News & Commentary

What can be said with absolute certainty about the so-called plan of adjustment Detroit Emergency Manager Kevyn Orr released last week?Almost nothing.It is a plan built on a mountain of ifs.According to a summary of the plan, “police and fire retirees would likely receive in excess of 90 percent of their earned pensions after elimination of cost of living allowances,” and “general retirees would likely receive in excess of 70 percent of their pensions after elimination of cost of living allowances.”But that’s only if they agree to give up without a fight and promise no lawsuits in the future. Otherwise the deal gets more stingy, and will be heaped on top of crushing cuts to medical benefits.Either way, the offer hinges on a promise by Gov. Rick Snyder to deliver $350 million in state money. But that’s a pledge Snyder can’t fill on his own. To actually deliver all those millions, he must convince a legislature that’s controlled by conservatives often hostile to Detroit to actually appropriate the money.On the other hand, it could be that the pensioners won’t have to take any cut at all. Obscured by all the coverage of Orr’s proposed “adjustments” was news that the U.S. 6th Circuit of Appeals had agreed to consider a case, brought by the city’s two pension systems and others, which challenges the legitimacy of the bankruptcy itself.A key component of that case is the contention that the Michigan Constitution guarantees the payment of pensions promised to public employees, and that U.S. Bankruptcy Judge Steven Rhodes grievously erred when he allowed those pensions to be placed on the chopping block along with other unsecured creditors.And just who, really, is an unsecured creditor – meaning one that is subject to the kind of buzz cuts the bankruptcy court will be administering?As the New York Times reported, it seems unlikely that Wall Street is going to willfully roll over and accept pennies on the dollar for debt it is owed. “While we understand that favoring pensioners and discriminating against bondholders and other creditors may be politically popular, we believe this is contrary to bankruptcy law and will result in costly litigation that will hamper the city’s emergence from bankruptcy,” Steve Spencer, a financial advisor to one of the companies that insures several types of Detroit’s debt, told the paper.And then there’s a lawsuit Detroit filed claiming that a disastrous deal involving certificates of participation was actually illegal. If the city prevails in that case, it would free itself of $1.4 billion in outstanding debt.How can any final settlement with anyone be calculated with that big if still hanging out there?Aside from the virtual certainty that Kevyn Orr and company are going to burn through the $95 million that’s been extracted from departments throughout the city to pay for restructuring costs during the current fiscal year – with much of that money going into the very deep pockets at Orr’s former law firm, Jones Day – what else is considered to be a safe bet in this mess of a bankruptcy?Well, for one thing, there are the grassroots efforts by a coalition of activists who gathered at the Historic King Solomon Baptist Church on Detroit’s west side. Despite a dearth of media attention, they can be counted on to keep plugging away with their message, which is gradually finding a broader audience. The group held a press conference on Monday to announce a plan of their own, one intended to counteract what Detroit attorney Julie Hurwitz called a “full-scale assault on our constitutional rights and protections.”The reason they are doing so is laid out in the preamble to the group's People’s Plan for Restructuring Toward a Sustainable Detroit itself, which begins:“The restructuring and rebirth of Detroit will not be delivered by a state-imposed emergency manager, nor through Chapter 9 bankruptcy proceedings, foundation contributions, closed door deals, or other devious and misleading corporate schemes. Detroit’s rebirth will be the result of the people’s unrelenting demand for democratic self-governance, equal access to and management of the natural and economic resources of the city.”Anyone interested in learning more about that plan can visit the web site of the group Detroiters Resisting Emergency Management. That plan will be the focal point of a town hall meeting being held on Sunday, March 2 at 3 p.m. at Central United Methodist Church (the corner of Woodward and Grand Circus Park in downtown Detroit).By Curt Guyette, Investigative Reporter

What can be said with absolute certainty about the so-called plan of adjustment Detroit Emergency Manager Kevyn Orr released last week?Almost nothing.It is a plan built on a mountain of ifs.According to a summary of the plan, “police and fire retirees would likely receive in excess of 90 percent of their earned pensions after elimination of cost of living allowances,” and “general retirees would likely receive in excess of 70 percent of their pensions after elimination of cost of living allowances.”

 

In 2005, the city of Detroit faced a monumental dilemma: It desperately needed to borrow more than $1.4 billion to help shore up its two pension systems, but doing so would far exceed the legal limit on the amount of debt it could amass.The solution arrived at by the administration of then-Mayor Kwame Kilpatrick was to sidestep the law by turning to something called certificates of participation, or COPs, which are similar to municipal bonds. But instead of borrowing the money directly, Kilpatrick and his crew – following the advice of investment bankers who would reap massive profits from the deal – set up two nonprofit “service corporations,” which in turn created trusts that would sell the COPs to investors. Technically, it was these two nonprofits that were obligated to ensure repayment of the debt. The city then entered into a contract with the nonprofits – both of which were controlled entirely by city officials -- agreeing to pay them for services rendered.In other words, they were mere shells.“At the time, it was seen as a clever legal circumvention of the debt limit,” says Laura Bartell, a Wayne State University Law School professor who specializes in bankruptcy.Last Friday, lawyers representing the city filed a federal lawsuit claiming that the deal was illegal from the start, and because of that Detroit should not be required to continue paying off the debt. The case is now in the hands of U.S. Bankruptcy Judge Stephen Rhodes.The lawsuit came as a complete surprise to most people, even those who have been following the bankruptcy proceedings closely. Until this point, attention in this aspect of the bankruptcy proceedings has been focused instead on interest rate swaps, a controversial side deal to the COPs transactions.A type of hedge, these swaps were essentially a very high-stakes gamble. In effect, the city bet that interest rates were going to rise over time. If they did, the banks would be on the hook for the increased costs. Instead, the economy crashed in 2008, and interest rates fell to almost nothing. As a result, the cost to the city has been about $300 million in payments to what are known as the swap counterparties – Bank of America/Merrill Lynch and UBS, an investment bank based in Switzerland.For the better part of a year, the city has been trying to end the swaps. The banks claim that the cost of doing so should be about $300 million, and that the city is in a bad negotiating position because, even in bankruptcy, the swap payments are secured by casino tax revenues (as a result of another deal, struck in 2009).This is where the weeds thicken.

In 2005, the city of Detroit faced a monumental dilemma: It desperately needed to borrow more than $1.4 billion to help shore up its two pension systems, but doing so would far exceed the legal limit on the amount of debt it could amass.The solution arrived at by the administration of then-Mayor Kwame Kilpatrick was to sidestep the law by turning to something called certificates of participation, or COPs, which are similar to municipal bonds.But instead of borrowing the money directly, Kilpatrick and his crew – following the advice of investment bankers who would reap massive profits from the deal – set up two nonprofit “service corporations,” which in turn created trusts that would sell the COPs to investors. Technically, it was these two nonprofits that were obligated to ensure repayment of the debt. The city then entered into a contract with the nonprofits – both of which were controlled entirely by city officials -- agreeing to pay them for services rendered.In other words, they were mere shells.

Another blog. That’s just what the world has been crying out for, right? Yet another blog. Especially one that doesn’t yet have a name, and is still searching for the right voice. A permanent home with a web page of its own also remains in the future. And actual, substantial content … that too is yet to come. Other than that, though, everything is good to go. So, let's begin this experiment in nonprofit journalism by turning to the traditional five Ws -- who, what, when, where, why -- and scrambling their order, going straight to the last one first.

Another blog. That’s just what the world has been crying out for, right? Yet another blog. Especially one that doesn’t yet have a name, and is still searching for the right voice. A permanent home with a web page of its own also remains in the future. And actual, substantial content … that too is yet to come. Other than that, though, everything is good to go. So, let's begin this experiment in nonprofit journalism by turning to the traditional five Ws — who, what, when, where, why — and scrambling their order, going straight to the last one first.

What do you know about Detroit candidates and their positions on civil rights and civil liberties issues? At the ACLU of Michigan, we are passionate about a vast array of issues, including free speech, women’s rights, reproductive freedom, racial justice, LGBT rights, voting rights, immigrants’ rights, and criminal justice reform. The ACLU of Michigan Metro Detroit Branch put together a candidate survey because we want our members and supporters to be well informed about the candidates’ positions on civil rights and civil liberties issues before they vote in the upcoming mayoral and city council races. Unfortunately, neither of the mayoral candidates and only five of the council candidates responded. We appreciate those candidates that did take time to answer the series of questions. The ACLU link below allows you to view the survey answers for those candidates who responded. In addition, we prepared a commentary on the ACLU perspective on the issues in the questionnaire. We suggest that you contact candidates, before or after the election, to let them know how you feel about these important issues. Detroit Mayor Michael E. Duggan Did Not Respond Benny Napoleon Did Not Respond Detroit City Council District 1 Wanda Jan Hill Did Not Respond James Tate Did Not Respond District 2 Richard Bowers Jr.  George Cushingberry Jr. Did Not Respond District 3 Francine Adams Did Not Respond Scott Benson Did Not Respond District 4 Bettie Cook-Scott Andre Spivey Did Not Respond District 5 Adam Hollier Mary Sheffield District 6 Raquel Castañeda-López  William I. Robinson Did Not Respond District 7 John Bennett Did Not Respond Gabriel Leland Did Not Respond At-Large David Bullock Did Not Respond Saunteel Jenkins Did Not Respond Brenda Jones Did Not Respond Roy McCalister Did Not Respond Detroit City Council Candidates Contact Information Detroit Mayoral Candidates Contact Information 2013 Election—ACLU of Michigan Candidate Questionnaire 1. The ACLU released a new report finding blacks were arrested for marijuana possession at 3.3 times the rate of whites in Michigan in 2010, despite comparable marijuana usage rates. Do you support removing all civil and criminal penalties for marijuana use and possession? Yes. Across the country, the ACLU is calling for states to legalize marijuana. If that is not possible, the ACLU suggests removing all civil and criminal penalties for its use and possession; decriminalizing low-level marijuana possession by replacing all criminal penalties for use and possession of small amounts of marijuana with a maximum civil penalty of a small fine.  2. Do you support amending Michigan's Elliott-Larsen Civil Rights Act to add protections to LGBT citizens in employment and public accommodation? In Michigan you can be fired if someone thinks you’re gay or transgender. The ACLU of Michigan is mobilizing to stop this injustice, teaming up with a coalition of civil rights organizations and everyday Michiganders to launch the Don't Change Yourself: Change the Law campaign.  3. Do you oppose implementation in Detroit of a stop and frisk training program that may be similar to the recently ruled unconstitutional by a federal court in New York? The ACLU of Michigan has raised serous questions about the possible implementation of a New York City style stop and frisk program in a letter from Mark P. Fancher, Racial Justice Project staff attorney, to James E. Craig, Chief of Detroit Police. 4. Do you support public employers and universities using race-conscious policies that take into account race as one of many factors in enrollment and employment in order to attract a diverse work force or student body? The ACLU of Michigan recently argued in the United States Supreme Court opposing Michigan’s Proposal 2 as unconstitutional because it bars students from lobbying universities to consider race as but one of nearly 100 factors in admissions. The ACLU supports the continued narrowly tailored use of race in admissions decisions to further the educational benefits that come from a diverse student body. 5. The ACLU of Michigan has opposed private employers who have challenged on religious grounds the new requirement under the Affordable Care Act (or “Obamacare”) that all employee health insurance plans include birth control prescription coverage. Do you agree that just as employers cannot rely on religion to discriminate against racial and religious minorities, they cannot rely on religion to ignore civil rights laws protecting women? The ACLU of Michigan works to ensure that women are not denied information and the health care they need because of the religious views of their health care providers.  6. States and localities have not been permitted to enact, enforce or implement federal immigration law. Do you oppose proposals to deputize local law enforcement officers to enforce federal immigration law? The ACLU of Michigan has opposed local police practices that are discriminatory and encourage the harassment of innocent people perceived to be immigrants.  7. The ACLU of Michigan has challenged as unconstitutional a state law that would have barred many public entities from providing health insurance to the domestic partners of their employees? Do you support providing health benefits to domestic partners of gay and lesbian public employees? The ACLU of Michigan has obtained a temporary injunction in federal court against a state law that would have barred many public entities from providing health insurance to the domestic partners of their employees, arguing it to be unconstitutional. 8. Do you support the right of police, fire and other public employees to speak out publicly on matters of public concern? The ACLU has long supported the right of public employees to speak out on matters of public concern. As an example, in a recent letter, the American Civil Liberties Union of Michigan urged the Ironwood Department of Public Safety to uphold the free speech rights of a firefighter who was threatened with discipline and termination for writing letters to the editor that were critical of city government. 9. The ACLU of Michigan sent a letter to the Detroit Police Department and filed a complaint with the United States Department of Justice (DOJ) demanding an end to the Detroit police’s alleged illegal and abusive tactics toward homeless individuals in the city. Do you oppose the practice of “taking homeless people for a ride” – removing them from popular areas such as Greektown and driving them to remote areas of Detroit or the suburbs? It’s illegal and unconstitutional for police to arrest or harass people who have committed no crime, simply because they appear to be homeless. A yearlong ACLU investigation uncovered the disturbing practice of officers approaching individuals who appear to be homeless in the Greektown area, forcing them into police vans, and deserting them miles away. 10. The Michigan State Police and other police agencies currently use electronic devices that can extract the contents of cell phones within moments. Do you support placing restrictions on the use of the devices? The ACLU of Michigan has expressed concern about the possible constitutional implications of using portable devices that have the potential to quickly download data from cell phones without the owner of the cellphone knowing to conduct suspicionless searches without consent or a search warrant. 11. Do you support requiring private organizations and security firms that manage the Detroit RiverWalk and other public parks to be held to the same constitutional standards that government agencies must adhere to in upholding the free speech rights of Detroiters and visitors to leaflet or demonstrate? The ACLU of Michigan regards it as well-established that a private entity is bound to honor the constitutional rights of individuals in the course of carrying out a function that is traditionally performed by the government. 12. The City of Detroit’s longstanding practice of allowing police officers to seize vehicles simply because they were driven to a location where unlawful conduct occurred is currently being challenged in federal court. Do you support changes to forfeiture policies and practices in the City? The ACLU of Michigan has argued in federal court that the 2008 Detroit police raid of the Contemporary Art Institute of Detroit in which 130 innocent CAID patrons were detained and their cars impounded was unconstitutional. Police had no evidence that the patrons had broken the law and no illegal drugs or weapons were uncovered during the raid.

Everyone knows that the Supreme Court is a big deal—the decisions that the highest court in our land makes affect every individual in our country.  Rulings made in the Supreme Court influence the ACLU’s work greatly and the we've been involved in hundreds of Supreme Court cases. We're celebrating since the Court agreed with us and invalidated corporate patents on naturally occurring genes, but still biting our nails waiting for rulings to come down that will impact LGBT equality across the country. It can be tricky to stay informed, but just follow the simple steps listed below to get the news on current Supreme Court cases and how they can affect you and your community.