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Congressman John Conyers

Representing the 13th District of Michigan

Conyers, Kildee & Lawrence Urge Governor Snyder to Ensure Local Taxpayers Don’t Foot the Bill for Emergency Managers’ Mistakes

May 19, 2016
Press Release

Washington, D.C. – Congressman John Conyers, Jr. (MI-13), Ranking Member of the House Judiciary Committee, today led a letter to Michigan Governor Rick Snyder, urging him to strongly reconsider requirements that local governments operating under Emergency Management, pay the legal fees and judgements against their Emergency Managers.  In addition to Congressman John Conyers, Jr., the letter to Governor Snyder is signed by Congressman Dan Kildee (MI-5) and Congresswoman Brenda Lawrence (MI-14). 

Currently, Michigan’s Local Financial Stability and Choice Act, MCL § 141.1560, requires local governments to cover the costs associated with appointed emergency managers who are sued in that capacity. However, legal fees incurred during Congressional investigations by former Emergency Manager for Detroit Public Schools and the City of Flint, Darnell Earley, have been voluntarily paid by the state. Congressman Conyers, Congressman Kildee, and Congresswoman Lawrence are calling on Governor Snyder to ensure all of Earley’s legal fees are covered by the state, not local taxpayers; and to ensure local governments are not required to pay legal fees associated with emergency managers’ mistakes.

“The exception made in the case of Darnell Earley, should be the rule moving forward,” said Congressman Conyers. “Local taxpayers shouldn’t have to foot the bill for mistakes made by state appointed officials who they didn’t elect. Governor Snyder must ensure the burden of legal fees incurred by emergency managers falls on the state, not local governments.”

“Michigan families should not have to pay the legal bills for state-appointed emergency financial managers. Unelected emergency financial managers are accountable only to the Governor and the state should have to pay for their mistakes,” Congressman Kildee said.

“I find it unreasonable to place the burden of legal fees incurred by emergency managers on local taxpayers,” said Congresswoman Lawrence. “Michiganders should not be on the hook for the mistakes of the Governor’s appointed emergency managers. The State’s emergency manager law disenfranchises voters and takes away local control. Local taxpayers should not be required to foot the bill of fraud and abuse committed by Snyder’s appointees. The State should absorb the financial burden imposed by such crimes and Governor Snyder should ensure that taxpayers are protected from the misuse of their hard earned dollars.”

In their letter, the Members wrote, “…we find it deeply troubling that the former Emergency Manager of the Detroit Public Schools and the City of Flint, Darnell Earley, requested that Flint reimburse more than $75,000 in legal fees that he incurred while under investigation by Congress regarding his role in causing the City’s water crisis…By diverting local taxes from crucial priorities to pay for unelected officials’ legal fees representation and damages, this law places a burden on local taxpayers even as it removes their control of that burden.”

“Further, it would appear to frustrate several federal statutes designed to protect the civil and constitutional rights of our citizens.  And, it permits the State of Michigan to shift responsibility for its actions to localities by dipping into the local taxpayers’ pocketbooks, even in cases where those taxpayers are injured by an Emergency Manager’s conduct…,” the Members continued.

Full text of the letter to Governor Snyder is below and attached.

 

The Honorable Rick Snyder

Governor of Michigan

P.O. Box 30013

Lansing, MI 28909

Dear Governor Snyder:

 As you know, many of us have previously written to you about our concerns regarding the impact the Local Financial Stability and Choice Act  – known as the Emergency Manager Law – has on the constitutional rights of local citizens.  Once appointed, Emergency Managers effectively replace duly elected public officials and are unaccountable to the citizens under their jurisdiction.  Representational democracy is the cornerstone upon which our nation was founded.  Indeed, many of us have introduced legislation intended to address the constitutional issues  that this law presents.

Underscoring these concerns is the fact that the Flint Water Advisory Taskforce, commissioned by your office, issued a final report which found that the lack of public accountability for public decision-making by state appointed emergency managers directly resulted in the Flint water crisis.  The task force report further recommended that the state review the Emergency Manager Law and included among its recommendations that the state reform or consider alternatives to the emergency manager model because state appointed emergency managers operate unconstrained by the checks and balances provided by representative local government.

Our constitutional and policy concerns are further compounded by the fact that a community under the control of an unelected Emergency Manager may be forced under the Emergency Manager Law to pay the Manager’s legal fees, even if the community was harmed as a result of the Manager’s mismanagement.   

For example, we find it deeply troubling that the former Emergency Manager of the Detroit Public Schools and the City of Flint, Darnell Earley, requested that Flint reimburse more than $75,000 in legal fees that he incurred while under investigation by Congress regarding his role in causing the City’s water crisis.   It shocks the conscience that the citizens of this devastated community should also share the legal costs incurred by Mr. Earley as a result of his mismanagement pursuant to a state law that permits him to hire the very best attorneys that money can buy—including a “discounted” lead counsel who typically charges in excess of $1,000 per hour for his time.  

Among other things, the Emergency Manager Law in this respect clearly exacerbates

a community’s financial distress by potentially exposing it to vast liabilities that it cannot control much like the fact that it cannot control an Emergency Manager’s actions.

In addition, it would seem inequitable to require citizens to support appointed officials who replace their elected leaders.   By diverting local taxes from crucial priorities to pay for unelected officials’ legal fees representation and damages, this law places a burden on local taxpayers even as it removes their control of that burden.

Further, it would appear to frustrate several federal statutes designed to protect the civil and constitutional rights of our citizens.  And, it permits the State of Michigan to shift responsibility for its actions to localities by dipping into the local taxpayers’ pocketbooks, even in cases where those taxpayers are injured by an Emergency Manager’s conduct.

Fortunately, we understand that the Michigan Treasury Department, which approves Emergency Managers’ indemnification requests,  has stated that Michigan, not Flint, will pay for Mr. Earley’s legal fees related to the Congressional investigation.   It seems to us that in order to help protect citizens’ constitutional rights going forward, this exception to the law should, in fact, be the rule, namely, in all cases Michigan should be the primary indemnifier of Mr. Earley for all future legal claims against him, as well as for other Emergency Managers appointed by the State.

It is clear that the citizens of Flint—as well as the parents, teachers, and students of Detroit Public Schools—did not appoint Mr. Earley nor could they fire him or direct his conduct.  Accordingly, it would seem problematic if they are forced to pay for the cost of defending his actions, even when these citizens have been harmed by the Emergency Manager’s actions.

Thank you for your time and attention to this matter.

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