Jack Lessenberry talks Detroit bankruptcy, NERD fund and fracking

In this Week in Michigan Politics, Christina Shockley and Jack Lessenberry discuss Detroit's bankruptcy eligibility trial, Governor Snyder's NERD fund, and new proposed fracking rules.

Detroit’s bankruptcy eligibility trial begins

Even though it might not seem like it, Detroit is not officially in bankruptcy.

But today marks the first day of eligibility hearings that will help bankruptcy judge Steven Rhodes decide if Detroit will go that route.

Lessenberry says it seems inevitable Detroit is headed for bankruptcy.

“It’s very hard to imagine the judge not finding the city eligible,” Lessenberry says, “And if he does say the city is ineligible for bankruptcy, chaos will result, many lawsuits will be filed and it doesn’t solve the problem of the $18 billion plus in unfunded liabilities the city has.”

Snyder’s NERD fund to be shut down

Governor Rick Snyder says his controversial NERD fund will be shut down this week, and replaced by a fund that will be more transparent. The NERD fund stands for the New Energy to Reinvent and Diversify Fund. Snyder used the fund to pick up costs he says should not be paid by taxpayers. The NERD fund was fueled by anonymous donors, and some wondered about potential conflicts of interest.

Lessenberry says the secret funds were a political liability for Governor Snyder.

“Anything that smacks of money and secrecy in politics always comes around to bite the person involved.”

But Lessenberry says funds like these have been used for a long time. In fact, Lessenberry says Richard Nixon was almost dumped from the ticket when he ran for vice president in 1952 and even Governor Snyder’s challenger for governor in the next election, Mark Schauer had a similar fund.

But Lessenberry says these funds are used for things like travel, but it got Governor Snyder in trouble when it was discovered to have been used to pay some of the living expenses of Detroit Emergency Manager Kevyn Orr.

New fracking rules proposed

The Department of Environmental Quality has proposed new rules for fracking in Michigan. The rules will require disclosure of chemicals used by developers, and make it easier for people to track where fracking is occurring.

Lessenberry says what’s interesting about these new rules is even developers are in favor of them.

“The executive director of the Associated Petroleum Industries of Michigan said doing this would help cure some misinformation.”