Johnnie Brice, in “outraged” shirt, and other Detroit teachers rally outside Fisher Building July 19, 2012.
Leadership evidently has no concrete plan to achieve victory
By Diane Bukowski
July 26, 2012
DETROIT – Hundreds of Detroit teachers rallied outside Detroit’s Fisher Building July 19 to demand that Detroit Public Schools emergency manager Roy Roberts come to the bargaining table, long after he imposed a contract on their union. They have not taken a strike vote and their representatives said they have no plans to do so.
Children of teachers joined their parents at the rally.
“What do we want—a contract! When do we want it—NOW!” they shouted.
A week later, on July 25, some of 3,000 members attending the American Federation of Teachers national convention in downtown Detroit supported them in a similar protest. AFT President Randi Weingartern spoke with Roberts but got no guarantee from him that anything would change.
Johnnie Brice has worked for DPS for 12 years, and currently teaches at Burton International elementary school.
“I’m outraged,” she said. “We’re being treated like second-class citizens, with no respect. We are held responsible for all the ills of the system but we have no control. We took a 10 percent wage cut and don’t have enough paid prep time to prepare for our classes. We are mandated to come to work 15 minutes early without extra pay. The whole situation makes us so stressed out it is hurting our students as well.”
Detroit teachers demand respect July 19 outside Fisher Building.
She said teachers this summer are in the process of interviewing for their jobs all over again. Seniority has been thrown out of the window. The principals of each school decide whether they come back or not. Discussions were taking place all over the picket line between teachers about whether they had been called back.
Dave Hecker, president of the Michigan Amalgamated Federation of Teachers, led the protest, along with DFT President Keith Johnson and Vice-President Edna Reeves. Officials from the Metro Detroit AFL-CIO and other unions also joined the protest.
Michigan AFT president Dave Hecker (l with bullhorn) leads chants as DFT VP Edna Reeves rallies the crowd.
“All we want is what’s good for the students and the teachers and staff,” Hecker said. “Collective bargaining with the UAW saved the auto industry. Why not come to the table? We are going to DEMAND, DEMAND AND DEMAND until he [Roberts] respects us.”
Johnson and Reeves spoke along similar lines. Johnson announced last year that Roberts informed him months before he imposed the contract that he was going to do so. Asked what he planned to do about it, Johnson said he would wait to see and take legal action if necessary.
In a side interview, VOD asked Hecker and Steve Michalakis, president of the Metro Detroit AFL-CIO, why they are not taking stronger action such as pushing the entire union movement to shut down Detroit and Michigan, to fight what has become an all-out assault on union members, working and poor people across the state under Public Act 4.
They had no real answer. Two years ago, when Keith Johnson took office again, a reform movement in the DFT led by teacher Steve Conn and others claimed that Johnson stole the election, during a raucous meeting where they had broad support from the membership. Hecker nonetheless swore Johnson in.
VOD: Read Labor Notes story above this which details the results a reform slate in the Chicago Teachers Union has been able to achieve there, in their battle against pro-charter school district president Rahm Emanuel. They have already taken a strike vote and are conducting mass campaigns in the community to stop school closures as well. What position would the DFT be in today if Johnson had not stolen the election as alleged?
In an era of declining municipal revenue, it would appear that George Orwell is alive and well. How else can you explain the logic of asking for more money from homeowners for the arts when budgets for core services like public safety, schools, and badly needed infrastructure repair are being cut back year after year?
The Detroit Institute of Arts is asking for a property tax increase to, well, uh, depending on the audience it is before, stop it from closing its doors. Oh, wait, it’s to raise new funding so that the DIA doesn’t have to touch its $100 Million-plus endowment surplus. No matter what the reason, this DIA millage proposal should be more like DOA (dead on arrival).
The arts community says this new money is needed because the arts play a crucial role in the marketability of a community. The DIA marketers insist that the promised free admission to the Institute is well worth a tax increase that only homeowners will have to pay.
Homeless man sleeps at base of former Detroit Mayor Hazen Pingree’s statue in Grand Circus Park. The plaque on the statue calls Pingree, who served in the 1890’s, the “People’s Mayor,” who warned of “the power of the private corporations.” He was a founder of the public service sector in Detroit.
Well, the word on the street is that a picture will not respond to a home invasion call… a sculpture will not transport you to an emergency room, tea and crumpets are no substitute for feeding the hungry…no, the priority should be on people, not pictures, on services, not sculptures, on roads, not Renoirs, on schools, not elite social gatherings, or at this time, any other function which does not directly prioritize using tax revenue to stabilize neighborhoods or make communities safer and stronger.
Let the DIA marketers tell you, admission will be free at the DIA while you drive through unsafe and decaying roads to get there. Let the DIA tell you, the arts are critical to the region while you fight just to keep your child’s neighborhood school open and your children safe in that school. They will tell you admission will be free while not telling you that the tax they want from you is actually frontloading the admission price.
They will tell you, however, that the arts are essential to the economics of the region…hasn’t worked in the past and won’t in the future. Tell that to the 3,000 Detroit employees scheduled for layoff, or explain it to the Oakland and Macomb County residents who are dealing with reduced services based on deficits the likes of which have not been seen in decades. There are more important things that bring business to a region, like public safety, good schools, viable transportation systems, solid infrastructure, and diverse communities. This DIA millage brings none of that to the table.
Protesters in front of the Spirit of Detroit demand a moratorium on home foreclosures.
The promoters of this tax want you to bail them out; where is your family budget bailout? Haven’t we had enough of bailouts on the backs of hard working homeowners who can’t get banks that got bailed out to help homeowners stabilize and reduce their mortgages and by extension, help the families who taxes bailed out the banks in the first place?
What sense does it make to regionalize the revenue stream for the arts when we can’t even agree on a regionalized transportation system, nor a regionalized public safety system, a consolidated school system, or a regionalized water system? If we are looking at priorities to more efficiently utilize and leverage tax revenue, taxes for arts should be at the bottom of any sane person’s list for sure.
Taken one step further, how fair is it that people who do not own a home can dictate that you have to pay more taxes based on the fact that you do own a home? Why should people like me, who lease or rent property, determine how much a hardworking homeowner should pay in property tax that I and others will never be on the hook for? It would be different if we were talking about a flat sales tax or helping veteran or first responders, fixing streets, or helping to keep schools open and safe.
As much as I deplore Leon Drolet’s and the Michigan Taxpayer’s Association’s abject cowardice as exemplified by their running from the issue of the state and Detroit imposing through the consent agreement a new $137 million debt obligation on its residents, I have to agree with his selective outrage over the DIA’s blatantly misleading media campaign to win over votes for this ill-timed attempt to get at more taxpayer money.
This revenue stream would better spent on core services that affect the quality of life…like police and fire services, local roads, health and human services, etc., all of which are declining at alarming rates due to declining tax revenue.
After it is all said and done, your vote on art millage should boil down to this: If you want more, pay for it at the door, and if you don’t go, vote no.
I am an independent journalist and partisan-free observer who refuses to become a political indentured servant. I have served as the editor of a Michigan State university minority newspaper (Grapevine Journal), an US Air Force Base newspaper (Nellis Bullseye), and as managing editor of the Atlanta Voice. My service includes serving as a past president of the Atlanta Chapter of the National Association of Black Journalists; president of Minorities in Cable, and co-founder of MOCA (Mediators of Color in America). My background includes an extensive history in dispute resolution, including a stint as the co-chair of the Community Sector for the Society of Professionals in Dispute Resolution (SPIDR).
Manuel Diaz Fatal Shooting By Police Officer Makes Community Question Law Enforcement’s Motives
By AMY TAXIN 07/23/12 10:43 PM ET AP
ANAHEIM, Calif. — The densely packed neighborhood where police shot to death an unarmed man this weekend and angry residents faced off with authorities in fiery clashes is just a few miles up the road from Disneyland but a world away from the theme park’s shine and shimmer.
Manuel Diaz, 25, of Santa Ana, CA, killed by Anaheim police July 21, 2012.
With another officer-involved killing Sunday, involving a man who allegedly shot at police, residents of this city of 336,000 people are questioning what has made officers resort to deadly force and crack down on demonstrators by firing pepper ball and bean bag rounds.
The killings take the tally of officer-involved shootings to six so far this year, up from four a year before, said Anaheim police Sgt. Bob Dunn. Five of the incidents this year have been fatal.
“It concerns me when we have any officer-involved shooting,” said Police Chief John Welter, adding that he believes an uptick in gang-related crime in the last eight to 10 months is driving the increase.
“There just seems to be a lot more violence between the gangs. As a result, we’ve increased our gang unit, which has increased our contact with gang members,” he said.
Anaheim is a city of contrasts that ranges from upscale, hilltop homes to packed, gritty apartment complexes. The city 25 miles southeast of Los Angeles is known as home to the Angels baseball team, and above all, to world-famous Disneyland.
Protesters confront police over the July 21, 2012 killihg of Manuel Diaz.
Mayor Tom Tait issued a statement Monday calling on the state attorney general’s office and the U.S. attorney’s office to aid a full, independent investigation.
In the largely Hispanic, working-class neighborhood where 25-year-old Manuel Diaz was killed Saturday afternoon, residents left candles, flowers and posters blasting police and questioned why officers would shoot a man they said was a gang member but didn’t have a gun or appear to be committing a crime.
Jose Gallardo, 30, said he was chatting with Manuel Diaz in an alley behind the complex Saturday afternoon just a few minutes before he saw an unmarked police car pull up carrying two officers. Gallardo said he stayed away to avoid drawing attention from police until he heard two shots and went running.
Protester against Diaz killing puts cops on notice.
“He was laying there, dead,” Gallardo said, adding that he saw bullet marks in his friend’s lower back and neck. “They were searching him – I was like, why are you searching him? He’s dead right there.”
The death sparked two nights of protests. On Saturday, angry demonstrators hurled rocks and bottles at officers who were securing the scene for investigators, and police responded by firing bean bags and pepper balls at the crowd.
The next morning, protesters stormed a news conference at police headquarters. Later that night, demonstrators set fire to a trash bin and pushed it into the street outside the apartment complex, which was still strewn with litter early Monday from the unrest.
Welter said the shooting occurred after two officers approached three men who were acting suspiciously in an alleyway before running away. One of the officers chased Diaz to the front of the apartment complex.
Woman wounded by police during protest against Manuel Diaz shooting.
The chief would not say what exactly led the officer to shoot Diaz, who authorities say was a known gang member. But Diaz wasn’t just hanging out in the alley. He failed to heed police orders to stop and threw something on the roof of the complex that contained what officers believe to be heroin, Welter said.
“He certainly was running from police and not stopping,” Welter said. “That’s no justification for shooting him, so I will be interested in what the district attorney finds out.”
Both officers were placed on paid leave pending an investigation.
Video below, taken shortly after shooting, shows police allowed Diaz to die, watching him moving and twitching for at least three minutes.
The second officer-involved shooting occurred Sunday when anti-gang officers spotted a suspected gang member in a stolen sport utility vehicle. A brief pursuit ended when three people jumped from the SUV and ran, authorities said.
Joel Acevedo, at right.
During the chase, a suspect [allegedly] fired one or two rounds at an officer. The officer returned fire, killing the gunman, who was identified as 21-year-old Joel Mathew Acevedo, Dunn said.
Both incidents were under investigation by the county’s district attorney office, which asked witnesses to come forward with information or video footage of Saturday’s shooting.
Online court records show Diaz was convicted last year of drug possession, and three years earlier of possessing a firearm on school grounds and being a member of a criminal street gang.
Mourners at site of Manuel Diaz killing July 24, 2012.
On Monday, residents remembered him as a young man who was friendly to people in the neighborhood and stopped to read posters affixed to a fence near the spot where Diaz was shot. The signs read, “another person dead” and “stop killing, start protecting.”
Junior Lagunas, 19, had his forearm wrapped in white bandages and a hospital identification bracelet around his wrist as he recovered from being bitten by a police dog during the Saturday night melee.
Lagunas said he went outside with his girlfriend and 1-year-old son to observe the commotion when police began firing something, possibly bean bags, at the crowd.
He said he ducked and pushed the child, still in his stroller, to the ground, then turned around and saw a dog gnaw on his arm, leaving teeth marks and drawing blood.
“It’s just crazy, the cops are going crazy on us,” said Lagunas, who was friendly with Diaz.
Video captured by a KCAL-TV crew showed a chaotic scene as some people ducked to the ground and others scattered screaming. A man is seen yelling at an officer even as a weapon is pointed at him. Two adults huddled to shield a boy and girl.
Police said five people, two of them juveniles, were arrested that night. Authorities said the dog accidentally escaped from a patrol car, and the incident is being investigated by the department.
Police also are reviewing the use of bean bags and pepper spray during the protests, which grew raucous when officers moved to arrest someone in the crowd suspected of committing a minor crime, Welter said. The man was later found to be wanted in a murder case.
Carroll Seron, a professor of criminology at University of California, Irvine, said relations between police and minority communities are often tense and an incident such as a shooting can trigger a loud reaction.
Kelly Thomas, beaten to death in 2011 by Fullerton CA police.
“In lots of instances, people kind of reach a threshold where they feel their communities are a little bit under siege,” she said.
The shootings in Anaheim came a year after an unarmed, mentally ill homeless man died after a violent confrontation with police in the nearby city of Fullerton. The death of Kelly Thomas sparked protests by outraged residents, criminal charges against two officers, an FBI investigation and the recall of three elected councilmembers.
Outside the Anaheim apartment complex, Caleb Fuentes, 23, left flowers for Diaz, a man he said was like a big brother when the two played junior varsity basketball at Anaheim High School.
Fuentes said he hadn’t seen Diaz since those days but wondered if he, too, could end up like his old friend.
“If I wore baggy clothes and had a shaved head, would they shoot me, too?” he said.
___
Associated Press videojournalist Raquel Maria Dillon contributed to this report.
Warren Lee Hill: is elimination of two drugs in legal injection process “cruel and unusual” punishment?
State’s high court halted execution due to change in lethal injection process;
Hill’s lawyers have also contended he is mentally disabled
By NBC News and news services
July 24, 2012
The Georgia Supreme Court halted the execution of Warren Lee Hill, a death-row inmate who had been scheduled to die at 7 p.m. on Monday at the state penitentiary at Jackson.
At issue is whether the Department of Corrections’ decision to switch to a one-drug formula violates state rules, the Atlanta Journal-Constitution reported. The state announced the change last week, which Hill’s lawyers challenged.
The high court said in a statement Monday that it would consider the challenge because such a change requires public hearings and a 30-day public comment period.
Hill was the first inmate set to be executed in Georgia since the state changed its execution procedure last week from a three-drug injection to a single dose of the sedative pentobarbital.
Hill was convicted in the Aug. 17, 1990, beating death of another inmate. Hill was serving a life sentence at the time for the shooting death of his 18-year-old girlfriend.
His lawyers argue that Hill is mentally disabled – significant because federal law prohibits states from executing the mentally disabled. But the state said the defense hadn’t conclusively shown that Hill has a mental disability.
On July 18, Yokamon Hearn, 33, became the first prisoner killed with the one-drug formula. Texas Department of Criminal Justice officials announced last week they were modifying the three-drug injection method used since 1982 because the state’s supply of one of the drugs — the muscle relaxant pancuronium bromide — has expired.
Hearn’s lawyers had argued that his mother drank alcohol when she was pregnant, stunting his neurological development and leaving him with mental impairments that disqualify him from execution under earlier Supreme Court rulings. Testing shows Hearn’s IQ is too high for him to be considered mentally impaired.
Ohio, Arizona, Idaho and Washington have already adopted a single-drug procedure.
The Associated Press contributed to this report.
VOD: Now the alleged global economic crisis has resulted in even more horrendous suffering for those already subjected to the cruelest penalty possible.
At City Council table Jan. 31, 2005: (l t r) CFO Sean Werdlow, UBS representative (in background), Stephen Murphy of Standard & Poors, Joe O’Keefe of Fitch Ratings, Deputy Mayor Anthony Adams push for (then) $1.2 billion pension obligation certificate deal with USB, minority partner.
UBS is member of US Dollar LIBOR panel that manipulated rates
Banks also under criminal investigation by DOJ, SEC, CFTC and others; UBS already cited by DOJ for $18 billion tax cheat scandal
Detroit should join anti-trust action, initiate moratorium on debt, instead of punishing workers, poor
By Diane Bukowski
July 22, 2012
(Note: the author reported on the Detroit POC deal beginning in 2005, while writing for the Michigan Citizen, and has exposed its fall-out repeatedly in the Voice of Detroit.)
Former Detroit Mayor Kwame Kilpatrick and administration engineered 2005 POC deal with UBS.
DETROIT – In 2005, former Detroit Mayor Kwame Kilpatrick and former Chief Financial Officer Sean Werdlow cut a deal with Swiss-based global giant UBS Financial Services and its minority partner Siebert, Brandford, Shank & Co. to borrow $1.2 BILLION in so-called “pension obligation certificates” (POC’s) from their firms.
Due to subsequent re-financings, that amount has now become $2 BILLION.
Kilpatrick said the city had a $300 million deficit and threatened to lay off 2,000 workers if the deal was not approved. There was broad opposition from four City Council members, both pension boards, and the city’s unions.
Former City Councilwoman Sharon McPhail in 2005.
“This is a very risky transaction,” former Councilwoman Sharon McPhail told Kilpatrick.
“Your own people at your economic forum called this [POC borrowing] one of the seven deadly sins of municipal finance,” McPhail explained. “If the deal doesn’t do what is expected, we could face receivership under the local government Fiscal Responsibility Act. If the stock market does well, that $1.5 billion in unfunded pension liability could go away, but we’d still owe it in bonds.”
“So what?” Kilpatrick responded.
UBS, S&P, Fitch came to Council table
UBS, Standard and Poor’s and Fitch Ratings all sent their representatives to the Council table on Jan. 31, 2005 to push for a yes vote (see top photo taken by this author). The ratings agencies threatened negative action against Detroit if the deal did not go through.
Brewer Recreation Center was among 22 closed in 2006.
Despite objections, the Council approved the deal 8-0 on Feb. 4, 2005.
At Wall Street’s insistence, Kilpatrick afterwards laid off 1,396 workers anyway. Shortly after his election that year, he closed 22 recreation centers along with other cuts. But Standard & Poor’s shrugged even at that, downgrading Detroit’s debt to BBB-, a step above junk level. Downgrades this year have sunk Detroit’s rating to C-, below junk level, the lowest rate for any major city in the country.
“The administration’s hesitancy to cut positions, as well as the inability to adjust union contracts to gain savings, has deepened the budget gap for fiscal 2006,” S & P said at the time. They also cited the city’s “high level of debt,” which ironically included the $1.2 billion POC deal.
Former Detroit CFO Sean Werdlow, now a managing partner with Siebert, Brandford, Shank & Co., one of lenders in Detroit POC deal.
Werdlow left the administration after the election. He is now a managing partner with Siebert, Brandford, Shank & Co. Former Mayor Dennis Archer likely also benefited, since he was a lobbyist for UBS. Neither has faced charges despite the ongoing federal criminal case lodged against Kilpatrick and four others related to water department and pension board contracts.
Detroit POC deal part of world-wide predatory lending orgy
It is now apparent that the POC deal was part of an orgy of predatory lending by banks in the U.S. and world-wide, which resulted in the historic 2008 economic collapse, when “the bubble burst.”
The story of that orgy is laid out in the 2010 movie, “Inside Job,” by Academy Award nominated filmmaker Charles Ferguson.
In 2009, Detroit defaulted on the POC loan. UBS and other parties demanded a $400 million payment, one-third of the city’s budget. To stave off the default, former Mayor Kenneth Cockrel, Jr. agreed to hand over all the city’s casino income taxes to US Bancorp as trustee, and increase the total amount, to ensure payment of the deal.
McPhail’s words turned out to be prophetic, as Detroit is now indeed in the grips of the successor to the Local Government Fiscal Responsibility Act, Public Act 4.
US Bancorp’s HQ in Portland, Oregon. As US Bank NA, they are trustee over all of Detroit’s casino tax and state revenue-sharing income.
US Bancorp also gets all of the Detroit’s state revenue-sharing funds, along with a hefty service fee for sending them along to UBS and other creditors. Those funds are now additionally controlled by State Treasurer Andy Dillon under the April 4, 2012 “Fiscal Stability [consent] Agreement.”
Cities, states, investors sue UBS, other banks
On Aug. 5, 2011, the City of Baltimore lodged a class-action anti-trust lawsuit against Bank of America, Barclays Bank, Citibank NA, HSBC Holdings PLC, J.P. Morgan Chase, Lloyds Banking Group PLC, Westlb AB, and UBS AG for rigging rates in interest swaps, causing the city of Baltimore and others to lose up to billions of dollars that should have been spent on services for their residents, among other damages.
They alleged that the defendants’ conspired to “unlawfully manipulate the London Interbank Offered Rate for the U.S. dollar (‘LIBOR’) from August 1, 2007 through such time as the effects of the Defendants’ illegal conduct ceased . . . .”
The banks named were all members of the U.S. Dollar LIBOR panel, which set global borrowing rates.
“Defendants devised and executed their scheme to manipulate LIBOR in order to benefit their financial positions,” says Baltimore’s initial suit. “Throughout the Class Period, Defendants sold financial products which tied rates of return to LIBOR. By manipulating LIBOR, Defendants paid lower returns to customers who bought those financial products.”
Regarding UBS, the suit says, “Defendant UBS AG (“UBS”) is a Swiss company based in Basel and Zurich, Switzerland. During the class period, UBS was a member of the British Bankers’ Association’s U.S. dollar LIBOR panel.”
UBS Bank’s offices in New York City.
It thus alleges that while UBS was hounding the City of Detroit for its money, it was criminally violating the Sherman Anti-Trust law and profiting from the proceeds.
The suit has mushroomed into a mammoth federal class action, “IN RE LIBOR-BASED FINANCIAL INSTRUMENTS ANTITRUST LITIGATION,” Docket No. 11-md-2262. The U.S. Judicial Panel on Multidistrict Litigation consolidated 21 lawsuits filed by cities, states, investors and other plaintiffs against the banks into the action, for pre-trial purposes.
In addition to the banks cited by the City of Baltimore, defendants now include Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, the Royal Bank of Scotland Group PLC, Deutsche Bank, and the Norinchukin Bank.
U.S. District Court Judge Naomi Reice Buchwald of Southern District of NY receives bar award.
U.S. District Judge Naomi Reice Buchwald of the Southern District of New York state is hearing the case.
On June 29, the defendants except for Barclays and UBS, which are expected to file separate motions, moved to dismiss the claims. The plaintiffs have not yet responded, and no dates for hearings have yet been set.
Numerous governmental investigations are also underway in the U.S. and abroad. The U.S. Department of Justice (DOJ), the Commodities Futures Trading Commission (CFTC), and the Securities Exchange Commission (SEC) are among those involved.
Robert Wolf, outgoing president of UBS in the United States, one of U.S. President Barack Obama’s major campaign contributors.
Judge Buchwald has ruled that the government agencies do not have to turn over their investigative documents for use in the civil case, despite demands by the litigants. Due to government ties with the banks involved, including U.S. President Barack Obama’s ties to UBS, one of his largest campaign contributors, it is likely government officials are trying to minimize the impact of the lawsuit.
Attorneys with Sedgwick, LLC of the United Kingdom authored a summary of the case published July 5, 2012. They wrote that Barclays has already been fined, although not criminally charged:
“The record-breaking £59.5 million fine imposed on Barclays by the Financial Services Authority (FSA) and $360 million penalty imposed by the U.S. Commodity Futures Trading Commission and Department of Justice in connection with the improper submission of London InterBank Offered Rate (Libor) rates has led to intense public scrutiny of Barclays’ practices, procedures and management and possible misconduct by other financial institutions.”
Barclay’s outgoing CEO Bob Diamond in London.
The Sedgwick attorneys also say that Japan has imposed sanctions on Citigroup and UBS, accusing them of “asking other banks for an advantageous rate in violation of Japan’s Financial Instruments and Exchange Act.”
UBS settled $18 billion in US DOJ tax cheat charges for $780 million; got $74.5 billion Fed Reserve bailout, $800M AIG taxpayer bailout
While bludgeoning the City of Detroit to pay back the $2 billion POC deal, UBS was exposed as a haven for wealthy tax cheaters by the US DOJ. UBS allegedly helped its U.S. clients hide $18 billion in income in 19,000 secret Swiss bank accounts. It paid a paltry $780 million fine to prevent an indictment that FINMA, the Swiss regulatory agency, said “would have threatened its existence.”
That did not stop the U.S. Federal Reserve from bailing it out after the 2008 global banking meltdown to the tune of $74.5 billion.
“Federal Reserve data showing UBS AG and Barclays Plc ranked among the top users of $3.3 trillion from emergency programs is stoking debate on whether U.S. regulators bear responsibility for aiding other nations’ banks,” according to a Dec. 2010 Bloomberg News article.
“UBS was the biggest borrower under the Commercial Paper Funding Facility, with $74.5 billion overall, more than twice as much as Citigroup Inc., the top U.S. bank recipient, according to the data released yesterday. London-based Barclays Plc took the biggest single amount under another program that made overnight loans, when it got $47.9 billion on Sept. 18, 2008.”
UBS also raked in $800 million as a silent partner in the taxpayer bailout of insurance giant AIG, according to CNN.com.
MAKE UBS PAY! POC deal likely the largest factor in Detroit debt crisis
Although some have reported that Baltimore stands to gain only small amounts from its lawsuit against UBS and other financial giants, Detroit’s POC deal with UBS ranks as one of the largest in history.
Michigan State Treasurer Andy Dillon at second meeting of Financial Advisory Board June 28, 2012 in WSU Law School’s Spencer Partrick Auditorium.
That deal has come back to haunt the city repeatedly. In 2009 alone, the city appropriated funds to pay $106, 911, 659 for that year’s “POC Swap Hedge Payment.” Continued threats of default have been used to pressure the city to cede control of large parts of its income.
Wall Street downgrades of the city’s debt rating have forced the city to pay hundreds of millions more in interest rates on new loans, including on Detroit Water and Sewerage Department bonds. DWSD is an enterprise agency separate from the city’s general fund which has previously received AAA ratings on its debt, but Wall Street is using the general fund downgrade to bleed more money out of Detroit, the poorest major city in the U.S.
Currently, City Corporation Counsel Krystal Crittendon is deciding whether to appeal a lawsuit to overturn the April 4 consent agreement. US Bancorp and State Treasurer Andy Dillon have threatened to withhold not only income from a $137 million loan guaranteed by state revenue-sharing funds and made part of the consent agreement, but also other state revenue-sharing payments.
Marchers demand moratorium on or cancellation of Detroit’s debt to the banks May 9, 2012.
It is the global banks, and in particular UBS, which have put Detroit under this yoke of slavery. When will city leaders stand up to them, at least by joining in the anti-trust lawsuit initiated by the City of Baltimore? Then they can declare a moratorium on the city’s debt to the banks as former Detroit Mayor Frank Murphy proposed during the Great Depression of the 1930’s, so that the city’s people can be provided with homes, health care, food, jobs, and the other necessities of life.
(Copies of this article are being sent to Mayor Dave Bing, the City Council, Corporation Counsel Krystal Crittendon, COO Chris Brown, PMD Kriss Andrews, CFO Jack Martin, the Financial Advisory board, Treasurer Andy Dillon, Gov. Rick Snyder, US Attorney General Eric Holder, and US President Barack Obama with requests for their comments and action.)
Links to LIBOR lawsuit documents will be included once they are downsized to fit this site.
Also read 2010 Wall Street Journal article, “Interest Rate Deals Sting Cities, States” by clicking on INTEREST RATE DEALS STING CITIES, STATES, which details efforts some cities were making at the time to re-negotiate deals after the market went south in 2008. Below is chart from SEIU study cited in the article, which shows Detroit paid $107.1 million in questionable nterest rate swaps in 2010, the fourth highest amount in the country, despite the fact that Detroit was not even among the country’s 10 largest cities. Click on SEIU Study Interest Rate Swaps to download this two-page report.
Auto workers came from Midwest locals to protest at International Auto Show Jan. 8, 2012.
Sent by Ron Lare
July 21, 2012
As Yogi Berra would say it’s Déjà Vu all over again. In 2009 we reopened the contract to help Ford Motor Company. We gave up raises. We gave up performance bonuses that were agreed to in place of raises. We gave up COLA. We gave up break time. We gave up Christmas bonuses. We gave up a holiday.
UAW International President Bob King at podium during Rainbow PUSH press conference with Rev. Jesse Jacks to his second right, July 12, 2010. Many promises were made that have not materialized. During a protest last September against cut-offs of thousands of Michigan families from public assistance, Jackson was asked if Rainbow:PUSH would initiate a boycott of Michigan businesses until the families were restored. His answer was an adamant NO. During a press conference last year on foreclosures, King was asked when he would call on the economic clout of his workers to fight back on the picket lines against the assault on working and poor people. He denied any knowledge of a mass union protest against Public Act 4 that was shortly upcoming at the State Capitol, and had his minion shut the question asker up. Meanwhile, UAW workers say they feel betrayed.
In return we asked for a couple things. First, when our company got “back on its feet” we should have those concessions restored—we were told that the concessions only represented “suspension,” not elimination of language. Second, that management and executives share our sacrifice. That wasn’t enough for the greed of our corporate masters. They came back in six months asking for more hand-outs from the workers, with the support of our International President and Vice President.
Immediately following the rejection of this ridiculous second round of concessions two things happened. First, Ford turned a billion dollar quarterly profit for the third quarter of 2009. Second, Ford reinstated much of the salaried employees’ pay and benefits they had taken away. Our International Vice-President was “outraged”! It turns out there was contract language that requires equality of sacrifice. So, a grievance was initiated at every plant in the Ford system at the recommendation of then Vice-President Bob King. Two years later that grievance still languishes in arbitration.
Workers on strike at Ford Rouge plant in 1941 cite Henry Ford’s anti-Semitic views and alliance with Adolf Hitler. Is he back today in Snyder disguise?
Fast forward to September 2011. The contract that our International leadership brought to us for ratification made PERMANENT the concessions in the 2009 modifications. This was after Ford posted ten consecutive quarters of incredible profits totaling $13.7 Billion. Then, to add insult to injury, the company announced that salaried employees would receive both a 2.7% pay increase and bonuses in 2012. Sound familiar?
We the members of UAW Ford are fed-up with being deceived and taken advantage of. We feel the time is now! We need our wage increases re-instated, we need our brothers and sisters to ALL be 1st tier workers. We cannot afford to sit idle until the next contract, only to be hoodwinked once again. The complacency must end! We need UAW direct action against concessions! Restore previously negotiated wages and benefits! Our families and future generations of workers need our unions to be STRONG!
The concessions we want back include:
Restore time – and – a–half pay after 8 hours work.
Restore the amount of Break Time to the pre-concession agreement.
Restore COLA to our weekly pay, and COLA RAISES.
Restore the PERFORMANCE BONUS as stated in 2007 Agreement.
Restore the CHRISTMAS BONUS to $600 per year for active and retired hourly.
Restore PAID HOLIDAY – MONDAY after EASTER.
Click on UAW petition to download copy of petition in PDF format.
Police, firefighters and other city workers demonstrated in May 2010 against pension system takeover by private Michigan Employee Retirement System, which was funded at a rate of 50 percent at the time, while Detroit’s $6 billion pension systems were 100 percent funded.
BELOW IS A LETTER FROM SHIRLEY LIGHTSEY, PRESIDENT OF THE DETROIT CITY RETIREES ASSOCIATION (DRCEA), TO MAYOR DAVE BING
July 11, 2012
SUBJECT: “City Employment Terms For All Non-Uniform Employees”
Dear Mayor Bing,
The Detroit Retired City Employees Association (DRCEA) has reviewed the “City Employment Terms For All Non-Uniform Employees” Agreement that was recently distributed to the civilian employee unions of the City of Detroit. After thorough review, the DRCEA is outraged and vehemently opposedto the proposed attempt to change the composition of the General Retirement System Board of Trustees. The changes that are contained in this document represent, (as described below) a radical power play to wrest control of $2.4 Billion dollars of Trust Fund assets under management by the Board and to manipulate the takeover that could ultimately undermine the entire System.
Detroit Mayor Dave Bing and Program Management Director Kriss Andrews, both proponents of assault on city’s pension systems. Both Bing’s company The Bing Group and Andrews’ former employer Energy Conversion Devices went bankrupt, ECD in February, 2012.
This idea now follows the ill-fated attempt in 2010 by the Bing Administration to transfer both the General and Police & Fire Retirement Systems to the Municipal Employees Retirement System (MERS) – a system that is severely under-funded in comparison to both Detroit Retirement Systems, charges excessive administrative fees, and imposes iron-clad restrictions if a municipality wishes to exit at any time.
The effective date of the General Retirement System is July 1, 1938, when a governing body was created to administer, manage, and conduct the operations of the System. There was never any consideration given to change the representative membership of the General Retirement System Board of Trustees when major Charter revisions were adopted in 1974, 1997, and 2011. The Board of Trustees, (as described below) has continually performed their duties as fiduciaries to the System, the members, and the City ofDetroit. They represent the City administration, the citizens of the City of Detroit, active and retiree members; and, have always acted in the best interest of the Plan.
Thousands protested Gov. RIck Snyder’s presence in Benton Harbor last year, calling him a DICTATOR. Snyder and corporate backers are behind PA4, Detroit consent agreement, CET, and attack on Detroit’s pension systems.
There has never been any individual control or majority rule by one party-in-interest; however, this will change if the new Board design is implemented. The Mayor would control seven (7) of the eleven (11) seats through appointment which will tilt the balance of power on the Board. Governance of the Trust cannot be administered in the form of a dictatorship whereby one individual, or those appointed by that individual, monopolize the decision making process that affects the lives of thousands of current and former employees.
AFSCME city workers protest Bing attack on pension systems.
Although unsuccessful, recent experience under a prior Administration with pay-to-play, bribery, indictments, favoritism, Federal grand jury and SEC investigations should clearly dictate that no one person or Administration should ever hold the type of power that is being proposed here. In addition, to place control of the pension system in the hands of any one Trustee destroys the concept of independence and undoubtedly is a violation of the requirements set forth in Public Act 314. A balance of power that has worked until now should continue. Therefore, there is no rational justification to even consider such a structural change to the composition of the Board that could have serious detrimental consequences.
The current General Retirement System Board of Trustees, as described in Article 11 Retirement Plans, Sec.11-103 Principles Applicable in Administering Plans of the Detroit City Charter, consists of:
The Mayor
A City Council member selected by that Body
The City Treasurer
Five (5) members of the retirement system, to be elected by the members of the retirement system under rules and regulations as may be adopted by the Board; except that not more than one (1) trustee shall be elected from any department,
A citizen of the City who is neither an employee of the city nor eligible to receive benefits under the retirement system, appointed by the Mayor, subject to approval by the Board; and
One (1) retirant, receiving benefits under the retirement system and elected by retired city employees under procedures established by ordinance.
The proposed change to representation on the General Retirement System Board of Trustees is:
The Mayor, ex-officio or designee
The President of the City Council, ex-officio
The City Treasurer, ex-officio
The Budget Director, ex-officio
The Finance Director, ex-officio
The Human Resources Director, ex-officio
Three members of the retirement system to be elected by the members of the retirement system, under such rules and regulations as may be from time to time adopted by City Council, except that no more than one trustee shall be from any one department.
The Mayor, shall appoint, subject to the approval of City Council, as a trustee, an individual with a background in investment and/or municipal finance.
The Mayor shall appoint, subject to the approval of the City Council, a retiree who is receiving benefits under the retirement system.
Following are several critical matters of concern that can be affected by the change in the representation on the Board of Trustees. These actions can be easily manipulated when the balance of power is so one-sided.
Enforcement of timely contribution payments to the Plan. The City has failed to make their required contribution on numerous occasions to both the General and Police & Fire Retirement Systems. Both Boards have filed “demand payment” lawsuits in the past and have always been successful, whereby the City was ordered by the Court to make an immediate payment to the Fund or establish a payment arrangement that included penalties and interest. If the administration controls the General Retirement Board, the collection effort may be delayed or never enforced.
Establishing the actuarial assumptions and funding levels, the wage inflation factor, and smoothing of gains/losses. Control of these decisions can have a material affect on the health of the overall Plan.
Selection of Board actuary, auditor, investment managers, consultants, and other service providers.
Control of duty & non-duty disability process.
Control of Employee Benefit Board that approves health care rates and administers the Death Benefit Fund.
Possible loss of the Internal Revenue Service qualified Plan status that could ultimately result in tax consequences to retirees and active members’ annuity loans.
Even though efforts are being made to control the severe financial distress of the City of Detroit under the Financial Stability Agreement negotiated between the Governor, State Treasurer, Mayor, and City Council, restructuring the Board of Trustees will in no way solve those problems. It is the DRCEA’s belief that all parties to the Financial Stability Agreement should direct their efforts at working togethe budgetary problems of the City rather than causing fear and anxiety among members of the Retirement System.
Specific to the changes that are cited above, the DRCEA is profoundly troubled by the proposal to take away the rights of all retirees (approximately 11,900, which includes 5600 Detroitresidents) to elect their independent representative on the Board of Trustees. Citizens in this country have fought and died for the opportunity to vote and let their voices be heard through the election process.
The proposal to allow the Mayor to choose the retiree representative will take that right away from retirees for no logical reason. The retiree representative will now perform his/her duties under the influence of the Mayor and be governed accordingly. This cannot and must not happen. The DRCEA will take whatever legal steps are necessary to continue the practice of electing a retiree representative and make every effort to support that individual’s total independence to act as a fiduciary in the best interest of all members and the System. We will rally our members if necessary, coordinate our efforts with all unions, and stop this attack on our retirement system.
Sincerely,
Shirley V. Lightsey
President – DRCEA
Cc: Detroit City Council, City Clerk, General Retirement System Board of Trustees, City of Detroit Civilian Unions
Opponents of PA4 hold sit-down rally in Cadillac Place lobby in Detroit June 28, 2012 to demand that PA4 referendum be placed on the ballot immediately.
Buses leaving from around Michigan for Lansing hearing
From: Lucianna Sabgash
July 20, 2012
Attorney Butch Hollowell points out PA4 referendum has 14 pt. font size, but says most others recently placed on the ballot had smaller sizes.
Oral arguments will be heard by the Michigan Supreme Court in Lansing this Wednesday, July 25th concerning the font size of the petitions to repeal the emergency manager law, Public Act 4. The Stand Up for Democracy Coalition will argue for immediately certifying the petition drive and placing the PA 4 “Dictator Law” on the Michigan State November ballot. Once certified, the law and the EMs are immediately suspended.
[VOD: Citizens for Fiscal Responsibility, the group which lodged a protest against the PA4 referendum, brought this case before the state’s high court. They are asking them to overturn the appeals court decision ordering that the PA4 referendum be placed on the ballot. The appeals court said June 4:
“Defendants [Board of Canvassers] have a clear legal duty to certify the petition for the ballot because the petition has the requisite number of signatures and meets all other statutory requirements,” the COA ruled. “Under all of the circumstances presented here, the act of placing the petition on the ballot is ministerial . . . we direct the Board [of Canvassers] to certify plaintiff’s petition for the ballot.”
Stand Up for Democracy filed a motion with the Appeals Court asking that their ruling be given immediate effect, so that the referendum can be on the ballot in time for the November elections, but the Appeals Court has continued stalling.]
Michigan Supreme Court justices.
The Supreme Court Justices, with a current Republican majority, should see the ongoing popular demand for ending the Dictator Law. It is important to note that three of the Michigan Supreme Court seats will be up for election this November. Oher ballot initiatives coming up may very well be contested as well [e.g. the constitutional amendment guaranteeing collective bargaining as a right.]
Buses are being organized in various cities around the state to leave early Wednesday morning for a Lansing 9:30a.m. arrival in Lansing, leaving as early as 7a.m. from Detroit, to rally on the Supreme Court steps.
Some of those who conducted sit-in at Cadillac Place June 28, 2012.
If anyone would be able to offer support for logistics in the form of buses, staging on the court steps; including, sound equipment, supporter sign-in, media wrangling/sign-in, food/water, first aid, political signs, event marshals, or any other recommendations, it would be greatly appreciated.
Follow-up actions are currently under consideration and planning stages following this event as well to keep the pressure on the justices. This is not just one event, but an on-going campaign to raise the voice of the people, build momentum for voter outreach and education so we don’t just put PA4 on the ballot, but vote it down, restoring democracy to our great state.
Map link to Supreme Court Building (Hall of Justice, 925 West Ottawa Street, Lansing, MI), click here for those organizing buses or carpools.
Please contact me directly if you have any questions or could offer support regarding logistics organizing this event!
Regards,
Lucianna Sabgash
Organizer for the 99% lsabgash@gmail.com
c 313.458.1467
Rainbow PUSH Michigan is coordinating buses leaving from following cities on the July 25, 2012. YOU MUST RSVP BY TUESDAY MORNING, JULY 24.
Washtenaw County delegation at march on Gov. Snyder’s house MLK Day, 2012.
ANN ARBOR/ YPSILANTI: 7:00 AM
ARBORLAND MALL
3765 Washtenaw Avenue
Ann Arbor, MI 48104.
For More Information Contact:
Rod Casey Sr, Washtenaw County Coordinator
734-340-7417
or email Casey_36@ juno.com
Rev. Edward Pinkney speaks at march against PA4 and PGA in Benton Harbor May 26, 2012.
BENTON HARBOR: 6:30 AM
Benton Harbor City Hall
200 E. Wall Street
Benton Harbor, MI 49022
For more information Contact:
Reverend Edward Pinkney
(269) 369-8257 banco9342@sbcglobal.net
DETROIT: 7: 00 AM
Bethany Baptist Church
15122 W Chicago
Detroit, MI 48228
Earline Hunter
313/836 – 7667
Detroiters traveled to Mason Michigan for Court of Claims hearing on Detroit Corporation Counsel Krystal Crittendon’s lawsuit v. PA4 consent agreement June 13, 2012.
FLINT: 7: 00 AM
Hasselbring Community Center
1002 West Home Avenue, Flint, MI 48505
For more information Contact:
Pastor Latrell Holmes or Bishop Jefferson
(810) 252-3010 bljfaith1@yahoo.com
Marchers from Muskegon Heights at march on Snyder’s house MLK Day 2012.
MUSKEGON HEIGHTS: 7:00 AM
Greater Harvest Baptist Church
2435 Riordan St, Muskegon, MI 49444
For more information on the event please call B.W.P.C. Chairperson Marianne Harris-Darnell at (708)-456-6116.
PONTIAC: 7:00 AM
Trinity Missionary Baptist Church
123 Wesson Street, Pontiac 48341
Pastor John Tolbert
For more information call:
(248)334 – 5043
(VOD editor: Detroit must take a cue from Baltimore and other cities who are taking a stand against the banks.)
“Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action. Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays.” (New York Times)
Baltimore Mayor Stephanie Rawlings-Blake announces lawsuit against banks over LIBOR scandal.
The news on Wednesday that cities and states are suing some of the world’s largest banks over Libor manipulation shows how this scandal could blow up into one of history’s biggest bank frauds.
That’s because interest-rate manipulation might well have kept your town or state from hiring firefighters or teachers, from paving roads or paying for indigent care or after-school programs for your kids — adding to the human suffering of the economic collapse these same banks caused in the first place.
Citibank one of many being sued.
If it’s any consolation, the lawsuits and fines over this manipulation could potentially cost the banks — which include not only Barclays but Bank of America, JPMorgan Chase, Citigroup, and many more — billions of dollars.
“This could get very ugly in a hurry for some banks,” Peter Tchir of TF Market Advisors wrote in a note.
And this could finally be enough to make Americans stop reacting to the Libor scandal with “a shrug,” as Joe Nocera recently put it, and push them closer to believing what Robert Shapiro, founder of economic advisory firm Sonecon, calls possibly “the biggest financial fraud in history.”
Would it be enough, maybe, to finally cause banks to lose the argument that regulating them too much will hurt the economy?
Detroiters march to demand action against banks on May 9, 2012.
The New York Times wrote Wednesday that several states, towns and other municipalities are rounding up posses of lawyers to sue big banks over their manipulation of Libor, a short-term interest rate that affects borrowing costs throughout the global economy. Barclays has admitted to manipulating the rate for years, paying $450 million in penalties. Other banks are under investigation for doing the same thing. The scandal has already engulfed Treasury Secretary Tim Geithnerand Federal Reserve Chairman Ben Bernanke who have been asked to testify before a Senate subcommittee about rate manipulation.
Interest rate swap.
The states and cities suing the banks often bought — from some of the same banks they’re suing — credit derivatives called interest-rate swaps. The swaps protected them when Libor rose, but hurt them when Libor fell. If these states and cities can prove the banks manipulated Libor lower, then they could have a case that the banks owe them some money.
Other potential litigants — hedge funds, maybe — bought derivatives that cost them money when Libor rose. Again, if they can prove that banks manipulated Libor higher, then they, too, could have a case that banks owe them money.
How much money are we talking?
Some of Wall Street’s best thinkers have scoffed that such lawsuits will likely result in small potatoes, or maybe tater tots at best. It could be hard to suss out how much financial damage somebody really suffered from this, or how much any one bank — or even more than one bank — is responsible.
And a lot of borrowers, maybe including the same states and cities suing the banks, arguably benefitedwhen the banks manipulated Libor lower, because it lowered their borrowing costs.
$800 trillion.
But the sheer vastness of the derivatives market makes this a potentially huge headache for the banks. There’s a general estimate floating around that Libor affects about $800 trillion in notional derivatives — that’s “trillion,” not “billion” or “million.” Banks are not going to be on the hook for anything near that much, as the bulk of this amount is “notional” — meaning, roughly, “not real.”
What is far more likely is that people with derivatives contracts tied to Libor lost tiny percentages of that $800 trillion with some regularity because of Libor manipulation. Some municipalities in the Times story estimate Libor manipulation cost them millions of dollars — $13 million in the case of Nassau County, New York, for example. That’s the same Nassau County whose crushing long-term unemployment is the subject of an HBO documentary, “Hard Times: Lost On Long Island.”
Protest against massive education cuts in Pennsylvania.
That’s “millions,” not “trillions.” Tater tots, if you’re a bank. But priceless for a municipality struggling to hire workers, build infrastructure or take care of the people being crushed by the recession and painfully slow recovery.
And there are hundreds, maybe thousands, of municipalities involved in this. A 2010 Wall Street Journal article about how states and cities were losing money on derivatives noted that in Pennsylvania alone, 107 school districts owned interest-rate derivatives during the time period banks were allegedly manipulating rates.
That’s 107 school districts in one state alone losing untold millions of dollars because of lower interest rates, which may have been lower than they should have been because of Libor manipulation. That’s 107 school districts in one state alone that had a harder time paying teachers, buying computers, of funding art programs.
Peter Tchir of TF Market Advisors tried in a research note this morning to arrive at what some of the big numbers might look like, if all of these potential litigants decided to up and hit the banks all at once.
If the banks were responsible for moving the three-month Libor rate by just 1/100th of a percentage point on that entire universe of $800 trillion in notional derivatives contracts, then that would be worth $20 billion, according to Tchir’s calculations.
Banks are probably not going to be on the hook for derivatives worth anything close to that $800 trillion. But if banks manipulated rates by more than that 1/100th of a point, or for more than 90 days — the term of three-month Libor — on even smaller notional derivative amounts, then the numbers can still get big in a hurry. And that doesn’t even include punitive damages. And it doesn’t include the estimated $10 trillion in mortgages and other loans tied to Libor, including $275 billion worth of U.S. mortgages, according to an estimate from the Office of the Comptroller of the Currency referenced in the FT.
“That is the real exposure a bank caught ‘lying’ faces,” Tchir writes. “If the lie was big enough and for a long enough period and anyone entitled to receive payment based on LIBOR can make the claim, the potential damage to the bank is enormous.”
