Detroit Bankruptcy Takes Aim at Pensions
By Jane Slaughter | Labor Notes | July 19, 2013
Detroit hit the Trifecta last week—the third in a series of body blows that politicians have landed on the city’s working people.
The Michigan legislature passed “right-to-work” in December and gave the governor the right to impose “emergency managers” on cities two days later. When Detroit’s emergency manager Kevyn Orr announced Chapter 9 bankruptcy Thursday, he was following a predicted trajectory that will lead to further impoverishment and privatization.
The bankruptcy will enable an appointed judge to impose further cuts to city expenses and to void union contracts. A prime target for cost-cutting is the pensions owed to 21,000 city retirees and 9,000 active workers. The city estimates its pensions are underfunded by $3.5 billion, and wants to reduce payments to both workers and the bondholders who have lent the city money over the years: equality of sacrifice.
Michael Mulholland, vice president of the city’s largest AFSCME local, said city workers are “in a state of somewhere between perplexion and total anger. Everything they’ve been promised, both contractually and kind of a social contract, is being pulled out from under them. It’s morally indefensible.”
Mulholland retired in February, after 29 and a half years in the Water Department. “I could have worked someplace else and made more money,” he said, “but I was told if I worked here I’d have a steady job and in my old age not be in poverty.”
The bankruptcy of Detroit, which now has fewer than 700,000 residents, is the largest city bankruptcy in U.S. history.
Orr sprung the hurry-up filing yesterday because union pension fund attorneys were scheduled to be in court on Monday, arguing for an injunction against bankruptcy.
The state constitution appears to protect public employee pensions: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof and shall not be diminished or impaired thereby.”
But proponents of making city workers bite the bullet note that bankruptcy judges have wide latitude to break contracts.
Tag-Teaming with the Governor and the Banks
Pundits said other states and cities would look to Detroit as a template for how to manage ailing city budgets. A recent law in Rhode Island specifies that in a city bankruptcy, bondholders must be paid first, before pensioners.
Asked if the Michigan legislature could pass a similar law, Mulholland laughed. “If they proposed a law that Detroiters should all be shot,” he said, “some of them would get up at midnight to sign that one.” Governor Rick Snyder has guided the process of putting Detroit through a “consent decree,” Orr’s rule, and now the bankruptcy.
The Republican-dominated legislature has long been hostile to majority-black Detroit. In November 2012, the state’s voters passed a referendum that threw out a previous “emergency manager” law, which had been used almost exclusively to take over majority-black cities and school districts. A few weeks later the legislature simply passed the law again.
Although the law requires negotiations with affected parties before a city files for bankruptcy, Mulholland, who was in the talks, said, “It wasn’t negotiations, it was PowerPoint presentations about how bad the situation is.
“Orr wouldn’t answer AFSCME’s requests for negotiations, so they went and taped a letter to the door of his office.”
As an AFSCME member who had reached the top of the pay scale, Mulholland’s pension is $1,600 a month before health care contributions are taken out. He said exactly how much Orr intends to take from retirees has always been left vague, though union leaders were told health care would be slashed.
Two years ago, he said, city officials encouraged workers to retire right away. Now active workers are told to “relax, we’re going after the retirees.”
Local 207 is planning a demonstration in downtown Detroit July 25.
Orr touts the bankruptcy as a way to improve city services—which often, in the world he comes from, is code for privatization. Water, garbage pickup, an island park called Belle Isle, and the Detroit Institute of the Arts have all been mentioned as potential salable items. “The only thing they’re going to ‘improve’ is somebody’s bottom line,” Mulholland predicted.
General Motors, which is headquartered downtown, said it wouldn’t be affected by the bankruptcy. Apparently, with Snyder—who ran on his record as a businessman—in charge, business is going to be just fine.
Evo Morales: No Need for US Embassy in Bolivia
Al-Manar | July 5, 2013
Bolivia’s president threatened Thursday to close the US embassy as leftist Latin American leaders joined him in blasting Europe and the United States after his plane was rerouted over suspicions US fugitive Edward Snowden was aboard.
President Evo Morales, who has accused Washington of pressuring European nations to deny him their airspace, warned he would “study, if necessary, closing the US embassy in Bolivia.”
“We don’t need a US embassy in Bolivia,” he said. “My hand would not shake to close the US embassy. We have dignity, sovereignty. Without the United States, we are better politically, democratically.”
Morales arrived home late Wednesday after a long layover in Vienna. He said his plane was forced to land there because it was barred from flying over four European nations over groundless rumours that Snowden was aboard, sparking outrage among Latin American leaders.
The Bolivian president’s air odyssey began hours after Morales declared in Moscow he would consider an asylum application from Snowden, who is holed up at a Moscow airport as he seeks to evade US espionage charges for revealing a vast Internet and telephone surveillance program.
In a show of support, the presidents of Venezuela, Argentina, Ecuador, Uruguay and Suriname met with Morales in the central Bolivian city of Cochabamba to discuss the incident. They demanded that the four European countries — Spain, France, Italy and Portugal — explain their actions and apologize, saying that the treatment of Morales was an insult to Latin America as a whole.
Protests in Brazil Reflect Ongoing Disparities
By Kyle Barron | NACLA | June 25 2013
Hundreds crammed into a room for over six hours, passing around the microphone so that everyone could weigh in. The protestors, mostly students, called the meeting in order to better articulate their message after Rio de Janeiro’s Mayor, Eduardo Paes, had requested to meet with one of the university groups. They emerged that Thursday night with five demands—”five points”—they felt would bring cohesion to the slogans splashed across the signs being waved in the street.
This meeting, or plenaria, took place on Tuesday, June 18, the day after the protests first surged and two days before over a million people took to the streets in over 100 cities across Brazil. While there is no uniformity to all the protests from city to city, and—as Kate Steiker-Ginzberg, a 23-year-old from Philadelphia who attended the plenaria insisted—there exists diversity among protestors within each city, the five points coming out of the plenaria address issues cutting across the various protests.
The first point addresses the 20-cent increase in transportation fare, what has been seen as the catalyst for the protests. While this may not sound like a significant fare hike, as Steiker-Ginzberg explains, it represents a “political miscalculation” on the part of the administration. The fare increase was implemented the same day as the Confederation Cup opened in Brazil. Since 2005, this international soccer tournament had served as a rehearsal for the World Cup, which will be held in Brazil next year. Many were frustrated that the price hike would go toward the extravagant sporting facilities instead of improving the dismal public transportation that is often slow, overcrowded, and dangerous—despite the relatively steep price Brazilians pay for their public transportation.
The fare hike was one among many contributing factors to these protests, and together with the other points addressed by the plenaria, reflects grievances that have been brewing across Brazil for quite some time. The second point concentrates specifically on the excessive spending on mega-events instead of on investment in health and education. Along with the World Cup, Brazil is slated to host the 2016 Olympics.
This taps into the broader question of who benefits from these mega-events. While the country is pouring massive amounts of public funds into the construction and improvement of stadiums, some people complain of the poor state of public infrastructure, hospital overcrowding, and low educational performance in Brazil. As soccer-player-turned-congressman Romário de Souza Faria criticizes, the money for the World Cup could have been used for “8,000 new schools, 39,000 school buses or 28,000 sports courts in the whole country.”
Cost benefit analysis of mega–events shows that these exorbitant affairs rarely deliver many of the economic outcomes promised. While it is estimated that Brazil will spend over $12.5 billion in preparation for the World Cup, it looks as though private interests are the ones poised to benefit most from these events. FIFA reported a profit of $202 million from the 2010 World Cup in South Africa. As their financial statement boasts, “The 2010 FIFA World Cup South Africa™ was a huge success, a fact that was reflected by its financial result.” Most of these profits are a result of selling broadcasting rights and sponsorships, with a smaller percentage coming from ticket prices. Similarly, the International Olympic Committee (IOC) garnered $250 million from the last Olympic games, the majority of those profits coming from television licensing.
Furthermore, Brazil has spent over $473 million in public funds on improvements to the Maracanã, Rio de Janeiro’s iconic soccer stadium, which will host the World Cup Final as well as stage the opening and closing ceremonies of the Olympic games. This investment was on top of the almost $300 million that had been spent on renovations to the stadium during the last 15 years. Earlier this year, after months of negotiations, Maracanã was privatized with the granting of a 35-year contract to a consortium of investors for a comparatively low price tag of $85 million. After public outcry over the deal, a judge reversed the ruling, citing irregularities and claiming that one of the companies involved in the deal had an unfair advantage in the process. Finally, on May 13, the judgment was reversed again, allowing the privatization to continue. Beyond the importance as the site for the most high-profile moments in the upcoming mega-events, the stadium has long been a cultural symbol for Brazil. According to Steiker-Ginzberg, “this major symbol of democracy and public space and class intermingling in the city is now being destroyed and privatized.”
The megalopolises of Rio and São Paulo are not the only places the public’s money is being spent. Throughout Brazil, $13.9 million will be put toward preparing for the World Cup and the Olympics. In many of these places, such as the northeastern city of Manaus, the excessive and over-budget spending does not seem justified. This is especially true considering that after the games are over, Manaus’s $246 million Amazonia Arena is predicted to be underutilized in the city of 2.3 million people. This could be true of other stadiums around Brazil as well—Brasília, Cuiabá, and Natal simply don’t have clubs with a following that would justify the investment over the long term.
The third concern of the plenaria focused on the criminalization of protests and the militarized response of the police to demonstrations. Social media has been rife with images of the riot police with Choque emblazoned on their shields, indicating they are “shock troops,” shooting rubber bullets, using pepper spray, and hurling seemingly endless canisters of tear gas at protestors. These crowd-control tactics have been so aggressive that some have termed this the Vinegar Revolution, in reference to the palliative effects the common kitchen staple has against tear gas. As Brazil and Security Policy expert Joseph Bateman explained in an interview with the Washington Office on Latin America, while other sectors throughout the government have opened up to civil participation since the end of the military dictatorship in 1985, the security sector has only just begun to do so, and “a lot of police still see their role as protecting the state, not protecting citizens.” This has been especially salient in São Paulo, where protests intensified in response to images of police brutality, particularly against journalists, that circulated on social media. Shock police shot a journalist, Juliana Vallone, at point-blank range in the face.
This violence against protestors is tied into the fourth point, which aims to democratize the media. There has been criticism that the major media networks, primarily O Globo, have been concentrating on the vandalism and violence of the protestors while largely ignoring the police brutality against the protestors. The fixation on the violent aspects of the protests is also at the expense of the reporting of the largely peaceful expression coming from the majority of protestors. As a university professor remarked after recently arriving for a visit to her native Rio de Janeiro, “it’s sad that some television stations only show the destruction and fail to show the people that want a better Brazil.”
The fifth point concerns the forced evictions and community removals resulting from the major urban transformation taking place in Brazil. In 2012 in São Paulo, 2,000 riot police were called in to suppress the uprising of more than 6,000 residents who refused eviction in the community of Pinheirinho. Many of these evictions throughout Brazil are being done in preparation for the World Cup and Olympics. Rio’s oldest favela, Providência, has lost its central square—the community’s only public space—to Olympic construction. Almost 5,000 residents are slated for eviction in this community alone. Altogether 170,000people throughout Brazil are facing removal or have already been evicted. The Popular Committee for the World Cup and the Olympics, a human rights group based in Rio, estimates that over 10,000 families will be affected in Rio de Janeiro alone because of these mega-events.
These forced evictions have been taking place amidst a major real estate boom throughout Brazil.
According to Forbes, Brazil is the country with the most rapidly increasing home prices in the world. In Rio, the rise in home prices has been four times greater than the rise in wages over the last five years. Donald Trump is investing in five skyscrapers in the city that, according to the developer’s website, will be the “largest urban office development in the BRIC [Brazil, Russia, India, and China] countries.”
Critics contend that many of these evictions are driven by economic incentives. The city of Rio de Janeiro has used a host of reasons to justify the demolition of the community of Vila Autódromo—from environmental and safety concerns to its use as a security or media zone for the Olympics. It is reported that the mayor of Rio de Janeiro, Eduardo Paes, entered into a partnership with private companies that will open up 75% of this site for private development after the Olympics. His reputation for these kinds of deals recently made headlines after a physical altercation with a constituent who accused him of catering to the interests of developers.
While the government does provide several forms of compensation to communities facing removal, the resettlement programs have systematically moved poor residents away from the high-value land and into peripheral areas of the city with little access to transportation or employment opportunities. Furthermore, O Estadão reported that the City of Rio de Janeiro paid $8.9 million for resettlement land to two companies—both contributors to Mayor Paes’s election campaign. After this was revealed, Paes revoked the deal.
On Saturday, June 15, communities affected by these evictions came together on the same day as the Confederation Cup opened, not far from Maracanã stadium for their own soccer tournament. The People’s Cup Against Removals was organized to “give a voice, to give time, to give space for those being excluded and for those being removed.” The stark contrast between the newly renovated stadium hosting the precursor to the World Cup and the small and humble field occupied by the People’s Cup players reflected the disparities at the heart of many of these protests. “I think that’s something that people woke up to,” remarked Steiker-Ginzberg, “the disparity between the investment in these stadiums and then people overflowing out of the public hospitals and ambulances not arriving on time . . . You can’t just reverse a 20 cent hike and expect everyone to get off the streets.”
Related
- Brazilian legend Romario questions 2014 World Cup (prosoccertalk.nbcsports.com)
- The Last Word: Mr Blatter, the party’s over (revoltadosvintecentavos.wordpress.com)
- Brazil: In The Eye Of The Storm – Video
Civil Liberties Groups Challenge Taxpayer Funding Of Religious Ministries In New Jersey
Public Aid To Sectarian Institutions Violates State Constitution And Law Against Discrimination, Watchdog Organizations Say
Americans United | June 24, 2013
Americans United for Separation of Church and State joined the American Civil Liberties Union of New Jersey (ACLU-NJ) and the national ACLU in filing a lawsuit today to stop the state of New Jersey from awarding more than $11 million in taxpayer funds to two higher education institutions dedicated solely to religious training and instruction.
The groups also filed a petition asking the court to immediately prevent the state from doling out grants to those two institutions, Beth Medrash Govoha and Princeton Theological Seminary.
“Religious institutions should pass the plate to the faithful, not the taxpayers,” said the Rev. Barry W. Lynn, executive director of Americans United. “Clergy training is the responsibility of religious communities, not the government.”
“We support freedom of religion; however the government has no business funding religious ministries,” said Ed Barocas, legal director of the ACLU of New Jersey. “Taxpayers should not foot the bill to train clergy or provide religious instruction, but the state is attempting to do exactly that.”
On April 29, New Jersey Gov. Chris Christie’s administration released a list of 176 college construction projects it intends to aid with money from a voter-approved bond. The New Jersey Constitution forbids any such taxpayer funds from supporting ministries or places of worship.
Yet Beth Medrash Govoha, an orthodox Jewish rabbinical school in Lakewood, is slated to receive $10.6 million from the state to pay for the construction of a new library and academic center. All courses of study at Beth Medrash Govoha are classified as “Theology/Theological Studies” or “Talmudic Studies.” The school prepares students to become rabbis and religious educators.
Similarly, Princeton Theological Seminary, a Presbyterian Christian seminary located in Princeton, is slated to receive $645,323 from the state. All courses of study at the seminary either prepare students to serve as ministers or priests in Christian religious traditions or to serve as religious educators. The New Jersey Secretary of Higher Education’s website identifies the school as a “theological institution.”
“The state of New Jersey has an important role to play in providing financial support for institutions of higher learning in our state, but public money should not be used to fund schools that are not open and welcoming to all students in New Jersey,” said Udi Ofer, executive director of the ACLU of New Jersey. “State funding of higher education should not be done at the expense of the separation of church and state.”
“Taxpayers should not be forced to pay for the training of clergy,” said Alex J. Luchenitser, associate legal director of Americans United. “These grants plainly violate the separation of church and state enshrined in the New Jersey Constitution.”
Giving public money to Beth Medrash Govoha also violates the New Jersey Law Against Discrimination. The school is identified in federal records as a single-sex school with only male students. According to state records, its entire student body of 6,538 students was all-male in 2012, and all 79 members of its faculty were male during 2011.
The lawsuit was filed in Superior Court in Trenton. The plaintiffs in the case are the ACLU-NJ, the Unitarian Universalist Legislative Ministry of New Jersey (UULMNJ) and Gloria Schor Andersen, a Voorhees Township resident who has been a public-school and a Hebrew School teacher/tutor. Andersen is also Speaker-at-Large for the Delaware Valley Chapter of Americans United for Separation of Church and State.
“As a member of the clergy, I recognize the important responsibility that faith groups have in training their next generation of leaders,” said the Rev. Craig Hirshberg, executive director of UULMNJ. “However, their religious studies should not be funded by taxpayers. When the government financially supports religious groups, it provides privileges to particular religions over others and diverts designated public funds away from programs that should benefit all citizens.”
The legislature has until June 28 to reject the grants. Some lawmakers have raised similar concerns about funding religious ministries and pressed the state for more information about its selection process.
In addition to the lawsuit, the ACLU-NJ has filed several open records requests with the state to learn more about the nature of the schools receiving funding and how the grants were awarded. The state failed to release scoring sheets and other records documenting how it determined who should receive the grants.
“These grants fly in the face of important state safeguards that protect the religious liberty of all New Jersey taxpayers,” said Daniel Mach, director of the ACLU Program on Freedom of Religion and Belief.
Along with Barocas, Luchenitser, and Mach, the attorneys representing the plaintiffs include Frank Corrado of Barry, Corrado & Grassi, P.C.; Lenora Lapidus and Mie Lewis of the ACLU Women’s Rights Project and Ayesha Khan, legal director of Americans United.
Americans United is a religious liberty watchdog group based in Washington, D.C. Founded in 1947, the organization educates Americans about the importance of church-state separation in safeguarding religious freedom.
Related articles
- Ultra-Orthodox Jewish college wins $10.6 million in public funds (nj.com)
- It’s an outrage! NJ plans to cough up millions to fund training colleges for priests and rabbis (freethinker.co.uk)
- Two Religious Schools in New Jersey May Receive More Than $11,000,000 in Taxpayer Money (patheos.com)
- Church and state, separated for a reason: Editorial (nj.com)
- New Jersey Blocks Release Of Lakewood Yeshiva’s $10.6 Million Grant Application, Opponents Cry Foul (failedmessiah.typepad.com)
- How did a male-only yeshiva get $10.6 million in public funds? (religionnews.com)
Medical chief at Costa Rica state hospital arrested as part of organ trafficking investigation
InsideCostaRica | June 18, 2013
A chief doctor at a Costa Rican government-ran hospital was arrested today on suspicion of being part of an international organ trafficking network which specializes in selling kidneys to patients in Israel, according to the Attorney General’s Office.
Attorney General Jorge Chavarria told the press that the arrested is Francisco Mora Palma, head of Nephrology at Calderon Guardia Hospital, one of the largest state medical centers in the country.
“The patients who required the transplants were in Israeli territory, and some of the (trafficking) victims [had their kidney removed] here and others were transported to Israel. We have information that at least one person died after being operated on in Israel,” Chavarria said.
The prosecutor explained that the organization has branches in Israel and Eastern Europe, though did not elaborate, citing the ongoing investigation.
Authorities have identified at least three Costa Ricans who were paid in exchange for one of their kidneys.
In addition to Mora Palma, authorities have arrested a police officer identified by the last names Cordero Solano, who collaborated with the doctor to identify possible donors.
Besides the Calderon Guardia Hospital, authorities raided other locations, including two private clinics where transplants were conducted.
“This is extremely serious,” the prosecutor said, urging those who were trafficking victims to come forward to authorities without fear of losing the money they were paid. “What we need is information to dismantle this organization,” he said.
Related articles
- Organ trafficking & Israel – A message from Alison Weir (gilad.co.uk)
- Israeli arrested in Rome for organ trafficking (theuglytruth.wordpress.com)
- Israel police uncovers organ trafficking ring in north (theuglytruth.wordpress.com)
Brazil sees largest protests in decades as unrest hits second week
RT | June 17, 2013
Mass protests continued throughout Brazil on Monday, with hundreds of thousands of demonstrators converging in Sao Paulo, Rio de Janeiro, Belo Horizonte, the capital of Brasilia and other cities.
Protests initially began last week following a government announcement of an increase in public transportation costs, which brought out students and young workers and led to more than 250 arrests.
According to reports by Brazilian media such as Jornal do Dia, the initially peaceful demonstrations last week became heated, and led to clashes with Brazil’s riot police that left at least 100 injured in the major cities of Brasilia, Sao Paulo, Rio de Janeiro and Belo Horizonte.
Though the protests initially began following the announcement of bus fare increases, they have evolved to include a wide range of groups that have grown dissatisfied over everything from government corruption and income inequality, as well as to outrage over the police’s harsh response to protesters last week.
In a sign that public dissatisfaction was still simmering, soccer fans booed president Dilma Rousseff on Monday during the opening of a two-week tournament at a stadium in the capital Brasilia. The heckling only intensified when the president of the global soccer body, FIFA, reprimanded the crowed for failing to show the president “respect.”
Though Rousseff was able to ride on her predecessor’s popularity, Brazil’s economic growth has slowed considerably since she took over from Luiz Inacio Lula da Silva, who is widely credited with lifting 40 million Brazilians out of poverty. Brazil’s economy has posted its worst two-year performance in over a decade, and inflation rose to 6.5 per cent in May.
At least 20,000 Brazilians were expected to demonstrate in Sao Paulo on Monday, with organizers placing the figure closer to 30,000.
Protesters climb atop the capitol building in Brazil. #ChangeBrazil pic.twitter.com/Tb6CblQ5T0


