Prophecy of Noah

Looting Operation: Corporate Elite Divvies up Detroit as Bankruptcy Plan Confirmation Looms

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As the Detroit bankruptcy moves into its final stage, it becomes
ever more clear that the corporate-financial oligarchy is implementing
the wholesale privatization of an entire US city.

With the full backing of a federal court acting on behalf of powerful
corporate and financial interests, a cabal of capitalist politicians
and legal and financial bagmen are looting virtually all of Detroit’s
basic public infrastructure—including street lights, garbage collection,
the water and sewerage department, as well as the city’s world class
art museum, the Detroit Institute of Arts (DIA).

The last portion of the bankruptcy follows the crafting of a “grand
bargain” supported by the major creditors and the unions, along with a
deal with one of the main bond insurers, Syncora. Last month, the
political establishment in Detroit and Michigan agreed to another
arrangement to keep Emergency Manager Kevyn Orr in power until after the
bankruptcy is completed, followed by a transfer of control to Mayor
Mike Duggan and the City Council. The city will be overseen by a new
Financial Review Commission (FRC), which will retain many of the powers
now held by Orr.

With these measures in place, the ruling class is moving forward with
parceling out Detroit into private fiefdoms allotted to individual
billionaires and corporations, while entire sections of the city will be
shut down or cut off from basic services.

The conspiring of the city’s ruling class was spelled out in a column published Thursday in the Detroit Free Press by
Tom Walsh, “Detroit after bankruptcy: now comes the hard part.” After
affirming that, “there’s little doubt” that Rhodes will confirm Orr’s
“plan of adjustment,” Walsh describes Orr and investment banker Kenneth
Buckfire as temporary hired guns to oversee the transformation of
Detroit.

“Think of Orr, Detroit’s outgoing emergency manager, and Buckfire,
president of restructuring firm Miller Buckfire, as the outside
mercenaries—er, professionals—hired to swoop into Detroit, restore order
and achieve specific objectives,” Walsh writes.

Proclaiming that Mayor Duggan “won’t have enough money left in the
kitty” once the bankruptcy is complete, Walsh calls for a fully
privatized “revival” of Detroit.

Walsh gives tribute to the city’s leading robber barons
for organizing “private investment on a massive scale.” He writes, “The
encouraging bursts of revival in Midtown and downtown Detroit during the early years of the 21st Century have been driven largely by a dogged
band of entrepreneurial corporate chiefs working in tandem with big
philanthropic foundations such as Kresge, Ford, Hudson-Webber and
others.”

“[Dan] Gilbert, the head of Quicken Loans and Rock Ventures, has
bought more than 60 Detroit properties, moved more than 12,000 workers
into the city and is a major force in anti-blight efforts. [Roger]
Penske led the Super Bowl committee, brought auto racing back to Belle
Isle and donated the Clean Downtown truck fleet. The Ilitch family is
leading a $650-million arena and entertainment district project as an
encore to its earlier renovation of the Fox Theatre and building
Comerica Park. Those business groups, along with Henry Ford Health and
the Detroit Medical Center, are teaming with the Rapson-led Kresge
Foundation and other donors on the M-1 Rail streetcar lines,” Walsh
notes.

Walsh concludes that “private sector investment” is the “key to the
renewal of Detroit,” and that “only a small part of that investment will
come from public funds.”

These plans were elaborated in bankruptcy court testimony on Thursday
and Friday, including from Emergency Manager Kevyn Orr, who declared
that the bankruptcy plan constitutes “yet another renaissance.”

Asked by Rhodes about the purpose of the Financial Review Commission,
Orr gave a response which clearly illustrated the anti-democratic
character of the institution. He said that the body would “provide a
level of oversight that can be flexible according to the discretion of
the commission itself.” In other words, the FRC will determine for
itself the appropriate level of involvement in managing the city’s
finances, overturning contracts and imposing austerity measures.

Speaking on the Syncora development agreement, which transfers
millions of dollars worth of credits and city assets to the bond
insurer, Orr acknowledged that the deal will “intensify and broaden the
relationship between Syncora and the city.”

Orr’s comments on the Syncora deal highlight the fact that, through
the bankruptcy, the city will become a hunting ground for rapacious
corporate and financial raiders. Last year the city gave Syncora partial
control over the Windsor tunnel to extricate itself from the toxic
“swaps deal,” which bled hundreds of millions from Detroit’s budget.
Syncora, having profited from the illegal swaps scheme, is being made a
first line stakeholder in the future of Detroit.

James Doak of Miller Buckfire gave similar testimony Friday, saying
that Syncora “has become a long-term business institution in downtown
Detroit,” and that the success of Syncora was “very much linked to the
revitalization and economic activity of the downtown area.”

Rhodes asked, “Do you have a sense as to how that relationship will
be monitored and executed on the city’s side of it?” Orr responded, “I’m
hopeful that the marriage will be better than the courtship,” making an
ironic reference to Syncora’s parasitic relationship to the city under
the swaps deal.

Orr testified that future revenues will go primarily to the banks.
“We will use revenues to pay debt and provide adequate services—not
gold-plated or platinum,” Orr said, reassuring the ruling class that the
city has no intention of investing in providing services for the broad
mass of the population.

Another billionaire and reputed Detroit “booster” (on account of his
promotion of corporate-funded development in the city), Roger Penske,
also gave testimony Friday. Penske is contributing millions of his own
funds to the bankruptcy plan, including some $10 million to the “grand
bargain” and millions toward the purchase of 100 new police squad cars.
Penske is also contributing money to the M1 rail project, frequently
touted in the media as a model for a privately planned and funded
transit system.

Penske gave his full support to the bankruptcy plan, saying that through the bankruptcy “a cleansing effect can take place.”

Similar comments from former presidential candidate Mitt Romney
circulated in the media Friday underscored that such views are common
currency throughout the entire US political and corporate establishment.
Romney declared his support for the bankruptcy, saying that “dramatic
steps” are necessary “when a municipality begins to circle the drain.”
The bankruptcy has also received the full support of the Obama
administration, which sees it as a model for other cities throughout the
county.

The corrupt dealings surrounding the courtroom are also revealed in
ongoing discussions with the Financial Guaranty Insurance Corporation
(FGIC), another major insurer. FGIC is set to lose some 95 percent of
the $1.1 billion it committed to insuring Detroit’s bondholders.
Anonymous sources cited by the Detroit News state that FGIC is
offering to drop its opposition to the bankruptcy plan in exchange for
some portion of a “$123 million bankruptcy reserve fund, city-owned real
estate, including riverfront property east of the Renaissance Center,
and a 300-space municipal parking garage on Riopelle Street.”

The bankruptcy is, in substance, a vast looting operation conducted through the mechanism of the bankruptcy courts.

Source: Washington’s Blog