Detroit, Emergency Manager Law, Emergency Managers — July 25, 2013 at 12:39 pm

Kevyn Orr: “Michigan’s EM law is a clear end-around the prior initiative that was rejected by the voters in November”


That must have been one very convincing sales job…

Photo by Anne C. Savage, special to Eclectablog

Back in January when the Snyder administration was negotiating with Kevyn Orr to become Detroit’s Emergency Manager, well ahead of the city even being declared in a financial emergency, Orr had this to say about Michigan’s newly-enacted Emergency Manager law, Public Act 436 which was signed into law on December 26, 2012 by Governor Snyder:

Michigan’s EM law is a clear end-around the prior initiative that was rejected by the voters in November…[A]though the new law provides the thin veneer of a revision it is essentially a redo of the prior rejected law and appears to merely adopts [sic] the conditions necessary for a chapter 9 filing.

You can see the Detroit Free Press’s image of the email that contained these words HERE.

Kevyn Orr is a Democrat and has ties to labor through his family. Given that he saw PA 436 — the Orwellian-named “Local financial stability and choice act” — as an abrogation of the will of the voters, it’s rather astonishing that he chose to take the job anyway. It really makes me wonder what sort of sales job was done on him. Given that he is a bankruptcy attorney, you can’t help but wonder if he was told that they wouldn’t be utilizing him in the role of an Emergency Manager but rather as a skilled attorney to bring the city through a Chapter 9 bankruptcy. Certainly as a bankruptcy lawyer the thought of bringing Michigan’s largest city in for a smooth landing in this process must have been a pretty shiny bauble to have dangled in front of him. Quite a resumé plum, to be sure.

I don’t doubt that Kevyn Orr wants the best for Detroit. Unlike the corporatists who passed this law and run our state, I actually believe the he would like to see the process play out in a way that damages the city the least, improves the lives of Detroiters, and screws over individuals as little as possible.

That said, in order for him to complete the process, he will be compelled to make concessions to the large corporate bondholders and other wealthy creditors whose voices and clout far outweigh those of the retirees and city workers who are trying to stay afloat through this catastrophe.

I hope that whoever is appointed to represent the non-corporate creditors in court — the retirees whose pensions are on the line, for example — is a strong advocate for their interests. If they aren’t, then the benefits of a Chapter 9 bankruptcy — preservation of local government and protection of public assets — may not be worth the price. Considering the fact that preservation of local government has already been compromised by installing Orr as Emergency Manager BEFORE entering the bankruptcy process, it may already not be worth it.

I’ll be eagerly watching Mr. Orr as he takes Detroit through this process. I’m hopeful but less than optimistic that he’ll protect the citizens of Detroit, including those who rely on their pensions to survive.

Real people’s lives, people who have little in comparison to the corporate creditors, are at stake. Compassion and sensitivity to that, Mr. Orr, should always guide your actions.