Finance

Gov. Snyder on the Stand: Bankruptcy Was a 'Last Resort' for Detroit

October 29, 2013

Gov. Rick Snyder knew that he had the power to make Detroit’s bankruptcy filing contingent on protecting pensions — but he chose not to exercise it and impede efforts to fix the beleaguered city.

That’s one of the revelationsSnyder made in his historic appearance in federal court Monday as attorneys grilled him about why he authorized the bankruptcy filing, and whether he took any steps to make sure pensions would not be hurt.

The city was in crisis, Snyder said, and he did not want to get in the way of those working to solve it, nor did he think he was violating the Michigan Constitution.

Snyder’s testimony comes in the middle of a trial before U.S. Bankruptcy Judge Steven Rhodes on whether Detroit is eligible to file for bankruptcy. Criteria include insolvency and bargaining in good faith.

Snyder dodged many questions during his testimony Monday, either citing attorney-client privilege or saying he didn’t recall certain events. But he did not apologize for the state’s role in trying to address Detroit’s woes as quickly as possible. That included support for emergency manager Kevyn Orr’s proposals to creditors designed to spur negotiations and it included a range of contingencies, including filing for Chapter 9 bankruptcy protection.

“I describe it as the biggest issue in our country,” Snyder said, adding Detroit’s plight has been an issue for 60 years. “It could be viewed of national importance, but my concern is for Detroit and the people of the state.”

Snyder was subpoenaed by the UAW and took the witness stand Monday afternoon — a first for a sitting governor — and spent more than three hours defending his decision to authorize the largest municipal bankruptcy filing in U.S. history. He was questioned by lawyers representing the American Federation of State, County and Municipal Employees (AFSCME), the UAW and a number of retiree groups and others challenging the emergency manager law.

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