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Mayor’s EM lawsuit threat more about politics than money

Mar 4, 2017

Mike Duggan knows politics.

That’s partly why Detroit’s mayor is alleging that former Emergency Manager Kevyn Orr misled him about the city’s pension exposure. It’s an insurance policy.

The mayor’s critics wonder whether he’s sufficiently loyal to the city. And Duggan’s allegation fuels a juicy political narrative – namely, that the EM and his white-shoe law firm, Jones Day, fleeced the city and its retirees.

Did I mention the mayor is up for election this year?

The charge against Orr inoculates the mayor from insinuations he secretly supported the state’s controversial emergency manager law. Or that he conspired with a Republican governor and a Republican-controlled Legislature to wrest control of the minority-majority city from Detroiters.

The mayor says Orr “concealed” pension-fund assumptions likely to prove more costly to the city than first expected. He says he could decide against filing a lawsuit if his lawyers deem the chances of winning remote. He also says he would not file suit to score, quote, “political credit.”

Of course not.

The reality of Detroit politics is that it’s the idea, the charge and, then, the media amplification that matter. Not so much the facts. Lawsuit or not, the damage would resonate across the neighborhoods at least until Election Day.

And that may be the point of legal shadow boxing that never lands an actual punch or ends up in court.

Publicly undermining the EM law, and the credibility of Orr, has tactical advantage for Duggan.

Publicly undermining the EM law, and the credibility of Orr, has tactical advantage for Duggan. It answers simmering suspicion among would-be voters in this summer’s Democratic primary.

It bolsters his standing with labor. And it positions the mayor to push for dismantling the EM law during a second term, especially if the balance of power in Lansing shifts after 2018. 

So what if the campaign tactic tarnishes the reputations of Orr and Jones Day? That’s just politics in Detroit, proving once again that good deeds around here seldom go unpunished.

There are all sorts of legitimate criticisms to level at the EM law, starting with the messes of Detroit Public Schools and the Flint water crisis. Orr’s stewardship of the EM process, however, is the standard by which all others in Michigan would be found wanting.

The irony here is that Duggan’s first term owes a measure of its success to two things the mayor could not control: Orr, appointed emergency manager by Governor Rick Snyder, and the investment spree of Dan Gilbert, the chairman of Quicken Loans Inc.

Without Gilbert’s prodigious wallet and appetite for risk, the Detroit that Duggan wants to lead for another four years would look a lot different. Without the financial restructuring engineered by Orr, the city would be saddled with more debt and more assets it could not afford to maintain.

Put another way: bankruptcy enabled by the EM law addressed immense financial and operational challenges the mayor would otherwise have been unable to negotiate under normal circumstances.

The plan that Detroit accepted when it exited bankruptcy largely protects lawyers and other professionals from litigation. But it doesn’t bar anyone, including the mayor, from alleging misbehavior in hopes the charge proves its usefulness.

Because that’s politics.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.