VOICE OF DETROIT: The city's independent newspaper, unbossed and unbought

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.

U.S., Japan, UK, others conducting criminal investigations

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.)

Related links:

http://voiceofdetroit.net/2012/07/20/libor-scandal-could-turn-ugly-as-cities-begin-to-sue-banks/

http://voiceofdetroit.net/2012/07/18/war-on-city-workers-wrong-dirty-and-low-down/

http://voiceofdetroit.net/2012/07/16/detroiters-sue-city-officials-to-void-consent-agreement-next-hearing-thurs-july-26-9am/

Click on the following PDF’s of other related articles:

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

Libor manipulation probe and litigation update Sedgwick LLP

Detroit POC Crains

Banks get paid while Detroiters lose MC

UBS END GAME The Federal Reserve is now bailing out the world

UBS received 800 million in US bailout

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.

For more information, contact Ron Lare or Judy Wraight at ronlare@sbcglobal.net ; jswraight@aol.com .

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 togethebudgetary 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

VOD: this letter was sent prior to the presentation of an even more stringent CET to City Council July 16, 2012. Click on City CET Council Discussion Document 2012-07-16_1_5 for full CET.

For additional info, click on:

http://michigancitizen.com/retirees-fight-b-takeover-p8513-1.htm (article by this author)

 http://www.crainsdetroit.com/article/20120720/FREE/120729993.

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)

The Huffington Post | By Mark Gongloff

 July 11, 2012

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.”

For more info, click on:

• http://articles.baltimoresun.com/2012-07-14/business/bs-bz-libor-suit-20120714_1_baltimore-suit-banking-watchdog-libor
• http://www.washingtonpost.com/business/economy/baltimore-takes-lead-in-suit-against-banks-over-alleged-libor-manipulation/2012/07/11/gJQAN3V7dW_story.html?wprss=rss_business

Detroit’s “Gang of Four” plus one: (l to r) LR director Lamont Satchel, Police Chief Ralph Godbee, COO and city’s defacto mayor Chris Brown, CFO Jack Martin, and Program Mgt. Director Kriss Andrews, at Council table 7/16/12.

Detroit City Council “no” vote on imposed contract likely to0 late 

By Diane Bukowski 

July 18, 2012 

DETROIT – Despite Detroit City Council’s 5-4 “no” vote on a corporate-sponsored assault on city workers July 17, a union-busting “City Employment Terms”  (CET) contract will likely take effect in 30 days, under terms of the city’s Public Act 4 “consent agreement.”

Council President Charles Pugh said he was the deciding “No” vote on the CET. By the same reasoning his was the deciding “Yes” vote on the consent agreement, the poisonous tree from which all subsequent actions have fallen. The consent agreement clearly spelled out its union-busting intent.

Sheila Pennington, President AFSCME Local 1023, calls CET “wrong, low-down and dirty.”

Detroit’s new “Gang of Four,” Chief Operating Officer (COO) Chris Brown, Program Management Director Kriss Andrews, Chief Financial Officer (CFO) Jack Martin, and Labor Relations Director Lamont Satchel, along with Police Chief Ralph Godbee, presented the CET package to Council July 16. It includes even more severe cuts than those in a package sent to unions earlier.

“All the time, you are talking like the sky is falling and there are going to be payless paydays,” Sheila Pennington, President of AFSCME Local 1023, told the Gang of Four. “We went to the table with you, Chris and you, Chief Godbee, and negotiated a tentative agreement, but it didn’t see the light of day. You have torn apart and destroyed our contract without any input at all from us. We have NOT lost the right to collective bargaining. This is WRONG, DIRTY AND LOW DOWN.”

Pennington represents civilian workers at the Police Department.

Tyrone Travis of Free Detroit-No Consent, previously with Coalition to Stop Privatization and Save Our City, working-class activist since the 1960’s.

“According to the Charter, the Financial Stability [consent] agreement doesn’t exist.” Tyrone Travis, of Free Detroit-No Consent, said. “You are giving all the jobs in the city to the suburbs and private contractors. We will no longer agree to proposals you put on the ballot. Say NO to the DIA! Put any funds owed to the state in escrow!”

The CET  includes a 10 percent wage cut and other financial cuts, with more possible in the future, an assault on the city’s pension plans and retirees, including elimination of dental and vision care after Jan. 1, 2013, a 20 percent annual premium co-pay on health care, elimination of seniority rights in promotions and transfers, work rule changes at the city’s whim, and cuts in union representation rights, to cite a few.

(See chart and link to 7/16/12 CET package at end of article.)

Detroit PMD Kriss Andrews (r) glares at camera as COO Chris Brown (l) discusses proposed CET with Atty.Michael McGee, a co-author of PA4, before FAB meeting June 28, 2012.

The plan allegedly will save the city $102 million in labor costs.  The city’s PA4 Financial Advisory Board (FAB) vetted and approved it earlier in three closed sessions with State Treasurer Andy Dillon, Brown, Andrews, and Satchel also present. Under the consent agreement, the FAB can impose the contract regardless of the Council’s vote.

A coalition of city unions earlier bargained a contract that would have saved the city $180.2 million, according to its chief negotiator Ed McNeil, but Gov. Rick Snyder and State Treasurer Andy Dillon would not agree to let the Council finalize it.

This was the first time city workers and union officials even saw the current plan.

Al Garrett, Pres. AFSCME Council 25 (in red shirt), with COO Chris Brown (l, looking bored), chief negotiator Ed Mcneil at Garrett’s right, Richard Mack at far right, during Council meeting July 16, 2012.

“I’m amazed at what you don’t know,” Al Garret, President of AFSCME Council 25, stood to say. “The consent agreement says if there is a collective bargaining agreement and they bring it to you, you can put it in place. There AIN’T no collective bargaining agreement. This has gone too damn far. At some point, you are going to have to stand up. Don’t vote for this, let them impose it.”

Councilwoman JoAnn Watson at table July 16, 2012, says city needs to re-negotiate debt to banks.

Councilwoman JoAnn Watson said the City Charter requires collective bargaining, and that the consent agreement does not pre-empt that obligation under three sections of the Public Employee Relations Act (PERA) not barred by Public Act 4.

“Folks are acting like Michigan has a right-to-work [anti-union] law in effect,” Watson said. “It does not. Detroit is the home of organized labor. This package throws all respect for the legacy of the unions out the window.”

She also brought up the possibility of a moratorium on the city’s debt.

Linda Willis at demonstration calling for a moratorium on Detroit debt to the banks, held May 9, 2012 in downtown Detroit.

“Why was there no effort to re-negotiate the city’s huge debt load to Wall Street bondholders who got bailed out by the taxpayers to the tune of trillions of dollars?” she asked. “You want to get tough with the working class, but you won’t confront Wall Street.  Power concedes nothing without a demand.”

The city paid $597 million to the banks in the 2011-12 fiscal year, and carries a total debt load of $12.6 billion.

Watson added that Gov. Rick Snyder should restore residency requirements for city workers to increase the city’s revenue base. She asked why the Law Department, headed by Corporation Counsel Krystal Crittendon, had not been consulted on the package since it must approve all contracts.

City officials admitted that the law firms of Butzel Long, Miller Canfield, and Ernst & Young have been retained instead to advise on the contracts, at millions of dollars in expense to taypayers, let alone the costs for the salaries and staff of the CFO, the PMD, and the FAB.

Council members JoAnn Watson (l), Brenda Jones, (center) Kwame Kenyatta (r) consult after consent agreement vote April 4, 2012.

Council members Pugh, Gary Brown and Saunteel Jenkins contended that an emergency manager would have been worse.

“We’ve basically got 14 emergency managers in place already [referring to the FAB, the CFO, the PMD, Dillon and Snyder among others],” countered Councilwoman Brenda Jones. Unless we change things at the top, someone can give the city $1 billion and we would be in the same place. It is not the employees’ fault.”

Brown, a former DTE executive and international privatizer, said, “Things are not the same. It may not be fair, but it’s necessary. The market is not providing these services anymore.”

Detroit’s defacto first white mayor, COO Chris Brown, smirks at Council table July 16, 2012.

Neither Mayor Dave Bing nor Deputy Mayor Kirk Lewis were at the table. Brown, who led the administration’s presentation at the opposite end of the table from Council President Charles Pugh, appears to be the city’s first white mayor, de facto.

Andrews was most recently Chief Financial Officer at Energy Conversion Devices, which filed for bankruptcy in February.

Neither he nor Brown have had any prior experience dealing with the public sector. Under the consent agreement, Andrews has veto power.

“We are looking at the possibility of more reductions in force, significant reductions in overtime, and using selective furlough weeks,” he noted. “We are going to re-evaluate retiree health care coverage as a whole. We retained a third party actuary to deal with things in the most ‘humane’ way.”

Jack Martin, also former Highland Park schools EM, chewed out by Highland Park parents.

Martin was a member of the Detroit financial review team Snyder appointed and also Highland Park Schools EM. He previously served under U.S. President George W. Bush as CFO for the U.S. Department of Education, where he helped implement the pro-charter school No Child Left Behind Program. He is making $224,000 as the City’s CFO, also with veto power under the consent agreement.

“It’s Doomsday,” he said. “No matter what happens with Public Act 4, the bottom line is that we are running out of cash and we don’t want to file bankruptcy. We may have to shut down parts of the city. The only way we can survive and prosper is to take actions like this.”

Labor Relations Director Lamont Satchel (l) listens intently to COO Chris Brown at Council table July 16, 2012.

Martin did not produce any financial documents detailing evidence of projected cash flow shortages.

“The most significant part of this package is the management rights clause,” Satchel said. “Management reserves the right to make any changes as it deems necessary to act to achieve its desired goals. We will sit down with the unions to inform them of the changes if there is time.”

Satchel insisted that the Labor Relations Division and department heads were responsible, in “collaboration” with the FAB, for producing the meat of the CET.

Jan Winters, Snyder’s director of Office of State Employer.

However, Ed McNeil, chief assistant to AFSCME Council 25 President Al Garrett, said that State Treasurer Dillon told him that Jan Winters, head of the Office of the State Employer (as she was under former Gov. John Engler), oversaw the drafting of the package.

Satchel also repeatedly insisted that the “duty to bargain has been suspended” under PA4. However, Attorney Richard Mack, representing AFSCME, cited three clauses in PERA that were not suspended.

“In the next 30 days that the consent agreement gives you, have the Corporation Counsel look at specific sections of state labor law that say that the city still has to bargain with the unions,” Mack said. You made a mistake last time not getting her advice.”

Detroit Corporation Counsel Krystal Crittendon

Mack and AFSCME Council 25 have asked Crittendon to review the proposed CET and issue a legal opinion, in a letter sent July 16. He also gave Council a copy of the letter.

“With this letter, the Coalition of Detroit Unions formally asks you, Madam Corporation Counsel, to issue a legal opinion indicating that the City of Detroit may not impose employment terms on its unionized workforce, because of the city’s duty to bargain with the unions,” the seven-page letter begins. “This duty is found expressly in the City Charter . . . . If the leadership of the City refuses to comply with your opinion of an existing duty to bargain, we then ask that you seek ‘judicial action’ to require such bargaining. Charter 7.5-209.” (Click below for full copy of letter.)

Michael McGee advising Council on PA4 consent agreement April 4, 2012.

When it voted 5-4 for the consent agreement, which allowed the current scenario to take place, the Council instead listened to legal advice rendered by Attorney Michael McGee of Miller, Canfield, Paddock and Stone. Council member Kwame Kenyatta exposed McGee as a co-author of the language in Public Act 4, a contention confirmed by McGee himself in an article for the Michigan Municipal Advisory Council newsletter.

SAAA Vice-President Greg Murray said, “This is tyranny, a way to pay the corporate interests first. When will Detroit’s greatest assets—its people and workers—be used? We didn’t vote for this consent agreement. Stop this subjugation! This 21^st century document amounts to indentured servitude, taking the city back to the 1800’s.”

EMS tech Joseph Barney (r), tells Council, “People are dying out here because we can’t get to them!”

Joseph Barney, an EMS technician and union representative with the Fire Department, said, “People are dying out here! EMS is killing them because we can’t get to them. There are no ambulances in southwest Detroit. We are 60 technicians below budget. This is not a collective bargaining agreement, it’s nothing but getting rid of the workers while you still have too many managers.”

Click on City CET Council Discussion Document 2012-07-16_1_5 to read entire package.

Click on AFSCME 25 letter to Krystal Crittendon to read entire letter.

Georgia prison hunger strikers facing death.

By: Deborah Dupre

July 16, 2012

Nine prisoners face death on a hunger strike for human rights that began June 11 at Georgia’s massive Diagnostic and Classification prison, where Troy Davis was murdered last year and where men are tortured in solitary confinement.

“It has been 33 days since these men have eaten. We must move swiftly or people are going to start dying,” writes Delma Jackson, wife of the inmate who leads the strike, Miguel Jackson.

Miguel Jackson, GA. prisoner beaten with hammers by guards, 12/31/10. Photo courtesy Final Call.

Miguel Jackson is the prisoner beaten with a hammer-like object in retaliation for his role in the December 2010 mass sit-down strike to raise awareness about slave labor and other atrocities at Georgia’s massive Diagnostic and Classification prison, what CBS Atlanta reported the inmates call “unreasonable and inhumane treatment by prison guards and officials.”

The Atlanta Journal-Constitution, based on claims by the Georgia Department of Corrections, reported Tuesday that the strike is over:

“A hunger strike by 10 inmates at the Georgia Classification & Diagnostic Prison has ended, according to the Department of Corrections. The strike, which sparked a protest at the state capitol building Monday, lasted from June 10 to July 6. Corrections is also denying claims that it mistreated the striking prisoners.The hunger strike ended when inmates requested food from GDC officials,’ said Dabney Weems, a public relations official.”

Georgia prisoner in pool of blood on cell floor. Photo courtesy Dr. Boyce Watkins, Your Black World

Families and an attorney for the prisoners, however, “insist that the nine hunger strikers remain resolved and continue to insist on administrative review of their status, adequate medical care, and access to mail and visitation privileges with their families and attorneys which have been arbitrarily denied them,” reports San Francisco Bay View News, based on the story by Bruce A. Dixon, managing editor at Black Agenda Report where this story first appeared.

Dixon is a member of the state committee of the Georgia Green Party and is heard on Black Agenda Radio Commentaries.

(Listen to Bruce Dixon’s commentary on the Georgia prison strike here.)

Georgia Classification and Diagnostic Prison, location of hunger strike. Troy Davis, who received world-wide support, was executed here.

Georgia’s Green Party called on Americans to fast for one day in solidarity with the prisoners, saying in a written statement:

“Eighteen months after Georgia Department of Corrections employees brutally suppressed a non-violent work stoppage led by inmates in as many as eleven of the state’s 34 prisons, it is believed that the “Hidden-37″ have been in solitary confinement ever since. The Georgia Green Party today called on Governor Deal to end the torture; and on Georgians to join hunger striking Georgia inmates in a one day solidarity fast.”

“Prison officials are surprised at the level of outside support the inmates enjoy despite a virtual news whiteout,” states Bruce Dixon, editor of The Black Agenda Report.

Georgia denies inmates hygiene and medical treatment for injuries inflicted 18 months ago

“Miguel and other inmates at Georgia Diagnostics have been denied access to proper hygiene [and] medical treatment for their numerous and severe injuries, many of which were inflicted 18 months ago,” wrote Delma Jackson in a Change.org petition.

Jackson’s family alleges that he was beaten by prison guards at Smith State Prison in December 2010, transferred in 2011 to the Georgia Classification & Diagnostic Prison where he has been kept in solitary confinement for the past 18 months.

Protest outside Detroit’s Mound Rd. prison on Dec. 14, 2010, to support striking Georgia prisoners, nine of whom are now on hunger strike facing death.

The Department of Corrections denied those allegations in a statement to the AJC.

“[The Georgia Bureau of Investigation] investigated the claim filed by inmate Miguel Jackson regarding the 2010 Smith State Prison incident and found no validity to the inmate’s complaint,” stated Dabney Weems, a public relations official.

According to the ACJ,the department also said Jackson has not been in solitary confinement.

Bruce Dixon, editor Black Agenda Report.

In a petition that citizens of faith and conscience are asked to sign, The Black Agenda Report states about solitary confinement torture:

“As the international community has examined the research, including over a century of scientific studies suggesting that prolonged solitary confinement leads to irreversable mental degradation, experts have found that use of segregation for period in excess of fifteen days constitutes torture and cannot be supported under existing international standards for human rights.”

Many of the men now on hunger strike were involved in a hunger strike launched in December 2010. Continue reading →

Maura Corrigan, Director of Michigan Department of Human Services.

By Diane Bukowski 

July 16, 2012 

DETROIT –Genessee County Circuit Court Judge Geoffrey Neithercut today threatened to hold Maura Corrigan, director of the state’s Department of Human Services, in contempt of court if the state does not process all outstanding re-applications for state public assistance by Aug. 10.

“These cases [were] not being processed in a timely manner in spite of DHS promises that they would be expedited, and families are suffering as a result,” said Jackie Doig, Senior Staff Attorney for the Center for Civil Justice (CCJ).  “DHS created a slow, cumbersome process for handling class members’ applications, with the end result that they still are not receiving assistance because of the unlawful policy.”

Attorney Jacqueline Doig, who won State Bar of Michigan’s Champion of Justice award.

The Saginaw-based CCJ filed the state lawsuit after U.S. District Court Judge Paul Borman said he could not rule on state issues in their original case, filed on behalf of thousands of families cut off beginning last November.

Another hearing is set for Aug. 20 in front of Neithercut, in the 7th Circuit Court in Flint,  to assess the state’s compliance.

Families were allowed to re-apply for Family Independence Assistance (FIP) after Neithercut earlier barred the state from cutting them off based on time limits counted from  prior to October 1, 2007.

That was the date former Governor Jennifer Granholm’s  2006 order cutting off lifetime assistance after four years went into effect.  In August, 2011, Gov. Rick Snyder signed legislation re-affirming her order and adding tougher provisions.

Neithercut’s order was overturned July 3 by the Court of Appeals (COA), but the Center for Civil Justice said July 16 that it plans to appeal the case  to the Michigan Supreme Court.

Family waits for housing assistance at local non-profit agency.

Because the COA denied the state’s order for immediate effect, the CCJ said it will not go into effect until at least Aug. 8, and certain families can still re-apply in the interim. (See link to CCJ story at end of this article for more information.)

Last year, a Detroit mother of eight, “Cathy Smith,” told VOD that she feared her children would be forced into the life of abusive foster care she led from the age of 2 if her benefits remained cut-off. Smith has severe health problems including a back injury, diabetes, asthma, a kidney disorder, and carpal tunnel syndrome, which ended her ten-year career as a waitress.

“Two of my sons have graduated from high school and are working, so they can help us out,” she said. “I have two other children in high school, one in middle school, and two in elementary school. They have zero absences. They go to school every day, because I want to make sure that they have it better than I did.”

She said she fears the state’s Child Protective Services division will take the six children still at home if she loses her ability to provide a roof over their heads.

The state reported earlier that it currently has a large budget surplus, but is battling all attempts by poor families, as well as cities like Detroit to which it allegedly owes over $307 million, to benefit from that surplus.

Click on JUDGE ORDERS DHS TO PROCESS 100 PERCENT OF APPLICATIONS BY AUGUST 10, 2012 for further information from Center for Civil Justice. The CCJ website is at http://ccj-mi.org/. Its phone number is 800-724-7441.

Plaintiffs’ attorney Herbert Sanders, backed by some of dozens who packed the courtroom to support lawsuit against Detroit consent agreement, speaks to media after hearing July 13, 2012.

Next hearing Thurs. July 26; state high court to hear case against PA4 referendum Wed. July 25 

By Diane Bukowski 

July 15, 2012

Wayne County Circuit Court Judge Amy Hathaway listens to arguments in earlier case against city filed by AFSCME. Atty. Herbert Sanders is at left. Hathaway is runnning for re-election this year.

DETROIT – Wayne County Circuit Court Judge Amy Hathaway ordered a two-week delay July 13 on an emergency hearing in a citizens’ lawsuit against the city’s PA4 consent agreement.  The request for a declaratory judgment in Rose Roots, Yolanda King and Yvonne Ross v. the City of Detroit, Mayor Dave Bing, and the City Council, is now to be heard Thurs. July 26 at 9 a.m.

She denied requests by the defendants to further delay or quash the suit, took under advisement a motion by attorneys for Mayor Dave Bing to bar the Corporation Counsel’s office from representing the City in the suit, and granted a state motion to intervene.

The lawsuit alleges that city officials did not have the right to enter into the April 4 “Fiscal Stability Agreement” with the state because the state owes the city over $307 million in revenue sharing payments, water and electric bills, and other debts.

Atty. Herbert Sanders, with plaintiff Yolanda King in back, speaks to media.

The allegations are the same made by Detroit Corporation Counsel Krystal Crittendon in her suit against the consent agreement, which targets the state of Michigan, Gov. Rick Snyder, and Treasurer Andy Dillon as defendants.

“We are asking the court to uphold the rights of the people with regard to the consent agreement,” attorney Herbert Sanders, who represents the plaintiffs, said. “The plaintiffs are saying city officials had no authority to enter into it in the first place. The State has no affidavits or other proof saying they don’t owe the debt involved, but we have affidavits and city records kept in the normal course of business. The state is in default to us.”

Sanders called the delay “unfortunate.”

Michigan Gov. Rick Snyder and Detroit Mayor Dave Bing are “joined at the hip,” according to an earlier comment from Bing.

“The Mayor and state attorneys used the same tactics being used to challenge the peoples’ right to vote on the referendum to repeal Public Act 4. But we will continue to fight this battle in the courts and on the streets.”

Earlier, on July 11, over 400 opponents of Public Act 4 once again occupied Cadillac Place, the state’s office building in Detroit, demanding that the State Court of Appeals get Stand Up for Democracy’s  referendum on the ballot in time for the November election.

In contrast, the state’s Supreme Court moved swiftly to set a hearing on an application for leave to appeal by Citizens  for Fiscal Responsibility. The group, which filed the initial challenge to the referendum, is asking that the high court strike down the appeals court ruling that the referendum is valid. That hearing is to take place Wed. July 25, at 10 a.m.

Hundreds occupy Cadillac Place June 28, demanding “Let the People Vote Now!”

“Each side will have 30 minutes for oral argument,” the Supreme Court said in its order. “At oral argument, the parties shall address: (1) whether plaintiff actually complied with the 14-point type requirement in MCL 168.482(2), specifically given the terms “point” and “type;” and (2) if not, whether substantial compliance with the 14-point type requirement in § 482(2) is sufficient to give plaintiff a clear legal right to certification of the petition.”

The same Supreme Court has yet to hear arguments in a lawsuit filed on behalf of plaintiffs around the state in 2011 asking that Public Act 4 be declared unconstitutional and struck from the books.

Plaintiffs Yvonne Ross (l) and Yolanda King speak to media July 13, 2012.

“My parents fought for civil rights in the South,” Yolanda King, a plaintiff in the lawsuit against the city, said July 13 after the hearing. “But now we are going back to the days where we had no right to vote. The money the state owes us would get the city out of the red. We are facing hundreds of lay-offs, the closing of recreation centers, the health department and other vital services.  We don’t have the right leaders. There is no way they should have entered into an agreement giving away our power, our jewels and our right to vote.”

Co-plaintiff Yvonne Ross said, “We have expressed our displeasure beginning with the formation of the financial review team. We feel everybody including the state of Michigan ought to follow the rules. It is illegal to contract with an entity in default to the city.”

King and Ross are both city workers and taxpayers. The third plaintiff, Rose Roots, is a city retiree.

Attorney Michael McGee, representing Mayor Bing, rushes past VOD trying to avoid being photographed after court hearing July 13, 2012.

Mayor Dave Bing, the City Council and the state sent a battery of attorneys to the courtroom to fight to maintain the consent agreement, which guts city officials’ authority over everything. It has now led to the union-busting unilateral “City Employment Terms” contract being presented to the City Council July 13 by the Financial Advisory Board.

Bing’s attorneys from the law firm of Miller, Canfield, Paddock and Stone, including Michael McGee, a co-author of Public Act 4, asked that the office of the Corporation Counsel be barred from representing the city during the proceedings.

McGee has been omnipresent, appearing at City Council to tout the consent agreement, at Financial Advisory Board meetings, and in Ingham County Circuit Court during a hearing on Crittendon’s lawsuit. Asked to comment, he rushed past VOD trying to avoid having his photo taken.

Lawsuit supporters discuss hearing afterwards.Tyrone Travis, a member of Free Detroit, No Consent, at center, is suing City Council President Charles Pugh for ousting him from City Council meeting in violation of Open Meetings Act.

“It’s a good question where the money to pay Miller Canfield is coming from,” Sanders said. “We are not aware that the Corporation Counsel hired anybody. “From my understanding, Attorney McGee helped draft Public Act 4 and was also involved in the drafting of the consent agreement. It is ironic that they are now representing the Mayor, giving at least an appearance of impropriety.”

Under the current City Charter, the Corporation Counsel must approve any outside counsel hired to represent the city.

Assistant Corporation Counsel James Noseda on behalf of City of Detroit arguing against consent agreement in front of Ingham County Circuit Court Judge WIlliam Collette June 13, 2012.

Assistant Corporation Counsel James Noseda, present to defend the City of Detroit, admitted that the plaintiffs’ grounds are identical to the grounds cited in Corporation Counsel Crittendon’s lawsuit, but said his office is still entitled under terms of the Charter to represent its clients, which include the City of Detroit as a whole, and the Mayor and City Council as requested.

Hathaway said she would rule later on whether the Corporation Counsel’s office can represent the city at the hearings.

She granted a motion by the State of Michigan to intervene in the case.

“I objected to the state intervening,” Sanders said. “In Corporation Counsel’s lawsuit, the state argued that they could not be sued because they have sovereign immunity, trying to get out of the suit. But now they are arguing that they want to be in this case.”

Judge William Collette at hearing June 13, 2012.

Ingham County Circuit Court Judge William Collette summarily dismissed both Crittendon’s suit and her motion for reconsideration, the last on July 12. She has 21 days to file an appeal from the Court of Claims to the state’s Court of Appeals. Crittendon met in closed session with the City Council and its Research and Analysis Division July 11 to discuss the appeal.

“Take it to the bank, she must and will appeal as is required by our city’s charter,” former Mayoral candidate Tom Barrow commented. “The Judge is simply wrong and she knows it. She gave him a chance to correct his obvious mistake and he refused. She is correct to follow the law to its ultimate conclusion and that means an appeal.”

Tom Barrow (l) is backed by dozens of supporters during Wayne County Board of Canvassers hearing in which he challenged validity of 2010 mayoral election.

Barrow said he has appealed his challenge to the 2009 Mayoral election to the U.S. Supreme Court. The Wayne County Board of Canvassers declared over 51 percent of the ballots cast in that election “unrecountable” due to gross irregularities.

Major media outlets continue to blame Crittendon’s suit as well as other “legal proceedings” for Wall Street bond ratings agencies continued downgrading of Detroit’s status. However, it is the bond ratings agencies themselves who are attacking Detroit to get the last drop of blood out of the city. The banks who pay them got $597 million in payments on the city’s debt in the 2011-12 fiscal years.

The city’s budget for 2012-13 sets aside $106,911,659 for a 2009 POC Swap Hedge Fund payment, aside from the remainder of outstanding debt. That payment results from an agreement the city entered into to avoid defaulting on a $1.5 billion Pension Obligation Certificates loan in 2005, under former Mayor Kwame Kilpatrick.

That loan was foisted on the city by representatives of Standard and Poor’s and Fitch Ratings, who came to the City Council table and threatened the city with bond downgrades if they didn’t agree to the deal.

Instead of making the workers and residents of Detroit pay for Wall Street’s greed, many in the city are demanding a moratorium on Detroit’s debt to the banks.

To read lawsuit, click on Root v Bing – 1st Amend Complaint.

Stephen Murphy of Standard and Poor’s and Joe O’Keefe of Fitfch Ratings at City Council in 2005 foisting $1.5 billion pension obligation bond on city.