Court Sanctions Emergency Manager Theft of Detroit

(reposted  from Michigan Citizen)

THEY PULLED IT OFF!

By Curt Guyette
Special to The Michigan Citizen

The grins stretched from ear to ear, and the hugs and back-patting were plentiful.

Emergency Manager Kevyn Orr, Gov. Rick Snyder, Mayor Mike Duggan and U.S. Judge Gerald Rosen — all were in a celebratory mode last week as they appeared at a press conference following the announcement by U.S. Bankruptcy Court Judge Steven Rhodes that Detroit’s proposed “plan of adjustment” had been accepted, putting an end to the city’s journey through bankruptcy.

Gov. Rick Snyder and Mayor Mike Duggan celebrated Bankruptcy Judge Steven Rhodes’ acceptance of their Plan of Adjustment that cuts workers’ and retirees’ pensions and healthcare, and takes back earlier annuity payments from the city over the last decade. CURT GUYETTE PHOTO

Newspaper headlines announced the city had been “reborn,” and the final words of the ruling read from the bench by Judge Rhodes echoed triumphantly: “It is now time to restore democracy to the people of the city of Detroit. I urge you to participate in it. And I hope that you will soon realize its full potential.”
The irony, of course, is that it was the hijacking of democracy that brought Detroit to this place.

It began in early 2012, when lawyers from the Jones Day law firm, in conjunction with the investment banking firm Miller Buckfire, began secretly meeting with Gov. Snyder’s office and other state officials to figure out how to thwart the will of Michigan voters.

The concern was that a grassroots-effort to repeal a new state law giving unprecedented powers to appointed emergency managers would succeed. And so they devised their response, and were ready to act when voters went to the polls in November 2012 and rejected the law by a significant margin.
Within a month, the state’s Republican-led Legislature crafted a new law containing many of the same provisions as the one Michigan’s citizens — engaging in the democratic process hailed by Judge Rhodes — had just voted to repeal. Only this time, an appropriation would be attached to the statute, making it “referendum proof.”

So much for a commitment to the democratic process.

As a result, instead of having elected officials deciding Detroit’s fate, Emergency Manager Kevyn Orr and his former partners at Jones Day began calling the shots, as the city was shoved into bankruptcy.
From the outset, the primary target of debt-cutting was clear: The city’s retirees would be the ones facing the most severe sacrifices.

Again, Jones Day, which had some of the city’s biggest creditors as its clients, would play a key role. The firm’s lawyers laid the legal groundwork for using bankruptcy to go after retiree benefits in bankruptcy — even in a state like Michigan, which has the protection of pensions written into its constitution.
Casual observers of this drama will have heard that, as a result of the much-hailed “grand bargain” — an $816 million cash infusion from the state, private foundations and the Detroit Institute of Arts — the cut to general retiree pensions would be just 4.5 percent, and that police and firefighter retirees won’t get nicked at all.

What tends to get lost in the reporting is the true extent of the hit being taken by retirees.




 
 
Kevyn Orr is all smiles at the press conference announcing Judge Rhodes’ acceptance of his Plan of Adjustment. CURT GUYETTE PHOTO



Both civilian and uniformed retirees will absorb massive losses thanks to deep cuts in future cost of living increases. For the general retirees, those yearly raises are being eliminated completely. Taken together, the two groups will give up a total of more than $1.3 billion in the coming years.

Cuts to healthcare benefits only compound the problem. Instead of being on a plan where the city covers 80 percent of healthcare costs, retirees are receiving a monthly stipend. For most, the amount is $125, leaving them to pick up the additional costs of insurance, which can be hundreds of dollars a month.

And then there’s the “clawback” of excessive interest rates the Jones Day attorneys argued was paid to people who participated in an annuity savings program between 2003 and 2013.

As one retiree observed, “I’m getting hit four different ways.”

Add it all up, and at least 75 percent of the estimated $7.3 billion in debt and obligations being shed in bankruptcy comes in the form of cuts to retirees.

Will that be enough to put the city on a sound financial footing?

Despite the media’s focus on Detroit’s supposed rebirth, there is real cause for concern that the fundamental factors that led to the city’s dire straits remain unaddressed. In a recent opinion piece, economist Peter Hammer — who’s also a law professor and director of the Damon J. Keith Center for Civil Rights at Wayne State University — warned:

“The perverse logic of fiscal austerity is creating dozens of second-class ‘minimal cities.’ The move to transition Detroit away from serving as a city, to a slimmed-down version with little to no municipal services, is part of the bankruptcy Plan of Adjustment that the city is pursuing, on a par with what the World Bank and International Monetary Fund pursued with Structural Adjustment Programs in much of the developing world. What we know from these SAPs is that they sucked the life out of countries forced to receive them.

“The same will happen with Detroit, especially given how out-of-touch managers are with the city’s history and context. The 226-page Expert Report, for example, on the feasibility of the POA and the reasonableness of the city’s revenue forecasts never addresses issues of race, racism, regionalism, segregation or foreclosure (all words that appear nowhere in the report). And poverty is only mentioned once. … We need alternatives to the dictates of fiscal austerity and structural racism.”

As for Judge Rhodes, this is what he told the people of Detroit:

“A large number of you told me that you were angry that your city was taken away from you and put into bankruptcy. You told me in your court papers. You told me in your statements in court. You told me in your blogs, letters and protests. I heard you.

“I urge you now not to forget your anger. Your enduring and collective memory of what happened here, and your memory of your anger about it, will be exactly what will prevent this from ever happening again. It must never happen again.”

Then he urged Detroiters to channel that anger into positive action by engaging in the democratic process.

For the next 13 years, however, the people of Detroit will have elected leaders, but it won’t really be a true democracy. That’s because an appointed, nine-member financial advisory board (containing only two Detroit officials) will have the final say over approval of major contracts and the budget process.
“It is your City,” Judge Rhodes told Detroiters.

But it is others who, though unelected and mostly living elsewhere, will be the ones with the final authority over crucial decisions facing Detroit for the foreseeable future.

Curt Guyette is an investigative reporter for the ACLU of Michigan. His work, which focuses on Michigan’s emergency management law and open government, is funded by a grant from the Ford Foundation. You can find his reporting at aclumich.org/democracywatch. Contact him at 313.578.6834 or cguyette@aclumich.org.

MWRO Statement on UN visit to Detroit to investigate massive water shutoffs--Part 1

This is the first of a two-part statement from MWRO on the United Nations visit to Detroit by two Special Rapporteurs on Detroit water shutoffs.

On Oct. 20th, 2014, United Nations representatives Catarina de Albuquerque and Leilani Farha met with Mayor Mike Duggan and part of his staff to discuss the recent mass water shutoffs plaguing Detroit.

U.N. Special Rapporteurs. Photo credit: theguardian.com

The meeting was very frank and at times contentious with the Special Rapporteurs (SR) asking questions based on citizen/resident reports they had received from what they refer to as “civil society” organizations and direct visits to residential homes. The premise of the meeting was itself historic in that this was a session to discuss best practices, shared by the SRs, relative to how decreasing revenues might impact water access, distribution and sanitation specifically in low-income households. The two special investigators have amassed a myriad of expertise over the years after visiting many countries that have faced dwindling economies and transient populations.

Amid a flurry of “denials” and veiled attempts to discredit the intention(s) of these two specialists, the SRs continued to press for answers about recent water shutoffs. The session went back and forth until Mayor Duggan stepped up and suggested he would be interested in receiving detailed information about any current residents without water. The Mayor placed a call at the suggestion of the MWRO rep to the phone center and was able to get right through to someone without a long wait. This single act proved the City’s case that new practices are being put in place to address resident complaints — the problem is that these procedures aren’t reaching the poorest and most vulnerable residents. Long waits on the phone to the Detroit Water and Sewerage Dept. have been a frequent complaint and we hope, at least in this instance, progress is being made. In the end, what was suggested is that specific account information would be needed to examine any claims of denied water and the City would look into each case that was submitted.

Detroit Mayor Duggan with Alexis Wiley. Photo credit: clickondetroit.com

Since that historic session, several things have occurred. The City has issued statements that paint the Special Rapporteur’s visit as “nothing but a show.” One city employee, Alexis Wiley, the Mayor’s chief of staff, labeled their initial report as “sad” suggesting they were following a separate agenda that did not reflect the truth about water shutoffs in Detroit. Another City employee suggested that information gathered by talking with a few residents did not rise to actual truth, and that only through talks with the City were facts able to be put forward. Residential interpretations were not credible, in other words, and were not to be validated. There are none so blind than those who refuse to see!

In 2005, 2006, and 2007 — the Water Affordability Plan was submitted to the DWSD after is was tweaked and then accepted by the City Council and the then Mayor. Always, it is said there are legal reasons why this wonderfully crafted document can’t be implemented. And always when we ask, “Why not?” no credible answers are shared. The corporate interests that have lined up in great anticipation of receiving mega-infusions of cash is the logical place to search for the financial support needed to help shore up the City. Revenue sharing, unpaid commercial and corporate water accounts, so many places to look for untapped resources yet the then Emergency Manager’s only goal, it appears, was to inflict economic and physical pain on the most marginalized, most vulnerable, the poorest.

Over and over again, the City has suggested that those unable to find resources to help prevent shutoff or restore water already shut off were not truthful or that they were too dumb to find simple information. The old, tired, “people want free water” message was dragged out, a phrase that is repeated even though no one ever asked for that. It was revealed that the City has always practiced water shutoffs, and that was an established practice never before challenged. It was admitted that some 300,000 water shutoffs have happened over a period of years, a fact the City was not ashamed to admit. Must have felt the same rage and shock like those in the room in Nuremberg during that trial, listening to soldiers talking about how they were just following orders....

Shutting off water in Detroit. Photo credit: detroitnews.com

The Special Rapporteurs’ questions and the session ended in about 90 minutes, after which they traveled back to their hotel to prepare the press release for the media. Their specific UN conclusions are online, which include a strong recommendation that all residential water accounts be restored, which allows the City to investigate each address to determine if there are low-income families with children, the disabled, the elderly, or veterans living there who need supportive programs that structure payments they can afford. There are other recommendations the SRs offered, that have been published far and wide that address other ways of managing delinquent water payments that other nations routinely employ.

In closing, MWRO agrees with the basic, fundamental conclusion offered by our international guests. Because the population of Detroit has dropped, because the unemployment numbers have risen, because the good paying auto-industrial jobs have disappeared, and because many of the jobs available today are low-paying, the City still has a legal obligation to supply clean water and sanitation to all — even if only one resident is left! It is in fact a violation of international law to deprive residents of water if they are too poor to pay in the regular way. Ms. de Albuquerque and Ms. Farha were not daunted by Mayor Duggan and his staffs comments. Clearly, they don’t understand the UN reps’ mission.

This is not a popularity contest that is directed by who we like and who we don’t. It is patently wrong to disconnect water where low-income people live, and no amount of “American Exceptionalism” can alter that fact. There are millions of poor Americans who live in horrible conditions that are ignored daily while we act as if all is well; and Detroit has a large share of those families.

The responses coming from the City are at best shallow, defensive, ignorant, and at least, devoid of compassion. What kind of city is this and what kind of people are in charge who would countenance such demonic practices? Are our elected officials so drunk with power that they would choose not to find a way to keep the poorest residents safe and clean? Why didn’t someone in city government stand up when the emergency manager made this life-threatening recommendation and scream to the highest star how wrong it is and that as duly-elected officials, you would not force-march masses of Detroit residents into the crematoriums of poverty and torture?

Thousands march in Detroit against water shutoffs. Photo credit: michiganradio.org

Why did it take strangers, trained in recognizing violations against humanity, to shine a light on these dark-age practices and call them out for what they are? This is the best example of how the recognition of class differences have surfaced because we have different ethnic races of administrators, both men and women, both young and old who have been part of this sorry episode of residential infliction of pain. Our elected city officials would have found continued comfort in the torture of low-income people had they not had the covers of gross negligence pulled from them exposing what all knew but few had the courage to declare.

Along with our city officials stand many of the members of the clergy from all denominations, who have stood in silence while the torture of the most vulnerable has unfolded. The Spirit that many profess to serve has been waiting for you all to discover your courage or your voice or at least your crippled-hand gripped around a pen where you could author an anonymous note decrying what has been happening relative to these water shutoffs. I try daily to forgive your cowardice and hope only that when you make your transition to the afterlife, that the fires of “hell” are unkind to you.

We hope the legal violations identified by the two Special Rapporteurs find their way sooner as written charges to the United Nations in Geneva, Switzerland, and also to the U.S. State Dept. All nations should be alerted about these international violations so that sanctions might be discussed and even levied to make this practice stop. The U.S. government is ultimately responsible to secure the human rights of the most vulnerable and that task lies first with our ‘beloved’ mayor, then with the county executive, then with the governor, and lastly with all presidents.

As a field general in the army of social justice for vulnerable, low-income populations, it falls to me and mine to keep this battle in the face of all humanity and to take every opportunity to convince those in power that their salvation lies in distancing themselves from the “dark” side in favor of protecting, serving, and advancing the quality of life for all.

Maureen D. Taylor
State Chairperson, MI Welfare Rights Organization

DWSD Regional Water Authority Is an Assault on Democracy and Human Right to Water

FOR IMMEDIATE RELEASE

September 10, 2014

Contact:

Lynna Kaucheck, Food & Water Watch, (586) 556-8805

Tawana Petty, People’s Water Board, (313) 433-9882

People’s Water Board Coalition Calls Regional Water Authority an Assault Against Democracy and the Human Right to Water
Community calls for protection and representation for all region’s residents

Detroit, Mich. – The People’s Water Board decried Mayor Mike Duggan’s plan to create a regional water authority as undemocratic and a threat to the human right to water for many in the region. We have access to the largest body of surface freshwater in the world, so it would seem abundance and access should not be an issue. However the manner of governing this valuable resource as responsible environmental stewards for the world has left many communities without trust.

The deal was negotiated behind closed doors without any input from the public and is the next step on the pathway to privatization. It takes away the rights of both the Detroit City Council and the citizens of Detroit to have input on big decisions impacting the system.

“Suburban customers should not be fooled into thinking that this deal gives them more control or influence over the water system,” said Lynna Kaucheck of the People’s Water Board. “The new authority will be made up of unelected officials who are accountable to no one. People need to know that this deal doesn’t take privatization off the table.”

Veolia Water North America, the largest private water company operating in the United States, has been hired to evaluate the management of the system and clearly has a vested interest in privatization. Privatization typically results in skyrocketing rates, decreased service quality and the loss of jobs. In fact, corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs, and a lack of competition and poor negotiation skills can leave local governments with expensive contracts. In the Great Lakes region, large private water companies charge more than twice as much as cities charge for household water service. This is not the solution for Detroit or the region.

“The regionalization plan is unacceptable. We need a system that is accountable and transparent and that works for all its customers,” said Tawana Petty of the People’s Water Board. “We want an elected board of water commissioners. We want to reduce costs for the region through bulk purchasing and resource sharing. And we want to implement the Affordability Plan as passed by Detroit City Council in 2005. Detroit and suburban leaders need to protect residents and democratize the system.”

The People’s Water Board advocates for access, protection, and conservation of water, and promotes awareness of the interconnectedness of all people and resources.

The People’s Water Board includes: AFSCME Local 207, Baxter’s Beat Back the Bullies Brigade, Detroit Black Community Food Security Network, Detroit Green Party, Detroit People’s Platform, Detroiters Resisting Emergency Management, East Michigan Environmental Action Council, Food & Water Watch, FLOW, Great Lakes Bioneers Detroit, Matrix Theater, Michigan Coalition for Human Rights, Michigan Emergency Committee Against War & Injustice, Michigan Welfare Rights Organization, Rosa and Raymond Parks Institute, Sierra Club, Sisters of Mercy, Voices for Earth Justice  and We the People of Detroit.

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MWRO Statement on DWSD 10 Point Plan

Today in Detroit, Mayor Mike Duggan and Detroit Water and Sewerage Department (DSWD) Director Sue McCormick announced a new 10 point plan for water payments and shutoffs for Detroit residents. We note: it does not meet the needs of restoring water delivery and stopping shutoffs to ALL low income residents. Read MWRO's statement on the 10 point plan.

Since March 2014, DWSD has been shutting off water to residential customers -- mostly low income households -- at the rate of several hundred to several thousand per week. MWRO, along with the Detroit People's Water Board Coalition, called for a halt to the inhumane water shutoffs. With support from the Council of Canadians, Blue Water Planet and Food & Water Watch, international attention to this violation of human rights was sent by a letter from the United Nations to DWSD. Netroots Nation with National Nurses United, Robin Hood Tax and actor Mark Ruffalo, helped expose the crisis to wider audiences.

Detroit and Michigan residents continue to fight vigilantly for the right to fresh drinking water in their homes! We know of teachers who wash laundry of school children from homes without water. Our organizational partner, We the People, tells of homes where newborn babies have no water for formula and seniors have no water to clean wounds. This is an outrage that we must not allow to continue.