Falling income. Unaffordable colleges. A dying middle class. Young people without hope. The greatest economic inequality in modern history.
And yet, in the midst of the Long Depression, we’re told that the president intends to cuts Social Security.
Pres. Barack Obama proposes cuts in Social Security, Medicare
According to reports, the new presidential budget proposal will also include job-killing spending cuts and a Medicare cost hike that will increasingly affect the middle class with every passing year.
The president says this isn’t his “ideal plan,” but he doesn’t say what his ideal plan would look like — and he certainly isn’t fighting for a better one. He also claims his budget offers “tough reforms,” which rings of self-satisfaction rather than sorrow.
He’s decided on his next move. What’s yours?
This budget represents a moral challenge for everyone, especially those of us who voted for him. I’ve already gone here to let my elected officials know that I unconditionally oppose these budget cuts.
Death by a Thousand Cuts
Call it ‘the unkindest cut of all.’ What makes the chained CPI particularly unkind is the fact that millions of Americans have already had their Social Security benefits cut. Benefits are determined based on a person’s lifetime earnings, so any significant loss in income now results in a benefit cut later. (More details here.)
Long-term unemployment is a benefit cut. A stagnating wage is a benefit cut. Wealth inequity is a benefit cut.
How many more cuts can the American people stand?
A Deep Cut
How big is the president’s chained CPI cut? For someone who retires at 65, it would be:
a 3.7 percent cut at age 75; a 6.5 percent cut at age 85; and a 9.2 percent cut at 95.
What about the dollar cost of the president’s cut? For the average earner, cumulative benefits would be cut by:
$4,631 — more than three months of benefits — by age 75; $13,910 — nearly a year of benefits — by age 85; and $28,004 — more than a year and a half of benefits — by age 95.
Unless the president’s budget excludes the chained CPI from IRS calculation, it would also lead to tax increases for all income except that in the highest tax bracket. So his Social Security cut would also be a middle-class tax hike.
All the President’s Cuts
Despite its severity, reports tell us that the chained CPI isn’t this budget’s only harsh austerity measure. The president will also propose increasing Medicare premiums for higher earners. The figure that’s been reported is $47,000 per year. That targets comfortable seniors, not just the wealthy.
In less than 25 years, that more than one retired person in four would be paying an increased Medicare premium. (See the Kaiser Family Foundation’s analysis for more.) This cost hike wouldn’t do anything to reduce runaway health care costs. It’s just cost-shifting.
The president’s budget also includes some plain, old-fashioned austerity. According to reports, the new Obama budget calls for $400 billion in cuts to health programs, along with cuts to federal employees’ retirement programs, the Post Office, and farm programs.
New Food & Water Watch Analysis Highlights Public Costs Associated With Water System Privatization Deals
April 4, 2013
Contact: Tia Lebherz, Food & Water Watch, (313) 486-1356 tlebherz@fwwatch.org
Detroit, Mich. – As Emergency Financial Manager Kevyn Orr works to balance Detroit’s budget in the wake of a state-declared financial emergency, reports indicate he may attempt to raise cash by privatizing Detroit’s drinking water and wastewater systems.
“Privatizing Detroit’s water and sewer system will do nothing to alleviate the city’s financial problems,” said Tia Lebherz, a Detroit-based organizer for Food & Water Watch. “Doing so would amount to a one-shot ploy to obscure larger money woes, and would ultimately come back to haunt residents in the form of higher bills.”
Although more than 80 percent of water systems worldwide are publically owned and controlled, the collapse of global financial markets in the 2000s has led many governments around the world to consider privatizing these assets through arrangements such as concession contracts, where a municipality retains ownership of a system, but the corporation that has assumed control is responsible for setting rates and financing system upkeep.
People’s Water Board Coalition protest outside Detroit Water Board building Aug. 21, 2012.
In these deals, the private company will give a local government what is effectively an upfront loan for control of its water system, while ratepayers, not the municipality, are expected to repay the loan through rate increases and other fees.
Because ratepayers must repay the loan from the company leasing their water system, water bills will increase. The more money a local government receives from the deal, the more households and local businesses will pay through their water bills.
The late Mary Shumake protests with the Michigan Welfare Rights Coalition in Detroit.
“Water privatization would disproportionately affect poor and working class families across Southeast Michigan who are already unable to keep up with water rate increases,” said Ann Rall of the Michigan Welfare Rights Organization. “Our water system should provide the highest quality service at the most affordable price to ensure that all can have access to safe drinking water and sanitation. The regressive rate hikes that would occur with privatization would place an unfair burden on those less able to pay. Privatization would also increase the already-staggering level of unemployment in this region.”
Concession contracts are far more expensive than the common form of government borrowing on the municipal bond market. The upfront loan can have an interest rate of 14 percent or higher, while local government debt typically has an interest rate of about 4 percent. For similar reasons, concession contracts have also been shown to drive up the cost of system improvements, adding $0.8 million to $2.5 million onto the total cost of every $1 million investment.
Detroit Wastewater Treatment Plant workers on strike Sept. 30, 2012
“In Detroit, both the Emergency Financial Manager and the Board of Water Commissioners have expressed that they are interested in pursuing the privatization of DWSD, either through the sale or lease of the system,” said Ken Gray, member of AFSCME Local 207. “However, we know, and this report confirms, that such an irresponsible and short sighted decision will not create a balanced budget but rather will dig Detroit into a deeper hole of long term financial instability.”
Food & Water Watch recommends that Kevyn Orr reject the idea of privatizing Detroit’s local water and sewer systems, as doing so will not provide a real, sustainable and responsible solution for the city’s financial shortfall. Policymakers should grant the public access to all information regarding potential privatization contracts, encourage public input and require a referendum on any proposed lease, concession or sale of a public drinking or wastewater system.
Borrowing Trouble: Water Privatization Is a False Solution for Municipal Budget Shortfallsis available here:
Food & Water Watch works to ensure the food, water and fish we consume is safe, accessible and sustainable. So we can all enjoy and trust in what we eat and drink, we help people take charge of where their food comes from, keep clean, affordable, public tap water flowing freely to our homes, protect the environmental quality of oceans, force government to do its job protecting citizens, and educate about the importance of keeping shared resources under public control.
Tia Lebherz
Organizer
Food & Water Watch
2727 2nd Ave, Suite 136
Detroit, MI 48201
Helen Moore, leader of Keep the Vote No Takeover, at press conference against Detroit EM takeover, March 22, 2013
Folks can tune in to Detroit’s participation on Saturday April 6 (Helen Moore, leader of Keep the Vote No Takeover, will be speaking at 2 pm). March to the White House at 3 pm.
Administrators of the public education advocacy group UNITED OPT OUT NATIONAL are hosting the second annual event on the grounds of the US Department of Education in Washington, DC on April 4-7, 2013. We ask all of those in support of teachers, students and public schools to attend. The third day will include an organized march to the White House.
Child at DOE protests standardized testing.
The event is a four-day gathering of progressive education activists endeavoring to resist the destructive influences of corporate and for-profit education reforms, which began in previous administrations and persist with the current one. We cannot and will not stand silent as the threats to dismantle our system of public education continue. These threats include the erosion of the teaching profession, excessive use of standardized testing, mandated scripted curriculum, the absolute disregard of child poverty, and reforms which disproportionately impact minority communities.
CTU Pres. Karen Lewis and Chicago teachers have led a massive strike, and are in the forefront of current school closings protests there.
We ask that you join us, stand tall, and meet your responsibility as citizens to be heard above the din corporate influence. You will have the opportunity to hear speakers and converse with public school advocates from across the country, including Diane Ravitch, Nancy Carlsson-Paige, Chicago Teachers Union President Karen Lewis, Stephen Krashen, Brian Jones, Deborah Meier, Helen Moore, and many other students, teachers, and community members (visit the link below for full schedule details1).
Do not miss this free and unique opportunity to connect with like-minded public school advocates. Come gather information and strategies that can be used to fight corporate education reform in your own community. Join us and make your voice heard.
If you require more information about the event, or to schedule interviews with the Administrators of United Opt Out National, please contact Peggy Robertson at (720)810-5593 or via email writepeg@juno.com.
Helen Moore (center) with Detroit Journey for Justice delegation on Capitol Hll Jan. 29, 2013.
VOD: The U.S. Department of Civil Rights just announced that it is opening an investigation into disproportionate closings of schools in communities of color in Michigan, as a result of the events below. Click on DOE letter to Helen Moore to read letter sent to Elder Helen Moore.
Video below is from National Journey for Justice event Sept. 12, 2013; a busload attended to protest destruction of Detroit Public Schools.
School Closures Violate Civil Rights, Protestors Tell Arne Duncan
Posted: 01/29/2013 7:01 pm EST | Updated: 02/01/2013 2:12 pm EST
WASHINGTON — The standards-based education reform movement calls school change “the civil rights issue of our time.” But about 220 mostly African American community organizers, parents and students from 21 cities from New York to Oakland, Calif., converged on Washington Tuesday to tell U.S. Secretary of Education Arne Duncan he’s getting it backwards on school closures.
Members of the group, a patchwork of community organizations called the Journey for Justice Movement, have filed several Title VI civil rights complaints with the Education Department Office of Civil Rights, claiming that school districts that shut schools are hurting minority students. While most school closures are decided locally, the Education Department’s School Improvement Grant gives underperforming school districts money for shakeups or turnarounds, including closures.
Chicago students march through the Loop protesting the city’s plan to close more than 50 elementary schools on March 25, 2013 in Chicago, Illinois. Last week the city announced the plan claiming it was necessary to rein in a looming $1 billion budget deficit. The closings would shift about 30,000 students to new schools and leave more than 1,000 teachers with uncertain futures. (Photo by Scott Olson/Getty Images)
The meeting became heated at times. “The voices of the people directly impacted can no longer be ignored,” said Jitu Brown, an organizer from the South Side of Chicago. “This type of mediocrity is only accepted because of the race of the students who are being served.” He called school closures “a violation of our human rights,” since many communities are left without neighborhood schools after districts shut them down.
“We are not Astroturf groups,” Brown continued. “We are not people who are paid by private interests to appear.”
Helen Moore, an organizer from Detroit, said the current reform movement is tantamount to racism. “We are now reverting back to slavery,” she said. “All the things that are happening are by design, by design, by design. They don’t want our children to have an education, but we’ll fight to the death.” Continue reading →
Claytown community activist Sheila Crowell (l) explains her concerns about contaminated grounds at new Munger PreK-8 school to community and officials, including (background) State Rep. Virgil Smith.
Bond project manager claims sites are safe based on inspection by “3rd party” environmental hygienist
DPS admits no removal of contaminated soil was done before constructing Prop S schools
Community fears sites remain dangerous to children and families
By Diane Bukowski with Sheila Crowell
April 1, 2013
DETROIT — The Chicago school district announced the closure of 54 schools last month, due to a $1 billion debt. The declaration brought back horrific memories of the Detroit Board of Education’s 2005 vote to close 50 schools, the beginning of a Hurricane Katrina that has left the district with only 104 bona fide (non-charter) public schools out of 268 it had in 1999. By 2014, additional closures will reduce that figure to 72.
Chadsey High School before its demolition.
Sheila Crowell, a community activist, has doggedly followed the demise of Chadsey High School, a storied multi-ethnic landmark, and other schools serving Detroit’s “Claytown” neighborhood on the city’s near west side over the last decade. Southwestern High School, and Hanneman, O.W. Holmes, Logan and Munger Elementary Schools, among others, have also been closed.
Recently, Crowell and her neighbors have focused on environmental and health issues resulting from Chadsey’s demolition, and its replacement by the $22.3 million Munger PreK-8 elementary on what was confirmed to be contaminated soil prior to the construction.
Chadsey during demolition, which left site contaminated with dangerous chemicals including asbestos and lead.
The construction managers were Turner Construction, a national white-owned company headquartered in New York City, and White Construction, a Black-owned Detroit-based business. Walbridge Aldinger, owned by John Rakolta, a close ally of Michigan Gov. Rick Snyder, Brailsford Dunleavy, and Fanning Howey form the overall Bond Program Management Team.
“Carol Weaver [DPS supervisor of community outreach] and the DPS feel the school grounds are safe,” Crowell said. “No one is bucking the DPS, because no one cares about the youth and our 48210 Claytown neighborhood residents, meaning our lives are in danger every day. When the rain comes this spring the so called safe DPS school and park grounds will melt away again, running down onto the school grounds, city of Detroit sidewalks, streets, and alleys, placing the homeowners’ lives and homes in major danger. Does someone have to wait until the ground sinks leaving open holes for a youth or adult to fall into to? All of this and more just so people like Walbridge could make money off the Proposal S Plan.”
Munger High School, front, during meeting March 1, 2013. Walkways into school were also covered with ice and unsafe.
The demolition and construction were paid for out of a $500.5 million bond issue allegedly approved by Detroit voters as Proposal S in 2010. (The Wayne County Board of Commissioners ruled that 60 percent of the votes in the election, including all absentee ballots, were not recountable due to irregularities, in response to a challenge by Mayoral candidate Tom Barrow.)
DPS officials at a March 1 meeting called by Crowell and held in the Munger school library admitted no removal of contaminated soil was done prior to the school’s construction, but claimed precautions taken have made the grounds safe.
MDEQ representatives stand in background during meeting at Munger.
They reiterated what Rachel Lynn of Brailsford and Dunlavey told Crowell in an email March 29, 2012:
“The soils on school site only (not Dingeman Park) were tested before the start of construction by a 3rd party environmental hygienist, and the test results showed that the contaminants in the soils were those found in diesel fuel and metals;
Rachel Lynn of Brailsford and Dunleavy, part of DPS Bond Program Management Team.
The Michigan Department of Environmental Quality (MDEQ) evaluates the risk associated with contaminants by examining the different ways people may be exposed to them, including eating, touching, inhaling dust, breathing vapors, etc.
For the contaminants found in the soils at Munger, and at the levels they were detected, the only way of exposure that posed risk was if the soils were touched or eaten; for all other ways (inhaling, drinking water, breathing vapors, etc.), the contaminants were not present at levels above the acceptable standards set by MDEQ for residential areas;
The imported soil and sand will be tested by the 3rd party hygienist to confirm that it is free of contaminants and do not pose risk to the students or community;
All soils currently seen piled on site will remain on site and will not be removed and dumped;
This method of managing the soils is a method approved by MDEQ and has been used at schools in Detroit and the suburbs; and
The site will be safe for the students and community as a result of these measures.”
Sheila Crowell makes a point during March 1 meeting.at Munger.
Crowell responded, “If the MDEQ has not or cannot receive copies of all testing done by this third party environmental hygienist who so called tested the Munger School grounds at any level, how would MDEQ be able to say and give the okay the contaminated soil was safe for anyone walking to school, attending school, playing and rolling on school grounds, residents, homeowners, anyone who would put themselves in, on or near the DPS school property, including Dingeman Playfield, both owned by the DPS? The Munger School grounds, Dingeman Playfield, Larkins Alley, homeowners/property on Larkins, Cecil and Martin, etc. must be tested and paid for by DPS. Just because we are a poor neighborhood, we have rights to live & breathe as any other human person living in the USA.”
Shreds of what appears to be orange geofabric on Munger site in July, 2012. Photo by Sheila Crowell.
Crowell proceeded to monitor the site herself repeatedly during and after construction. During one visit to the site in July, 2012, she observed that some of the “geofabric” barriers were already shredded, among numerous other problems.
In Aug. 2012, VOD went to the site with Crowell and took photos, observing large mounds of soil, standing pools of water, debris including a dog carcass, more orange geofabric that was out of place, and other items which appeared to be evidence of contamination.. VOD published an article by Crowell including those photos along with hers, and VOD commentary, at
Sheila Crowell and State Sen. Virgil Smith point out iced over walkway on Munger grounds that they fear will melt in the spring and contaminate new soil laid over old.
Crowell said that since then, she has repeatedly asked the Michigan Department of Environmental Quality to test both the Munger site and Dingeman Playfield, to no avail. During the March 1, 2013 meeting, former Chadsey and current Southwestern High School coach Ron Hardy asked, “Are the geo-fabric barriers waterproof?”
The MDEQ reps contended that “water infiltration is not necessarily a concern. The possibility of water becoming contaminated is minimal. There is no acute risk.”
“Why did the Bond Oversight Committee stand by the decision to lay geo-fabric barriers in landscaped areas, not covered by pavement on top of the contaminated soil, then import 12 inches of new sand and top soil to lay on top of the barrier?” Crowell asked. “That’s 12 inches of so called protection which is washing away. A foot of protection. Shame!”
The meeting and walk-though of the Munger grounds, called by Crowell for the community and government officials March 1, 2013, was well-attended.
Michigan State Rep. Rashida Tlaib (D-Detroit), State Sen. Virgil Smith (D-Detroit), and Jesse Gonzalez, representing Wayne County Commissioner Ilona Varga were present, along with two MDEQ representatives, Joseph DeGrazia, C.P.G. and Gerald Tiernan, C.P.G.
Community representatives included Claytown residents Al Nasir and Aswan Almaktary of ACCESS, John Lopes, President of Southwest PRIDE, and Coach Hardy.
Representing DPS in addition to Weaver were Roderick Brown, Executive Director of Operations for the bond program, Kevin Smith, Chief of Staff to DPS EM Roy Roberts, Felicia Venable-Akinbode, executive director of DPS Auxiliary Services, and Munger School Principal Deborah Hurst.
State Rep. Rashida Tlaib explains her bill that would require remediation of grounds before new school construction,.
The most striking admission from DPS at the meeting was that nothing was done at Munger or other newly-constructed Prop S schools to actually remove contaminated soil. Many of the schools have been built on sites where old schools laden with asbestos and other contaminates were demolished.
“I have introduced House Bill 4827, which would require an environmental assessment before schools are constructed,” Rep. Tlaib said. (Click on Tlaib 2013-HIB-4278 to read entire bill.)
The bill says public notice of the results of the inspection shall be posted on the school board’s website and published in a newspaper of general circulation.
Standing water turned into ice still on Munger grounds March, 2013.
It further states, “The board or board of directors shall not commence construction of a school building at the site unless a licensed professional engineer has attested under seal that planned reponse activities will at least satisfy the clean-up criteria for limited residential use under Sec. 20120A(1)C and (17) of the Natural Resources and Environmental Protection Act, 1994 PA 451, MCL 324.20120A, or planned corrective action will at least satisfy the cleanup criteria for restricted residential use under part 213 of the Natural Resources and Envionmental Protection Act, 1994 PA 451, MCL 324.21301A TO 324.21334.”
Ice was on Munger basketball court as well. Sheila Crowell and VOD saw children playing there last fall.
Rep. Tlaib said, “I would rather that the school sites just get completely remediated before the buildings are constructed.” She expressed concerns that DPS would be subject to lawsuits from the community as illnesses related to the contamination develop.
Crowell said she is also concerned about Dingeman Playfield adjacent to the new Munger PreK-8 building. DPS purchased those grounds from the City of Detroit, possibly through Prop S, and is now responsible for them.
“I am very concerned about health issues there for the kids and the parents,” Crowell said. “I want those grounds tested as well.”
Ice pool where trees were planted on Munger grounds by Greening of Detroit.
Conditions on the Munger and Dingeman sites became apparent as the group did a walk-through of the area. But even prior to the walk-through, VOD noted that the sidewalks in front of Munger were covered with ice and barely accessible for the young children entering and leaving the building, let alone adults.
During the walk-through, large iced over areas on the grounds were evident, in the same areas VOD observed pools of standing water during its walk-through in Sept. 2012. Also iced over were walkways and a basketball court used by students and the community. Crowell and others expressed concern that when the ice melts, the resulting water will sink into the new soil placed above the contaminated soil and carry contaminants back to the top.
Sheila Crowell and community group planting tree on Dingeman Playfield several years ago. Their community plan for the playground was destroyed by bureacrats; they lost over $508,000 in funding.
Crowell pointed out saplings that the Greening of Detroit had planted on the grounds and expressed doubts regarding whether they would be contaminated as well, and fail to grow properly. A retired City of Detroit Recreation Department forester told VOD earlier that the Greening of Detroit does not follow up properly on trees it plants because its young volunteers do not have the needed training.
As we walked through Munger School, images of what had been a vibrant, multi-ethnic, renowned Chadsey High School came to mind, a school destroyed by government officials and contractors greedy for dollars. Chadsey students walked out several times to protest their school’s closing, to no avail. See the video below taken in 2007 by a Chadsey student.
Chadsey High School 2007, uploaded by “death by reflection.” Some clips & pics from Chadsey high school my tenth grade year before I got expelled. Just watch, you might even be in it!! This is a video of a last view of how this school will be remembered! It will be demolished, starting March 8th, 2011. Long live ” The Explorers!” Comments:
Rachel Huttersondamn!!!MEMORIES MEMORIES; MzSweets1010 man this is just sad…so many memories here and now they’re all gone.. and i thought i could return in a few years and look back on the good times..smh CLASS OF 09!!!
Protesters including DPS board member Tawanna Simpson (r) carried out eviction of EFM Roy Roberts Nov. 12, 2012. Now he in turn has evicted the school board (again) under PA 436.
Detroit school board member Elena Herrada speaks at forum against EAA Aug. 2, 2012
The elected Detroit School Board members face a new Emergency Manager law, PA 436, which replaces the one the voters repealed. Despite the fact that the language of the ballot initiative stated that repeal of PA 4 would also repeal its predecessor law, and that once the signatures were certified, the emergency manager law would be immediately suspended, none of this came to pass.
Despite the fact that Detroiters pay for a bond iniatiative to build much needed new schools, when the State took over, it sold off or leased our new buildings to charters and to the separate and unequal new experiment, The Educational Achievement Authority.
The Emergency Manager can hold all power over elected officials. This is the greatest perversion of democratic representation; one who is not elected answers to no one, and those of us elected answer to a corporate proxy. Crucial decisions about education are made by share holders and bond holders who know or care nothing of education for poor Black and Brown children. This is economic organ harvesting with full complicity of the state, the philanthropic community and the banks.
Protest against DPS state-appointed CEO Kenneth Burnley June 16, 2005. Student Sasha Alford at front.
We are also being told that the options for voting out the emergency managers is actually a White Only option. None of the municipalities or school districts currently under EM will be eligible for the same option to vote out an EM. This “Grandfather” clause is similar to the Jim Crow laws that exempted Black people from equal protection under the law. This is being challenged; a law suit was filed in Federal Court last week on March 28th in Detroit.
The brutal racism leveled against Detroit- especially Detroit’s most vulnerable children- is something we have not witnessed in our lifetime- those of us under 70 or 80 years old. We have not witnessed state imposed racial and economic segregation; indeed, we were witnesses to court ordered school desegregation, which caused rapid white flight in the 70s, making way for Coleman A. Young to be the longest serving mayor in Detroit history. But it is no longer necessary to vote to run Detroit; indeed, voters run nothing. Detroiters who fought long and hard for representation- and for Latinos, a dream deferred- are watching our voting rights erode before our eyes while newcomers are being given tax abatements and incentives to move into the city.
Emiliano Zapata
The fact that the next election would have been the first in Detroit to offer the possibility of Latino representation via district voting vs. at large is only a small part of the current political moment. A city of 85% African Americans and all Black cities in Michigan have been stripped of voting rights by the state and we are still too numb to coherently make a plan to resist. Anyone elected to office now would have no power to make decisions. It calls into question why anyone would run. (School Board members do not get paid).
The elected school board members proudly return to exile. We invite the Detroit city council members to join us in exile and say NO to captivity; say NO to complicity; say NO to collaboration with those who steal our resources, our future and our city. SAY NO and JOIN THE DPS BOARD in EXILE!
In the words of Emilano Zapata, ” It is better to die on one’s feet than to live on one’s knees.”
Children ride their bikes past a City of Stockton recreational building.
Court says city of Stockton, California may proceed with bankruptcy
Creditors including Wells Fargo, BOA, Union Bank NA, IBM, Key Government Finance, Ambac, others object; judge rebukes them
Retirees still in danger if federal law trumps state law guaranteeing pensions
Detroit advocates of bankruptcy–beware
(VOD editor: As of April 14, 2013, VOD has corrected the original version of this post as follows: A representative of The Bank of Stockton contacted VOD earlir about the caption to the photo previously used at the top of the story, which showed a downtown building in Stockton displaying an ad for the Bank of Stockton. She indicated that the sub-title used for the photo when clicking on it appeared to indicate the Bank of Stockton itself was bankrupt, and she mis-stated the actual headline of the story, which remains as above. VOD responded that it would change the sub-title of the photo to clarify that it was not the Bank of Stockton that declared bankruptcy. Later, VOD received the following rather strongly, perhaps maliciously, worded email from the Bank’s attorney:
Rather than take the responsible action that I demanded, below, you reconfigured your story slightly to attempt to diminish the libelous nature and in so doing added a line, below a photograph of the advertisement for the Bank appearing on a downtown Stockton building, which now reads: “The Bank of Stockton is one of the city’s creditors.” And then you further called out the Bank by name in a list of creditors appearing below the referenced photograph. Your apparent source for the assertion that the Bank is a creditor of the City of Stockton is a document that is linked to your article. Your article references a linked document that you assert is “a creditors’ list from federal court records.” At the time I wrote my April 3 email, I gave you the benefit of the doubt that you had done adequate research to confirm the document was what you said it was and that the Bank was actually a creditor. We have since confirmed that neither is the case. The document is not an official creditors’ list as you claim, but likely is only a list of interested parties obtaining notice of the bankruptcy proceedings. In addition, the Bank is categorically not a creditor of the City. As a result, your article is false on two counts and both false claims adversely affect the Bank, particularly your falsely lumping the Bank in with the list of “capital market creditors [who] had failed to negotiate in good faith in a pre-bankruptcy mediation, as required by law, and [who were] also criticized [for] their refusal to pay part of the bill for mediation.” As a result of my April 3 demand and the exchange with Ms. Brusa, you apparently sought to temper the libelous nature of your original article by making the above-referenced modifications. The problem for your publication, however, is that in doing so you actually doubled down on the falsity of the assertions made against the Bank—assertions that—had you performed customary and appropriate research—should never have been made. You and your publication were therefore either reckless in republishing the story or are now republishing the story maliciously because the Bank pointed out the problems with your original story. Either scenario creates substantial liability for you and your publication. The Bank renews its demands for a complete retraction of the story, a cessation of use of the Bank’s advertisement in connection with the City of Stockton bankruptcy and an apology for the false assertions leveled against the Bank. You have two business days to do so. In all other respects, the Bank renews the demands and admonitions in my April 3 email. Please confirm by return email to me as soon as the required actions have been taken. Again, the Bank reserves all legal and equitable remedies to address this situation should you elect not to comply
Greg L. Johnson
Lewis Brisbois Bisgaard & Smith, LLP
VOD replied as follows when we finally got to the email among the hundreds we get every day, on April 14, 2013:
Well, you gave me two business days. I just got to this email today so I guess you’ve done whatever you plan to do. I should point out that this is a wire story from Reuters. Therefore I will not take the story down. Your problem appears to be with the photo and the inclusion of the Bank of Stockton as a creditor. You should be aware that the official U.S. PACER site advises users under bankruptcy courts to use the mailing matrix list instead of “creditors” because it says the creditor list may not be complete. https://ecf.caeb.uscourts.gov/cgi-bin/CreditorQry.pl?495514. Therefore, if I was in error stating that the Bank of Stockton is a creditor, I will publish a correction to the story indicating that the Bank of Stockton says it is not a creditor, and that this inclusion in the original story may have been due to a misreading of the federal PACER site. Plus I will remove the link to the mailing matrix list provided by PACER, since it DOES include the Bank of Stockton. To further allay your concerns, I will replace the photo (which is not mine but from another website) with a different photo with no reference to the Bank of Stockton. I apologize for any problem this may have caused the Bank of Stockton.
I completely take issue with the tone of your reply; there was absolutely no malice intended on the part of my publication. The Bank you represent should be more concerned about what it can do to help out the city of Stockton at this point. Let me know if you have any further problems.)
Mon, Apr 1 2013
By Jonathan Weber
SACRAMENTO, California (Reuters) – A federal judge on Monday approved the city of Stockton’s petition for bankruptcy in a case that sets the stage for a lengthy battle between bondholders and the California pension system.
U.S. NINTH DISTRICT BANKRUPTCY JUDGE CHRISTOPHER KLEIN
In a case being studied by other cash-strapped American cities including Detroit, U.S. Bankruptcy Court Judge Christopher Klein’s decision was a setback for bondholders and insurers who had resisted the California city’s bankruptcy filing. Stockton is the largest U.S. city ever to file for bankruptcy.
The judge also signaled that the California Public Employees Retirement System’s [Calpers] position in the case was not above review. Stockton, a city of 300,000, has so far not reduced pension payments to retired city workers, although it has eliminated retiree healthcare benefits.
“This does not mean there is not potentially a serious issue involving Calpers,” Judge Klein said. “But at this point I do not know what that is.” He added that there were “very complex and difficult questions of law that I can see out there on the horizon,” relating to Calpers.
Stockton, CA city worker leaves city hall in Feb. 2013.
The decision on Stockton marks the start of a lengthy restructuring of the obligations that currently overwhelm its finances, which were crippled by the housing crisis and recession.
Investors in the $3.7 trillion municipal bond market are concerned that if Stockton is able to avoid paying bondholders in full without cutting pension payments, other cities will pursue a similar strategy as they struggle to cope with budget shortfalls.
Kenneth Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles, agreed that the case could cloud the issue of where bondholders stand in relation to retirees and pension funds in a municipal bankruptcy.
STATEMENT OF STOCKTON, CA DEBT FROM 2011 CAFR
CALPERS ISSUE LOOMS; JUDGE REBUKES CREDITORS
In a lengthy preamble to his ruling, Klein delivered a stinging rebuke to the so-called capital market creditors – mainly the insurers for bondholders who own hundreds of millions of dollars of Stockton debt – who had opposed the bankruptcy filing.
He rejected the arguments of bondholders and insurers that Stockton was not truly insolvent when it sought Chapter 9 bankruptcy protection last summer and that it had improperly failed to seek relief from its pension obligations.
Klein said capital market creditors had failed to negotiate in good faith in a pre-bankruptcy mediation, as required by law, and also criticized their refusal to pay part of the bill for mediation.
Calpers is far from off the hook, but the city’s obligations to the retirement system are properly addressed as part of the effort to finalize a “plan of adjustment” for emerging from bankruptcy, the judge said.
Child defends Detroit retirees during Sept. 30, 2012 Wastewater Treatment Plant strike.
Michael Sweet, a municipal bankruptcy lawyer with Fox Rothschild who is not involved in the case, said the judge’s remarks suggested that “somewhere along the line the city will have to go to Calpers, because otherwise they will have problems with discrimination in the plan.”
A plan of adjustment, like any bankruptcy reorganization plan, cannot favor one group of creditors over another.
“You’re going to see an issue teed up that could go to the U.S. Supreme Court,” Sweet said.
Calpers asserts that California law protects pensioners from any haircut even in bankruptcy, but that position has never been tested in court.
‘SCORCHED EARTH’ TACTICS
Bob Deis, the Stockton city manager who is largely responsible for managing the bankruptcy process, called the judge’s verdict a “vindication” of the city’s position.
Artist Mark Bradford with his mural, “Scorched Earth.”
He criticized the “scorched-earth” legal strategy of the bond creditors as a waste of time and money, and said the city had already spent $6 million to $7 million on the mediation and legal costs.
Assured Guaranty Ltd, one of the bond insurers, said in a statement that it “disagrees” with the judge’s ruling but that it looked forward to working with the city on a “consensual approach” to resolving its debts. A company spokesman also said that it had tried to negotiate with the city prior to bankruptcy, but without success.
Others opposing the city’s bankruptcy included National Public Finance Guarantee Corp, Wells Fargo Bank, the Franklin California High Yield Municipal Fund and Franklin High Yield Tax-Free Income Fund.
Municipal bankruptcy court
Throughout his two hours of comments, the judge made it clear that he thought the city had done everything it could to avoid bankruptcy. He noted that sharp cost-cutting had begun years ago, and that 77 percent of the city’s budget was devoted to already-diminished police and fire services.
Klein agreed that further cuts in public safety and other services were not options.
It was not clear on Monday if any of the capital market creditors would appeal the ruling. A spokesman for Assured Guaranty said the company wanted to see the written ruling before it determined next steps. National Public Finance Guarantee had no comment on a possible appeal.
(Reporting by Jonathan Weber; Additional reporting by Michael Connor in Miami; Editing by Chris Reese, Tiziana Barghini and Will Dunham)
In 2010, French workers carried out a general strike and protests in the millions across the country to stop changes to their pension systems, which allowed workers to retire at 60. The government wanted to change the age to 62. The workers were victorious. Photo shows protest in Lyon.
(VOD: The Detroit City Council, under orders from its bosses anointed by the consent agreement, approved a contract with Milliman, Inc. to review the city’s pension fund systems, with the eventual objective of a takeover. Recent federal indictments of pension fund attorneys are linked to this objective. Detroit EM Kevyn Orr will have the power to appoint new officials to achieve the pension takeover.)
More on this is coming, but meanwhile, following is a statement from the Detroit pension systems’ actuary. For comments from pension officials which state the funds are on solid grounds, including 102 percent funding of Detroit Police and Fire, and 83 percent funding of the General system, click on http://www.detroitnews.com/article/20130321/METRO/303210470. A GRS report on the pensions’ status as of June 30, 2012 is due for release soon.)
In Detroit in 2010, city workers including police and fire held large protest against Bing’s attempt to take over their pensions systems.
Gabriel, Roeder, Smith & Company (GRS) is the retained actuary for both the General Retirement System of the City of Detroit and the Police and Fire Retirement System of the City of Detroit. GRS is a Michigan based company with a national practice, and is a leader in Public Sector Retirement Consulting. Milliman, Inc., a Seattle based consulting firm, was called in recently to perform certain actuarial analyses of the City of Detroit’s Retirement Systems for the review team under the financial stability agreement.
GRS performs an actuarial valuation of both Systems each year. The actuarial valuations develop the liabilities and funded ratios of the plans as of the valuation date. They also develop the City’s contribution rates for the fiscal year that starts one year after the valuation date, based on established funding policies. In addition, our reports typically present information that allows the reader to understand the extent to which contribution rates may be expected to increase (or decrease) in the future and may provide recommendations on the operation of the System.
City workers protest pension cuts July 26, 2012.
An article in the February 26, 2013 Detroit Free Press “Police, fire pension costs could crush Detroit’s finances, study shows” asserts that Milliman has “audited” our 2010 valuation reports and found that “the GRS numbers … don’t hold water.” We do not have access to the alleged audit by Milliman and thus can neither confirm nor deny that the Milliman report contains that statement. However, we can confirm the following:
• The GRS numbers do hold water.
• GRS has not provided any information to Milliman in conjunction with an audit of the 2010 valuations.
• A traditional audit of an actuary’s work almost always involves an exchange of information between the retained actuary and the auditing actuary.
• Conditions are changing rapidly at the City. Any review or audit of work done in the past must take into account differences between current conditions and conditions in effect when the original work was performed.
AFSCME protest at CAYMC.
The article goes on to state that contributions to the two Retirement Systems could rise to very high levels over the next several years, when expressed as a percentage of payroll. That is no surprise, given the shrinking covered payroll and the relatively large number of retirees. Contrary to the implications in the article, there is no inconsistency between the 2010 funded ratios calculated by GRS and potentially high future contribution requirements estimated by Milliman.
Gabriel Roeder Smith & Company stands by its work for the City of Detroit Retirement Systems. Our reports are accurate, complete, and provide policy makers with the tools they need to make informed decisions.
We are continuing to work with both Retirement Systems to provide meaningful long term solutions that all stakeholders can embrace.
Al Phillips, President of AFSCME Local 457, Detroit Health Department. Born Feb. 15, 1937, Died April 16, 1994.
If labor movement had listened then, the people would be thriving today
Pres, Al Phillips headed local union for Health Dept., now privatized
(VOD: the resolution below was brought by AFSCME Local 457 delegates to the AFSCME International Convention in 1992. It warned then that the union movement needed to take up the battle against the banks. A resolution against privatization which included the same call for a debt moratorium was passed by the AFSCME Presidents representing Detroit locals on April 15, 1994. The anniversary of Local 457 Pres. Al Phillips’ death the following day, April 16, 1994, is now approaching. It is long past time for a mass movement of working and poor people to overturn the power of the banks.)
AFSCME Local 457 President Al Phillips is shown at right with his local’s delegation to the national march in Washington against the first U.S. war against Iraq.
Council vote expected April 2 or 9; body’s last chance to stand up for Detroit, espouse Dr. Martin Luther King, Jr.’s dream
Major federal lawsuit against new EM Act 436 filed March 28 as protesters march, occupy Coleman A. Young Municipal Centr.
By Diane Bukowski
March 31, 2013
Dr. Martin Luther King leads freedom march in Detroit, 1963. It was the first time he gave his “I Have a Dream” speech.
DETROIT – Detroit’s City Council has one last chance to stand up for the people against the bankers’ seizure of the country’s largest and poorest Black majority city March 25.
They blew earlier chances nearly a year ago April 4, 2012, the anniversary of Dr. Martin Luther King’s assassination, with the 5-4 passage of a disastrous consent agreement. Most recently the Council failed to pursue its legal right to challenge Michigan Gov. Rick Snyder’s appointment of Emergency Manager Kevyn Orr in court.
Council Pres. Pro-Tem Gary Brown
Now, Council President Pro-Tem Gary Brown is pushing for the Council to approve a contract with Orr’s previous employer, the Jones Day law firm, according to inside sources. He wants the Council to vote Tuesday, April 2 at its regular session, but the vote may be delayed until April 9.
Snyder and Detroit Mayor Dave Bing tapped Jones Day, the world’s third largest law firm, to become the city’s “re-structuring counsel” under newly-minted Public Act 436. Orr worked for the firm from 1984 until his alleged resignation to take over as EM.
“I look forward to meeting [Orr] sometime today and talking about . . . how do we reduce crime in the city of Detroit,” Brown told WWJ radio March 25, the day Orr took office in the Coleman A. Young Center next to Detroit Mayor Dave Bing. Bing refused to fight the EM appointment. Orr’s spokeman is William Nowling, a former campaign aide to Snyder.
Brown did not address what may be the biggest crime in Detroit’s history. That crime will reap huge profits for Jones Day and its client banks, which hold most of the City of Detroit’s $16.9 billion debt, a key factor cited in the takeover.
These include UBS AG, which just paid a $1.5 billion fine to the U.S. Department of Justice for interest-rate rigging, Citigroup, which just settled another lawsuit brought by cities and pension funds for $730 million, Goldman Sachs, Bank of America’s Merrill Lynch, and Muriel Siebert and Co., an affiliate of the SBS Financial Group. Their role is confirmed by debt documents obtained through a Freedom of Information Act request by the Moratorium NOW! Coalition, and postings on the Jones Day website.
Most of the banks are also defendants in lawsuits world-wide brought by cities, states and investors, which claim they manipulated the “London Interbank-Offered Rate” (LIBOR), to increase their profits while defrauding public and private investors. It is estimated that $800 to $1000 TRILLION worth of securities and loans were affected.
“A lawyer shall not represent a client if the representation of that client will be directly adverse to another client . . .” say the Michigan Rules of Professional Conduct, section 1.7(a), Conflict of Interest.
Attorney Jerome Goldberg
Attorney Jerome Goldberg of The Moratorium NOW Coalition Against Foreclosures, Evictions, and Utility Shut-offs earlier said that the role of Jones Day clients in Detroit’s economic collapse is indeed “directly adverse” to that of Detroit’s people.
“[Michigan State Treasurer Andy] Dillon is fully aware of the real basis for the city’s deficit,” Goldberg said. “He and the city’s first financial review team concluded that without interest payments to the banks, the city would have more than enough revenue to fund its expenses. Their report showed the city owes a total debt of over $16.9 billion, with $4.9 billion in interest. The banks’ fraudulent lending procedures, including a $1.5 billion pension obligation certificates (POC) loan [by UBS AG and SBS] in 2004, forced the city to pay an additional $1 billion to hedge funds for betting the wrong on which way interest rates would go.”
Goldberg said that money should be spent instead on the people of Detroit, including jobs, affordable housing, street lighting and other services. He called for the city to declare a moratorium on its debt payments, an action which working and poor people across the globe have demanded, protesting by the millions, as banks exact draconian austerity measures.
Opponents including the Rev. Al Sharpton of the National Action Network filed a federal lawsuit against PA 436 March 27, which if successful would negate Orr’s appointment and that of other EM’s, almost exclusively in Michigan’s majority Black cities. The lawsuit says PA 436 is returning African-Americans in the state to virtual conditions of slavery. It cites discrimination based on race and wealth, and violations of the National Voting Rights Act and the 13th and 14th Amendments guaranteeing due process. (See separate article on lawsuit. Click on EM lawsuit 3 27 13 for full text.)
Over 200 protesters then marched on the federal court building in downtown Detroit, and occupied the Coleman A. Young Municipal Center for two hours demanding to meeting with Orr.
Protesters jam CAYMC lobby March 28, 2013.
“We are fighting for our children, we shall not be moved, just like a tree that’s standing b the water, we shall not be moved,” the occupiers sang. Sharpton promised that thousands more will descend on the city after NAN’s national conference next week.
“There will be a threat to everyone in this nation if the emergency manager in Detroit stands,” Sharpton said. “If they get away with it in Detroit, they can do it all over the country. . . . This is not a march, it is a walk to file a lawsuit. When we march, there will be thousands. We will engage in non-violent civil disobedience, and fight until this is overturned. . .”
Protesters call Synder a dictator in Benton Harbor, during annual parade.
Meanwhile, Gov. Snyder and Wall Street ratings agencies celebrated the takeover.
“Moody’s Rating Service today announced that it has revised the State of Michigan’s Rating Outlook for all bonds to Positive from Stable,” a March 28 release from State Treasurer Andy Dillon’s office said. “Moody’s also affirmed Michigan’s General Obligation Credit Rating of “Aa2.”
Snyder and Dillon met with all three ratings agencies in New York the previous week, according to the release.
Detroit EM Kevyn Orr is waiting to dine on Detroit’s assets.
“This is great news for Michigan, on the heels of our recent visit and on-going discussions with credit rating agencies,” Snyder said. “We have been optimistic that Wall Street would recognize all of the hard work we have put in, to get Michigan’s fiscal house in order. This is yet another sign that Michigan is the comeback state.”
The release added, “Earlier this month, Moody’s indicated that expanded oversight of Detroit’s finances by Emergency Manager Kevyn Orr under Public Act 436 of 2012 would ‘help expedite the city’s progress towards financial and operational stability.’ . . . The EM’s ability to amend the current year budget…could be a first step toward imposing fiscal stability and improving the city’s illiquid cash position.”
Standard and Poor’s, which is facing a $5 billion fraud lawsuit by the U.S. Department of Justice, chimed in earlier.
“The appointment of an (emergency manager) allows the city to move forward in a more efficient manner, continuing to make the types of adjustments necessary to regain structural balance,” S&P credit analyst Jane Hudson Ridley said in a statement.
Standard & Poor’s, banks responsible for “predatory lending” to Detroit.. Here Joe O’Keefe of Fitch Ratings and Stephen Murphy of Standard and Poor;s (center) press UBS $1.5 billion debt on City Council Jan. 31, 2004.
Meanwhile, however, S&P is keeping Detroit’s general obligation debt at junk level, citing budget deficits, cash-flow problems, and long-term liabilities including pension and retiree health benefits. Amazingly, they also mentioned potential payments on interest rate swaps. Ironically, keeping Detroit’s ratings downgraded provides more interest for the banks on new loans.
Millions protest bank-imposed austerity measures in Spain.
Representatives of S&P and Fitch Ratings pressed for the UBS AG $1.5 billion POC loan at the City Council table in 2004, despite objections from residents, pension board and union leaders that the loan represented tremendous risk if the market “went south,” as it indeed did in 2008.
In addition to their role in representing criminal banks, Jones Day represents clients far right wing clients opposed to Voting Rights Act, contraception, and corporate regulation, and the major media, including McClatchy, which owns the Detroit News and Detroit Free Press. They are one of the major law firms which represented the tobacco industry against the states in a 1998 master settlement agreement, and continues to pursue action on their behalf to diminish payments under that agreement. (For details on these issues, click on http://voiceofdetroit.net/2013/03/27/detroiters-march-in-cleveland-tell-jones-day-and-banks-get-out/.)
For history of the disastrous $1.5 billion pension bond deal, written largely by this author in the pages of the Michigan Citizen, click on Pension bond stories MC.
Overturning Emergency Manager In Detroit! – – A No Struggle, No Development Production! By KennySnod – – Overturning Emergency Manager In Detroit!
We oppose Emergency Managers because they rob us of our right to elect our own local representatives and deny democratic self-rule at the local level. We demand our elected leadership remember that they were elected by the same people who will voted out Public Act 4 on Nov. 6th, 2012. We demand that you abide by their decision. Now we’re working to “Overturn Emergency Manager In Detroit!” We ask you to
Stop Voter Suppression and Constitutional Violations.
We also ask you to join us in our 1) Our Mass demonstrations, rallies, press conferences to protest and denounce the actions of Governor Snyder and his collaborators;
To expose the criminal nature of the banks and the corporations who are at the root of the financial crisis in Detroit and throughout the State of Michigan;
We must link this struggle in Detroit with the plight of other cities throughout Michigan like Benton Harbor, Flint, Highland Park, Inkster, Ecorse, Muskegon. As well as dozens of other cities in the USA like California, Pennsylvania, Alabama, Rhode Island and many others facing similar crisis.
3/25/2013 – – A No Struggle, No Development Production! By Kenny Snodgrass, Activist, Photographer, Videographer, Author of 1} From Victimization To Empowerment… www.trafford.com/07-0913 eBook available at www.ebookstore.sony.com
2} The World As I’ve Seen It! My Greatest Experience! {Photo Book}
YouTube: I have over 390 Video’s, over 133,300 hits averaging 4,700 a month on my YouTube channel @ www.YouTube.com/KennySnod
By Richard (RJ) Eskow 04/07/2013 
Despite its severity, reports tell us that the chained CPI isn’t this budget’s only harsh austerity measure. The president will also propose increasing Medicare premiums for higher earners. The figure that’s been reported is $47,000 per year. That targets comfortable seniors, not just the wealthy.
