Detroit mayoral candidates Wayne County Sheriff Benny Napoleon, right, and Mike Duggan, left, on Wednesday The Detroit Economic Club's meetingCBS 62 'Michigan Matters' host Carol Cain, center, moderated. (Todd McInturf / The Detroit News)
Detroit — Fewer than four city blocks separated the city’s contentious, bankrupt past Wednesday from a future that doesn’t need to be either.
In the second of three mayoral debates, Mike Duggan and Benny Napoleon offered the Detroit Economic Club disparate visions for a Detroit beset with meager city services, inadequate public safety and the stigma of being home to the largest municipal bankruptcy trial in American history.
“If I’m elected mayor, the politics of division will be behind us,” said Duggan, the former CEO of Detroit Medical Center. He insisted the city would be open for business, open to constructive relations with City Council, open to black, white and brown, open to Christians, Jews and Muslims, open to gay and straight.
And Napoleon, the Wayne County sheriff, reiterated his staunch opposition to Emergency Manager Kevyn Orr. He again pushed his plan for reviving the city’s beleaguered neighborhoods, saying, “We have to change the city, but we have to do it where people live.”
The symbolism was stark, delivered simultaneously in a federal courtroom hearing opening arguments in the city’s bankruptcy case and in a renovated Cobo Center. Here was the indictment of Detroit’s disastrous financial irresponsibility unspooling in real time, competing with the two men vying to lead the city toward a future marked by private reinvestment, civic re-engagement and some encouraging signs of repopulation.
How? As the men who would be mayor at a time of unprecedented transformation traded competing visions and divergent plans of how to get there, a veritable platoon of high-priced lawyers battled over culpability for the past, telling U.S. Bankruptcy Judge Steven Rhodes why Detroit should be allowed to go bankrupt, why it shouldn’t and who’s to blame.
History is being made at the Theodore Levin U.S. Courthouse between Fort and Lafayette, however excruciatingly dull (and repetitious) some of the argument can be. Unions and pension funds are fighting to retain the credibility of good-faith bargaining, ensure the obligations of vested pensions, preserve the sanctity of their protection in the state constitution, even justify a bedrock reason for their existence.
The city, essentially declaring itself “Deadbeat Detroit,” is angling to use federal Chapter 9 bankruptcy to skirt the financial obligation to honor pensions protected by the state constitution, say lawyers for the pension funds, city retirees and emails produced in the first day of the bankruptcy eligibility trial.
The city also is trying to use the brute force of Chapter 9 to gain relief from some 50 years of bad practices; to improve poor management practices complicated by a meddling City Council; to exit costly services better provided by outside contractors; to end shoddy management of pension funds whose miscues chiefly harm pensioners; to bolster basic city services — including police and fire protection — for residents.
The battle is so intense, and likely to grow more so over the coming weeks and months, because the stakes are so high. How the judge rules along the way, and how the case proceeds, could radically alter a division of municipal power and financial muscle dating back to the early 1960s — and the participants know it.
Rhodes, nearing the end of his career on the bankruptcy bench, is guiding a precedent-setting case through a technical process shorn of the courtroom theatrics and pressure tactics favored in more sensational cases. The results are likely to shape his legacy, in part because pieces of his Detroit decisions are expected to make their way to the U.S. Supreme Court.
This, in a word, is huge. How Detroit’s bankruptcy is resolved, assuming Rhodes determines the city eligible to proceed, will have dramatic implications for distressed municipalities, their ability to shed obligations through Chapter 9, and the defenses unions and pension funds can muster to protect their people.
Still, the charges and counter-charges leveled in opening statements carried the tiresome air of the same old labor vs. management arguments too well known to Detroiters on both sides of the divide. The city didn’t bargain in good faith because a) its emergency manager and his patron, Gov. Rick Snyder, long conspired to push Detroit into bankruptcy and b) they manipulated the process to get there.
The unions, the city pension funds and the committee formed to represent city retirees in the bankruptcy (because their former unions refused to do so) didn’t bargain in good faith because they said the constitution guarantees their pensions cannot be diminished or impaired. So why discuss diminishing or impairing them?
Because the city is insolvent, for one. That’s an inescapable reality facing a reckoning all it’s own, no matter who is elected mayor in an election shaped by forces neither contender can control.
Daniel Howes’ column runs Tuesdays, Thursdays and Friday.