The Dirty Trick(s) That Rushed Detroit Into Bankruptcy
Governor Rick Snyder (R-MI) was so desperate to make Detroit the largest American city to declare bankruptcy that his lawyers apparently used deception to make sure their filing was in before a judge could block it.
Ronald King, an attorney for Detroit’s General Retirement System and the Detroit Police and Fire Retirement System, said that he agreed to delay a hearing on an injunction that would have prevented the city from filing for bankruptcy for five minutes at the request of Snyder’s lawyers. In that five minutes, attorneys filed papers to put Detroit under bankruptcy protection, placing all legal action against the city in a temporary stay.
“It was my intention to grant your request,” Ingham County Judge Rosemarie Aquilina told the pensioners’ attorneys.
“There’s no denying this was a race to the courthouse this afternoon and yet another example of usurping the will of the people,” King said.
The Michigan Republican Party’s eager embrace of emergency manager powers has left about half of the state’s African-Americans without elected local representatives.
When voters repealed the emergency manager law in 2012 by 53 to 47 percent, the state’s Republican-dominated legislature quickly restored it, including a provision that made it impossible for votes to repeal the law again.
Part of the argument for these laws, which allow state officials to replace all elected city officials in municipalities deemed to be in “emergency” with an unelected bureaucrat, was that this process would prevent bankruptcy, which would be too disruptive.
When Snyder selected bankruptcy expert Kevin Orr to be Detroit’s emergency manager, however, it became clear what path the governor, who faces re-election in 2014, had in mind for the Motor City. Orr — who has already hinted at his intention to cut pensions — will manage the bankruptcy, carrying out the governor’s wishes.
Unions who have seen Snyder and a lame-duck legislature rush in a law designed to weaken unions along with tax increases on pensioners are not hopeful about the bankruptcy process.
“Every step of the way, the citizens of Detroit were told that they had to give up their right to democratic representation in order to avoid bankruptcy,” Metro Detroit AFL-CIO president Chris Michalakis and Michigan State AFL-CIO president Karla Swift said in a joint statement. “Now that this filing has come anyway, it is clear that either state control has failed or that Governor Snyder and his emergency manager appointee were not honest about their intentions in the first place.”
As the city’s debts are discharged, the question is who will be asked to pay: workers — who were promised a retirement and have already offered concessions — or investors — who knew they were taking a risk?
Photo: Jason Paris via Flickr.com