Michigan Bill Would Prevent Emergency Managers from Giving Work to Former Employers

A Michigan lawmaker is attempting to stop state-appointed emergency managers from being allowed to approve contracts with firms they’ve worked for, saying the move is in response to Detroit emergency manager Kevyn Orr pushing the city to contract with his former law firm as Detroit’s lead bankruptcy counsel.
October 1, 2013

A Michigan lawmaker is attempting to stop state-appointed emergency managers from being allowed to approve contracts with firms they’ve worked for, saying the move is in response to Detroit emergency manager Kevyn Orr pushing the city to contract with his former law firm as Detroit’s lead bankruptcy counsel.

State Rep. Doug Geiss, D-Taylor, said today that he introduced House Bill 4945, which would impose many of the ethics rules applied to state and local elected officials to emergency managers — who now run Detroit, its public school system and several other cities and school districts around the state.

“In the case of the autocratic position of emergency manager, there is no check and balance,” Geiss said. “The person can do whatever he or she wants to do without having anyone else say yea or nay.”

News of Geiss’ ethics bill for emergency managers came a day after the Free Press reported that contracts for restructuring consultants and bankruptcy lawyers have soared to more than $62 million. A total of 17 firms stand to make that much, although Detroit had paid out only $18.7 million on those contracts as of Sept. 23, the Free Press found.

Geiss’ bill also would prohibit companies where emergency managers were owners, partners, employees or significant investors from being hired to handle bankruptcy proceedings for the cities or school districts the EMs represent.

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