FacebookTwitterGoogle+RedditEmail

Selling Out Detroit

by TOM STEPHENS

On Thursday, January 16, 2014 in the Detroit federal bankruptcy court, Judge Steven Rhodes issued a decision that promises a measure of justice in the face of Wall Street banks’ toxic threat that they are supposedly “too big to fail” (or jail).

Judge Rhodes denied payments of over $169 million to Bank of America/ Merrill Lynch (BAML) and UBS.   The motion to pay the banks was filed by Jones Day lawyers, supposedly representing Detroit and working in our best interest.  The judge’s decision against the payment proves otherwise.

BAML and UBS were among the Wall Street predators whose massive frauds caused the housing crisis, the economic crash of 2008, Detroit’s unprecedented neighborhood vacancies and blight after they drove People out of their homes, and the city’s financial crisis because of the resulting losses of tax revenue.  They are also clients of the giant Jones Day law firm.

Kevyn Orr was a senior partner with Jones Day, until the very day Governor Snyder made him Detroit’s one-man local government under Snyder’s emergency management statutes.  Jones Day sought a lucrative contract as Detroit’s “restructuring counsel” because for them this civic disaster is a business development opportunity.  Then they filed Detroit’s Chapter 9 municipal bankruptcy.  The implications of the January 16 ruling are truly extraordinary.

Indeed, this was the second time Judge Rhodes told Jones Day’s $1,000 per hour lawyers and Orr not to pay BAML and UBS their claimed “termination fees” for toxic interest rate “swaps” – predatory Wall Street instruments of financial destruction.  The first time Orr and Jones Day wanted to pay them over $230 million!  That money would have come out of the shares of hard-working and by no means wealthy Detroit retirees as well as city services for residents.

stephens2

Jones Day lawyers arriving at court on the day of the bankruptcy filing, led by David G. Heiman (2nd from left).

Instead of rewarding the Jones Day bankster clients for their predatory misconduct, Judge Rhodes’ order as a practical matter rendered their claims “unsecured” like others in bankruptcy.

But the more significant immediate issue is that this seems to be the final proof that Jones Day and Orr do not really represent the best interests of Detroit or its People.  What does it say about these lawyers and the one-man “emergency” local government forced on us by Governor Snyder, that they have now twice been told by the bankruptcy judge they improperly tried to sell us out to their other clients for hundreds of millions of dollars?  After being denied once by the court, they went into a back room on Christmas Eve 2013 and tried to do it again!

As this long-running neoliberal racist extravaganza churns into February and beyond, Orr has recently: 1) issued a top-secret first draft ‘plan of adjustment’ to creditors; 2) filed a massive suit against the Detroit retirement systems and ‘service organizations’ created to facilitate the fraudulent ‘swaps;’ and 3) is reportedly now trying to work out yet another deal with BAML and UBS for their end of the scam.  If no deal is reached, more litigation is said to be possible.  The price may be declining, but the Jones Day policy of selling out Detroit to their bankster clients remains the same.

stephens1

Protestors gathering on October 23rd outside the Detroit Federal Courthouse.

Detroiters have the basic right to competent and loyal legal representation, as well as democratically accountable local government, as we proceed through the largest municipal bankruptcy case in U.S. history.  Jones Day and Orr are mercenaries plagued by conflicts of interest, who have repeatedly demonstrated their lack of candor, integrity and faithfulness to our interests.  They should be fired and replaced by competent professionals who are in a position to truly represent Detroit.

Judge Rhodes’ decisions undermine the legitimacy of Wall Street’s claims on Detroit’s assets.  Cancellation of the debt allegedly “owed” to the banks by Detroit, not merely moving it into an unsecured position, should become part of the public dialogue over the future of Detroit.

As the plan of adjustment is made public, and Detroiters from all walks of life engage more directly and militantly with the unjust pillage and dictatorship forced on us by Snyder, these bungled attempts to address the crisis are creating new opportunities for us to build a new city.  We need a different approach from the bail-out-Wall-Street-at-all-costs policy of Snyder and Jones Day.  Everyone agrees things need to change.  Detroiters are coming together with our neighbors to resist this abuse and help make our city work for us.     

Tom Stephens is a coordinator of the communications working group of Detroiters Resisting Emergency Management (D-REM).  Their web site is at: http://d-rem.org

Tom Stephens is a coordinator of the communications working group of Detroiters Resisting Emergency Management (D-REM).  Their web site is at: http://d-rem.org

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
March 24, 2017
Friday - Sunday
Michael Hudson
Trump is Obama’s Legacy: Will this Break up the Democratic Party?
Eric Draitser
Donald Trump and the Triumph of White Identity Politics
Jeffrey St. Clair
Roaming Charges: Nothing Was Delivered
Andrew Levine
Ryan’s Choice
Joshua Frank
Global Coal in Freefall, Tar Sands Development Drying Up (Bad News for Keystone XL)
Anthony DiMaggio
Ditching the “Deep State”: The Rise of a New Conspiracy Theory in American Politics
Rob Urie
Boris and Natasha Visit Fantasy Island
John Wight
London and the Dreary Ritual of Terrorist Attacks
Paul Buhle
The CIA and the Intellectuals…Again
David Rosen
Why Did Trump Target Transgender Youth?
Vijay Prashad
Inventing Enemies
Ben Debney
Outrage From the Imperial Playbook
M. Shadee Malaklou
An Open Letter to Duke University’s Class of 2007, About Your Open Letter to Stephen Miller
Michael J. Sainato
Bernie Sanders’ Economic Advisor Shreds Trumponomics
Lawrence Davidson
Moral Failure at the UN
Pete Dolack
World Bank Declares Itself Above the Law
Nicola Perugini - Neve Gordon
Israel’s Human Rights Spies
Patrick Cockburn
From Paris to London: Another City, Another Attack
Ralph Nader
Reason and Justice Address Realities
Ramzy Baroud
‘Decolonizing the Mind’: Using Hollywood Celebrities to Validate Islam
Colin Todhunter
Monsanto in India: The Sacred and the Profane
Louisa Willcox
Grizzlies Under the Endangered Species Act: How Have They Fared?
Norman Pollack
Militarization of American Fascism: Trump the Usurper
Pepe Escobar
North Korea: The Real Serious Options on the Table
Brian Cloughley
“These Things Are Done”: Eavesdropping on Trump
Sheldon Richman
You Can’t Blame Trump’s Military Budget on NATO
Carol Wolman
Trump vs the People: a Psychiatrist’s Analysis
Stanley L. Cohen
The White House . . . Denial and Cover-ups
Kollibri terre Sonnenblume
Marines to Kill Desert Tortoises
Farhang Jahanpour
America’s Woes, Europe’s Responsibilities
Joseph Natoli
March Madness Outside the Basketball Court
Bill Willers
Volunteerism; Charisma; the Ivy League Stranglehold: a Very Brief Trilogy
Bruce Mastron
Slaughtered Arabs Don’t Count
Pauline Murphy
Unburied Truth: Exposing the Church’s Iron Chains on Ireland
Ayesha Khan
The Headscarf is Not an Islamic Compulsion
Ron Jacobs
Music is Love, Music is Politics
Christopher Brauchli
Prisoners as Captive Customers
Robert Koehler
The Mosque That Disappeared
Franklin Lamb
Update from Madaya
Dan Bacher
Federal Scientists Find Delta Tunnels Plan Will Devastate Salmon
Barbara Nimri Aziz
The Gig Economy: Which Side Are You On?
Louis Proyect
What Caused the Holodomor?
Max Mastellone
Seeking Left Unity Through a Definition of Progressivism
Charles R. Larson
Review: David Bellos’s “Novel of the Century: the Extraordinary Adventure of Les Misérables”
David Yearsley
Ear of Darkness: the Soundtracks of Steve Bannon’s Films
FacebookTwitterGoogle+RedditEmail