The $18 billion bankruptcy drama unfolding in Detroit is playing havoc with Motor City Democrats and may produce the first white mayor in nearly 40 years.
It’s an unusual twist in a majority-black city that has been defined by its racial politics, from the suburban white flight that hallowed out Detroit neighborhoods to the 1967 race riots that left 43 dead.
First, Kevyn Orr, a prominent black lawyer from Washington, D.C., was handpicked by GOP Michigan Gov. Rick Snyder this spring to take charge of the dysfunctional city, foreshadowing the all but inevitable bankruptcy proceedings that began last month.
Orr’s appointment instantly rendered powerless Mayor Dave Bing, a former NBA star and businessman, and the city council. The beleaguered Bing subsequently announced he would retire at the end of the year after only one term.
Then last week, Mike Duggan, a white former Wayne County prosecutor and CEO of the Detroit Medical Center, stunned political experts by finishing first in a crowded mayoral primary contest to succeed Bing.
Remarkably, he won by mounting a write-in campaign after the courts struck his name from the ballot over a residency issue. More than 80 percent of Detroit is African-American, so the race had already appeared to be something of a Hail Mary.
RELATED: DETROIT'S 60-YEAR DECLINE INTO BANKRUPTCY HELL
Duggan initially decided to drop out of the race after losing the court case, but was persuaded by supporters to wage a write-in campaign that attracted strong support from the business community. He captured 46 percent of the vote in a light turnout, carried in part by a public backlash over the ballot ruling.
MR. FIX-IT
“The big issue in everybody’s mind was, Detroit is in terrible trouble financially, is there anybody who can help us in this situation?” said Bill Ballenger, editor of Inside Michigan Politics, who has closely tracked the campaign. “Duggan’s candidacy from the very beginning was premised on the idea that he’s a Mister Fix-It, that he’s a turn-around guy. That he makes things happen.”
Wayne County Sheriff Benny Napoleon, an old-school black politician who was heavily favored to win the primary, came in second with only 30 percent of the vote. Duggan and Napoleon will square off in the November general election that will pit pro-business forces backing Duggan against labor groups including the AFL-CIO and United Auto Workers that are behind Napoleon.
Duggan likely holds the cash advantage. He raised nearly $1.2 million in campaign contributions during the primary, compared to $600,000 for Napoleon, according to the Detroit Free Press. With other money pouring in from political action groups, Duggan and his supporters outspent Napoleon 4 to 1 on advertising through mail, radio and TV.
If Duggan hangs on to win the general election, he will be thefirst white mayor of Detroit since the administration of Roman Gribbs between 1970 and 1974. Gribbs was succeeded by Coleman Young, the first in a series of five black mayors.
Duggan quickly emerged from a pack of 16 mayoral candidates as arguably the only candidate with the government and financial experience to eventually lead the city in a post-bankruptcy era.
Supporters noted that Wayne County had suffered through 17 consecutive years of budget deficits before Duggan took over as Deputy County Executive in 1987. Under his leadership, they say, he turned around Wayne County and secured fifteen years of balanced budgets.
Then as chief executive officer of Detroit Medical Center, Duggan helped to transform a failing urban hospital system. He stopped further layoffs and revived the finances of the network—which was purchased by Vanguard Health Systems of Nashville in December 2010.
RELATED: Detroit Bankruptcy is Big Red Flag for Other Cities
In an interview with Crain’s Detroit Business, Duggan explained why he was interested in the job of mayor: "I looked at who the alternatives were, and that it looks like the city is one step away from bankruptcy, and what they need is someone who does financial turnarounds. I don't see anyone else on the horizon who does financial turnarounds, and I thought maybe I could do something to improve quality of life in the city."
By contrast, Napoleon has had a spotty record as a financial steward during his career as Detroit’s police chief and then sheriff of surrounding Wayne County, according to Ballenger.
Napoleon – reflecting the views of his labor supporters – has been highly critical of the emergency financial manager who many fear will shred the city’s pension programs and city workforce in order to cope with Detroit’s massive unfunded debt.
Napoleon contends that Orr was illegally appointed as emergency manager. "My pitch to him is, 'You're here to straighten out the finances. You have no municipal government experience,'" Napoleon told the Associated Press recently. “The emergency manager puts the budget together. The mayor should be able to set the priorities."
For his part, Duggan doesn't expect a bankruptcy to turn Detroit back over to the mayor and council anytime soon. "My preference would be for the governor to dissolve the emergency manager and let the mayor represent the city in bankruptcy court," he told the AP. "I'll try to convince the emergency manager to adopt my version and, if not, convince the bankruptcy judge to adopt it."
One big question hanging over the campaign is why anybody in his right mind would want the job of mayor, now that it has been largely made irrelevant by appointment of Orr. Apart from a title and a $158,000 a year salary, there would be little for a new mayor to do until after a lengthy bankruptcy proceeding plays out.
Orr filed for Chapter 9 bankruptcy protection for the city on July 18 and declared that Detroit was insolvent and unable to pay off debt that his restructuring team warns could reach $20 billion. He has stopped paying on $2.5 billion in bonds and instead is using those funds to help struggling and underfunded city services. He also asked city creditors and Detroit's two pension funds to accept pennies on the dollar.
What’s more, Orr has fired or reassigned a handful of senior officials and department heads. Just last week he removed the director of the Public Lighting Department, after complaining that as many as half of the city’s 88,000 streetlights were not working.
“[Orr] can do whatever he wants as long as he’s there,” Ballenger said. “Once he leaves, yes, I think Duggan gives the impression without being specific that he would be extremely tough and that he would make all sorts of nasty, ugly decisions that the people who don’t want either the manager or a tough mayor to make.”
