Daniel Howes dissects rare testimony from a sitting governor in a court hearing as he analyzes Gov. Rick Snyder's appearance on the witness stand Monday during the Detroit bankruptcy trial in federal court.
Repeatedly, the governor replied “I do not recall” in answer to questions probing specific decisions along the path to his decision to approve Orr’s request to file Chapter 9 bankruptcy. A graduate of the University of Michigan Law School, he repeatedly invoked attorney-client privilege to avoid answering questions essentially seeking to establish what he knew and when he knew it.
Howes zeroes in on one of the most controversial aspects of the bankruptcy filing -- the risk to the pensions of retired city of Detroit cops, firefighters and other retirees.
Howes writes:
In a July 12 e-mail, the governor’s counsel, Mike Gadola, suggested to Snyder’s key advisers that he consider placing conditions on a Chapter 9 bankruptcy petition for anything that could impact pension benefits, general obligation debt and the sale of certain assets over a pre-determined value.
“I favor this approach ... primarily because I think we should exercise the governor’s ability under P.A. 436 to place conditions upon his authorization for a bankruptcy filing,” Gadola wrote six days before the city filed for bankruptcy. He suggested Snyder ask Orr to pursue “a more deliberative approach” to a process that rocketed to bankruptcy the next week.
The governor rejected attaching conditions to the filing. He testified that he concluded the bankruptcy, the largest of its kind in American history, would be further complicated and slowed by conditions likely to hinder efforts to get a so-called “Plan of Adjustment” confirmed in bankruptcy court.
