Kevyn Orr responds to question about his tax liens: Detroit's new emergency financial manager is asked about his own finances by reporter Chad Livengood.
Detroit — Gov. Rick Snyder is sticking by his choice of Kevyn Orr as Detroit's first emergency manager, despite the revelation he had four tax liens in four years on his Maryland home.
Speaking publicly for the first time about what's become a major distraction, Snyder told reporters Monday he has no regrets about choosing the Washington, D.C., bankruptcy attorney and defended his selection process that overlooked the liens.
The Detroit News found the liens — including two outstanding ones totaling about $16,000 — on Orr's $1 million house in Chevy Chase, Md., through an online records search that took about 90 seconds.
Snyder said the search that led to Orr's selection Thursday was "very thorough," even though neither his staff nor Orr said they knew about the liens until The News asked about them Friday.
"You can always improve the process, but it was a good process, and we're going to move forward," Snyder said Monday during a public event in Detroit.
He was bombarded with questions from reporters about the liens, interrupting what, until then, had been a relatively smooth introduction of Orr as the unelected manager charged with rescuing Detroit from insolvency. He begins the post that pays $275,000 per year Monday.
Orr, who resigned last week as a partner in the Jones Day law firm, said he was embarrassed by the debts and wrote a check Saturday to satisfy them.
He blamed them on unemployment taxes for a baby sitter and said he and his wife, a Johns Hopkins Hospital professor of gynecology and obstetrics, hire an accountant to do their taxes.
"This was a something that slipped between the cracks, I'm very embarrassed about it and I'm determined to get it resolved," Orr told The News Sunday. He didn't return calls Monday.
Some, though, question how a baby sitter alone could be responsible for such a debt. The outstanding liens for unemployment taxes were for $6,595 for the 2010 tax year and another for $9,409 for the 2010-11 tax years.
"That's an awful lot of taxes for a baby sitter. Are you sure he's not running a day care?" joked Maryland tax attorney Jeffrey Katz.
He said the numbers don't add up. In Maryland, unemployment taxes are capped at about $1,150 a year per employee, Katz said, so Orr would have to go through more than five baby sitters in one year to reach $6,500 in back taxes for one year.
"There has to be a different explanation," Katz said.
Maureen O'Connor, a spokeswoman for the Maryland Department of Labor, Licensing and Regulation, which issued three of the liens, would only say her office received Orr's payment Monday. She declined further comment.State privacy laws shield the files unless they are released by their targets.
On Sunday, Orr said he doesn't know why the tax bills were so high. The same baby sitter has watched his two children for a couple of years, arriving in the morning and leaving in the afternoon. No former employee has filed for jobless benefits, Orr said.
Bill Ballenger, editor and publisher of Inside Michigan Politics newsletter, said the episode prompts questions about how thoroughly Snyder's staff examined Orr's background.
"This is something they should have vetted and cleaned up before it ever came to light. Here you have someone who is going to be flyspecking everyone's books and getting facts and figures straight and he's got a lien against his property for unpaid taxes?" Ballenger asked.
"It's extremely embarrassing. It just makes you wonder, what are you thinking?" Howard Bragman, a Flint native and vice chairman of Reputation.com, an Internet privacy firm, said the failure of Snyder's office to search Orr's name inonline Maryland court records"is akin to malpractice."
"For the governor's office to do this and overlook something that's so public and so out there is almost incomprehensible," said Bragman, who's a publicrelations and crisis managementexpert in Los Angeles.
Sara Wurfel, a spokeswoman for Snyder, said Orr's background and resume "attest to his strong skills, abilities and ethics." She described the taxes as an "inadvertent oversight that was handled immediately."
Snyder suggested Monday that Orr could regain public trust by focusing on fixing public lights and crime. He said the tax issue is "done, it's behind us."
The damage is done, said Ed McNeil, special assistant to Council 25 of the American Federation of State, County and Municipal Employees. The union has been a fierce critic of the emergency manager law and accused Snyder and Detroit Mayor Dave Bing of ignoring several proposals to streamline services and reduce expenses.
"People will always look at (Orr) in a different light now," McNeil said. "How can he fix the finances of city of Detroit if he can't fix his own finances? … They are off to a clunky start."
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