Tom, 10/2013, testifying vs. Jones Day's excessive deal to resolve Detroit's interest rate swaps with their other clients, Bank of America and UBS
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TS: As most People probably know, Detroit filed the largest Chapter 9 municipal bankruptcy action in US history in July 2013. Or, rather, Jones Day, the giant corporate law firm and employer of Kevyn Orr, the "emergency manager" appointed by Michigan Governor Rick Snyder, filed that action in Detroit's name. The case has predictably developed into a major class conflict between Detroit city retirees and residents on the one hand, and Wall Street banksters on the other, fighting for their respective interests. The governance and access to billions of dollars in revenue flowing through the Detroit Water and Sewerage Department (DWSD) has become, as knowledgeable observers always knew it would, a major political football and economic prize in this struggle. This month, DWSD commenced an unprecedented mass water shutoff program targeting 1,500-3,000 households per week, up to over 150,000 accounts more than two months and $150 in arrears. Meanwhile, more than $30 million in commercial and industrial accounts goes uncollected. The objective is to eliminate bad debt and make DWSD look better on paper for purposes of active ongoing regionalization and privatization negotiations. A triumph of corporate property interests over fundamental human rights.
JB: What's going to happen to all those residents without water, Tom? It sounds very Third World.
TS: They're scrambling for water from family, neighbors, friends, whatever; trying to find new housing with water included, trying to keep the child welfare system from taking away their kids, trying to find a place to shower and use the toilet. I doubt that those of us who have never faced this particular kind of oppression can imagine what it must be like. Very neocolonial and unjust.
JB: You're not the only one who finds fault with this action. The UN has weighed in. Tell us about that, please.
TS: Yes, three human rights experts opined on behalf of the UN High Commissioner of Human Rights that shutting off water for those unable to pay would be a violation of the human right to water. And this morning [June 28, 2014], to many folks' surprise, the Detroit Free Press newspaper - which has generally been very protective and supportive of the emergency manager, published a pretty scathing editorial.
In the many conversations and online exchanges I've had over the last month, it's often seemed like the current leadership of DWSD are the only ones who just don't 'get it,' albeit well-disciplined corporate journalists might quibble about whether it's a human right or a contract or whatever, even they are open to the idea that this is horrible policy, as reflected in the Free Press editorial today. I mean it's not brain surgery; how many cities would you expect to have corporate contractors fanning out in neighborhoods cutting off water to thousands of people per week? Then, their spokesman had the nerve to describe this as 'working more aggressively with our customers,' like 'aggressive interrogation' or something - puts a whole different light on the "waterboard," if you know what I mean!
JB: You've given this a lot of thought. You're on the ground there. What's a better way to skin this cat?
TS: It's not rocket science. Many years ago, starting in the 1990s and continuing through the Two-Oh-Oughts, Michigan Welfare Rights - one of the complainants this month to the UN decrying this mass shut-off policy as a violation of human rights - began to see large numbers of water shut-offs, many tens of thousands per year. They hired an expert consultant in utility affordability and equitable access, a man named Roger Colton out of Boston. Dr. Colton developed a detailed "Water Affordability Plan" that led to years of struggle with City Council and DWSD under Kwame Kilpatrick and his fellow felon ex-DWSD Director Victor Mercado. They eventually implemented something called the Detroit Residential Water Affordability Plan (DRWAP).
Colton's original proposal was a real visionary, sustainable rate structure based on ability to pay - like the UN standard that no one should have to pay more than 3% of our household income for water. Of course, knowing Kilpatrick and Mercado, their actual DRWAP program was a much more limited, bureaucratic band-aid kind of thing, where money available from interest on late fees and voluntary contributions for poor relief was pooled and made available to help folks who fell behind on their payments into shut-off status. Not as much of a progressive, sustainable structural solution, but at least some resources to avoid the kind of fiasco we have now. And remember, none of this is bottom-line necessary for survival of DWSD as a utility - they simply want to end all obligations to the public interest, to the most vulnerable among us, and sweeten the pot for the corporate takeover they're arranging behind closed doors now. It comes down to a pretty simple question: What's more important: Human rights, social justice and protecting the Great Lakes with a sustainably funded water and sewer system at their geographic heart? Or setting themselves up with a Wall Street-model smash-and-grab privatization operation to make a quick economic killing for some fast operators? They're opting for the latter, and the hell with the people of Detroit who are in their way.
JB: How do we know that they're planning on privatizing? I'm not saying you're wrong but what proof do you have?
TS: Good question. I don't "know" with certainty exactly what the future holds. I do know several things: that DWSD has been privatizing gradually for decades under Federal Court supervision; using major corporations like Infrastructure Management Group (IMG) and EMA Inc. to take over more and more of their core operation all the time; that the emergency manager put out bids to privatize, which have been filed in secret; and that the powerful suburban county executives who will take over this incredibly important and lucrative system have said they favor privatization and don't want the burden of running it in their low-tax jurisdictions Whatever the specific form of privatization - and there are many, many models being implemented, especially emergency management government, which under Jones Day is a privatization of City Hall itself - you put it together and it looks to me very probably like a public private partnership (P3). The elected and appointed officials making policy decisions in Michigan today are dyed-in-the-wool privatizers, ideological acolytes of the Koch Brothers, ALEC, the Mackinac Center for Public Policy and the whole nationwide network of extremist rightwing "think" tanks - where very little thinking gets done but they know how to socialize risk and privatize benefit. On this point, I would recommend to everyone a sophisticated academic talk by Professor Jamie Peck of University of British Columbia, called "Framing Detroit" that he gave on January 30, 2014 at the University of Michigan 'Detroit School.'
I live with this stuff and used to even get paid to understand it , and he totally knocked me out. It should be required for anybody before bloviating an opinion on Detroit today.
JB: We're talking about Detroit, your city. But, it's not just Detroit, Tom. Most of us live in or near urban centers. And many if not most of them are in decline, if not decay. It feels like Detroit is the petri dish for other decaying urban areas. I live in suburban Chicago. None of us are safe from the privatizers, the Koch-inspired agenda. Which city/cities will be next? It's unnerving to contemplate what that agenda, creeping stealthily across the country, could look like.
TS: I don't know if I could say it any better than that. Maybe "pre-fascist scary" instead of "unnerving?" Seriously, you hit the nail on the head. Let me try quoting the long piece I wrote for Counterpunch in March:"Capital is experimenting here with whatever it might have of a gated, contaminated, extreme-energy and-climate future. Hundreds of thousands of People are being used & abused here as pawns of an urban renewal (or "Negro removal") process, without principles, human rights values or human dignity. The gravity of our situation, and its importance as a lens for understanding what we must do, are as hard to overstate as they are to overstand."
JB: Well said, Tom. What haven't we talked about yet? What else would you like our readers to know?
TS: We've barely discussed the vicious racist aspect of Snyder's emergency management policy. The eventual inevitable slow failure of this brand of corporate blindness in the face of the planetary crisis of economic justice, ecological health and extreme energy that defines our time.