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

More articles by:

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

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

July 24, 2017
Patrick Cockburn
A Shameful Silence: Where is the Outrage Over the Slaughter of Civilians in Mosul?
Robert Hunziker
Extremely Nasty Climate Wake-Up
Ron Jacobs
Dylan and Woody: Goin’ Down the Road Feelin’ Bad
Dan Glazebrook
Quantitative Easing: the Most Opaque Transfer of Wealth in History
Ellen Brown
Saving Illinois: Getting More Bang for the State’s Bucks
Richard Hardigan
The Media is Misleading the Public on the Al-Asqa Mosque Situation
Matthew Stevenson
Travels in Trump’s America: Memphis, Little Rock, Fayetteville and Bentonville
Ruth Fowler
Fire at Greenfell
Ezra Kronfeld
The Rights of Sex Workers: Where is the Movement to Legalize Prostitution
Mark Weisbrot
What Venezuela Needs: Negotiation Not Regime Change
Binoy Kampmark
From Spicy to the Mooch: A Farewell to Sean Spicer
Wim Laven
Progress Report, Donald Trump: Failing
Weekend Edition
July 21, 2017
Friday - Sunday
Kevin Zeese
Green Party Growing Pains; Our Own Crisis of Democracy
Jeffrey St. Clair
Red State, Blue State; Green State, Deep State
Paul Street
“Inclusive Capitalism,” Nancy Pelosi, and the Dying Planet
Anthony DiMaggio
Higher Education Fallacies: What’s Behind Rising Conservative Distrust of Learning?
Andrew Levine
Why Republicans Won’t Dump Trump Anytime Soon
Michael Colby
Ben & Jerry’s Has No Clothes
Bruce Dixon
White Liberal Guilt, Black Opportunism and the Green Party
Edward Hunt
Killing Civilians in Iraq and Syria
Matthew Kovac
Is the Flint Water Crisis a Crime Against Humanity?
Mark Harris
The Revolutionary Imagination: Rosa for Our Times
David Rosen
America’s Five Sex Panics
Robert Fisk
Saudi Arabia: the Kingdom Whose Name We Dare Not Speak At All
Jack Heyman
Class War on the Waterfront: Longshore Workers Under Attack
Kim C. Domenico
Marginalize This:  Turning the Tables on Neoliberal Triumphalism
Brian Cloughley
Trying to Negotiate With the United States
John Laforge
Activists Challenge US Nukes in Germany; Occupy Bunker Deep Inside Nuclear Weapons Base
Jonathan Latham
The Biotech Industry is Taking Over the Regulation of GMOs From the Inside
Russell Mokhiber
DC Disciplinary Counsel Hamilton Fox Won’t Let Whistleblower Lawyer Lynne Bernabei Go
Ramzy Baroud
The Story Behind the Jerusalem Attack: How Trump and Netanyahu Pushed Palestinians to A Corner
Farzana Versey
The Murder of Muslims
Kathy Kelly
At Every Door
David W. Pear
Venezuela Under Siege by U.S. Empire
Maria Paez Victor
Venezuelan Opposition Now Opposes the People
Uri Avnery
Soros’ Sorrows
Joseph Natoli
The Mythos Meme of Choice
Clark T. Scott
High Confidence and Low Methods
Missy Comley Beattie
Glioblastoma As Metaphor
Ann Garrison
Organizing Pennsylvania’s 197: Cheri Honkala on Frontline Communities
Ted Rall
What Happened When I Represented Myself as My Own Lawyer
Colin Todhunter
Codex Alimentarius and Monsanto’s Toxic Relations
Graham Peebles
Europe’s Shameful Refugee Policy
Louis Proyect
Reversals of Imperial Fortune: From the Comanche to Vietnam
Stephen Cooper
Gov. Kasich: “Amazing Grace” Starts With You! 
FacebookTwitterGoogle+RedditEmail