Protest outside federal courthouse during bankruptcy hearing Aug. 2, 2013
Gilda Jacobs of Michigan League for Public Policy.
By Gilda Jacobs
Michigan League for Public Policy
August 5, 2013
The July 18 bankruptcy filing for Detroit was shocking, though in many ways, it wasn’t a surprise at all. Detroit’s struggles have been evident for years. Still, as a native Detroiter, my heart broke a little that day.
One thing that is clear in this multilayered controversy: Detroit’s problems and solutions do not stop at the city limits.
“Detroit may be the canary in the coal mine for the rest of the country,” – Gilda Jacobs
We all have a stake in this — not only in Michigan, but across the country as Detroit may be the canary in the coalmine for other regions.
What should be the response from policymakers?
First and foremost, let’s remember that this is about people. Stronger state and federal strategies that invest in children and families, reduce poverty and grow jobs will be good for all. And we have lots of room for improvement.
Michigan lawmakers should move quickly to restore the state Earned Income Tax Credit from 6% to 20% of the federal credit. It encourages work and helps families gain independence. Detroiters lost about $44 million in state EITC payments this year. Restoring the EITC as part of a targeted jobs strategy for the beleaguered city would be a great first step.
Detroit children wait in line for free coats at Moorish Science Temple of America giveaway.
In addition, the shredded safety net means that millions of dollars have been pulled from Detroit at a time when it has nearly unbelievable and unacceptable levels of unemployment and poverty. Policies under Gov. Snyder to restrict access to food and cash assistance resulted in $75 million a year less in Wayne County alone. These harmful policies need a second look in light of the struggles of Detroit where nearly 60% of kids live in poverty.
Another way to help is to revisit the broken promises on revenue sharing to Detroit and other municipalities across the state. Detroit was dealt a double dose of revenue sharing cuts. A modernized revenue system is needed to restore revenue sharing and provide enough to pay for needed health ]care, education, protection for abused children and other essential services. Think sales tax on services, the capture of Internet sales, restoration of a portion of the corporate income tax and a more progressive income tax.
Public safety workers’ protest July 26, 2012 at CAYMC.
Of course, those most at risk of harm from bankruptcy are the pensioners, people who work for contractors owed money by the city and those who purchased Detroit municipal bonds. If there is a way for Michigan or the federal government to reduce this harm, it must be explored. In fact, the state Constitution may require Michigan to back the pensions.
Many agree that hardworking people with modest pensions should not end up with just a small fraction of the original promise. Detroit is also a cautionary tale as we move forward: Pensions and healthcare promises must be funded adequately and not simply left for future generations to figure out.
At both a state and federal level, an education and jobs strategy that strengthens foundational skills will help grow literacy and job skills. Detroit needs an infusion of jobs. In June, the Detroit –Livonia-Dearborn area posted the highest unemployment rate among 34 metro divisions with unemployment at nearly 12%. It also posted the biggest loss of jobs from June 2012 to June 2013.
Jobs a number one priority.
Economist Jared Bernstein makes a compelling case that creating jobs to clean up urban blight and restore the city’s infrastructure is a win-win.
In addition, the snarled debate over public transportation must take on a greater urgency to help connect the unemployed to jobs. This must be supported at all levels of government.
Detroit is Michigan’s major urban center and a touchstone for our state history, giving us the Motor City and the Motown sound. The muscle and ingenuity of Detroit in the last century grew our country’s auto industry, the middle class and our state and national economy. Let’s remember that when Detroit was prosperous, its revenue and jobs helped support our state and country.
The city’s economic contributions aren’t just in the rearview mirror, however. Detroit is the epicenter of the auto research and development that continues to help drive the auto industry. The revived auto industry that emerged from bankruptcy continues to grow. And with its sports teams and museums, Detroit is a cultural resource for all of us.
The people of Detroit need to know they are not standing alone. What’s good for Detroit is good for us all.
Emergency Manager Kevyn Orr Defames Detroiters and Detroit! A No Struggle, No Development Production! By Kenny Snodgrass
Press conference held August 6, 2013(PART ONE ABOVE)
EM Kevyn Orr’s words in the Wall Street Journal: “Much of Detroit’s dysfunction is also due to simple complacency. ‘For a long time the city was dumb, lazy, happy and rich,’ (Orr) explains. ‘Detroit has been the center of more change in the 20th century than I dare say virtually any other city, but that wealth allowed us to have a covenant (that held) if you had an eighth grade education, you’ll get 30 years of a good job and a pension and great health care, but you don’t have to worry about what’s going to come.’
Elections draw people away from fighting bankruptcy takeover
By Diane Bukowski — VOD Editorial
August 5, 2013
Monica Lewis-Patrick for City Council; Krystal Crittendon for Mayor
To date, VOD has not covered much of the city elections, other than our recent strong endorsement of Monica Lewis-Patrick for City Council at Large and Krystal Crittendon for Mayor.
There is a reason—the real battle taking place right now is in the bankruptcy court, where both Detroit Emergency Manager Kevyn Orr and U.S. Bankruptcy Judge Steven Rhodes are pushing for a conclusion by the end of this year, before any new city candidates assume office. This would be recording-breaking time for any Chapter 9 filing, and a violation of federal law, which states such trials must be “JUST and speedy.”
Orr and the city’s corporate creditors have aimed their guns squarely at the city’s retirees, seeking to set a precedent for the 24 states that protect public pensions by busting not just retiree health benefits, but gutting pensions themselves. There is no protection under federal law for public pensions.
But it’s not only the pensions—it’s the city’s assets.
CH 9 ALLOWS ATTACK ON PENSIONS AND ASSETS
The U.S. Courts official website says “there is no provision in the [Chapter 9] law for liquidation of the assets of the municipality and distribution of the proceeds to the creditors. Such a liquidation or dissolution would undoubtedly violate the Tenth Amendment to the Constitution and the reservation to the states of sovereignty over their internal affairs.”
DWSD workers protest at Huber facillity Aug.15, 2012.
It says Chapter 9 “limits the power of the bankruptcy court to ‘interfere with – (1) any of the political or governmental powers of the debtor; (2) any of the property or revenues of the debtor; or (3) the debtor’s use or enjoyment of any income-producing property” unless the debtor consents or the plan so provides.”
Chapter 9 also explicitly recognizes the power of a state to control a municipality’s affairs.
Snyder and Orr at press conference on bankruptcy July 19, 2013.
“Similarly, 11 U.S.C. § 903 states that “chapter  does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of the municipality, including expenditures for such exercise,” with two exceptions – a state law prescribing a method of composition of municipal debt does not bind any non-consenting creditor, nor does any judgment entered under such state law bind a non-consenting creditor.”
Michigan Gov. Rick Snyder and Orr have made it clear that Orr’s “Proposal to Creditors” is to lay the groundwork for any “Plan for Adjustment of Debts.” That proposal includes a drastic restructuring not only of Detroit’s debts, with the primary focus on the pension plans, but of its assets as well.
AN EMERGENCY OF THE GREATEST MAGNITUDE
Another story will be up shortly, on the Aug. 2 bankruptcy hearing before Judge Rhodes, which VOD covered. But it is clear NOW that city retirees, workers and residents need to take to the streets en masse as are the people of countries across the world during this global economic crisis.
U.S. President Barack Obama, AG Eric Holder
It is ALSO clear that most our top union and community leaders are themselves bankrupt in their approach to this catastrophe.
Instead of calling for a general strike or a boycott of Michigan over its abrogation of the voting rights of its Black residents, they are urging people to go to the polls to vote. They also want people to petition U.S. President Barack Obama to save Detroit.
Pres. Obama, Atty. General Eric Holder, U.S. Secretary of the Treasury Jacob Lew, and the rest of the federal administration have repeatedly said since the dawn of Public Act 4 that they will DO NOTHING to intervene—no investigation of Voting Rights Act violations, no “bail-out” of Detroit as the feds bailed out the banks and the mortgage and auto companies, no intervention in the bankruptcy case.
That’s a matter between Detroit and the State of Michigan, they have said. They haven’t even called on the corporations that owe Detroit $800 million, or the state which owes over $300 million, to pay up.
To that degree, VOD believes electoral politics are massively diverting the people’s energy away from the real battle that needs to be fought.
That said, however, VOD wants to expose the criminal records of the two alleged front-runners for Mayor in this election, who have garnered the lion’s share of corporate campaign contributions.
NO TO NAPOLEON–NO MORE COPS IN CIVILIAN CITY GOVERNMENT
UAW Pres. Bob King (far left) and others as Benny Napoleon announces run for Mayor March 26, 2013.
Since the UAW is sporting a big sign at its headquarters endorsing current Wayne County Sheriff Benny Napoleon for Mayor, we’ll start with him, although clearly both he and Duggan need to be locked up for the crimes they have committed against Detroit. The UAW itself has betrayed Detroit, contributing not one red cent to the campaign to repeal Public Act 4.
Napoleon is being touted as an alternative to Detroit’s having a white mayor, which VOD agrees would be a disaster.
But Napoleon is a cop, first and foremost. Take a look at the role two cops have played recently in Detroit politics—Councilman James Tate and former Council President Pro-Tem Gary Brown, currently the City’s “Chief Compliance Officer,” appointed by Orr.
Sell-out council cops James Tate and Gary Brown applaud Mayor Dave Bada Bing.
Both played primary roles in executing the disastrous Public Act 4 “Consent Agreement,” which Orr says laid the groundwork for his plan for Detroit, and what will become his “Plan of Adjustment” in Bankruptcy Court.
Tate (who says he was just a police press representative, but who held the title of Deputy Chief) accompanied disgraced former Council President Charles Pugh and Councilman Kenneth Cockrel, Jr. to Lansing to conspire directly with Snyder and State Treasurer Andy Dillon to come up with the consent agreement. This was admitted at the Council table.
WWTP worker on strike Sept. 30, 2013 denounces EMA plan to cut DWSD workforce.
Brown got his reward from Orr after robbing the taxpayers of $8 million in a lawsuit for which his attorney was sanctioned. His attorney gave the fatal Kilpatrick text messages to the Detroit Free Press, which withheld publication until after the two got their paws on the money.
U.S. District Court Judge Sean Cox later appointed Brown and Pugh to a “Roots Cause Committee” to make recommendations on governance of the city’s largest asset, the $6 billion Detroit Water and Sewerage Department. They both signed a document recommending separation of the Department from city control, and also endorsed the notorious EMA plan to cut 81 percent of the DWSD workforce.
UNDER NAPOLEON, DETROIT WAS ‘MURDER-BY-COP’ CAPITAL OF U.S.
Napoleon’s record as Detroit Police Chief belies that sweet baby-faced grin he relies on.
Cop with cattle prod. Use of prod resulted in the death of Fred Warren at the 2nd precinct in Detroit in 1980.
His official bio says, “He joined the Detroit Police Department in 1975 as a trainee police officer and was admitted to the Detroit Police Academy in June 1975. He served the Detroit Police Department in many patrol, investigative, undercover and administrative capacities. He began his career walking a beat in the Second (Vernor) Precinct. He quickly rose through the ranks of the police department, being promoted to sergeant in 1983; to lieutenant in 1985; to inspector in 1987; to commander in 1993; to deputy chief in 1994; to assistant chief in 1995; and was appointed Chief of Police by the Honorable Mayor Dennis W. Archer in 1998. After more than 26 years of distinguished service, Chief Napoleon retired from the Detroit Police Department in 2001.”
So, Napoleon began walking the beat in the notorious Second Precinct, known for the use of electric cattle rods on arrestees, resulting in at least one death. By 2000, Detroit was exposed as the “MURDER-BY-COP CAPITAL” of the nation, racking up more killings by police per capita than any other major city in the country.
Rodrick Carrington, Lamar Grable, Darren Miller, victims of Officer Eugene Brown while Benny Napoleon was a command officer.
That exposure began in 1998, when the original Detroit Coalition against Police Brutality held a historic public hearing before City Council. It exposed for the first time since the abolition of STRESS the extent to which cops, both white and Black, had been getting away with murder.
Coalition co-founders Arnetta Grable and Herman Vallery testified about the killing of their son Lamar Grable at the age of 20, shot eight times in the back and chest, by Detroit police officer Eugene Brown, The family of Rodrick Carrington reported Brown’s killing of their loved one in 1995. Their warnings went unheeded—Brown went on to kill a third man, Darren Miller, in 1999.
The Coalition detailed dozens of other police killings at the hearing and in its literature.
Members of Detroit Coalition Against Police Brutality including families of Lamar Grable and Derrick Miller. Herman Vallery is second from left, Lamar’s sister Arnetta Jr. and mother Arnetta Grable are right of Serial Killer Kop sign. Miller’s sisters and brother are a right.
It was this reporter’s ground-breaking story on Brown, “Serial Killer Kops?” published by the Michigan Citizen in March of 2000, that led to broader exposure in the daily media and across the country. That summer, Detroit police went on to kill a deaf man with a rake, Errol Shaw, Sr. and autoworker Dwight Turner, shooting at a vicious dog from his front porch to protect his community.
Detroit cop David Krupinski shot Errol Shaw Sr., a deaf-mute, to death after he could not hear his command to drop his rake.
The second killing led to a huge protest outside police headquarters by members of the UAW and hundreds of others. The protesters carried signs demanding the resignation of Mayor Dennis Archer and Chief Benny Napoleon. Both left office the following year. Arnetta Grable went to Washington D.C. to meet with former U.S. Attorney General Janet Reno, and later the Detroit Police Department subjected to a federal consent decree, which remains to this day.
The “Serial Killer Kops” story had a kicker headline: “We train our officers to shoot to kill,” a statement from Napoleon himself, made before the City Council.
Detroit police chief Benny Napoleon receives award at 2001 Arab-American Chamber of Commerce dinner.
Another story by this reporter, published a month before, was headlined, “Rent-a-Cops.” It included a photo of Chief Benny Napoleon and the entire Detroit police command wining and dining with merchants of Middle Eastern descent, at a lavish dinner sponsored by the Arab-American Chamber of Commerce.
The merchants were demanding police action against individuals allegedly victimizing their stores, which in turn victimized the people of Detroit by the sale of alcohol, cigarettes, unhealthy food, and even drugs and drug paraphernalia.
During that dinner, I asked Napoleon about Brown’s killing of three men in separate incidents. Napoleon said, “What would YOU do if someone pointed a gun at you?” In fact, none of the three men had guns. The Grable family battled for ten years before they won a $4 million jury verdict against Brown; the Miller family reached a settlement of $3.5 million.
Killer cop Eugene Brown proudly walks out of ceremony after promotion to sergeant. His fellow officers cheered him.
The public outcry about Brown’s killings, and his shootings of nine others, forced Napoleon to commission a three-member panel led by Deputy Chief Walter Shoulders to investigate his actions, a report which Napoleon promptly quashed. This reporter and the Michigan Citizen filed a Freedom of Information Act (FOIA) request, which was denied. Wayne County Circuit Court Judge Wendy Baxter granted our request, but the city appealed all the way to the Supreme Court, as they appealed the Grable verdict (which resulted in it totaling $6 million with interest.)
Eventually, we won a redacted version of the report which showed that Shoulders et. al. had recommended disciplinary action be taken against Brown in the killings. That was never done under Napoleon’s command or since. Brown, whose cousin said he had bragged about being able to “kill people and get away with it,” remained on the force, and was promoted to Sergeant.
Napoleon went on to become Assistant Wayne County Executive and Wayne County Sheriff, stepping over the bodies of the three men Brown killed and the bodies of dozens more killed during his tenure in the Detroit police department.
Napoleon ordered Jimmi Ruth Ratliff’s virtual execution at Detroit’s luxury 1300 E. Lafayette building in Dec. 1995.
Not only did Napoleon refuse to act against Brown, he himself directed the virtual execution of Jimmi Ruth Ratliff in Dec. 1995, when he was Acting Police Chief. The 48-year-old professional Black woman lived at 1300 E. Lafayette and had worked at Blue Cross Blue Shield for 28 years. After the deaths of her mother and sister and the loss of her job, she became severely depressed and began packing to move in with another sister.
The building management called police to report they had seen a “bullet hole” in her window. A Detroit Police SWAT team complete with helicopters, riot gear, and submachine guns rushed to the scene. Napoleon, irritated at being called away from a high school basketball game, showed up shortly afterwards to take command.
Four and a half hours later, after police refused to let Ratliff’s sister and other relatives up to talk with her, and after they fed tear gas under her door through a tube, the SWAT team stormed her apartment and shot her to death as she held her Bible and prayed. Police claimed she had fired a bullet through the wall which hit one of the cops in the leg. The family’s lawsuit in federal court was settled for $1 million just before Napoleon was set to testify in front of a jury.
DUGGAN – MCNAMARA LACKEY; PARTICIPANT IN STATE DPS TAKEOVER, EAA; FOUNDED CORRUPT UHCP TO ADMINISTER FEDERAL HEALTH FUNDS; EXECUTOR OF DMC SALE TO FOR-PROFIT VANGUARD
Mike Duggan is boasting on the airwaves that he will “work closely with Kevyn Orr,” who during the Detroit bankruptcy proceedings. Orr was just lambasted by Detroit retirees for the following remarks he made in a Wall Street Journal interview:
The late Wayne County Executive Ed McNamara; Duggan was his Deputy Executive from 1986-2002.
”Much of Detroit’s dysfunction is also due to simple complacency. ‘For a long time the city was dumb, lazy, happy and rich,’ (Orr) explains. ‘Detroit has been the center of more change in the 20th century than I dare say virtually any other city, but that wealth allowed us to have a covenant if you had an eighth grade education, you’ll get 30 years of a good job and a pension and great health care, but you don’t have to worry about what’s going to come.’”
In the video below, retirees angrily protested Orr’s statement today. They tried to storm his office to confront him in person, but were blocked.
Ingham County Circuit Court Judge Rosemarie Aquilina earlier ruled that Orr’s boss, Michigan Gov. Rick Snyder, had no authority to approve the bankruptcy filing under the State Constitution. Allegedly on behalf of the city, Orr’s former law firm Jones Day, now the city’s “debt restructuring consultant,” is arguing the debtor side of the case. Jones Day is a megalithic, white-dominated firm with an ultraconservative, pro-corporate and racist record.
Duggan home in Livonia.
Bad enough Detroit is being subjected to these phony plantation-style proceedings, but Duggan endorses them as well, right in line with his life-long record.
First and foremost, Duggan hails from Livonia, known as “the whitest city in America,” where he lived for 45 years. The residents of Livonia even opted out of participation in the SMART bus system to keep Detroiters out.
Duggan moved into Detroit too late to legally file to run. As a result, he is illegally running as a “write-in” candidate with the permission of State Attorney General Bill Schuette, another right-wing racist, despite an appeals court ruling against the write-in won by mayoral candidate Tom Barrow. For the first time in Detroit’s history, a write-in candidate has thus garnered the most corporate campaign contributions and is receiving mammoth attention from the media.
Mike Illitch benefited from Duggan’s largesse, with Compuware Stadium.
Duggan was Deputy Executive during the infamously corrupt Wayne County Executive Ed McNamara regime from 1986-2002, a fact he neglects to emphasize in his official website bio. The U.S. Department of Justice opened an investigation into blatant bid-rigging and contract kickbacks during the McNamara regime, resulting most famously in the conviction of McNamara’s top aide Wilbourne Kelley II and his wife of extortion, bribery and conspiracy involving Wayne County Airport operations.
In an earlier VOD story, reporter Ron Seigel detailed Duggan’s alleged role in the illegal eviction of long-time tenants from the Detroit YMCA in 1997, to make way for the construction of Mike Illitch’s Compuware Stadium, which got hundreds of millions of dollars in city, county and state taxpayer funding.
Duggan then colluded with former Governor John Engler and Detroit Mayor Dennis Archer in the first state take-over of the Detroit Public Schools in 1999. That summer, McNamara loaned Duggan out to become DPS Deputy CEO to run the Summer Repair Program. Michigan Citizen reporter, the late Jesse Long-Bey, ran a series of articles exposing corruption and waste by contractors Duggan selected for the program.
Michigan’s EAA, better known as the Educational Apartheid Authority, is limited to Detroit schools,
Duggan lately picked up his role in profiting from the mis-education of Detroit’s children as a member of the Educational Achievement (read Apartheid) Authority, appointed by Gov. Snyder to take over 13 Detroit public schools and privatize them as charters, with ill-trained teachers and insufficient books and supplies.
The peripatetic Duggan has been busy for years in the privatization of Detroiters’ health care for profit, as well.
While Wayne County Deputy Executive, Duggan helped found the non-profit Urban Hospital Care Plus (UHCP) in 1993, which handled hundreds of millions of dollars in federal “disproportionate share” funding for indigent care. The federal government earlier forbade state and local government-run hospitals from directly receiving the funds, essentially privatizing them.
The former Southwest Detroit Hospital housed Ultimed, the nation’s only Black HMO, which failed due to Duggan’s withdrawal of funds and other factors,
UHCP contracted with two for-profits, one of them Ultimed, whose CEO Harley Brown said it was the only Black-owned HMO in the country. Brown set up a hospital on the site of the former Southwest General Hospital, the amalgamation of several of Detroit’s last Black-owned hospitals. Southwest shut down in 1991 due to competition from larger hospital chains.
UHCP later refused to make further payments to Ultimed, complaining that Ultimed was not paying hefty county fees. Brown said the problem lay in the failure of private insurance companies to reimburse Ultimed for patient care, which he said was an attempt to drive Ultimed out of business. In 2003, the Detroit Medical Center sued Ultimed for payment of $5 million in allegedly outstanding bills. Eventually Ultimed won the suit, but it did go out of business.
Mike Duggan celebrates sale of DMC to Vanguard. Hundreds of workers have recently been laid off.
In 2004, after a brief stint as Wayne County Prosecutor, Duggan became CEO of the Detroit Medical Center, allegedly to save it from financial ruin after the ruin of Ultimed.
Duggan was hailed as the savior of the DMC for taking the jobs. Prior to that, huge service cutbacks and layoffs were going on. The DMC’s CEO threatened to close Detroit Receiving Hospital, after hundreds of millions in city funds left over from its century as a public hospital disappeared. This reporter ran a series on the DMC’s tax filings at the time, exposing the high salaries of its executives, its corporate dominated board, and money that was being siphoned off to accounts in the Cayman Islands. Duggan made many promises when he took over, but instead ended up sellling the DMC to the for-profit Nashville, Tenn.-based Vanguard Health Systems. This reporter also did numerous stories detailing Vanguard’s role across the U.S. in cutting back services and laying off workers at hospital chains it took over. While retaining a token role as CEO of the remaining DMC core funds, Duggan became a Vanguard Senior Vice President for an unknown salary.
Duggan’s long-time ally Min. Malik Shabazz behind him at rally.
Vanguard, 70 percent owned by a Wall Street hedge fund, has since been sold to Tenet Health Care. Meanwhile, hundreds of little publicized lay-offs have taken place at the DMC, including the whole division headed by the Inner City Sub-Center’s Paul Taylor, who also lost his job after supporting Duggan in the takeover. MichUCan, a state-wide coalition for health care for the poor has claimed that since the sale, indigent patients are frequently being turned away from DMC’s portals.
Duggan makes a practice of running around with well-known Black “leaders” including Min. Malik Shabazz of the Detroit 300, an alleged “neighborhood protection” organization which is informally affiliated with the Detroit police and has been known to engage in its own thuggery. Another of Duggan’s allies is the Rev. Jim Holley, a notorious privatizer who has run charter schools and taken over the city’s Considine Recreation Center.
(This editorial endorsement of Monica Lewis-Patrick for City Council at Large is interspersed with her own speeches on You Tube and photos of her supporters at the fish fry fund-raiser at Hush House near Greater King Solomon Baptist Church.)
DETROIT – The backyard of Detroit’s Hush House was packed July 26 with supporters of Monica Lewis-Patrick for City Council attending a fish fry fund-raiser. They included people who have fought side by side with her for self-determination for the people of Detroit, ever since the introduction of the legislation that became Public Act 4, otherwise known as Michigan’s Emergency Manager Act, in 2011.
Debra Taylor and Cecily McClellan rallied the crowd for Monica and for Detroit.
Present were the co-founders with Monica of We the People of Detroit and Free Detroit No Consent: Debra Taylor, Gloria (Aneb) House, Cecily McClellan, Chris Griffith, Valerie Glenn, Keith Hines, and more, including youths she brought into the battle like Demeeko Williams. Marian Kramer of the Welfare Rights Organization showed up to speak on Monica’s behalf, as did long-time community organizer Gwen Mingo. The rest are too numerous to name.
Also present, of course, was Councilwoman JoAnn Watson herself, who Monica has worked for over the past period.
Some of the many who turned out for a campaign fund-raiser/fish fry at Hush House Friday, July 26, 2012.
Gloria (Aneb) House who spoke at the fund-raiser on Monica’s behalf, with other supporters.
“Over the last two or three years, I have watched Monica as she and all the members of We the People fought every day,” said Gloria (Aneb) House, a renowned activist in Detroit since the 1960’s. “Strategy meetings, picket lines, non-stop organizing. She has a warrior’s spirit. She belongs to us. She brought the same fire to make sure Councilwoman Watson’s work was done by day and by night. She understands what’s going on. When she’s elected we can count on her not to be in the backrooms making deals behind closed doors. She is going to keep her head and feet behind us in the community. We must be ready to turn out to support her and fight for our city.”
Monica and her allies have paid their dues in the grueling battle to stop the corporate-state takeover of the world’s largest Black-majority city, Detroit, which is also the nation’s poorest major city. ‘
Prior to working for Councilwoman Watson, Monica worked diligently on the recount of the 2009 election that gave Detroiters Dave Bing, supporting the challenge brought by Tom Barrow. The Wayne County Board of Canvassers found that over 60,000 votes in that election were unrecountable due to numerous irregularities, but certified the elction anyway. Her work previous to that is described in her campaign flier above.
Monica then went to work for Councilwoman Watson, organizing rallies with the massive turn-outs in Lansing in February and April of 2011, against Public Act 4, the last swelling to over 10,000 people, then the huge Jan. 2, 2012 rally against a PA4 takeover of Detroit at Triumph Baptist Church She then worked day and night with thousands of others across the state on the arduous job of collecting over 240,000 signatures to repeal Public Act 4.
Monica’s supporters at picnic.
Monica poses with supporters.
At the same time, she worked with Councilwoman Watson to oppose the disastrous Public Act 4 Consent Agreement the Council voted for on April 4, 2012, the anniversary of Dr. Martin Luther King, Jr.’s assassination. That agreement began a prolonged assassination of Detroit. Despite all setbacks, however, Monica has never given up the battle, believing that the people of Detroit will win their city back.
Monica speaks at campaign rally July 25.
It is perhaps best said in her own words during the fish fry. Monica told how she felt going back into the Coleman A. Young Center to collect her belongings after she and Debra Taylor were laid off due to cuts sanctioned by Detroit Emergency Manager Kevyn Orr.
“I know they are trying to take our pensions, our water, our island, our city and our vote,” she said. “Over the last five years I have fallen deeply in love with the citizens of Detroit. Yesterday my oldest daughter gave birth to a little baby girl. There is something special about a grandchild. You know that part of you will live on. I’ve seen Detroiters fight to maintain their right to self-determination, with the Councilwoman fighting like none other.”
“We need you to help us save our city,” Monica said. Mitt Romney told us to let Detroit go bankrupt. We worked day and night to repeal Public Act 4, with Governor Snyder acting like a wolf going after sheep, like George Zimmerman hunting down Trayvon Martin. He found us in a most vulnerable state.
Keith Hines at right with Monica and others.
“He knew our leadership had been compromised and our assets were in jeopardy. Our fight has been unmatched, for collective bargaining, for HUD Section 3 which guarantees employment for our youth, for our children to be able to go to the same quality schools this city used to set the bar for.
“I am asking President Barack Obama to hold true to his promise not to let Detroit go bankrupt. We deserve the right to vote, to self-determination, to our water system that we paid for, to Belle Isle. Our forbears came from cotton picking and sharecropping to becoming engineers, lawyers, doctors, some of the best scholars in the world. We want to make sure we get a Mayor that’s proven they love this city.”
Monica’s daughters at left, friend
It was a delicious cake.
(Unfortunately, VOD lost track of who said what during the rally, but following are other comments, by speakers Cecily McClellan, Debra Taylor, Marian Kramer and more. They may be somewhat amalgamated.)
Demeeko, Tara, Ihekerema
“We have to push Monica’s campaign into high gear, like we did when we were voting for the President. They aren’t rebuilding Detroit for its current residents. Detroit is big enough for everybody. We’re not trying to keep anybody out, but we sure as hell aren’t going to let them kick us out.”
“Kevyn Orr was on the news talking about the thousands of people in Detroit who collect pensions. He said we have to balance the budget. This is evil when you turn your back on the people who built the city and kept it running. Our struggle is not against flesh and blood. Orr’s emails show that once upon a time he had a conscience, and knew it was wrong to take over Detroit.”
Marian Kramer of the Welfare Rights Organization supports Monica.
As editor of the Voice of Detroit, who religiously covered all the events Monica and others organized, from Lansing to Detroit, I have to say that I rarely trust politicians and do not believe in endorsements by newspapers. My former employer, the Michigan Citizen, previously had a policy of non-endorsement, knowing that promises made at election time can easily be forgotten in the fray afterwards. Unfortunately, the Michigan Citizen betrayed that policy in the last election, endorsing the likes of James Tate, Saunteel Jenkins, and Andre Spivey, who sold the people out, voting for the consent agreement and contracts with the law firms that are now pushing Orr’s attack on Detroit—Jones Day, Ernst & Young, Miller Canfield, Milliman, Inc. and many more. They literally sold our city to the devil, if such exists.
BUT, AS DIANE BUKOWSKI, AND AS EDITOR OF VOD, I DO TRUST IN AND BELIEVE THAT MONICA WILL NOT BETRAY THE PEOPLE OF DETROIT, HAVING WATCHED HER WORK THROUGH THESE LAST YEARS. MONICA LIKED TO TELL EVERYBODY THAT I WAS THE IDA B. WELLS OF OUR TIME—I DEFER. MONICA LEWIS-PATRICK IS THE IDA B. WELLS OF OUR TIME—THIS TIME, THIS PLACE, HERE IN OUR BELOVED CITY OF DETROIT. VOTE FOR HER!
Monica Patrick in green at right and Debra Taylor at left rally the crowd of 10000 April 13 2011 in Lansing at protest against PA4.
I decided to review VOD’s entire archives beginning with late 2010 to see what actions Monica Lewis-Patrick and Councilwoman JoAnn Watson led to stop the corporate-state takeover of Detroit, which VOD reported on. The list below is VOLUMINOUS; it was exhausting just to think of what work went into the actions reported on, in particular by Councilwoman Watson and her staff, including Monica and Debra Taylor, as well as Councilwoman Brenda Jones, who is running again.
While reviewing these articles, I also saw dozens describing Mayoral Candidate Krystal Crittendon’s heroic battle to stop the consent agreement despite attacks from Gov. Snyder, Mayor Bing, and the City Council Sell-Out Six that resulted in her discharge as the city’s Corporation Counsel. I know that Councilwoman Watson and her staff consulted frequently with Krystal Crittendon.
I WISH TOM BARROW AND OTHER SUNDRY MAYORAL CANDIDATES HAD JOINED FORCES WITH MS. CRITTENDON INSTEAD OF RUNNING ON THEIR OWN, EFFECTIVELY SPLITTING THE VOTE IN THE FACE OF THE CORPORATE FUNDED CANDIDATES, BENNY NAPOLEON AND MIKE DUGGAN. MORE ON THIS BY MONDAY AT THE LATEST, ALTHOUGH I KNOW IT’S LATE IN THE GAME. BUT I JUST WANT TO SAY ALSO: KRYSTAL CRITTENDON FOR MAYOR–A TOUGH WOMAN PROVEN IN BATTLE!
Those who stood against the consent agreement: (l to r) Debra Taylor, Monica Lewis-Patrick, Councilmembers JoAnn Watson, Kwame Kenyatta, Brenda Jones, after Fatal Five approved it April 4, 2013
See articles below, related to the battleswaged by Monica Lewis-Patrick, Councilwomen JoAnn Watson and Brenda Jones along with Councilman Kwame Kenyatta (not running this year), and Mayoral Candidate Krystal Crittendon and decide for yourselves who should get your vote!
Ed McNamara, Mike Duggan joined at hip from 1986-2002.
DETROIT – In his campaign for Mayor of Detroit, Michael Duggan has continually urged people to “look at his record.”
Some suggest that voters ought to examine carefully a prominent part of Duggan’s recorrd—his role from 1986 to 2002 as Deputy Executive to Wayne County Executive Edward McNamara in handling the destruction of the downtown YMCA in order to make way for the construction of Comerica Park.
Evangelist Sarella Johnson, founder of Unity in the Community, charges he authorized bullying and vandalism to drive tenants out of the building, many of them senior citizens, so that the Stadium Authority would not have to live up to their obligation of providing them with adequate relocation expenses.
Comerica Park under construction. City of Detroit taxpayers anted up $40 million, along with state and county funds, to Mike Illtich to build the stadium.
Because the tenants were removed partly through government action, they were entitled to a relocation away that provides compensation in line with their ability to pay.
If Duggan becomes Mayor, some wonder whether he might drive scores of people out of house and home and use government to create more homelessness.
During urban renewal cases in the 1960’s, residents claimed that government officials cut services and made conditions so unbearable most people wanted to get out fast.
One of the residents in the building at the time, Minister Craig Dorsey, said there were violations of the law.
Logo for Unity in the Community, founded by Sarella Johnson.
“They broke the faucets and put them in the sink, put the caps off the radiators and shoved them against the wall [shutting off the heat in the winter time, vandalized and toree off the only pay phone in the lobby and took it completely out.”
Johnson said, “We asked them [the people who did this] who sent them. We were told Mike Duggan.”
Dorsey and Johnson also said a fire was set in the building.
Duggan and his campaign officials could not be reached for comment by the time of this writing. However, Johnson said when confronted at the time Duggan blamed the tenants for the destruction of their own building.
She said it was unlikely the tenants would destroy the building they lived in for years. Dorsey said the fire was set in a portion of the building that tenants had no access to.
Many tenants of the downtown YMCA were elderly and poor.
Both Dorsey and Johnson said they did not allow the tenants to get their belongings out of their room.
According to the state Tenant Rights Act, people can stay 30 days before eviction is final,* so they can appeal their case in court. Johnson said this state law was blatantly violated.
Johnson said she paid some of the tenants’ rent, so they could at least take some of their things. Dorsey said some of the money the tenants kept in their rrooms was stolen.
Mike Duggan lures in woman, elderly like the men evicted from the YMCA.
Johnson said the tenants were “devastated.
“Some were unable to speak themselves. I told them there was nothing for them to be ashame of. The older men, who had memories of the Y, were crushed.”
“This is unAmerican,” she said. “It should not be allowed in this city or this country.”
Coming across the people in the Y, she said was one of the things that got her involved in city issues.
*VOD editor: What was done to these tenants, if true, was an illegal lock-out. Since I work part-time as a counselor for potentially homeless people, I have become aware of the following:
1.) You have a right to written notice of eviction, given to you by hand. If you have a lease, it must give you 30 days to move. If you rent month to month, it must give you seven days. However, you do not have to move even then.
2) After that period, the landlord must go to the District Court and have a “Notice and Summons” sent to you by the court, which will set a time and date for a hearing.
3) During the hearing, you will come before a judge. You also have the right to a request a jury trial (for a fee). You have a right to legal representation in court.
4) The judge will issue a Judgment telling you what date you have to move by. It will likely be at least ten days from the date of the hearing.
5) After that date expires, the landlord must go BACK to court to have the judge sign a Writ of Eviction.
6) The landlord must then contact the bailiff’s office for eviction. By city ordinance, he must rent a dumpster to put your belongings in.
Unless and until all these steps are taken, the landlord has no legal right to lock you out, turn off your utilities, change your locks, remove your belongings, or physically force you out. If any of this happens, you have the right to call the police to have them intervene (h0pefully—don’t count on it in Detroit).
For further information and to get free legal representation, contact the United Community Housing Coalition Landlord-Tenant Division at 313-963-3310.
City workers protest Mayor Dave Bing’s earlier move to take over pension systems.
By Ian Suite
August 1, 2013
U.S. Pres. Barack Obama, AG Eric Holder, head of the Justice Department
DETROIT — [Regarding the attack on Detroit’s retirees], where are [U.S. Reps and Senators] Peters, Conyers, Dingell, Levin, Stabenow et. al. in this ?? And you would think the President and the Justice Department would be looking into this and have something of meaning to say to protect these retirants.
Does anyone realize the disastrous socio-economic effect that not keeping whole the current retirees would have on society as a whole ?? Many retirees would lose their homes, maybe their vehicles, have to move in with their children who probably have families of their own, causing them stress and financial burdens they did not expect and should not have. Then there are those retirees who are still caring for and/or raising minor children of their own; and believe me there are more than you think in this position. That has a generational effect too.
City workers and kids at AFSCME picnic on Belle Isle in 2012
And while we are on it, this whole news coverage of the plight of our uniformed employees and retirees is squelching the fact that many other retirees are out here who were civilians belonging to the General System. They are damn important too !!
Let us NOT forget that attendant issues involving the plight of current affairs rest with some other statutes – first is P.A. 312 , the 1969 addendum to the Public Employment Relations Act of 1965 for public employees; which historically until the mid-2000’s has given public safety personnel close to everything they demanded at the bargaining table from an economic perspective. As an example, they didn’t begin paying co-pays for their health insurance until about 2005-6, while the civilian employees started this practice in 1987 !! Astounding!
Ernst & Young, a City of Detroit consultant in the bankruptcy, did the books for Lehman Brothers, whose collapse triggered the 2000 economic meltdown. They are being sued by the states of New York and New Jersey for their role.
And let’s not vilify the pension boards for this mess ; these bodies were hamstrung in many instances by the statute which governs investment criteria for ALL public pension systems in Michigan, P.A. 314. This statute is arcane and has not kept up with the ‘real-world’ of invetments. And let me add that throughout this statute the State is “exempt” from the stated limitations set forth in the act for particular investment types.
And, then there are the losses connected to the “Market-Crash” of 2007-2008, manipulated as it was , which caused the funds to lose a bit over 1 billion in assets because of Wall St mischief. Where is that money ? Particularly since many of these same money-manipulators were “Bailed-Out” and were major participants in the Global-Crash.
Protest against PA 4 in Lansing April, 2011. Ten thousand participated.
Many of these same entities have recently been involved in International Money Laundering, fixing the LIBOR rates, untold insider trading and God knows what else.
Any attempt to alter retirees’ income would be criminal and societally unacceptable.
P.S. I was around in 1963 when the State Constitution was amended and Article IX Section 24 was put in there, and as a further piece of FACT this provision , along a few others , was written by Theodore Sachs , a pre-eminent Constitutional authority. Unfortunately, he passed away many years ago.
In brief, the objection makes the following points: 1. The “Retirees Committee” should not be used as a “surrogate” or “straw person” to replace the Retirement Systems. 2. The Retirement Systems have “significant resources” which should not be barred from use on behalf of the retirees. 3. The Retirement Systems object to the City’s role in selecting the retirees as a conflict of interest; they should be selected by the Office of the U.S. Trustee. 4. The committee members should be paid officials. 5. Clark Hill and Greenhill, attorneys for the Retirement Systems, have participated in extensive consultations with the Retirement Systems and have also met with EM Kevyn Orr in negotiations. 5. Orr wants the committee because he claims the Retirement Systems cannot legally bind retirees. However, neither can the Retirement Committee or any other body. 6. Orr’s motion says the Retirees Commitee would be the single representative of the retirees. The Retirement Systems object that this is “an inappropriate attempt to marginalize the Retirement Systems–the city’s two largest creditors. . .in negotiating the protection of benefits . . . and the deprive the participants of the Retirement Systems of the significant resources” the systems can bring to bear.
DETROIT – Detroit Emergency Manager Kevyn Orr’s motion in the city’s bankruptcy case to for U.S. Judge Steven Rhodes to appoint a separate “Retirees Committee” that could replace the city’s elected Pension Boards will be heard this Friday, Aug. 2, 2013 at 10 a.m.
David Sole, a city retiree with the newly formed “Stop the Theft of Our Pensions Committee” (STOP) said they and others plan to protest at 9 a.m. outside the federal courthouse at 231 W. Lafayette in downtown Detroit.
Orr wants the newly-concocted committee to represent all 23,500 city retirees.
Snyder is interviewed after repeal of Public Act 4.
“There is still a request in front of the bankruptcy judge to appoint a creditor’s committee that will include retirees, so they will be the party that will really be representing retirees,” Michigan Governor Rick Snyder told Channel 7 in an earlier interview, making it clear that he and Orr want to eliminate the role of the pension funds in dealing with the bankruptcy.
Such a committee would not have the financial resources or expertise to fight what Orr and Snyder have made clear is their intent to raid retirees’ pensions.
The Detroit General Retirement System (DGRS) and the Detroit Police and Fire Retirement System (DPFRS) have set aside “war chests” to defend retirees in the bankruptcy case. They filed lawsuits at the state level and are currently intervening in the bankruptcy proceedings.
Bankruptcy attorney Robert Gordon of Clark Hill
“The Michigan State Constitution provides protection for accrued pension benefits,” bankruptcy attorney Robert Gordon of Clark Hill, representing the pension systems, argued during the first bankruptcy case hearing July 24. He said Michigan Governor Rick Snyder thereby had no authority to authorize the bankruptcy filing, since he is sworn to uphold the state Constitution.
“The Governor cannot unilaterally abrogate the constitution. He is seeking to do indirectly what he can’t do directly,” Gordon said.
Article 9, Sec. 24 of the Michigan Constitution explicitly forbids “diminishing or impairing” public pension benefits.
The pension funds also argued earlier in their state lawsuit that the current “Emergency Manager” act, PA 436, binds any Emergency Manager as well to comply with Art. 9 Section 24.
Detroit firefighters protest bankruptcy filing outside court July 24, 2013.
Jones Day, the city’s consultant, argues in Orr’s motion that the boards “have no authority to amend the terms of the Retirement Systems and pension plans.” They say the authority lies with the city through amendments of the City Code, and thereby with Orr.
The motion cites Detroit City Code § 47-4-4 (“The City reserves the right to amend . . . the Plans created hereunder at any time; such amendments may include termination of the Plan.”) Click on DB retirees committee motion to read full motion. Also click on DB 8 2 13 order to read agenda for Aug. 2 hearing.
The motion also argues that both pension funds are funded at levels lower than those reported by their actuary, Gabriel, Roeder and Smith. Milliman, Inc., hired by the city last year as a consultant, has made those contentions in unpublished reports. Under Public Act 436, Orr can remove one or all the elected trustees of the pension boards if that is the case.
Protest at CAYMC July 25, 2013.
Detroit’s case is unique among others in the country because it is being brought by an unelected official, Orr, with no accountability to the people, in a federal forum where there are no federal statutes protecting public pensions.
San Bernadino Mayor Pat Morris has opposed cuts to pensions as well as privatization during bankruptcy proceedings.
In the Stockton, California Chapter 9 bankruptcy case, the California Employees Retirement System (CalPERS) has been able to preserve public pensions in negotiations with the elected governments involved, while making concessions on health care. In San Bernadino, California, city officials there also held out against pension reductions.
Some union officials including Ed McNeil of AFSCME Council 25 and Dan McNamara of the Detroit Firefighters Association have misconstrued the gravity of Rhodes’ ruling, claiming it is better to be in the federal courts rather than the reactionary state courts.
USDEM Chief Judge Gerald Rosen.
After the hearing, McNeil proclaimed it a victory to retirees outside, despite the fact that AFSCME Council 25’s attorney Sharon Levine argued strenuously against the bankruptcy filing in court just hours earlier.
Judge Rhodes’ background is murky, but it is not likely that he will be any less reactionary than the state courts. He appointed U.S. District Court of Eastern Michigan Chief Judge Gerald Rosen as a mediator in the case. Rosen is a member of the arch-conservative Federalist Society. Before his appointment to the bench by President George W. Bush, he worked with Miller Canfield.
That is a likely conflict of interest, since Miller Canfield is also representing the city (i.e. Kevyn Orr) in the bankruptcy filing.
A representative for Gordon said he will be filing appropriate motion(s) on behalf of the funds before Friday to protect the pension boards, but that he cannot talk to the media until after the actions are filed. She said he takes the matter very seriously.
DWSD workers including Local 207 VP Mike Mulholland at right during July 25 protest.
At a luncheon held by the Detroit Retired City Employees Association July 20, retirees were recruited to sign up for representation on some form of committee, according to several attendees. In his motion, Orr suggested that retiree associations do so.
On their website, DRCEA President Shirley Lightsey has posted a letter she sent to Orr in March asking to meet with him. She says in the letter that the DRCEA has 6500 members. Lightsey letter to Orr.
“As you can certainly imagine, retirees and beneficiaries are fearful of what may happento their pensions and medical coverage as you try to find ways to correct the financial problems of the City of Detroit,” Lightsey wrote. “We are the liaison to many of those that will be affected by your decisions; and, I feel it would be helpful and informative if you would agree to meet with myself and several Officers of the DRCEA. We understand the challenges you face and the very difficult decisions you will be required to make going forward; however, we feel it is important for us to discuss with you the very serious impact any changes will have on all retirees and beneficiaries.
“If you agree to meet, we appreciate having the opportunity to share our concerns andallowing an open dialogue before you finalize your decisions and recommendations.”
Detroit’s Water and Sewerage Dept. will be taken over under bankruptcy if Orr wins.
The federal bankruptcy court website lists Attorney Ryan Plecha as representing both the DRCEA and the Detroit Retired Police and Firefighters Association (DRPFA) in the case.
Don Taylor, President of the DRPFA, earlier told another station, “Most of the retirees live on a fixed income and their pension is all they have because the city of Detroit opted out of social security so the retirees only have their pensions. They are worried right now.”
His organization represents 6,000 retirees.
Taylor is listed with Lightsey as one of the intervenors represented by Plecha on the court website.
Lightsey was contacted by email for further information, but had not responded before this story went to press.
Michigan Attorney General Bill Schuette
In related news, Michigan Attorney General Bill Schuette’s much publicized pledge July 26 that he would file a motion July 29 to defend retirees’ constitutional rights to their pensions did not materialize. As of July 30, no such motion had been filed according to the court’s website. Schuette only filed an appearance, although he was already represented at the July 24 hearing.
VOD earlier contacted Schuette’s press representative Joy Yearout for a copy of Schuette’s release cited in the Detroit News and Free Press, but to date has not received a response.
Orr additionally pledged in the daily media that he will not cut retirees’ pensions or health care benefits for six months, but did not cite what provision under the Bankruptcy Code allows him to make such a pledge.
Some retirees have said they feel Schuette and Orr are stringing them along to prevent an all-out fightback.
To contact STOP, the Stop the Theft of Our Pensions Committee,” call 313-680-5508 or go to www.moratorium-mi.org. Meetings of the Moratorium Now Coalition, which initiated STOP, are held every Monday at 7 pm at 5920 Second near Wayne State University.
Watch VOD for further updates on this matter, and on the fast-tracking of the bankruptcy filing.
Tranformers 4 is shooting in downtown Detroit at this site near Clifford and Bagley.
HEARING ON MOTION TO REPLACE PENSION BOARDS AUG. 2, 2013 10 AM
Judge Rhodes takes federal jurisdiction over broad range of issues
Represents national challenge to pension rights guaranteed by states
Firefighters, other retirees mobilizing to stop the attack
City services will NOT improve, despite contentions by Orr, Freep
By Diane Bukowski
July 28, 2013
Detroit firefighters protest outside courthouse July 24. Photo: Paul Sancya, AP
DETROIT – Detroit firefighters and other city workers shouted out “This is war” in protests this week, after U.S. Bankruptcy Judge Steven Rhodes declared exclusive federal jurisdiction over actions related to their pensions and all matters connected to Detroit’s historic bankruptcy case, both present and future. The bankruptcy filing is the largest in the history of the U.S.
Judge Rhodes’ sweeping order is significant particularly because it takes the issues out of Michigan’s state courts. The Michigan Constitution has strong provisions protecting public retiree pensions, whereas there are no such protections under federal statutes.
“It was argued today that perhaps the exclusive grant of jurisdiction to the Bankruptcy Court in Chapter 9 is unconstitutional,” Rhodes said during his ruling. “I find nothing in the 10th amendment or the more ambiguous concept of federalism to support that. In all of the other recent Chapter 9 cases, the Bankruptcy Court determined eligibility. This is entirely consistent with the bankruptcy and supremacy clauses of the Constitution. There is nothing in Title 28 jurisdictional provisions that suggests that Congress intended for state courts to have jurisdiction.”
U.S. Bankruptcy Court Judge Steven Rhodes with his book on Ponzi schemes.
The 1oth Amendment to the U.S. Constitution says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”
His ruling as finalized reads in part, “Pursuant to section 105(a) of the Bankruptcy Code, the Chapter 9 Stay hereby is extended to apply in all respects (to the extent not otherwise applicable) to the State Entities (defined as the Governor, the State Treasurer and the members of the Loan Board, collectively with the State Treasurer and the Governor, and together with each entity’s staff, agents and representatives), the Non-Officer Employees and the City Agents and Representatives.
“For the avoidance of doubt, each of the Prepetition Lawsuits hereby is stayed, pursuant to section 105(a) of the Bankruptcy Code, pending further order of this Court.
“This order is entered without prejudice to the right of anycreditor to file a motion for relief from the stay imposed by this order using the procedures of and under the standards of 11 U.S.C. § 362(d)-(g).”
(VOD will be publishing links to other court documents later.)
JUDGE RHODES GRANTS JONES DAY MOTIONS
Heather Lennox leads Jones Day’s victorious charge out of court July 24.. Beside her is Jones Day Attorney David Heiman and in background at right is managing partner Stephen Brogan.
Judge Rhodes’ sweeping order completely granted “stay” and “extended stay” motions by the City of Detroit, as represented by Emergency Manager Kevyn Orr and the megalith, ultraconservative Jones Day law firm. Jones Day was hired after mass opposition from Detroit residents who said it represents most of the city’s corporate creditors in other matters.
Jones Day has a team of five in town handling the bankruptcy and debt re-structuing, including its Managing Partner [i.e. CEO] Stephen Brogan. Attorney Heather Lennox argued their case July 24.
Lennox, of their Cleveland office, according to the law firm’s website, is “a restructuring partner, has counseled manufacturing clients in various industries through bankruptcies involving significant changes (both negotiated and court-imposed) to collective bargaining agreements, retiree benefits, and pensions affecting various unions.”
NATIONAL ATTACK ON PENSION RIGHTS
Attorney Jerome Goldberg of Moratorium Now Coalition speaks against banks at Detroit Financial Review Team meeting March 26, 2012/ Photo by Diane Bukowski
Attorney Jerome Goldberg of the Moratorium NOW! pointed out the national implications of Judge Rhodes’ order.
“Detroit is now in the forefront of what amounts to a national attack on the working class and pensions across the country orchestrated by the ruling class and banks who caused this crisis,” Attorney Jerome Goldberg of the Moratorium NOW! Coalition said, speaking outside Rhodes’ court July 24.
“Twenty-four other states have constitutional protections of public pension benefits,” Goldberg explained. “Michigan’s law is among the best. If it is eviscerated here, this will be a signal to the other states. The real secured debts are the pensions, secured by the workers who sacrificed higher pay for them. The city’s debts to the banks must be cancelled. They have committed predatory lending both to homeowners resulting in massive foreclosures that have devastated Detroit, and to the city and other municipalities, out of greed for profits.”
Protesters carry a sign outside the Levin Federal Courthouse in Detroit, Wednesday, July 24, 2013. .(AP Photo/Paul Sancya)
Most civilian city workers make less than $19,000 annually in pensions, said a union attorney during the hearing before Rhodes. For many, their pensions are reduced when they become eligible for Social Security. Detroit firefighters and police, however, don’t even pay into Social Security, so their pensions are their only source of income after retirement.
FIREFIGHTERS PROTEST EN MASSE; THEY GET NO SOCIAL SECURITY
Darrell Freeman, captain of Engine 59 and president of the Phoenix, the city’s Black firefighters association, spoke to VOD as dozens of firefighters, clad in red T-shirts declaring “Detroit Vs. Everybody,” joined with Moratorium NOW! outside Rhodes court. The firefighters have been protesting daily outside the Coleman A. Young Center as well.
Detroit Phoenix members/Facebook photo
“We don’t pay into the Social Security system,” Freeman said. “This is our primary job. Firefighting is the second most stressful job after being president. Our average life expectancy is 65. We are defending our pensions for our families. It is amazing to me that the courts are not being sympathetic to the fact that we have given our lives to the city and for the city. The whole state of Michigan voted against emergency manager laws—that should play a part in Judge Rhodes’ decision.”
Freeman declared further, “They are clearly gangsters. They want to take everything we’ve earned over the years after approving Public Act 436 in the wee hours, in a lame duck session. For people not to see this is a travesty. [Michigan Gov. Rick] Snyder’s plan all along was to combine our pension money into [the Michigan Employees Retirement Association]. Ours is outperforming pension funds there. He’s been after our money since he’s been in office.”
Detroit EM Kevyn Orr with boss Gov. Rick Snyder at press conference July 19, 2013./Photo Diane Bukowski
PA 436 replaced PA 4, which Michigan voters overwhelmingly repealed Nov. 6, 2012.
Orr later threatened the firefighters for claiming, as their pension fund’s actuary Gabriel, Roeder and Smith says, that the Detroit Police and Firefighters Retirement System (DPFRS) is 96 percent funded.
The city earlier hired Milliman, Inc., as its pension “consultants.” It has declared in secret reports that funding levels for both the DPRFRS and the Detroit General Retirement System (DGRS) are far lower than their actuary says.
In the bankruptcy proceedings, Orr has moved for the appointment of a “Retirees Committee” by Judge Rhodes to represent retirees, replacing the elected pension board trustees. A section of PA 436 says that if the city’s pension systems fall below an 80 percent funded level, Orr can remove any or all of the trustees and replace them.
Rhodes has set a hearing on Orr’s motion, which would essentially replace the pension boards, for Friday, Aug. 2, 2013 at 10 A.M. in Room 100 of the Federal Courthouse at 231 W. Lafayette in downtown Detroit. (Click on DB 8 2 13 order for full text of his scheduling order for July 24 and August 2.)
PROTESTERS DEMAND BANKS PAY
Detroit Health Department retiree Walter Knall protests outside the Coleman A. Young Center with dozens of others July 26.
Along with the firefighters, Moratorium NOW!, with the newly formed “Stop the Theft of Our Pensions Committee,” brought retirees and their supporters by the dozens to protest outside the Federal courthouse building in downtown Detroit on July 24, and outside the city’s headquarters, the Coleman A. Young Center, on July 26. They declared “THIS IS WAR!” in their fliers. They also demanded total cancellation of the city’s debt to the banks, many of which have been charged and some convicted of predatory lending, mortgage fraud, and laundering drug money.
Former UBS AG banker Peter Ghavami leaves the Manhattan Federal Court in New York July 24, 2013 REUTERS Eduardo Munoz
Orr has recognized a 2005-06 predatory $1.5 billion pension obligation certificate loan to the city from the global Swiss bank UBS AG as a chief factor in the debt crisis. On top of numerous other global charges and convictions against UBS AG related to fraud and interest-rate rigging, three former UBS executives were sentenced to prison July 24 in a New York Court “for deceiving U.S. municipalities by rigging bids to invest municipal bond proceeds,” according to Reuters.
U.S. District Court Judge Harold Baer of New York on July 25 blamed another Detroit creditor, Morgan Stanley, for the devastation of Detroit’s neighborhoods in a lawsuit brought on behalf of African-American homeowners,, according to Reuters’ blog author Allison Frankel.
U.S. District Court Judge Harold Baer of the Southern District of New York.
“Judge Baer . . . . rejected all of the bank’s arguments for dismissing the homeowners’ Fair Housing Act claims, giving a stamp of judicial approval to the plaintiffs’ theory that ‘by creating the conditions under which New Century originated toxic loans, Morgan Stanley caused African-American borrowers to fall prey to those loans at a disproportionate rate, or put another way, to make this homeowner nightmare come true,'” Frankel wrote.
“In fact, Baer tied Morgan Stanley – which he described as “this alleged icon of the free enterprise system” – to Detroit’s economic downfall. Citing the complaint’s argument that New Century mortgages to African-Americans that were subsequently purchased by Morgan Stanley suffered unusually high foreclosure rates, Baer said that the city’s bankruptcy filing ‘only emphasizes the broader consequences of predatory lending and the foreclosures that inevitably result.’”
WILL ORDER STAY CHALLENGE TO CONSTITUTIONALITY OF PA 436?
Former Council member Gary Brown, now Chief Compliance Officer under Kevyn Orr, applauds Detroit Mayor Dave Bing. At right is former Council Pres. Charles Pugh, who has disappeared after an alleged sex scandal.
Rhodes’ order stayed all current and future proceedings, financial and otherwise, against the city, and its officers and employees, including Mayor Dave Bing and heads of the Finance and Budget Departments, and Chief Compliance Officer Gary Brown. As part of a stay extension, it barred legal proceedings against Michigan Gov. Rick Snyder, State Treasurer Andy Dillon, and the state’s Emergency Loan Board, related in any way to the bankruptcy case.
Judge Rhodes specifically recognized Orr as a city officer, although he was appointed by Snyder.
The stay permanently quashed three retirees’ state lawsuits which contended that Snyder has no authority under the State Constitution to approve a city bankruptcy filing without exempting pension benefits from consideration.
Attorney Herb Sanders represents plaintiffs in Phillips v. Snyder.
Judge Rhodes said he would “tweak” the order proposed by Jones Day with regard to various matters, but his order only adds, “This order is entered without prejudice to the right of any creditor to file a motion for relief from the stay imposed by this order using the procedures of and under the standards of 11 U.S.C. § 362(d)-(g).”
It is unclear whether Rhodes’ order will stay proceedings in other federal courts, including two lawsuits, Phillips et al v. Snyder et al, and that claim Michigan’s Public Act 436, under which Orr operates, is unconstitutional. A hearing on Phillips et al is set for September 13 before U.S District Court Judge Graham Steeh’s court. His clerk said they have had no order from Rhodes staying the action as of yet.
Attorney Herbert Sanders, one of the attorneys in Phillips v. Snyder, told Rhodes, “There has already been a motion for summary judgment, and arguments have been scheduled. It appears that the city seeking an extension of the stay regarding finances, but pursuant to oral litigation they are seeking relief concerning any litigation that might interfere with city’s rights as a Chapter 9 debtor. Our case should not be included as part of the stay order. It is imperative the issue in our case should be determined before bankruptcy proceedings.”
FEDERAL LAWSUITS V. POLICE, CONSENT DECREE AFFECTED?
Nathaniel Brent, a pro se federal litigant, questioned during the hearing whether Rhodes’ order will stay federal lawsuits against Detroit police officers accused of violating federal constitutional protections of citizens.
Police siege similar to that in which children of Nathaniel Brent were kidnapped.
Brent’s five children were seized by Detroit police without judicial review. They were working with Child Protective Services worker Mia Wenk, who initiated the similar seizure of Maryanne Godboldo’s daughter in a case that has become a world-wide cause celebré.
Brent regained custody of his children later after filing pro se.
“I have a claim against City of Detroit police officers for violation of my Fourth Amendment rights, which has been pending for the last two and one-half years,” Brent said. “Now issues of their liability cannot be litigated, although they should continue to be litigated. My case is not part of the City of Detroit restructuring issues. The city has a risk management fund required to have at least $20 million.”
Detroit bankruptcy has stayed payment of $5 million to Dwayne Provience, who spent 10 years in prison as a result of a wrongful conviction.
He also questioned whether the stay should be extended to city employees who are not indemnified for their actions.
Since the city pays millions a month to a federal monitor under a police consent decree, it is unclear whether it will stay further action on that in U.S. District Judge Julian Abele Cook’s courtroom.
ATTORNEYS FOR PENSION FUNDS, UNIONS OPPOSED ORDER
Representing AFSCME Council 25, the union for the majority of city workers, Attorney Sharon Levine argued against Rhodes’ grant of complete federal jurisdiction, referring to state constitutional protections of pension rights.
AFSCME Council 24’s attorney Sharon Levine speaks with news media after hearing July 24. (Photo by Bill Pugliano/Getty
“The state has not properly in fact authorized a Chapter 9 bankruptcy,” Levine said. “If chapter 9 is being used to avoid the state constitution, you are taking away fundamental constitutional rights. The state’s interests are to go after the pensions.”
She argued that state courts, where the retiree lawsuits were pending, are courts of primary jurisdiction under the U.S. constitution, while federal courts are of secondary jurisdiction.
“The people of Detroit have very, very fundamental rights to go to their state courts first,” Levine said. “The Federal Rules of Civil Procedure protect the parties and provide due process. Most of our members are at or below 19,000 a year in their pensions. Unlike the corporations, they have no safety net.”
Attorneys for the city’s pension funds and the United Autoworkers agreed with Levine.
Atty. William Wertheimer represented UAW, retirees in Flowers case.
“The Michigan State Constitution provides protection for accrued pension benefits,” Robert Gordon of Clark Hill, representing the pension funds, said. “The Governor cannot unilaterally abrogate the constitution. He is seeking to do indirectly what he can’t do directly.”
William Wertheimer, representing the UAW and plaintiffs in the Flowers case, one of the three retiree lawsuits, added, “Whether the state authorization violates the state constitution is totally a state issue. State courts already have jurisdiction. The Governor’s failure to except pension benefits violates state law.”
Ironically, Attorney Barbara Paddock, representing the Detroit Firefighters Association, the Detroit Police Command Officers Association, The Detroit Police Lieutenants and Sergeants Association, and the Detroit Police Officers Association, concurred with Jones Day’s arguments and even took them a step further to ask the judge to make “an affirmative rule of preliminary injunction,” which he later did.
“We are not conceding the city is eligible to be a debtor,” Paddock said. “We simply believe this court is the proper forum because of the interaction of state and federal law. We want the stay to include members of public safety unions who may be subjected to lawsuits.”
RHODES SAYS MAJOR ISSUES WILL BE ARGUED IN HIS COURTONLY
Someone painted “Bankruptcy” on wall of building on Grand River near I-75. The letters are in black, green and red, colors of the Black nation.
In his court discussion, Rhodes said he was that day making “no ruling whatsoever as to whether city is eligible to be a debtor under Ch9, . . . whether the state constitution prohibited the Emergency Manager appointment and prohibited the governor from authorizing CH 9 filing without excepting constitutionally protected pension rights . . . whether state orders should be given preclusive effect. . . .whether any order entered by state court after Ch 9 filing violated the stay [and] . . .whether C of D is proposing a feasible plan in light of State Constitution.”
Rhodes added, “Whether it serves the public interest is the most important factor of all. Granting this motion will enhance debtor’s likelihood of reorganization, create efficiency, expedite, reduce city’s costs as well as those of other parties. Court finds it is in the public interest.”
He asserted, “All issues are fully preserved, when and if raised in an appropriate way. The Court will rule on them at that time. We will address procedures in a status conference Aug. 2.”
Rhodes was appointed to the bench during Ronald Reagan’s presidency.
It is not clear how Rhodes will rule on these matters. He has only presided over one other Chapter 9 case, which a press representative said he thought involved a utility. Rhodes was appointed to the court in 1986 while Ronald Reagan was president.
A Michigan Lawyers Weekley blog reported in 2007, “On a dour note, Rhodes said Chapter 7 debtors need to be more forthcoming about disclosing administered assets. Thirty-seven percent are not “fessing up” to all that they have.
Rhodes said proposed amendments to the court’s local rules, if adopted, will give trustees and the U.S. Attorney’s Office more muscle power to enforce asset disclosure rules.
“'[O]ne of our new proposed local rules would require the trustee to file a report whenever the trustee discovers an undisclosed asset after the debtor testifies at the meeting of creditors that the schedules are accurate. Another … would require the debtor to provide additional documents at the meeting of creditors,’ Rhodes explained.”
Chapter 7 is primarily used by small debtors, not corporations.
BANKRUPTCY WILL NOT IMPROVE CITY SERVICES
Cecily McClellan speaks in Benton Harbor in 2011 after EM takeover there.
Cecily McClellan, a retired city worker who is Vice-President of the Association of Professional and Technical Employees (APTE) said, “It appears to me that Rhodes is being taken in regarding arguments on the public good. Local propaganda about deficiencies in street lighting, quality of life, police protection, does not recognize that much of this was manufactured in order to reach this point. For example, DTE has a $154 million contract to provide energy for the city instead of using the Public Lighting Department. The new Public Lighting Authority wants to issue bonds backed by city for $160 million, in a move orchestrated by DTE.”
McClellan earlier fought the city’s de-commissioning and privatization of three predominantly federally-funded departments as part of the PA4 consent decree. They were Health and Wellness Promotion, Human Services, and Workforce Development. Along with workers in Public Lighting, who are being laid off to make way for the Authority, most of the city workers in those departments lost their jobs, further diminishing Detroit’s tax base, and services to city residents were thrown into chaos or eliminated.
Detroit Wastewater Treatment Plant worker on strike Sept. 30, 2012.
Orr has said he is using the consent agreement as a blueprint for his future plans for Detroit, which he published earlier. His proposal to creditors, which he says will be the basis for the city’s plan of adjustment in bankruptcy, also follows those earlier pacts.
They include the regionalization of Detroit’s Water and Sewerage Department and the lay-off of 81 percent of its workforce under a contract with Toronto-based EMA, which union officials have said will lead to higher rates for Detroit residents.
A state Belle Isle long-term “lease” with no lease payments is also on the agenda, with the attendant elimination of city jobs and current contractors, and the takeover of federal funds which continue to flow to the city to improve the Island, as well as revenues from events and permits.
The Detroit Free Press published a front page interview with Orr July 28, with a banner headline declaring, “Detroit bankruptcy upside: City services will improve.”
It played on residents’ fear of crime. Orr said he plans to provide more police cars, tasers, and even on-body cameras for cops to fight what he portrayed as Detroit’s primary problem: small-scale criminals on the streets.
“The Taser issue illustrates one of the complications Orr’s team faces in improving police service,” said Freep writer Matt Helms in the article. “The city has been under federal oversight for a decade, and the U.S. Justice Department must approve any changes in the Police Department’s policies on use of force. Tasers, which use electricity to temporarily disable suspects, must win federal approval, something top aides to Orr say they believe will be granted because the devices help reduce shootings by officers.”
The city pays millions a month to the federal overseer of the consent decree. Under the stay, those payments should be halted for the time being.
Kelly Thomas died from his injuries after Fullerton, CA police tasered and beat him.
There was a huge outcry during the last decade against the use of tasers in Detroit, which have been shown nationally to cause hundreds of deaths. Opponents said they have their origins in the 19th Century Afrikaaner concept that people of African descent are sub-human, with extraordinary animal strength that must be subdued by extraordinary measures. The website “Electronic Village” reported two days ago that there have been 541 taser deaths in the U.S. since 2001.
Helms said funding for police improvements will come from $11 million annually which he claimed was released by Judge Rhodes stay. Orr recently sued city creditor Syncora, Inc., which insures U.S. Bank NA’s holding of the city’s casino tax revenues pursuant to its 2009 default on the UBS $1.5 billion pension obligation certificates loan. UBS and US Bank agreed to release the funds, but Syncora balked.
Hearing on D-DOT route cuts two years ago.
Rhodes told representatives of Syncora in court July 24 that their claims will be discussed in a status conference Aug. 2, so those funds are actually still pending for an indefinite period.
The article said further that plans are being laid to hire ANOTHER private contractor to run D-DOT, in the wake of the disastrous performance of Envisurage/Transpro, which led to drastically impaired bus service. Under the new Regional Transit Authority authorized by the state legislature, Detroit has already lost $7.8 million a year in federal funds for D-DOT, which are its primary support. Plans are being laid to subsume D-DOT and SMART into that authority.
STATE AG SCHUETTE TO INTERVENE FOR PENSION RIGHTS
State Attorney General Bill Schuette announced in a release July 25 that he would intervene in the bankruptcy case to protect public pension funds under the state constitution.
Michigan AG Bill Schuette
Schuette said the constitution makes it “crystal clear in stating that pension obligations may not be ‘diminished or impaired,’” and said Michigan cannot afford to have the standard of living for its people including its retirees further compromised.
He cited the same constitutional provisions Wayne County Circuit Court Judge Rosemarie Aquilina used to bar Snyder from approving Detroit’s bankrujptfy filing in the three state lawsuits.
Schuette, however, opposed her rulings. He previously called for the Michigan Supreme Court to immediately rule on the constitutionality of PA 436, and earlier in his tenure apposed affirmative action in U.S. Supreme Court proceedings, as well as relief from life without parole for juvenile offenders.
However, Schuette may be making note of provisions in PA 436 itself that actually require the governor and the EM to abide by state constitutional protections of pensions.
A brief filed by the city’s pension funds in their state lawsuit says, “It is clear that Michigan’s legislators never intended that the governor or an emergency financial manager take action in violation of Art IX Sec. 24 [protecting pension benefits]. Indeed MCL 141.1552(m)(ii) [in PA 436] expressly provides that “[t]he emergency manager shall fully comply with . . . . section 24 of article IX of the state constitution of 1963. And MCL 38.1683 provides that “[t]he right of a member or retirant of a retirement system to a retirement benefit shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law and shall be unassignable.”
TO CONTACT RETIREES’ COMMITTEE THAT HELD PROTEST AT CAYMC JULY 26, CALL 313-680-5508 OR GO TO THEIR WEBSITE AT WWW.MORATORIUM-MI.ORG . They hold meetings every Monday at 7 p.m. at 5920 Second Ave. Detroit, MI 48202, near Wayne State University.