida Tlaib, and Maureen Taylor of the Michigan Welfare Rights Organization.
NAACP plaintiffs hold press conference May, 2013 announcing their challenge to PA 436. Attorney Melvin “Butch” Hollowell is at podium, with Attorney Nabih Ayad to his right. Plaintiffs are the Detroit Branch of the NAACP, the Michigan State Conference of the NAACP, Donnell R. White, State Reps. Thomas Stallworth III, and Rashida Tlaib, and Maureen Taylor of the Michigan Welfare Rights Organization.

Judge Rhodes ruled Nov. 6 that he would allow a similar complaint, Phillips et al, to proceed because it exempted Detroit’s situation from its complaint, to avoid interfering with the ongoing Detroit bankruptcy case. But he himself is hearing that complaint.

“The substance of our case is not about debtor-creditor issues, but about voter law,” Melvin “Butch” Hollowell, the Michigan NAACP’s in-house counsel, told Judge Rhodes during the Oct. 2 hearing on their motion to remove Rhodes’ stay of the case, which was then pending before U.S. District Court Judge George Caram Steeh.

“PA 436 creates two classes of voters, a superior class of voters with elected officials with full power and duties, and an inferior class of voters,” Hollowell said. “It violates the 7th and 14th Amendments and therefore does fundamental and irreparable harm. Now, since the law took effect, 50.4 percent of all Michigan’s African-Americans are under emergency managers vs. 1.3 percent of whites.”

The assignment to a U.S. District Court judge, a level higher than Bankruptcy Court, is significant because it may divert a headlong rush by Rhodes, mediator U.S. District Court Chief Judge Gerald Rosen, Detroit Emergency Manager Kevyn Orr, and the pro-corporate Jones Day law firm, t0 slash and burn Detroit retirees’ pensions, as well as Detroit assets like the Water & Sewerage Department, in the near future.

U.S. District Court Senior Judge Bernard A. Friedman.
U.S. District Court Senior Judge Bernard A. Friedman.

However, Friedman, who was previously Chief Judge of the U.S. Court of the Eastern District of Michigan, was assigned to the case by Rosen. Senior Judges only hear cases assigned by the current Chief Judge.

Friedman is a Ronald Reagan appointee who struck down the University of Michigan’s affirmative action program in 2001, dismissed a case challenging the No Child Left Behind Act in 2005, and dismissed another case against DTE by the Environmental Protection Agency in 2011. But this year, in somewhat of a turnaround, he refused to throw out a case challenging Michigan’s ban on gay marriage.

The assignment to Friedman instead of Judge George Caram Steeh, who was hearing both the NAACP et al and the Phillips et al cases challenging the constitutionality of PA 436, is thus open to question. But hopefully it will pave the way to putting that key question in the hands of higher courts even if Friedman does not rule in the NAACP’s favor.

Rhodes earlier certified an appeal of his eligibility ruling by other objectors directly to the U.S. Sixth Circuit Court of Appeals, but refused to recommend an expedited hearing as they asked.

Rosen RhodesThe NAACP appeal entered Friedman’s court Dec. 30, 2013, as Rhodes prepared for a Jan. 3 hearing on a motion forcing the City of Detroit to pay $165 million on swaps deals to banks including UBS AG, Bank of America, and Barclay’s, that have raped it for decades.

Rhodes made a show of demanding that the original $230 million deal be reduced, bringing a temporary halt to bankruptcy court hearings while mediation progressed, under Chief Judge Gerald Rosen of the U.S. District Court of Eastern Michigan. Rosen, who was appointed as mediator by Rhodes, is a member of the right-wing Federalist Society.

Rosen has openly recommended the new pact. Many creditors including Detroit’s pension funds have objected that he overstepped the bounds of an impartial mediator by doing so, in particular since they have not agreed to the deal.

(L to r) Former Detroit CFO Sean Werdlow, SBS' Bill Doherty, Fitch Ratings' Joe O'Keefe, Standard and Poor's Stephen Murphy, and former Detroit Deputy Mayor Anthony Adams press predatory $1.5 billion POC loan on City Council Jan. 31, 2005. Photo/Diane Bukowski

(L to r) Former Detroit CFO Sean Werdlow, SBS’ Bill Doherty, Fitch Ratings’ Joe O’Keefe, Standard and Poor’s Stephen Murphy, and former Detroit Deputy Mayor Anthony Adams press predatory $1.5 billion POC loan on City Council Jan. 31, 2005. Photo/Diane Bukowski

The deal also diverts attention away from the need for a criminal investigation of the original $1.5 billion Pension Obligation Certificates deals of 2005-06, a predatory loan orchestrated by Wall Street ratings agencies and former Detroit CFO Sean Werdlow, under former Mayor Kwame Kilpatrick. Werdlow promptly took a top management position with Siebert, Brandford and Shank, a partner in the deal, and is now its COO.

Detroit’s Chapter 9 bankruptcy case is the only one in the country taking place under an unelected official.

It has gone far beyond Chapter 9 strictures barring demands that a municipality liquidate its assets, because Chapter 9 allows such liquidation if the municipality (Orr, as recognized by Judge Rhodes), consents. So far, none of the Chapter 9 bankruptcies in the rest of the country have resulted in cuts to retirees’ pensions or liquidation of assets.

Water Department workers struck the Wastewater Treatment Plant Sept. 30, 2012 in an effort to save not only DWSD, but the city itself. They were sabotaged by the leadership of Michigan AFSCME Council 25.

Water Department workers struck the Wastewater Treatment Plant Sept. 30, 2012 in an effort to save not only DWSD, but the city itself. They were sabotaged by the leadership of Michigan AFSCME Council 25.

Only one, in Central Falls, Rhode Island, succeeded in slashing pensions because the state legislature passed a law allowing it.

The Detroit Water and Sewerage Department, the third largest in the country, which serves six counties,  faces liquidation under Rhodes and mediator Rosen.

Strike at WWTP Sept. 30, 2012.
Strike at WWTP Sept. 30, 2012.

The duo just issued the following order for continuing mediation in the matter to the City of Detroit, Emergency Manager Kevyn D. Orr, U.S. Bank National Association, as Trustee, etc., Assured Guaranty Municipal Corporation, Financial Guaranty Corporation, Black Rock Financial Management, Berkshire Hathaway Reinsurance Group, Fidelity Management and Research Co. and Eaton Vance Management:

“IT IS HEREBY ORDERED that the above-named noticed parties shall appear, with counsel, for continuing mediation on Monday, January 6, 2014, and Tuesday, January 7, 2014, at the NEW YORK OFFICE OF JONES DAY, 222 East 41st St., New York, NY 10017, at the following times: Monday, January 6, 2014 at 1:30 p.m. — City of Detroit, Emergency Manager Kevyn D. Orr, and DWSD bondholder representatives, only; Tuesday, January 7, 2014 at 2:00 p.m. – City of Detroit, Emergency Manager Kevyn D. Orr, DWSD bondholder representatives and bond insurers.” (Bold designation part of order.) 

There is no representation at these talks, being held in New York City, from the residents and voters of Detroit, who paid for the construction of DWSD through billions in bonds over many decades. They continue to be hit with massive rate hikes every year, including sewage rate hikes higher than those outside Detroit, allegedly due to the large numbers of delinquent bills.

Judge Rhodes with co-conspirators including (l) Frederick Headen of the Michigan Treasury, and to Rhodes left, Douglas Bernstein and Judy O'Neill, EM Trainers, with O'Neill a co-author of PA 4, and Charles Moore of Conway McKenzie, a key witness for Orr/Jones Day in the Detroit bankruptcy trial.
Judge Rhodes with co-conspirators including (l) Frederick Headen of the Michigan Treasury, and to Rhodes left, Douglas Bernstein and Judy O’Neill, EM Trainers, with O’Neill a co-author of PA 4, and Charles Moore of Conway McKenzie, a key witness for Orr/Jones Day in the Detroit bankruptcy trial. The photo was taken at a forum on Chapter 9 and Emergency Managers.

There is no representation from the unions representing DWSD workers and the workers themselves, or the pension funds, which will be decimated if DWSD workers are taken out of their system.

The key issue appears to be getting Detroit’s future out of the hands of Orr, Rhodes, and Rosen. Rhodes, like Rosen, clearly is guilty of rampant collusion with Orr/Jones Day. He has ruled on their side almost without exception on every issue.

He should have recused himself from the current bankruptcy case, or at the very least disclosed his participation in “chairing” a one-sided forum on Chapter 9 and Emergency Managers Oct. 20, 2012. Five out of six participants were direct supporters of the original Emergency Manager Law, Public Act 4, and one even helped co-author it. Another participant, accountant Charles Moore of Conway McKenzie, was a key witness for Orr/Jones Day in the bankruptcy trial.

Dr. Martin Luther King, Jr. leads march over Edmund Pettis bridge at Selma, Ala. which was viciously attacked by police.
Dr. Martin Luther King, Jr. leads march over Edmund Pettis bridge at Selma, Ala. which was viciously attacked by police.

Despite the fact that VOD brought this issue to the attention of attorneys for the pension systems, the unions, and others, only VOD editor Diane Bukowski ended up filing a motion for Judge Rhodes to recuse himself, which he refused to publish online but issued a six-page opinion claiming he only “chaired” the session.

Whether Judge Friedman will be any more principled than Rhodes and Rosen remains to be seen. It is clear, however, that actions like those which birthed the Voting Rights Act, the massive civil rights and Black nationalist and freedom movements of the 1960’s, including the Montgomery bus boycott, the battle at the bridge at Selma, Alabama, and the militant class-conscious struggles of the Black Panthers, are necessary to save the nation’s largest Black-majority city from the claws of the vultures, the banks and other financial institutions, and their politician lackeys, who now hold it.


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SOLIDARITY WITH THE PEOPLE OF DETROIT: OPPOSE BARCLAYS BANKRUPTCY SWAP DEAL FRI. JAN. 3

 

Retirees protest outside bankruptcy trial Aug. 19, 2013/VOD file photo
Retirees protest outside bankruptcy trial Aug. 19, 2013/VOD file photo

Oppose Barclays Swap Deal Which Will Cost the City of Detroit Its Future

Demonstrate Outside Federal Court

Friday, January 3, 8:30 a.m.

231 W. Lafayette in Downtown Detroit

Contact: 313-671 3715, 313-680-5508

bigstock-Financial-fraud-in-word-collage

Cancel Detroit’s Debt –Make the Banks Pay, They Owe Us

Hands Off Our Pensions

Save City Services and Assets

Make the Banks Fund a Jobs Program

Initiated by Moratorium NOW! Coalition (moratorium-MI.org) Stop Theft of Our Pensions Committee (S.T.O.P.) Detroit Resisting Emergency Management (d-rem.org)

A bad deal crafted by emergency manager Kevyn Orr and his multi-million dollar tax-paid consultants rewarded Bank of America and UBS, two financial institutions which have been implicated in the sub-prime mortgage debacle that devastated Detroit, over $200 million to terminate interest rate swaps that the banks have used to swindle cities across the U.S.

Protest outside Wayne County Airport June 14, 2013 as Kevyn Orr presented his Proposal to Creditors.

Protest outside Wayne County Airport June 14, 2013 as Kevyn Orr presented his Proposal to Creditors.

On December 24, the corporate media attempted to sell the public on a revised form of this same deal saying that it will save the city tens of millions of dollars. In fact, the revised deal still pays the banks $165 million to terminate these swaps that already netted these banks $250 million in profit from 2008-2012.

We must not believe these stories. These swap deals signed in 2005 and renewed in 2009, are the worst possible financial arrangements imaginable with questions still looming in regard to their legality.

Barclays Bank, another questionable firm connected with the LIBOR interest-rate rigging scandals, would pay off Bank of America and UBS through a loan to the city which nets the bank at least $4.4 million in fees.

Judge Steven Rhodes "chaired" a one-sided forum on EM's and Chapter 9 bankruptcy Oct. 10, 2012. (L to r) Frederick Headen, State Treasury Official who has been instrumental in over a dozen municipal and school takeovers; Edward Plawecki, Judge Rhodes, Douglas Bernstein and Judy ONeill. both trainers of EM's, with O'Neill a co-author of EM Public Act 4,  Charles Moore of Conway McKenzie, a chief witness for Orr in trial before Rhodes. Rhodes refused to recuse himself after VOD editor Diane Bukowski demanded he do so.

Judge Steven Rhodes “chaired” a one-sided forum on EM’s and Chapter 9 bankruptcy Oct. 10, 2012. (L to r) Frederick Headen, State Treasury Official who has been instrumental in over a dozen municipal and school takeovers; Edward Plawecki, Judge Rhodes, Douglas Bernstein and Judy ONeill. both trainers of EM’s, with O’Neill a co-author of EM Public Act 4, Charles Moore of Conway McKenzie, a chief witness for Orr in trial before Rhodes. Rhodes refused to recuse himself after VOD editor Diane Bukowski demanded he do so.

When Judge Steven Rhodes adjourned the trial examining the swap deals and Barclays loan on December 18, it was with the suggestion to Orr, Snyder, Jones Day and the corporate interests they work for, to come back with a better deal. But the arrangement they have arrived is still horrendous for the residents of Detroit. It means the City’s residents will pledge 20% of their income tax dollars for the next 5 years to pay off the banks, rather than improve services in the city.

We in the Moratorium NOW! Coalition feel that justice can only be served by the cancellation of the purported debt to Bank of America and UBS and that any funds they have collected be turned over to the people of the Detroit in an attempt to begin to repair the damage they have done to the city.

We have opposed the imposition of austerity, emergency management and forced bankruptcy over the recent period. Our organization will continue to demand that all pensions, salaries, jobs, city services and assets, including the DIA and the DWSD, remain under the ownership and control of the people of this city who have paid for them through decades of labor and taxes.

The objective of the banks including Barclays, Bank of America and UBS is to rob the city and state of Michigan even further through the imposition of usurious interests rates, the slashing of salaries and pensions and the complete disregard and disenfranchisement of the people of the city and the state.

Joe O'Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor's (center), abetted by then Detroit CFO Sean Werdlow (l), foist predatory, illegal $1.5 billion UBS/SBS Pension Obligation Certificates loan on City Council Jan. 31, 2005. Likely criminal behavior: Werdlow got a top job with SBS nine months later and is now its CEO; ratings agencies had no business at table; loan was done through phony "service corporations" to avoid vote of the people and state debt ceiling laws. Swap deals were attached to the loan.

Joe O’Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor’s (center), abetted by then Detroit CFO Sean Werdlow (l), foist predatory, illegal $1.5 billion UBS/SBS Pension Obligation Certificates loan on City Council Jan. 31, 2005. Likely criminal behavior: Werdlow got a top job with SBS nine months later and is now its CEO; ratings agencies had no business at table; loan was done through phony “service corporations” to avoid vote of the people and state debt ceiling laws. Swap deals were attached to the loan.

Please join us in front of the Federal Courthouse downtown when the trial on the swaps resume on Friday morning January 3. We will gather at 8:30 a.m. for a mass demonstration demanding that the illegal bank debt be canceled and the democratic rights of the people of Detroit be immediately restored.

We are also encouraging people to pack the courtroom of Judge Rhodes at 9:00 a.m. in order to witness the operations of the banks and their agents in federal bankruptcy court. Only the workers, retirees and community residents of Detroit can reverse the current crisis.

In addition, we are requesting that people around the United States and the world hold demonstrations in solidarity with the working people of Detroit on January 2 and 3 at the offices of Bank of America, UBS, Merrill Lynch and Barclays. The outcome of the struggle to save pensions, jobs, public assets and the right to vote in Detroit will set a precedent for people throughout the country.

SOLIDARITY WITH THE PEOPLE OF DETROIT — JAN. 2 & 3, 2014

Dec 30, 2013

Please let us know of your solidarity action by emailing details to moratorium@moratorium-mi.org

Solidarity Actions:

Friday, January 3

New York City – 1:00 PM

WE WON’T LET THE BANKS LOOT OUR PENSIONS OR OUR LIVES
TODAY IT’S DETROIT, TOMORROW IT’S NEW YORK
@Merrill Lynch/Bank of America Offices, 2 Financial Center, Liberty & West Street, NYC

Raleigh, North Carolina – 12 p.m. (Noon)

NORTH CAROLINA SOLIDARITY PROTEST
STAND WITH DETROIT! MAKE THE BANKS PAY!
Gather at Bank of America, 421 Fayetteville Street, Raleigh, NC

Oakland, California – 12 p.m. (Noon)

Demo at BofA near Fruitvale BART to support Detroit.
3251 International Blvd, Oakland, California 94601-2903

Facebook: Support Detroit Workers – Make the Banks Pay – demo against Bank of America

VOD story Jan. 2, 2014


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NO DETROIT POLICE STATE IN THE NEW YEAR! DUGGAN FIRED MEDICAL EXAMINER IN MALICE GREEN CASE

Mural painting of Malice Green by Detroit artist Bennie White Israel, at site of Green's beating death at 23rd and W. Warren in 1992, at the hands of killer cops Larry Nevers and Walter Budzyn.
Mural painting of Malice Green by Detroit artist Bennie White Israel, at site of Green’s beating death at 23rd and W. Warren in 1992, at the hands of killer cops Larry Nevers and Walter Budzyn.

Detroit Police Chief James Craig says that under new Mayor Duggan, EM Kevyn Orr,  Gestapo-like police raids on poor Black neighborhoods will continue

DPD has asked for suspension of monitoring of excessive force and conditions of confinement provisions of U.S. Department of Justice consent decree overseeing Detroit police

Soon to be Mayor Mike Duggan, in 2000 photo taken by Dale Rich for the Michigan Citizen.
Soon to be Mayor Mike Duggan, in 2000 photo taken by Dale Rich for the Michigan Citizen.

VOD editor, Dec. 27, 2013: I came across my file copy of the March 26, 2000 issue of the Michigan Citizen while packing to move today. The article below, written by the late Jesse Long-Bey (Omowale Ankobia), should lay to rest any illusions those who voted for soon-to-be Mayor Mike Duggan have, in particular regarding his concern for the Black majority population of Detroit. An earlier VOD article, linked below this one, discussed Duggan’s other alliances with the corporate elite who are seeking to drive poor and Black Detroiters from their city, by any means they choose.

Detroit police chief James Craig (l) with EM Kevyn Orr (r), who appointed him.
Detroit police chief James Craig (l) with EM Kevyn Orr (r), who appointed him.

That includes the vicious, Gestapo-like raids that Detroit Police Chief James Craig has visited so far on the Colony Arms Apartments on East Jefferson, the Martin Luther King Apartments on East Lafayette, and the Grand River/14th St./Joy Rd. neighborhood on Detroit’s west side. The mass media has reported these raids directly from the mouths of the police, with no investigation of whether the arrests, conducted by hundreds of police from multiple agencies, were valid, or just a means of further ridding the city of its Black and poor population, particularly its youth.

There are few job opportunities for them, half the public schools have been closed, virtually no recreation centers are left, and now the State has taken over Detroit’s Belle Isle, the largest urban island park in the country. State troopers will see to it that Detroit youth are denied access to the island to “cruise,” while suburbanite youth continue the time-honored tradition down Gratiot and Woodward Avenues.

The Oreo-cookie trio of EM Kevyn Orr, Duggan, and Chief Craig, who hails from the Los Angeles Police Department, one of the most vicious in the country, bodes ill for us in the coming year.

Duggan Jiraki headline

Duggan Jiraki 1
Duggan Jiraki 2

Related VOD stories:

http://voiceofdetroit.net/2013/08/05/no-to-duggan-napoleon-and-other-gangsta-politicians-take-it-to-the-streets-to-save-detroit/

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

http://voiceofdetroit.net/2013/10/18/httpvoiceofdetroit-net20131018chief-craig-intensifies-detroit-police-state-march-mon-june-21-9-am-as-trial-of-aiyana-jones-father-opens-in-frank-murphy-to-new-dpd-hq/

http://voiceofdetroit.net/2013/04/29/police-slaughtered-matthew-joseph-23-on-detroit-streets/

Related Detroit News articles on suspension of excessive force constraints on DPD, and multi-agency raids on Detroit’s poor neighborhoods:

http://www.detroitnews.com/article/20131223/METRO01/312230068#ixzz2omAAAcIW

http://www.detroitnews.com/article/20131217/METRO01/312170088

http://www.detroitnews.com/article/20131115/METRO01/311150073

http://www.detroitnews.com/article/20131203/METRO01/312030094

Families and supporters of police victims including Aiyana Jones, Davontae Sanford, many others march at Frank Murphy Hall against new police regime Oct. 21, 2013.

Families and supporters of police victims including Aiyana Jones, Davontae Sanford, Lamar Grable, many others march at Frank Murphy Hall against new police regime Oct. 21, 2013.

The Colony Arms Apartments residents are largely poor Black youth with their children. The building is Section 8 and represents one of the few affordable places they can stay. Police raided it in November.

The Colony Arms Apartments residents are largely poor Black youth with their children. The building is Section 8 and represents one of the few affordable places they can stay. Police raided it in November.

 

Multi-agency task force raided MLK Apartments earlier this month, also home to some of the city's poorest residents.
Multi-agency task force raided MLK Apartments earlier this month, also home to some of the city’s poorest residents.
"Operation Mistletoe" on west side Dec. 17, in same Grand River neighborhood where police earlier executed Matthew Joseph, 23, with 50 gunshot wounds after a brief chase April 2, 2013.

“Operation Mistletoe” on west side Dec. 17, in same Grand River neighborhood where police earlier executed Matthew Joseph, 23, with 50 gunshot wounds after a brief chase April 2, 2013. Police claimed Joseph killed a drug dealer who was the son of a Detroit police officer. Another officer killed during the execution of Joseph was later found to have been the victim of “friendly fire.”

 


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OBAMACARE VS SINGLE PAYER–TOP 10 THINGS THE ACA GAVE US VS. THE TOP 10 WE GAVE UP

Unaffordable Health Care Act

Black Agenda ReportBy BAR managing editor Bruce A. Dixon

October 16, 2013

VOD editor’s note, Dec. 23, 2013: This article is being published belatedly, on the last day people can sign up for Obamacare. I just discovered the CHEAPEST premium available in Michigan is $281.00 a month for a single male, including those who are unemployed or working minimum wage jobs, etc. A TRAVESTY! When will the people wake up and rise up?

Universal Health care dont_be_silly_0What happens when opportunity knocks and you tell it to go away? There’s a term in economics called an “opportunity cost.” The opportunity cost of any project is the negative value of the most favorable option you gave up to get whatever you got. In the case of the so-called Affordable Care Act, aka Obamacare, the most favorable option not just thrown away, but avoided at every opportunity by the president and Democrats in Congress, despite majority support among their constituents for it at the time, was a single payer health care system.

Back in the days when President Barack Obama was still Illinois state senator Barack Obama, he too was an advocate of single payer, famously telling audiences that all we had to do was elect a Democrat House and Senate, and put a Democrat in the White House to make it happen. The electorate followed Obama’s advice, but the president went another way.

What did we gain? What did we lose? Was it worth it? You decide…

Health Care for ALL march Photo courtesy Greencare

Health Care for ALL march Photo courtesy Greencare

WHAT WE GOT WITH THE AFFORDABLE CARE ACT

WHAT WE GAVE UP WHEN OUR LEADERS REFUSED TO PUSH SINGLE PAYER

1. We got a swiss cheese system that exempts many large corporations from having to ensure their employees.

Obamacare exchangeThe only grain of truth in the mountain of partisan lies Republicans tell about the ACA is that hundreds of large corporations have indeed been granted under-the-table exemptions from the obligation to provide health insurance to many of their workers, along with regulatory loopholes which let them to raise co-pays and deductibles to levels that will compel many of their low-paid workers to take their chances on the federal and state exchanges.

A single payer system would have freed US businesses altogether from the crushing burden of providing health insurance for their employees, and left no one without health insurance.

2. We got a Medicare expansion which can be thwarted at will by current or future Republican controlled state governments.

Medicare for allThe only unalloyed silver lining of the ACA was its expansion of Medicaid, which the Supreme Court threw out, enabling state governments to selectively deny Medicaid benefits to millions.

Medicare has been settled law for 50 years. Hostile state governments have no say in any part of its funding or administration. Lowering the Medicare qualification age to include everyone is and would have been a legally bulletproof, and Supreme Court proof way of guaranteeing health care for everybody in every state. But we threw that away.

3. We got a chaotic and confusing “marketplace” [2] in which patients with little information are encouraged to conflate low insurance premiums with low-cost quality insurance.

In reality many families of modest means will choose low-cost plans with deductibles and premiums so high and coverage so limited that these costs will remain significant barriers to getting medical care even though they are technically “insured.”

Under a single payer system everyone is insured, period, from the cradle to the grave. Under single payer the experience of shopping — essentially being preyed upon in a marketplace where the sellers have all the information and all the advantages never happens.

4. We got an initially unworkable internet front end [3] for our chaotic and confusing “marketplace.”

fixing-obamacare-glitches-cartoon-morin-495x322In the first week of open enrollment in the state of New York, which is entirely cooperating with the ACA, almost none of the hundreds of thousands of eligible persons succeeded in enrolling online.

The first day of single payer customers would have to do exactly nothing. The social security system would already have your address and income data, with no confusing and predatory “marketplace” to navigate, people could go about their productive lives.

5. We gave an ongoing river of cash to private health insurance companies. Millions more are now forced to buy their crappy product, with the premiums funded by billion annually in public subsidies.

Too much profit not enough careHealth insurance executives got massive salary increases since the passage of the Affordable Care Act. Existing insurance company shareholders saw profits and stock prices spike, first with the passage of the ACA, then with the onset of open enrollment. Anticipated ballooning profits have led health insurance companies to buy back as much of their own stock as possible. What else would you expect? Health insurance company lobbyists wrote the ACA.

While the ACA pads the pockets of insurance company executives and keeps employed an army of advertisers, marketers and bureaucrats, single payer would have created a quarter million new good paying jobs delivering actual health care to people, according to the National Nurses Union.

6. The ACA gives us little or no cost control over medical care and even bans most measures that would lower the cost of prescription drugs.

With the substandard policies the most families will be able to afford, skimpy coverage, high co-pays and deductibles will continue to threaten hundreds of thousands annually with bankruptcy due to unpayable medical bills.

The US is one of the few places in the developed world in which a family can lose its home, and its children their college educations because of unpayable medical bills. We could have changed that. But we didn’t.

Claretha Briscoe, left, of Hollandale, Miss., with family. She earns too much to qualify for Medicaid but not enough to get subsidies on the new health exchange. Photo: James Patterson, NYT.

Claretha Briscoe, left, of Hollandale, Miss., with family. She earns too much to qualify for Medicaid but not enough to get subsidies on the new health exchange. Photo: James Patterson, NYT.

7. ACA only covers about half the nation’s total uninsured. It leaves two thirds of the blacks and single mothers, along with half the low-wage employed currently without health insurance untouched [4].

You can blame Republicans for blocking ACA implementation, but they’re only exploiting the opening Democrats gave them. The White House and Congressional Democrats made the decision to go for piecemeal private insurance reform rather than wholesale public health care reform.

Democrats and the entire political establishment placed much of what little credibility they had after the bank bailout behind the purported achievements of the ACA. A promise is a promise, and people DO remember broken promises. Broken promises poison the well of civic trust for established political parties and candidates.

8. We have to wait till 2016, when the Obama administration is on its way out of office for all the provisions of the ACA to take effect.

Back in 1965 and 66 it took only eleven months from the signing of the Medicare legislation by the president to the sending out of cards to patients, in an era when computers were the size of boxcars.

The same as the previous…. the ACA is for many, another broken promise.

9. Making health insurance and health care privatized commodities instead of human rights granted certain permanent rights to those profits under the currently popular conservative legal “takings” doctrine.

Corporate welfare officeConservative jurists, like the majority on the current Supreme Court believe that whatever profits corporations lose from future government action must be paid in perpetuity to those corporations. They call this the regulatory takings doctrine. ACA’s corporate welfare giveaway will make it enormously difficult to take this billion dollar candy back from health insurance scammers by making health care a human right any time in the future.

We gave up the human right to health care. In exchange we got the right of health insurance corporations to get paid. Such a deal.

10. ACA’s scheme of privatized health insurance paid for by public dollars was originally devised by one arm of the ultraconservative Heritage Foundation, and is opposed today by another arm of that same organization. Go figger.

Before it was called Obamacare nationally, it was called Romneycare in Massachusetts when that state’s governor implemented it there.

By embracing what was a short time ago a right wing pipe dream as “health care reform” Democrats and so-called progressives have given Republicans encouragement to move further to the right, opposing ACA even though it originated at the nation’s premiere right wing think tank.

Bruce Dixon, BAR managing editor
Bruce Dixon, BAR managing editor

Bruce A. Dixon is managing editor at Black Agenda Report, and a member of the state committee of the Georgia Green Party, which unashamedly and unwaveringly supported single payer health care. Contact him via this site’s contact page at www.blackagendareport.com/ or at bruce.dixon@blackagendareport.com.


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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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