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Report scrutinizes treasury department's role in Flint water crisis

Aug 8, 2016

 

As the Flint water crisis unfolded, most of the blame was heaped upon the state departments of Environmental Quality and Health and Human Services.

But Wayne State University law professor Peter Hammer claims there’s another government agency at fault: Michigan’s treasury department. In a new report, Hammer faults Treasury for its willingness to bend rules when it came to the Karegnondi Water Authority (KWA) pipeline, and its indifference to whether the city could pay to upgrade treatment plants and guarantee safe drinking water.

“This is the big contradiction — you would think that as you’re approving a decision, you would approve not only, ‘Does this make sense?’ but, ‘Can I pay for it?’” Hammer said.

 

Hammer claims the Treasury Department is at fault for pushing the city toward using the Flint River as a water source in the interim, without guaranteeing it could afford to make that water safe to drink.

Hammer also points toward structural and strategic racism in the choices made by government agencies during the crisis.

 

“At the end of the day, what I indict them on is the failure to exercise independent economic judgment,” Hammer said.

Hammer joined Stateside to describe why he thinks the treasury department should be held accountable for its role in the Flint water crisis.

 

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Peter J Hammer is the director of the Damon J. Keith Center for Civil Rights at the Wayne State University Law School.

 

We also reached out to the Michigan Treasury Department and former State Treasurer Andy Dillon for comment. 

 

Statement from Michigan Treasury Department

 

While we disagree with many of the facts and conclusions reached in Professor Hammer’s paper, our focus will remain on moving forward with the city, county, and state to do all we can to improve the lives of the residents of Flint.

 

Email response from former State Treasurer Andy Dillon:

 

I briefly reviewed the first part of professor's report and reject many conclusions.

 First, no rules were 'manipulated' during my tenure and nothing was done 'that committed the Flint River as the interim drinking water source.'  After all, if Genesee County stayed withDWSD, why couldn't Flint?  The move to Flint River happened after my tenure with Treasury.  While pros and cons of the EM law can be debated, this was a clear example of state accommodating the wishes of the local government as the initial view, at least from Treasury's perspective, was not to support Flint joiningKWA.  Moreover, the professor criticizes the EMs for forcing balanced budgets, that is mandated by state law. No city, school or county can adopt a budget that isn't balanced.  The conclusion that Flint had financial risk for theKWAproject is not accurate. Flint's only obligation was to purchase water from the KWA when construction was completed for the price agreed upon. This was noted in the conditional letter of approval which I don't see referenced anywhere in the professor's report. His claim that Flint was on the hook for $85 million of the $285 million for KWA is not accurate.  Where is the document showing that?  The professor claims the DEQ was ill-equipped to render judgments regarding economic feasibility. I won't judge that but they were essential to the process because they determined what the minimum capabilities/requirements were for any option Flint chose. The DEQ's requirements for redundancy, back up plans etc played a critical role in evaluating the options of KWA vs. staying w/ DWSD or staying w/ DWSD and bleding [sic] Flint River. All options under consideration at the time.  There were meetings w/ Tucker Young, DEQ, KWA and Treasury.  Legitimate assumptions made by TY to reach their findings were found inaccurate after DEQ advised certain aspects to the project would or would not be required.  Yes I did want to make sure Flint's rejection of the last best offer was made in good faith, meaning it was based on what was in the best interests of Flint not the pro-KWA agenda of the local officials.  Why is that a bad thing?  My tenure as Treasure ended in October of 2013 and I was not there when the Flint opted for the Flint River.  Thus, I am not sure I am qualified to comment on the other findings in this report."

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