Michigan Gov. Rick Snyder and Detroit Emergency Financial Manager Kevyn Orr. (John T. Greilick / The Detroit News)
Lansing— Gov. Rick Snyder has waded into Detroit’s decades-long financial problems in ways no other governor in modern history has — and this morning, he’ll be grilled under oath about why he did it.
Attorneys for the United Auto Workers, the American Federation of State, County and Municipal Employees and city retirees will have three hours to ask the governor about the decision-making that preceded his July 18 authorization for Detroit to file the largest municipal bankruptcy in U.S. history.
The union attorneys, whose clients have all but declared a political war on the Republican governor, are expected to ask Snyder why he didn’t place a condition on the bankruptcy filing prohibiting Emergency Manager Kevyn Orr from cutting pensions in the process. Orr has made it clear pensions will have to be slashed as part of an effort to pare down $18.5 billion in debt.
“It’s our chance to learn the facts,” said attorney Bill Wertheimer, who represents a group of city retirees and UAW members. “Obviously, we need to question the governor about why he did what he did.”
One Lansing insider closely aligned with Snyder said the deposition is yet another obstacle for a governor whose administration has had to navigate a legal minefield of lawsuits designed to derail the state’s takeover of Detroit.
“People sometimes forget that in addition to being an MBA and a CPA, the governor also has a law degree,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce. “My guess is his plan is to answer questions truthfully and be done with it.”
U.S. Bankruptcy Judge Steven Rhodes on Tuesday ordered the union attorneys not to ask Snyder about other candidates considered for the emergency manager position.
Snyder agreed to the deposition — which will take place at his Lansing office — last month after Rhodes grilled the governor’s attorney in court about the state’s initial effort to claim executive privilege and shield Snyder from testifying.
“We are glad that they ultimately did agree to comply with the subpoenas and let us take the deposition under oath,” AFSCME attorney Sharon Levine said Tuesday.
Snyder is believed to be the first governor in modern Michigan history to testify under oath in any legal proceeding while in office.
Snyder spokeswoman Sara Wurfel said the governor agreed to the deposition “because of the unprecedented nature of this case” and “to help make sure it was resolved as fairly and quickly as possible.”
Unions and retirees opposed to Detroit’s eligibility for bankruptcy are deposing Snyder, state Treasurer Andy Dillon and gubernatorial aide Rich Baird with hopes of proving the Snyder administration planned to take Detroit to bankruptcy court months before Orr was appointed emergency manager in March.
In order to be eligible for Chapter 9 bankruptcy, Detroit must prove Orr negotiated with creditors in good faith before the July 18 filing. A trial on Detroit’s bankruptcy eligibility is scheduled to begin Oct. 23 and Snyder’s deposition could be used as evidence.
“The whole issue is really looking at the authorization, the lack of contingencies … and the lack of what we believe are good faith negotiations leading up to the bankruptcy filing,” Levine said of the governor’s deposition.
Bankruptcy expert Douglas Bernstein of Bloomfield Hills said the unions and retirees are exercising their rights as creditors to uncover evidence that might support their theory Snyder and Orr were set on taking the city into bankruptcy.
Rhodes’ order gives the UAW and a group of retirees the right to seek a court order at a later date to force disclosure of the EM candidates’ names, according to the court order. The state reserved its right to oppose such a move.