EDITORIAL: We hired an EM, not his ex-employer

**MSUguy** · April-17-13, 03:17 PM

Detroit's top attorney told the City Council last week that there is no conflict of interest in giving what is surely a multimillion-dollar contract to the Jones Day law firm.

We beg to disagree.

Until last month, Detroit's new emergency manager, Kevyn Orr, was a Jones Day partner. Yes, technically, he resigned and surrendered his partnership to take the Detroit job.

But awarding the contract will absolutely reinforce a pervasive suspicion in Detroit that rules exist for "other people" -- not the well-intentioned power brokers trying to put Detroit back together. This is not the message you want to send as the city emerges from the taint of fraud and insider deals during the era of Kwame Kilpatrick Inc.

Orr, state Treasurer Andy Dillon, Gov. Rick Snyder and the city's state-appointed financial review team, as well as elected officials, should avoid any whiff of conflict. That includes no-bid and sole-source contracts. Even before the Jones Day issue arose, some consultants were grousing to learn that other firms had been hired to do work on city restructuring without a bidding process.
http://www.crainsdetroit.com/article...is-ex-employer

Even Crain's knows this is a conflict of interest.

**Detroitnerd** · April-17-13, 03:31 PM

Good editorial. I am appalled that neither daily has the ability to do the kind of critical thinking they can at Crain's.

**TexasT** · April-17-13, 03:31 PM

I get that.

On the other hand, Jones Day is one of the best restructuring firms [[which is why Chrysler used them) and Orr is one of the most talented within that field. Should the City just ignore the most qualified candidates for the sake of appearances?

When I hear "conflict," I think inability to do the job correctly. I don't see a conflict here [[now the Merrill Lynch issue perhaps, yes).

**brizee** · April-17-13, 03:45 PM

Originally Posted by Detroitnerd

Good editorial. I am appalled that neither daily has the ability to do the kind of critical thinking they can at Crain's.

It's getting to the point I don't even want to even give them clicks.

Straight garbage.

Who didn't see this coming? Anyone?

And I'm sure this won't be a problem many. There is nothing honorable about defending the indefensible, even when it's your "side".

**Wesley Mouch** · April-17-13, 03:46 PM

Originally Posted by TexasT

I get that.

On the other hand, Jones Day is one of the best restructuring firms [[which is why Chrysler used them) and Orr is one of the most talented within that field. Should the City just ignore the most qualified candidates for the sake of appearances?

When I hear "conflict," I think inability to do the job correctly. I don't see a conflict here [[now the Merrill Lynch issue perhaps, yes).

The Crain's editorial cites "reinforce[[ment of) a pervasive suspicion in Detroit that rules exist for "other people" -- not the well-intentioned power brokers trying to put Detroit back together."

The State has done a good job of attentive to public perceptions -- while taking action some of their Detroit citizens criticize. But I agree that the State needs to do everything it can to make sure that this looks and is legitimate.

**TexasT** · April-17-13, 03:52 PM

Originally Posted by Wesley Mouch

The Crain's editorial cites "reinforce[[ment of) a pervasive suspicion in Detroit that rules exist for "other people" -- not the well-intentioned power brokers trying to put Detroit back together."

The State has done a good job of attentive to public perceptions -- while taking action some of their Detroit citizens criticize. But I agree that the State needs to do everything it can to make sure that this looks and is legitimate.

Agreed...but not turn down the best option they have. I'd rather it look bad and get done right than it look squeaky clean and hire a firm that doesn't have the size, facilities, and expertise to handle a job as big as this in as few months as JD is handling it.

**mwilbert** · April-17-13, 03:56 PM

Originally Posted by TexasT

I get that.

On the other hand, Jones Day is one of the best restructuring firms [[which is why Chrysler used them) and Orr is one of the most talented within that field. Should the City just ignore the most qualified candidates for the sake of appearances?

When I hear "conflict," I think inability to do the job correctly. I don't see a conflict here [[now the Merrill Lynch issue perhaps, yes).

First, a conflict of interest doesn't mean you can't do the job properly; it means that there is reason for an outside observer to think you might not act solely in the interests of the party who you are supposed to be representing.

I'm not sure if this is exactly a conflict of interest, and I assume it isn't a violation of Michigan's ethics rules, but if Orr had any role in the selection it is inappropriate. You can't have people giving contracts to their friends and former colleagues--there is no way you can convince people that you have made the selection purely on the merits.

If, on the other hand, they had already been picked, or were picked without Mr. Orr's participation, that should be OK. But he should not have been part of the process.

**mwilbert** · April-17-13, 04:00 PM

Originally Posted by TexasT

Agreed...but not turn down the best option they have. I'd rather it look bad and get done right than it look squeaky clean and hire a firm that doesn't have the size, facilities, and expertise to handle a job as big as this in as few months as JD is handling it.

This strikes me as a straw man. There is no reason to think JD is the only firm with the relevant expertise. If they really were the only firm with the capability, then picking them wouldn't really be a choice [[since there is no choice) and then Orr would in some sense not be influencing it. I do not believe that is the case.

**Wesley Mouch** · April-17-13, 05:56 PM

Originally Posted by mwilbert

This strikes me as a straw man. There is no reason to think JD is the only firm with the relevant expertise. If they really were the only firm with the capability, then picking them wouldn't really be a choice [[since there is no choice) and then Orr would in some sense not be influencing it. I do not believe that is the case.

They may not be the only firm, but working with your former firm has advantages. It certainly could have disadvantages -- such as fraud. But the obvious advantage is that Orr knows this crew and can hit the ground running. It may cost less to use a firm he knows, rather than start fresh with someone else.

**downtownguy** · April-17-13, 07:46 PM

Originally Posted by Wesley Mouch

But the obvious advantage is that Orr knows this crew and can hit the ground running.

I think that's what Kilpatrick said about Bobby Ferguson.

**TexasT** · April-17-13, 09:34 PM

Originally Posted by mwilbert

First, a conflict of interest doesn't mean you can't do the job properly; it means that there is reason for an outside observer to think you might not act solely in the interests of the party who you are supposed to be representing.

I'm not sure if this is exactly a conflict of interest, and I assume it isn't a violation of Michigan's ethics rules, but if Orr had any role in the selection it is inappropriate. You can't have people giving contracts to their friends and former colleagues--there is no way you can convince people that you have made the selection purely on the merits.

If, on the other hand, they had already been picked, or were picked without Mr. Orr's participation, that should be OK. But he should not have been part of the process.

I thought Jones Day was picked before Orr was named. That is the assumption I am working under. I am pretty sure they were. So if that's the case, no I dont believe they should be disqualfied for appearance's sake.

EDIT: Yep Bing brought JD on before Orr was appointed. From 3/11:

In a prepared statement on the subject provided by Warfield, Mayor Dave Bing said that the "experience of the Jones Day law firm will be a valuable asset as we proceed with our plan for restructuring the City of Detroit."The Detroit City Council, which has not always gone along with Bing's plans, must still approve Jones Day's hiring.

http://www.americanlawyer.com/PubArt...20130317224129

**TexasT** · April-17-13, 09:46 PM

Originally Posted by mwilbert

This strikes me as a straw man. There is no reason to think JD is the only firm with the relevant expertise. If they really were the only firm with the capability, then picking them wouldn't really be a choice [[since there is no choice) and then Orr would in some sense not be influencing it. I do not believe that is the case.

Only firm, no. One of the top restructuring firms, absolutely. I'm not sure how Orr influenced it when he came on after Bing picked JD.

**mwilbert** · April-17-13, 10:22 PM

Originally Posted by TexasT

Only firm, no. One of the top restructuring firms, absolutely. I'm not sure how Orr influenced it when he came on after Bing picked JD.

Whether it is problematic certainly depends on whether Orr had any input into the process. If not, I don't think there is an issue. If he did, the process is tainted, as is he. Given the timeline, I'm perfectly willing to believe he didn't influence the selection.

Unfortunately, because the EM doesn't have the normal checks on his power that a regular city official would have, it is more difficult for him to avoid questionable situations which is one reason it was a very good idea to appoint someone without a lot of interests in the city. The Jones Day thing kind of messes that up. Even if this contract is completely OK, what about possible follow-up work? Does anyone have any say about that other than the EM? Is it even possible for him to delegate that? To whom?

**Gannon** · April-18-13, 06:59 AM

Originally Posted by TexasT

I thought Jones Day was picked before Orr was named. That is the assumption I am working under. I am pretty sure they were. So if that's the case, no I dont believe they should be disqualfied for appearance's sake.

EDIT: Yep Bing brought JD on before Orr was appointed. From 3/11:

In a prepared statement on the subject provided by Warfield, Mayor Dave Bing said that the "experience of the Jones Day law firm will be a valuable asset as we proceed with our plan for restructuring the City of Detroit."The Detroit City Council, which has not always gone along with Bing's plans, must still approve Jones Day's hiring.

www.americanlawyer.com/PubArticleALD.jsp?id=1202591774929&The_Bankruptcy_ Files_Ailing_Detroit_Hires_Jones_Day&slreturn=2013 0317224129

Nah, that only proves collusion between Snydley and Bong before anything was announced publicly. Do you remember when some were wondering why the empty-shell of a mayor laid down and didn't contest 'the inevitable'?! I am guessing they worked out some sort of deal ahead of time. Snydely works that way, he's a businessman.

**Honky Tonk** · April-18-13, 08:03 AM

Good article, except WE didn't "hire" anyone. An EFM was appointed by the State, due to the incommpetence and mismanagement of the City government.

**Eber Brock Ward** · April-18-13, 08:15 AM

Can we be frank in this thread?

If so, you have to start with the premise/reality that any non-black EM would be a non-starter, politically at least, and for other reasons as well. You also have to understand that for the EM to be effective, they cannot be from Detroit or Michigan, which is one of the top breeding grounds for qualified black candidates by virtue of a strong black political base.

Operating under those premises, that the EM needs to be a black male or female and not from the area, I think it's worth noting that there are probably only a dozen or so truly top-flight candidates out there. After Anthony Williams and a few others turned the job down, there probably wasn't much left that was a home run choice beside Orr.

Now with respect to Jones Day, they are probably the cheapest firm out there that has the resources and capability to handle how bad things are here, and it's important to note, the firm can't be local, either, just like the EM. From the Snews a week ago: "The rates, Tate noted, range from $425 an hour to $1,050, for top attorneys at the firm [[http://www.detroitnews.com/article/2...#ixzz2QouRy1Ik)" That's not cheap, but it's below median for a biglaw firm with the capability to do this sort of work, depending on how the team is staffed.

So while the Orr/Jones Day situation may not be ideal, it's a marriage of a dearth of qualified candidates -- which is the case with Orr's generation, but hopefully won't be the case in a decade or two, as the effects of affirmative action are felt as a new generation of leaders comes up -- and there being only a handful of firms that can handle the work, with Jones Day among the cheapest.

**compn** · April-18-13, 10:57 AM

kevin orr just lost all credibility. more of the same cronyism plaguing detroit.
i feel ashamed that i thought an outsider would be any different.
i still dont want mike duggan or anyone related to kwame/wayne county politicos.

to say bing picked the firm is still not kosher. months before the EFM was announced, bing was trying his hardest to be the EFM. i have a hunch that some of this was planned in advance , and that bings support before the EFM was to ensure that he still gets paid during the EFM's reign.

"hired"? what a farce. people who say we "hired" orr because michigan voted snyder into office, and snyder appointed him, are anti-american. supporting appointments also means supporting nepotism and cronyism. i was willing to overlook the anti-democratic appointment of orr because i thought bing and kwame [[and city council) werent able to balance the books. but i'm not willing to support that anymore.

three strikes for kevin:
1. not elected nor 'hired'
2. kept city council/mayor to do nothing
3. hires previous law firm.

**Wheels** · April-18-13, 01:02 PM

Originally Posted by Eber Brock Ward

Can we be frank in this thread?

You also have to understand that for the EM to be effective, they cannot be from Detroit or Michigan, which is one of the top breeding grounds for qualified black candidates by virtue of a strong black political base.

Is this a joke?

**Eber Brock Ward** · April-18-13, 01:37 PM

Originally Posted by Wheels

Is this a joke?

No. Atlanta, DC, Detroit, Chicago, etc.

**Wesley Mouch** · April-18-13, 02:04 PM

Originally Posted by compn

..."hired"? what a farce. people who say we "hired" orr because michigan voted snyder into office, and snyder appointed him, are anti-american. supporting appointments also means supporting nepotism and cronyism. i was willing to overlook the anti-democratic appointment of orr because i thought bing and kwame [[and city council) werent able to balance the books. but i'm not willing to support that anymore.

three strikes for kevin:
1. not elected nor 'hired'
2. kept city council/mayor to do nothing
3. hires previous law firm.

Wow. How picky you are. Things aren't just perfect, and you toss things out?

We didn't vote on the head of Detroit's Buildings Department. Does that mean its anti-democratic? No. Its absurd to ask that an EFM be 'elected'.

**mwilbert** · April-18-13, 04:36 PM

Originally Posted by Gannon

Nah, that only proves collusion between Snydley and Bong before anything was announced publicly. Do you remember when some were wondering why the empty-shell of a mayor laid down and didn't contest 'the inevitable'?! I am guessing they worked out some sort of deal ahead of time. Snydely works that way, he's a businessman.

But that would be OK. Orr wouldn't have made the choice. If Snyder/Bing somehow made an agreement on a package deal ahead of time, that isn't on Orr, and I know of no reason to think Bing or Snyder is conflicted with respect to JD.

The problem comes in when Orr is in a position to influence the selection of his own firm, but if it was made before he was appointed, he wasn't required to represent the city at that time. When he was still working for JD it was fine for him to represent JD.

**compn** · April-22-13, 10:22 PM

i want accountability and transparency from people who are running the city/state/country.

what do you want?
a bidding process where companies bid on projects and the city picks the lowest or most feasible plan.
or
a no-bid contract that goes to the city's friends/relatives/employers.

this development also cements the theory that kevin orr was going to follow snyders' orders.

basically snyder is running detroit now. a republican now controls detroit 100%.

**313WX** · April-23-13, 08:04 AM

Originally Posted by TexasT

I thought Jones Day was picked before Orr was named. That is the assumption I am working under. I am pretty sure they were. So if that's the case, no I dont believe they should be disqualfied for appearance's sake.

EDIT: Yep Bing brought JD on before Orr was appointed. From 3/11:

In a prepared statement on the subject provided by Warfield, Mayor Dave Bing said that the "experience of the Jones Day law firm will be a valuable asset as we proceed with our plan for restructuring the City of Detroit."The Detroit City Council, which has not always gone along with Bing's plans, must still approve Jones Day's hiring.

http://www.americanlawyer.com/PubArt...20130317224129

All of that is true, but what's also true is that Bing and Snyder had already secretly met with and selected Kevyn Orr upwards of a month before the official announcement to appoint him as EM was made.

**TexasT** · April-23-13, 09:54 AM

Originally Posted by 313WX

All of that is true, but what's also true is that Bing and Snyder had already secretly met with and selected Kevyn Orr upwards of a month before the official announcement to appoint him as EM was made.

After several others turned them down...

**Wesley Mouch** · April-23-13, 11:09 AM

Originally Posted by 313WX

All of that is true, but what's also true is that Bing and Snyder had already secretly met with and selected Kevyn Orr upwards of a month before the official announcement to appoint him as EM was made.

Your statement confuses me. Do you think Bing and Snyder should not meet and interview potential candidates for a position that everyone on this board knew was going to be filled? Its only natural and sensible to meet with potential candidates in advance.

Your 'secretly' is my 'discretely'. He was still a partner at Day Jones after all.

Everything here seems reasonable. We don't want 'Republican' control, so Snyder gives Detroit's Mayor some respect and includes him in discussions with leading candidates for a most discussed and controversial appointment. I guess when you're used to Detroit's corrupt politics, real leadership and collaboration look like a conspiracy.