American Legislative Exchange Council (ALEC) Confidential Memo; “The Plan for Detroit II”

Confidential sources recently disclosed the following shocking document pertaining to the Detroit bankruptcy. It appears to be a memo from a representative of the American Legislative Exchange Council (ALEC), the corporate-funded one stop shop for repressive legislation created by Koch Industries and other equity investors in rightwing gangster enterprises. The memo to leading agents of corporate power in Michigan addresses US Bankruptcy Judge Steven Rhodes’ eligibility determination in the Detroit bankruptcy case on December 3, 2013.

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Here is the full text of the memo:

From: H. Barrett Strong, III
American Legislative Exchange Council (ALEC)

To: Michael McGee, Esq.
Miller Canfield Paddock and Stone

Jase Bolger
Speaker of the Michigan House of Representatives

Joseph Lehman
President of the Mackinac Center for Public Policy

Re: The Plan for Detroit II (CONFIDENTIAL)

Date: December 4, 2013

Little Brothers,

Lucrative wishes for many happy returns of The High Retail Season to you all. Reference is made to my previous memo dated October 1, 2012 (attached), on the eve of the last presidential election product rollout.

This follow-up communication relates to anticipated events throughout the coming year in Detroit under the management of Jones Day for the benefit of our interests as served by Michigan Governor Rick Snyder, “One Tough Nerd” who is totally dedicated to the proposition that We Always Win No Matter What and No Matter Who Gets Hurt.

As you know, yesterday’s eligibility finding by bankruptcy judge Steve Rhodes further paves the way for our continued profitable restructuring of Detroit’s assets and community in our pockets, I mean interests.

In no particular order other than ‘Whatever We Say Goes,’ this analysis of our prospects and opportunities for the speculative ‘restructuring’ of Michigan’s largest city follows from the bankruptcy court’s long-awaited, if anticlimactic and basically meaningless ruling:

1. Any concerns about finance, employment, welfare and democratic procedure in favor of the pathetic losers who live in Detroit are not our problem.1 As you know, what we are always concerned with is power. And in Detroit, as elsewhere within our expansive domains, this includes the power to define and structure reality itself, as well as the law. What else are we paying all these lawyers and flacks (cc’d below) for? As repeatedly stated by Detroit’s new Mayor, elevated with millions of our dollars via the ‘turnaround fund,’ “The first rule in any turnaround is face reality.” Before applying the ‘rules’ to the little people, we make the ‘reality.’ There is no alternative.

1 See, e.g., “Tens of thousands of people in our city face circumstances far below what might be considered normal. As the winter sets in, they will suffer hunger, homelessness, joblessness, illness without medical relief, and a total lack of support for themselves and their children.” Stop whining and get a life!


2. Now that Judge Rhodes has dutifully said what everyone always knew he would, and our media assets (copied below) are frantically bloviating about it, we are in a position to move forward at Detroit’s expense to take full advantage of our position and our power. We are deceiving ourselves and others when we pretend to have answers to the problems, which agitate Detroit’s people. Furthermore, we have about 46% of the world’s wealth but only 1% of its population. This disparity is particularly great as between ourselves and the African-American people of Detroit and other major cities in Michigan we placed under emergency management. In this situation, we cannot fail to be the object of envy and resentment.Our real task in the coming period is to devise a pattern of relationships, which will permit us to maintain this position of disparity without positive detriment to our interests. To do so we will have to dispense with all sentimentality and daydreaming; and our attention will have to be concentrated everywhere on our immediate political and economic objectives. We need not deceive ourselves that we can afford today the luxury of altruism and benefaction.

In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to Detroit. We should dispense with the aspiration to ‘be liked’ or to be regarded as the repository of a high-minded inter-racial altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague — and for Detroit — unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are hampered by idealistic slogans, the better.2

2 With no apologies whatsoever to the architect of US cold war foreign policy George Kennan (


3. The acceleration of Detroit’s third world-ization process will now commence in earnest. Emergency Manager Orr is meeting today with the team advising Jones Day regarding monetizing the water and sewerage department. Stripping Detroit of its retirement systems’ assets, real property, cultural institutions, tax income streams and opportunities for economic development and international trade will follow in rapid order and for the benefit of our interests. We’re paying consultants (copied below) over $60 million to make it happen.


4. In the not-too-distant future, you may be slightly annoyed by discussions of alleged ‘alternatives’ to our restructuring program; the ‘Demos report’ on Detroit’s bankruptcy;3 a ‘tale of two cities’ cheating neighborhoods for the sole benefit of white people downtown; the foreclosure crisis and predatory municipal interest rate ‘swaps;’ alternative, equitable, community-based economic development; alleged voting ‘rights;’ mafia capitalism; racial justice, regional suburban reconciliation and other quaintly trivial matters about loss of ‘local control’ over Detroiters’ sad, heartbreaking ‘community.’ We’re the debtor-in- possession now, and we’ll make our own reality.4 (as well as lots of money!)


4 “Corporate welfare for billionaires combined with brutal austerity for working people and the poor” Oh, please!


5. One word of caution: Under no circumstances (not even after several drinks with the Mayor-elect in the ‘Detroit Future City’ cabaret and bordello) should you ever acknowledge that any of this is a specific set of policy choices on behalf of rich Wall Street financial interests, that has absolutely nothing to do with ‘fixing’ Detroit or benefiting (poor, miserable) Detroiters. We have the ‘law’ behind us now – a carefully read, thoroughly paid for statement by a Judge who sees things our way. We’re the same power brokers who have been calling the shots for the last forty years of Detroit’s decline, and this bankruptcy is just another way we have of taking home all the goods. (As noted above) There is no alternative!


6. Rhodes is already squirming about having to approve the debtor-in-possession financing deal Jones Day negotiated for the benefit of Bank of America and UBS, at a trial scheduled for December 17. Good thing he’s so pliable under that smarmy ‘I feel your retirement pain’ surface.If the bankruptcy court approves: 1) The big British finance bank Barclays will loan Detroit $350 million; 2) Detroit will immediately pay the even bigger (Jones Day client) Bank of America and the other Wall Street ‘counterparties’ on interest rate ‘swaps’ $230-250 million; and 3) Barclays will then move to the head of the bankruptcy line, with a “senior secured superpriority Chapter 9 debtor financing” … “Quality of Life Note” (LOL! Don’t you just love that? “Quality of Life” in Detroit because Wall Street banks –get $250 mil and the whole city’s in hock! I love this job!) This is secured by a first-priority lien on every asset Detroit (i.e., Jones Day) sells that is worth more than $10 million. In other words, our power to take the Detroit Water & Sewerage Department, as well as anything else we can get our hands on. It is imperative that everybody keeps their traps shut, I mean ‘maintains alignment,’ until after we get this deal approved. Omerta.


This message is intended only for the use of the entities to which it is addressed. It may contain information that is privileged, confidential and exempt from disclosure under applicable law as confidential communications. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication or other use of a transmission received in error is strictly prohibited by some shit we will have Jones Day make up on the fly. Any resemblance to reality, democracy, justice, freedom or equality is purely coincidental.

Cc (corporate feeding chain order):

Jones Day Detroit Team (David Heiman, Corinne Ball, Bruce Bennett, Kevyn Orr, Heather Lennox, Jeffrey Ellman, Greg Shumaker, plus paralegals)

Miller Canfield Detroit Team
Pepper Hamilton Detroit Team

Other Detroit Contractors Team (Miller Buckfire, Conway MacKenzie, Ernst & Young, Milliman, Inc., Manhattan Institute, Plante Moran, Aon Hewitt, Kessler and Assocs., Christie’s Appraisals, Duffey Petrosky, Abernathy MacGregor Group, Stevenson Keppelman Associates, RR Donnelley, Turnaround Bendover & Coff)

Stephen Henderson, Nancy Kaffer, Detroit Free Press

Nolan Finley, Daniel Howes, Detroit News

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