Forensic Audit – Now!

Rhodes Image 1aRetired U.S. Bankruptcy Judge Steven W. Rhodes, now the Detroit Public Schools’ ‘Transition Manager’, just let another financial whopper out of the bag. Detroit Public Schools received about $30 million in U.S. Department of Education reimbursements for the pensions of grant-funded employees, but failed to forward those federal funds to the Michigan Public School Employees Retirement System. So DPS owes MPSERS $ 30 million dollars, give or take. They are ‘negotiating’.

DPS officials knew of this funds misappropriation in December 2015. Judge Rhodes knew “in March 2016”. Before or after the Michigan Legislature got suckered into passing HB 5296 and HB 5385, the DPS emergency bailout and purported financial review commission?  HB 5296, the $ 48.7 million emergency DPS bailout, cleared the Michigan House on 17 March and the Michigan Senate on 24 March. Governor Snyder signed it as Public Act 54 on 12 April.

Did anyone in Lansing know that 60% of the PA 54 DPS bailout was headed straight to the MPSERS?

If so, why did they not share this little detail with the rest of the Legislature and the public prior to the passage of HB 5296?

Nick KhouriJudge Rhodes did finally officially share this tidbit with Michigan Treasurer Nick Khouri in his 45 day report on 14 April, two days after the $ 48.7 million bailout was secured. But, as we have learned from the Flint water emails, everyone in Michigan government is gaming communications to defy FOIA. So it is more likely than not that this detail was common knowledge at exalted levels in the Snyder Administration well before HB 5296 became PA 54 of 2016.

Screwed Image 1It was only you, the voter, who was kept out of the information loop. Your only function in the Michigan political system is to shell out the money demanded by the gods of Lansing, both Democrats and Republicans.  HB 5296 passed 104 to 5 in the House.

This subterfuge has become a common story in Lansing. Proposal 2015-01 was the most egregious example, but the Detroit Plan of Adjustment – another fine deceit authorized by Judge Rhodes – is another. Then you have the Flint water fiasco which is a veritable Lansing ‘Liars Club’ still performing for your entertainment.

We told you that DPS should have been subjected to a comprehensive forensic audit before more taxpayer money is poured down that rathole, but no one in Lansing noticed. They failed to notice because spending taxes is far more fun than actually competently managing government.

DPS’s problems go far beyond 12 thieving principals. The whole organization is staffed by bunglers whose level of incompetence will vex the HB 5385 (now PA 53 of 2016) financial review commission. No single emergency – or transition – manager can bring such large, institutionally corrupt organizations under control.  DPS really needs to be wrung out through a genuine bankruptcy, and not a Judge Rhodes supervised sham bankruptcy.

Returning the current incarnation of DPS to local control can only be described as retrograde motion. Want to see even bigger deficits?

A serious, comprehensive forensic audit of DPS is long overdue.  Before they get any more Michigan government bailout money.

You Betcha! (13)Nuh Uh.(0)

  7 comments for “Forensic Audit – Now!

  1. Sue Schwartz
    April 26, 2016 at 7:32 am

    10x25--I knew it, I knew it I knew it! So, lets recap--they're trying to prosecute Gamrat/Courser for perjury--three guys thus far are charged with violating the public trust in Flint--now an ex-federal judge, who I might add no longer has judicial immunity--lied, stole, fib, robbed, withheld facts--so the dumbed down legislature would give more $$$, while all along the feds gave them money which they've no doubt kept in a banking account gaining interest for over a year--and this information has been around and not one Lansing Jerk asked for a forensic audit before giving them more money?????? And in the whole state only Wayne Schmidt and the Gov are under recall efforts? What's wrong with this "selfie" other than the above being a run-on sentence?

    You Betcha! (6)Nuh Uh.(0)
  2. KG One
    April 26, 2016 at 10:57 am

    Well, what else are they going to use for an argument (albeit, on the sly)?

    I remember that was the excuse given to me by my state rep as to why their caucus (not from constituent feedback, mind you), voted for the Detroit bailout (aka "Grand Bargain").

    Words to the effect of "I was very concerned about the retirees", was the pat response I got point blank when I asked exactly what Macomb County Taxpayers had done to precipitate Detroit's bankruptcy and why we should be rewarding gross incompetence.

    Nothing was ever mentioned as to what Macomb County had ever done.

    OABTW, bailing out DPS retirees isn't the only thing that government is doing behind everyone's back.

    In a few months, Tri-County voters will be asked to give their approval on a millage for the RTA.

    I picked up this interesting bit regarding a similar situation dealing with SMART and just how well they balance their own books (remember: the RTA is supposed to be this umbrella that SMART and D-DOT will fall under prior to us experiencing mass transit utopia):

    "Then there was the concern about whether SMART is so smart when it comes to managing finances.

    “I did some looking, and they have about $229 million in pension and retiree health care liabilities,” McClure said to the Eagle following the meeting. “I do wonder, if we were locked in, would we be responsible for that?”

    If anyone believes that the RTA millage will go strictly towards improving mass transit here in Southeast Michigan, then I have some prime Florida real estate that you will be very interested in purchasing as well!

    You Betcha! (5)Nuh Uh.(0)
  3. Corinthian Scales
    April 26, 2016 at 11:18 am

    DPS really needs to be wrung out through a genuine bankruptcy, [Full stop]

    Like the one for GM and Chrysler?

    Keep dreaming...

    You Betcha! (3)Nuh Uh.(0)
  4. JD
    April 29, 2016 at 9:26 am

    Keep in mind that the (cough) "conservative"/tea party/grassroots movement lived/(ultimately) DIED due to bankrupt pensions/non-existant social security funds NEVER being 'allowed' in to even ONE of their fiscal debates nationwide. Those who indeed lobbied for this extremely simple math years ago or even so much as brought up these realities to the (mostly) gray-haired 'patriots' spurring these movements were immediately and NECESSARILY shouted down at every single turn. History will record this and everybody knows it.
    It's pretty hard to (cough) 'angrily' rail against pension bailouts or 'reform' of any type when your entire 'conservative' movement is centered around giving up absolutely nothing so that your grandchildren can pick up the tab in your stead.

    Forensic audit indeed.
    Let's start with "we're broke.."
    ..and end with:
    "..so this is YOUR share of not only being an integral part of it (due to your falsely inspired activism/apathy)...but for attempting to IGNORE same for just as long as possible while claiming "..because this is all about my grandchildren!..".

    How about one more VIP (only) 'conservative' rally before this upcoming election...just for old time's sake?

    You Betcha! (0)Nuh Uh.(0)

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