A bad deal crafted by emergency manager Kevyn Orr and his multi-million dollar tax-paid consultants rewarded Bank of America and UBS, two financial institutions which have been implicated in the sub-prime mortgage debacle that devastated Detroit, over $200 million to terminate interest rate swaps that the banks have used to swindle cities across the U.S. On December 24, the corporate media attempted to sell the public on a revised form of this same deal saying that it will save the city tens of millions of dollars. In fact, the revised deal still pays the banks $165 million to terminate these swaps that already netted these banks $250 million in profit from 2008-2012.
We must not believe these stories. These swap deals signed in 2005 and renewed in 2009, are the worst possible financial arrangements imaginable with questions still looming in regard to their legality.
Barclays Bank, another questionable firm connected with the LIBOR interest-rate rigging scandals, would pay off Bank of America and UBS through a loan to the city which nets the bank at least $4.4 million in fees.
When Judge Rhodes adjourned the trial examining the swap deals and Barclays loan on December 18, it was with the suggestion to Orr, Snyder, Jones Day and the corporate interests they work for, to come back with a better deal. But the arrangement they have arrived is still horrendous for the residents of Detroit. It means the City’s residents will pledge 20% of their income tax dollars for the next 5 years to pay off the banks, rather than improve services in the city.
We in the Moratorium NOW! Coalition feel that justice can only be served by the cancellation of the purported debt to Bank of America and UBS and that any funds they have collected be turned over to the people of the Detroit in an attempt to begin to repair the damage they have done to the city.
We have opposed the imposition of austerity, emergency management and forced bankruptcy over the recent period. Our organization will continue to demand that all pensions, salaries, jobs, city services and assets, including the DIA and the DWSD, remain under the ownership and control of the people of this city who have paid for them through decades of labor and taxes.
The objective of the banks including Barclays, Bank of America and UBS is to rob the city and state of Michigan even further through the imposition of usurious interests rates, the slashing of salaries and pensions and the complete disregard and disenfranchisement of the people of the city and the state.
Please join us in front of the Federal Courthouse downtown when the trial on the swaps resume on Friday morning January 3. We will gather at 8:30 a.m. for a mass demonstration demanding that the illegal bank debt be canceled and the democratic rights of the people of Detroit be immediately restored.
We are also encouraging people to pack the courtroom of Judge Rhodes at 9:00 a.m. in order to witness the operations of the banks and their agents in federal bankruptcy court. Only the workers, retirees and community residents of Detroit can reverse the current crisis.
In addition, we are requesting that people around the United States and the world hold demonstrations in solidarity with the working people of Detroit on January 2 and 3 at the offices of Bank of America, UBS, Merrill Lynch and Barclays. The outcome of the struggle to save pensions, jobs, public assets and the right to vote in Detroit will set a precedent for people throughout the country.
- Demonstrate Outside Federal Court
- Friday, January 3, 8:30 a.m.
- 231 W. Lafayette in Downtown Detroit
- Contact: 313-671-3715 or 313-680-5508