Detroit Fires Most Hated Man

What they did might have been legal, but the entire affair failed to pass the ethical smell test

 

And don’t let the door hit you on the way out.

Last week, Detroit’s mayor and city council unanimously voted to fire the city’s emergency manager Kevyn Orr 18 months after Michigan’s Governor Rick Snyder appointed him to run the bankrupt city’s affairs.

The Republican governor and Michigan’s Republican Legislature had already pushed the city to the edge of bankruptcy, slashing state revenue sharing just as Detroit faced a financial crisis.

And although Michigan’s constitution protects public pensions, Snyder and Orr successfully abrogated the constitutional language, putting the city’s retired public-sector employees in line behind banks and other secured creditors.

In a city that is 83 percent African American, Kevyn Orr’s appointment was as cynical as bringing in a white lawyer in blackface.

Their assault on organized labor and retirees was revealed in one court ruling, on which I reported in February of this year, as attorneys representing pensioners went to court in an attempt to stop the bankruptcy filing that would put pensions in play:

Lawyers representing pension funds and city retirees were in state court on July 17, the day before Orr was scheduled to file bankruptcy. They were requesting a ruling that would block the governor from authorizing a bankruptcy they feared would put pensions at risk. As the hearing began at 4:11 p.m., the attorney general’s office called to inform the court clerk that Orr had filed for bankruptcy at 4:06 p.m. Below Orr’s signature on the bankruptcy filing, the numeral “8” in “July 18, 2013,” is written over in pen and replaced with a “7.” The emergency manager’s race to bankruptcy court didn’t allow him time to print out a clean document.

The state district judge presiding over the hearing told the attorneys representing the retirees that she had intended to grant their request, according to CNN and other sources. Orr’s filing rendered their request moot. He had said he needed to shed $9.5 billion of $11.5 billion in unsecured debt. And he knew that much of that debt was tied up in pensions and health care benefits for retirees.

“They say it’s legal,” a retiree from the Public Works Department told me. “But we don’t see it as such. We look at it as not only lawfully wrong, we look at it as definitely morally wrong.”

What they did might have been legal, at least it stood up in court, but the entire affair failed to pass the ethical smell test.

The governor had signed of on D.C.-based Jones Day law firm to represent the city, at a cost of $18 million. Then he appointed Orr, who had to resign his partnership at Jones Day in order to serve as the city’s emergency manager.

On a day I spent in bankruptcy court in Detroit, one week before Christmas last year, 18 lawyers, all white, were gathered in a sidebar with Judge Stephen Rhodes listened in. Orr was the only African-American lawyer.

In a city that is 83 percent African American, his appointment was as cynical as bringing in a white lawyer in blackface. At least that was the sentiment of the mostly-minority union members and retirees watching the lawyers and judge decide on what percentage of their pensions would be taken from the bankruptcy proceedings.

Snyder had Orr’s back until the end, as MSNBC reported in the story taking note of Orr’s departure.

Gov. Snyder had urged Detroit to keep Orr in full control. Yet many residents of the city have grown angry at Orr over the past 18 months because of his approach to the city’s finances. His support for pension cuts and the city’s recent wave of household water shutoffs helped to inflame local protests.

Orr isn’t out immediately. He’ll stick around until the bankruptcy proceedings are concluded.

I assume he keeps his $4,200-a-month condo at the Westin Book Cadillac in downtown Detroit. And his security detail.

All of that is covered by a slush fund Snyder controls through a nonprofit foundation.

No word yet if Orr returns to his Jones Day partnership when he leaves Detroit.

—Lou Dubose