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October 24, 2014

Detroit and Transparency

An emergency management law was needed in the state of Michigan allowing the state to step in and intervene in the management of a subdivision of the state when that subdivision's elected officials are not acting in the best interest of its citizens and endangering the welfare of the remaining citizens of the state. Michigan has done this with Detroit and other cities and school districts.

There appears to be a serious flaw in the law. The consultants put in place, including the Emergency Manager, have the power to make decisions that affect the municipality's ability to function for years to come. In some cases these decisions may be detrimental to the long term interest of the citizens and the viability of the municipality.
Consultants are used all the time in business when an organization lacks the expertise or resources to address an issue. In the private sector the consultant reports to the owner of the organization or a representative of the owner. This does not appear to be the case under Michigan's emergency manager law.

The Governor of Michigan appoints a Local Emergency Financial Assistance Loan Board consisting of the State Treasurer of Michigan, Director of Licensing and Regulatory Affairs and the Director of Technology, Management and Budget. Kevyn Orr reports to this Board. All of the members of this Board are part of a Republican administration that is very unlikely to win a majority of votes in a city that has always voted Democratic. There is no local representation on this board and its members keep their other responsibilities with the state. Detroit has as its emergency manager, a lawyer from Florida, with limited experience running a major city and reporting to three employees of the state of Michigan while they continue to perform there existing duties with the state.

Complicating matters, there is little transparency for the citizens of Detroit to see. The judge in the case, Steven Rhodes, has announced he plans on making his ruling on the city's Plan of Adjustment in the first week of November 2014. To date, the citizens of Detroit have not been provided a full accounting of the financial impact of the plan. They are the ones who must live with it for years to come. I have much confidence in Judge Rhodes and I trust if significant disclosure to the citizens is not made prior to his ruling he will announce his decision in such a manner that will allow the citizens of Detroit to voice their concerns.

To be fair, the local major newspapers, the Detroit Free Press and the Detroit News are not performing their duty to the public of assuring transparency. Neither is the Michigan Citizen and Michigan Chronicle who tend to serve the black community in the city. It is the black community that has the largest racial make up of the city. This is disappointing.... More

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