The Emergency Financial Manager

What Happens in Detroit Doesn't Stay in Detroit

It is not every day, though it is increasingly more common, that an “election” in the People’s Republic of China is more democratic than a political event in the United States.  The appointment of Kevyn Orr as the Emergency Financial Manager (EFM) of Detroit is one such moment.  Orr becomes the 14th such emergency manager appointed in the state of Michigan since 1988.  Once installed, he will wield the kind of nearly unlimited decision making power that is all the rage in Beijing and Pyongyang.

The position of EFM was created by Michigan Public Act 101 in 1988 in response to a budget crisis in the city of Hamtramck.  The Act was challenged multiple times in the judicial system and was even overturned by a vote in a popular referendum during the 2012 election.  True to the undemocratic spirit of the position itself, the Governor of Michigan promptly overrode the will of the people and re-created the position after the elections.

An EFM has the ability to bypass any elected body in a local government.  EFM’s connected to school districts often wielded their power in order to close or consolidate school districts irregardless of local communities or school boards.  In Orr’s case, this means that he will not have to listen to anything that the Detroit City Council has to say.  The EFM can then use this power to reduce the pay of public employees, outsource public works and to terminate union contracts at will.

The political architect behind both the move to rescue the EFM position from democracy and the appointment of Orr is Michigan Governor Rick Snyder.  While resuscitating the EFM, Snyder was sure to make it democracy proof by including legislation that shields the EFM position from future referendum initiatives to repeal it.  Orr was tagged by Snyder because of their long time friendship from college and Orr’s experiences as a bankruptcy attorney.  These links fit well with Snyder’s clear ties to both the investment capital sector, which could profit from outsourcing, and the real estate and insurance industries, that have an eye on the re-shuffling of public properties.

The terms of Orr’s agreement with the Governor seem like an even deeper violation considering Detroit’s recent experience with corrupt Mayor Kwame Kilpatrick.  Orr will be given one year of nearly unlimited political power.  He will be paid a salary of $275,000 for that year.  His office will be reimbursed for all travel, meals and lodging.  He will be able to hire staff as needed and “contract outside professional resources” with oversight from the Treasurer’s Office only if a contract exceeds $50,000.  And, finally, the EFM is considered to be “immune from liability for any action taken which he believes to be within the scope of his authority.”  Terms more befitting a medieval prince than an official inside of a supposedly democratic society.

Simultaneously in Beijing three thousand carefully vetted delegates to the National People’s Congress cast their “votes” for the new President Xi Jinping.  All the trump and procession of a controlled coronation was underway with the prerequisite nods to ending corruption and being a “man of the people.”  Yet even in this most undemocratic of processes, a lone dissenting “no” vote slipped through.

No such difficulties in Michigan where even the charade of democracy was dispensed with.  It was replaced with the most corporate of events – the press conference.  No dissent, even symbolic, would be permitted.  Instead, Snyder, Orr and Detroit Mayor David Bing stood at the podium to declare a one-year extermination of democratic rights in the once proud city of Detroit.

Billy Wharton is a writer, activist and co-chair of the Socialist Party USA. He can be reached at: Read other articles by Billy, or visit Billy's website.