Corporatism, Detroit, Michigan Republicans, Rick Snyder — October 29, 2013 at 12:30 pm

Gov. Snyder had the chance to save Detroit pensions from being cut and chose not to


Even when he has the choice to do the right thing, Gov. Snyder doesn’t

Photo by Anne C. Savage, special to Eclectablog

Yesterday during his testimony in the court hearing to determine Detroit’s eligibility for Chapter 9 municipal bankruptcy, Michigan Governor Rick Snyder revealed an astonishing fact: although he had the opportunity to shield Detroit retirees from cuts to their meager pensions and was actually advised to do so, he chose not to:

In a July 12 e-mail, the governor’s counsel, Mike Gadola, suggested to Snyder’s key advisers that he consider placing conditions on a Chapter 9 bankruptcy petition for anything that could impact pension benefits, general obligation debt and the sale of certain assets over a pre-determined value.

“I favor this approach … primarily because I think we should exercise the governor’s ability under P.A. 436 to place conditions upon his authorization for a bankruptcy filing,” Gadola wrote six days before the city filed for bankruptcy. He suggested Snyder ask Orr to pursue “a more deliberative approach” to a process that rocketed to bankruptcy the next week.

The governor rejected attaching conditions to the filing. He testified that he concluded the bankruptcy, the largest of its kind in American history, would be further complicated and slowed by conditions likely to hinder efforts to get a so-called “Plan of Adjustment” confirmed in bankruptcy court.

As Mark Totten, a Democratic candidate for state Attorney General points out, even our illustrious Attorney General Bill Schuette got on the “protect the pensions and pensioners” bandwagon after the fact:

From day one, Governor Snyder and his lawyer, Attorney General Bill Schuette, have told the public that the question of the Detroit retirees’ pensions and their protection under the Michigan Constitution is a murky legal question for the courts to decide. In fact, Snyder and Schuette had every power they needed to protect these pensions, uphold the Michigan Constitution, and take the issue off the table. They refused to do so. As a result, the future of thousands of retired cops, firefighters and other Detroit retirees is in peril. […]

[I]n the weeks before Governor Snyder approved Detroit’s bankruptcy filing, Schuette was asked whether the Michigan Constitution protects the retirees’ pensions. His response? “The federal bankruptcy judge will make a decision.” […]

What Snyder and Schuette have tried to conceal at every turn is the fact that they had full and complete power to protect these pensions and prevent the issue from ever coming before the court, where the pensions may be slashed…[S]tate law clearly says the “the governor may place contingencies on a local government in order to proceed under Chapter 9.” M.C.L. § 141.1558(1). In other words, the Governor can say certain issues are off the table. […]

So here’s the short of it. The U.S. Congress gave the states the power to set the terms under which a municipality may file for bankruptcy. The Michigan legislature – with Governor Snyder’s signature – said that the Governor must approve any bankruptcy filing and that the Governor can make such approval subject to conditions. Snyder and Schuette had every power they needed to approve the Detroit bankruptcy filing subject to the condition that it not harm these retirees’ pensions, as the Michigan Constitution requires. They refused to do so, and today these retirees face the prospect of their pensions being slashed by a federal judge.

This is the type of behavior that comes as no surprise from a corporatist CEO running our state. The lives of our most vulnerable citizens are just pawns in a chess game, to be sacrificed as needed to achieve their goals. And Bill Schuette, for all his hand waving about protecting these pensioners, only got into the game AFTER the bankruptcy was announced, too late to be effective and after he could have done something that truly would have protected them.

I’ve said it before but it bears repeating: this is what happens when you vote Republican.

Photo by Chris Savage | Eclectablog