Retired 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?
Judge 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.
It 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.