It Ought To Be a Crime

Yesterday, four more public officials associated with the lead-tainted drinking water crisis in Flint, Michigan, were charged with serious crimes that could put them in prison for up to twenty years. Two of the new defendants are former emergency financial managers for the City of Flint, Darnell Earley and Gerald Ambrose.

Under Michigan’s emergency manager law (Local Government Fiscal Responsibility Act, Act 72 of 1990), an emergency financial manager can be appointed by the governor if the governor determines that a financial emergency exists in a local government or certain school districts, and that the current local managers are unable to solve the problem on their own. Technically, the governor appoints a local emergency financial assistance loan board and they appoint the emergency financial manager, but it’s essentially the same thing. The governor appoints people to take over the financial management of a local government entity or school board if he or she determines that a financial emergency exists.

And that’s what happened in Flint. But the law contains a provision protecting the emergency managers from liability.

“Sec. 23. The state, the members of the local emergency financial assistance loan board, and the emergency financial manager are not liable for any obligation of or claim against a local government resulting from actions taken in accordance with the terms of this article.”

If the emergency managers are protected from liability, why are two of them now charged with felonies? Simple, the law explicitly protects them from lawsuits, but does not contain a provision protecting them criminal prosecution, but that’s where this case gets tricky.

Mr. Earley and Mr. Ambrose were charged with false pretenses and conspiracy to commit false pretenses, along with other misconduct. The charges allege that they used a false story to secure funding (bonds) in order to participate in a regional water pipeline plan, a non-emergency project forbidden under the emergency manager law’s provisions. They falsely claimed that the funds were needed for an emergency cleanup of a retention pond.

The cases against Mr. Earley and Mr. Ambrose will be very difficult for the state to win, and any victory will almost certainly be appealed.

Most of us like to see government officials who commit crimes face justice. This is especially true when they have stolen public monies or harmed those they should have been protecting. While there is no doubt people were harmed in the Flint water crisis – many children were unnecessarily exposed to the neurotoxin lead during important brain development periods, and twelve people died from Legionnaires Disease – the defendants will likely be able to create reasonable doubt in a jury.

Mr. Earley and Mr. Ambrose did not enrich themselves with their actions – they did not steal public funds. Instead they made decisions which seem to have been based on long-term financial criteria, rather than on short-term difficulty in the community. Yes, their decisions led to serious consequences for many residents of Flint, but I believe the Act itself gives them cover. While it does not specifically exempt them from prosecution, the reason for the law clearly states,

“Sec. 2. The legislature hereby determines that the public health and welfare of the citizens of this state would be adversely affected by the insolvency of units of local government, including certain school districts, and that the survival of units of local government is vitally necessary to the interests of the people of this state to provide necessary governmental services.”

So the law specifically states that a financial crisis is a threat to the public health and welfare of its citizens. The former emergency financial managers were therefore facing two threats to public health and welfare – one if they acted as they did, and one if they did not. It appears that they chose the long-term financial benefit option that came from switching the city’s water source from the City of Detroit to the Flint River. Even their false story about the retention pond cleanup to get funds for that transition can be seen as action taken for the long-term health of the community.

There is, however, another crime here, although not one for which anyone can be charged. It is the idea that people with less money count less than those with more money.

Flint was a manufacturing powerhouse until about thirty years ago, and the economic transition has been hard for the city. In 2014, 34% of Flint’s children lived in poverty, and median household income was 22.4% below that of the nation. When a community looses major employers, the people with means can move, but those without means stay behind because they have few, if any options elsewhere. The population has dropped to half of its peak of nearly 197,000 in 1960, but the infrastructure of a shrinking city costs more than the leftover residents can support.

Michigan’s emergency manager law essentially punishes those who stay. The managers break contracts, reduce healthcare and pension benefits for retirees, cut public services, and perhaps raise taxes or public utility fees for the residents. They may leave the city better able to meet its financial obligations with projected income, but in the process, they may make it more difficult for the city to recover. Thriving cities are the ones that offer businesses and Millennials public services and venues for entertainment and community events that make living there worthwhile. A post-emergency manager city can be a sad place, and risk-adverse businesses are wary of moving there because it may be difficult to retain good employees.

According to the World Happiness Report 2016, the happiest people in the world live in Denmark (the U.S. was number 13). Denmark’s citizens have a lot going for them. The minimum wage is about $20/hour, there is a lot of social support, gross domestic product per capita is high, they believe government officials are not corrupt, there is a high degree of freedom to make choices, life expectancy is long, and the Danes tend not to judge people for their idiosyncrasies. They also have the world’s second highest rate of taxation, which helps support those social programs.

So in the U.S., a community which faces trouble is often punished and left a shell of its former self. Our “Business First” philosophy means that workers have limited rights, and that is especially true for low skilled workers. “Business First” is a trickle-down philosophy which contends that low skilled workers have it better when millionaires and billionaires thrive. There is plenty of data which show that the effect is temporary, and wealth inequality is a long-term negative for low and middle-class Americans. Keep in mind that social safety net programs are often cut to provide tax breaks to the wealthy in the hopes they will create or expand companies which hire primarily low wage workers.

I am afraid that the next four to eight years under a Trump administration, especially under the guidance of the millionaires and billionaires in his cabinet, will enshrine policies that will hasten wealth inequality and set up the poor and middle-class for a devastating blow during the next recession. I admit that I may be wrong. President-elect Trump has certainly accomplished many things that I did not believe possible, and that trend may continue. But his cabinet picks suggest to me that people without money count less than those with money.

And that ought to be a crime. In fact, we now have a test case to see if it is. Mr. Earley and Mr. Ambrose will fight the charges against them, and while I think they have a strong case for acquittal, you never know with a jury and the court system.

About tonyj126

I'm a 50+ married man who always seems to have a large backlog of work to do, but also a lot of flexibility in my schedule. Much of the work I do is volunteer or taking care of extended family members. I suffer from, as my priest calls it, "the sin of self-sufficiency," which means I can figure out how to do most things myself, and consequently, reduce the need for community to solve problems. As a logical extention (at least to me), I find myself called to comtemplate the country's and the world's woes and offer my observations. I hope someone out there will find them useful.
This entry was posted in Economics, Make America Great Series, U.S. Politics, Uncategorized. Bookmark the permalink.

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