News Release

Detroit Emergency Manager Scheme Under Fire


On Thursday an emergency manager was named for Detroit, Kevyn Orr, a partner in the Jones Day law firm.

Available for a limited number of interviews with major media, Stampfler is former emergency manager of Pontiac, Michigan. He said: “I do not believe emergency managers can be successful — they abrogate the civic structure of the community for a period of years then return it virtually dismantled for the community to attempt to somehow make a go of it. The program provides no structure for long term recovery, and that is why most communities slide back into trouble, if they experience any relief at all — a vicious cycle. The Public Act is not sufficient and the state bureaucracy isn’t up to a performance offering any significant success — as can be noted from the communities repeating.”

General counsel for the Detroit NAACP, Hollowell said today: “The new emergency manger comes from a firm that represents Wells Fargo, which is the leader in forecloses in our state; which participated in one of the largest fraudulent robo-calling schemes — they’ve forced people out of their homes and then don’t pay property taxes on the properties. It represents the Amway corporation, which got ‘right to work’ through the legislature. It represents Bank of America and Lehman, whose actions sunk our economy and then got billions in tax-payer TARP funds. Where’s Detroit’s TARP bailout? The new emergency manager is the ‘diversity chairman’ at his firm and it’s a virtually all-white firm. …

“The emergency manager statute allows for dissolving the legislative body and this unelected official enacting statutes. So my vote in Detroit, Michigan does not equal the vote of someone in Grand Rapids. This violates the Voting Rights Act.”

JOHN PHILO, [email]
Philo is director of the Sugar Law Center, which has taken legal action against Michigan’s emergency management model under Public Act 4 and that is exploring legal challenges to the emergency management regimes in Detroit and elsewhere in Michigan. He said today: “It’s significant that the emergency manager was picked before March 28, because that’s the date the new law kicks in. After that date the city would have the option of choosing alternatives, such as neutral mediation or bankruptcy.” Philo noted this was ironic since the new emergency manager, in his remarks Thursday touted the possibility of the city going into bankruptcy.

“Over a decade of experimentation has shown that the emergency manager model is undemocratic and it hasn’t worked. Where they have been in place, those cities and school districts have gone through several emergency managers. The stated goal is to balance the books and the emergency manager model fails to deliver that in the long term. What it does do is force privatization of public resources and guts the public sector unions. But that hollows out your tax base and the city continues in a downward spiral. The people of a city need to decide how to get out of a financial mess and how to prioritize necessary sacrifices. Do they want to sell a park or eliminate a tax break for some business? These are policy choices that residents, not technocrats, should decide.”