2013 until december 10, 2014, you served as emergency manager of detroit. Kevyn yes. Brian why did you take the job . Kevyn i have been asked that a lot of times. I was a restructuring professional. Detroit is 83 africanamerican, a city that had gone through several decades of decline. It was a city that needed restructuring. I initially was a little reluctant to take the job. I thought it would be difficult and i was comfortable in my corporate attorney life, my family and i. My managing partner steve and my wife said, look, this could be a call to action. It is important. It is outside your comfort zone, but we have people making the ultimate sacrifice on behalf of their country. This is temporary. And you will still be in an Airconditioned Office in the summer and heated in the winter. Sometimes you have to give back. After some reflection, it seemed like the right thing to do. Brian you are based in washington and a graduate of michigan law school. Do not have anything to do with why they ask you . Kevyn i think it did. I was an undergraduate at the law school at university of michigan. From 1976 to 1983, i lived in michigan. The 1980s were pretty good years. The class of 1982 was rick snyder. 1983 was me. , we all came up in that era. Having a connection to the city and understanding what it was in its heyday, as well as having participated in other cases, the chrysler case, perhaps made me seem like a more logical election than someone else. Wxyz tv in detroit covered you a lot. We are going back to one of the first times in march of 2013, to get a sense of what they were saying before he took the job. [video clip] a historic day, but not the sort of history a city its people want to make. Detroit has been declared in financial emergency. Millionicit of 100 coming up june 30. 15 billion in longterm debt. 1. 5 billion of that due in the next five years. Has taken the next step in getting the finances under control. Was in the room when he made the announcement. He joins me now. Orr, do weo kevyn know when his first day will be . They have to do all the paperwork. His start date is march 25. Brian what did you feel like at that point . Kevyn it is interesting. At that point, i had underestimated the amount of attention the case would get. I had participated in other highprofile matters in federal government. I was responsible for supervising the whitewater investigation. Three years earlier, we completed the chrysler case. Another significant matter. I had been involved in significant things. I thought this is another job with a little bit of attention early on. Appreciate they local scene. Kilpatrick, mayor was sentenced to 28 years. The city had gone through a long period of trauma about the state of affairs. The city did not look like an American City should. There was a long history of reviews. Governor rick snyder spent two years reviewing the status of detroit and pushing out reports, including 22 pages of finding of facts on march 2013. That was when i began to get an inkling of how significant this might have been and how the Due Diligence and Academic Work had played into the body politic as expressed by the press corps. I began to realize it might be more significant than i thought it would be. Brian what was the first thing you notice was really a mess when you got there . Kevyn the city was operating. Bing had restored a sense of confidence and asked workers to give back 10 , particularly Public Safety workers. We had 9000 active city workers with 6000 on the civil side. 4000 in Public Safety. 2700 as police, 1100 as firemen. s. As firefighters and emt two thirds of the budget is Public Safety. We met with the Public Safety unions for several reasons. Some of our initial metrics, 56 minutes response times for police, were down to 12. They were good metrics for any city, let alone detroit. Our initial view was, we have to focus on the basics. Lets get government running as it should, deal with Public Safety. Focus on delivery to citizens. The other stuff that had happened in the past, we were not going to spend time looking at that. My term was 18 months. The clock started ticking from day one. My team and i had to get focused and move quickly. Brian you left Jones Day Law Firm to do this. Kevyn resigned from the firm, totally separated from the firm, and worked exclusively as emergency manager for detroit. Brian your back to the firm now . Kevyn back to the firm now, yes. Brian here is a stumble august 2013. Wxyz. O [video clip] these are comments the emergency manager made that he may be regretting for the next year and a half he will be the emergency manager in detroit. Look at what he says about the wall street journal published this weekend. Detroit was dumb, lazy, happy and rich. He goes on to say that anyone with an eighth grade education can get 30 years of a good job and pension and healthcare, but you do not have to worry about what is going to come. That is a reference to detroit going through bankruptcy. Some 20,000 city workers facing cuts in their pension and health care. Brian why did you make those comments . Do you stand by them . Kevyn i do, but let me give you context. We were having an interview with the wall street journal. You were talking about the city in the 1920s and 1930s. We said, the city was rich and buying art. The city was dumb, lazy, happy and rich. Senator cory booker used those very phrases three times the week after that. Idea that anyone was ever going to make that connection to the contemporary city at that time. Dom, lazy, rich. We were not rich. Clearly, i was not talking about the city. Eighth grade education, that was a reference to both my grandmothers having an eighthgrade education. It did not dawn on me that had any connection to what we were doing at that time. But let me tell you, the city exploded, commentators, that is, for about a week and a half. Look,y, i went and said, you can scour my professional behavior and background for the next 30 years. Time,n the most heated you have never heard me use that kind of language about anyone, let alone a city i am obligated to represent and standby. I appreciate people have taken umbrage with it because they thought i was referring to the city at that time. That was not my intent, but i will apologize for it. I do not insult people and have never done that. Even people i have been in heated events with would not say that is my character. Work beyond the offguard comments. There is a difference between the wall street journal and working city, that kind of stuff. We need to move behind that. I had a little over a year at that time to get done with all this. I am happy to say that when i did that, cool heads prevailed. A lot of commentators said, we understand what he meant. Brian Rachel Maddow talked about the difficulty that happened in the state at the time of getting an emergency manager. Lets watch what she said. [video clip] voted to repeal the Emergency Management law. But the republican still held majority in legislature and passed a replacement bill to the one that just got repealed, but only in a way that could not be repealed the way the old law was. 13 weeks after that, republicans in michigan are going for it, going for the big one. Rick snyder announced he would use the takeover law that got repealed and reinstated, he would use the takeover law to overrule the Voting Rights of the population of the largest city in michigan. With the takeover, this will put roughly half the black population of michigan under direct control of governor rick snyder. If you are an africanamerican and live in michigan, the chances are one in two you will be allowed to vote for elected officials. Brian your reaction . Kevyn yes, the law was repealed. But it was public act 4. I came in under 72. Then 436 took effect. On the 28th, i think it was. That was a process under the michigan constitution entitled to be taken up. Elections have consequences. One of them is a joint legislature. They did what was constitutionally permissible. The second layer is there was a lot of chatter about Voting Rights, suspension of Voting Rights. It is not true. Elections, one for mike duggan, on a write in and Governor Snyder was reelected with more votes out of detroit in the first time around. Voting rights were preserved. Number three, if you had come to the city at that time and looked around, certainly, most reasonable people would have come away feeling a receivership, which is what i was, was an appropriate mechanism to address 60 years of neglect. There were homes with 20yearold trees growing through the roof. Some of the police cars did not have bumpers on them. Our ambulances. A meeting with an emt Union President in the fall of 2013. A woman had a seizure downstairs but there were no ambulances available. She had to stop and help with the seizure because they were being run into the ground. Any reasonable person would have , which hasivership been going on for a couple hundred years, this has been worthy. This is by far the largest ever bankruptcy . Kevyn a different order of magnitude. The start was 15 billion in debt. We discovered it was 18 billion in longterm debt. The ironic thing about this is, of the 10 billion secured, we agreed to pay the secured debt. But for the 8 billion that was unsecured, 5. 7 billion of that was Retiree Healthcare obligations, obligations to retirees where the city had not save a dime coming out of the General Fund Budget year after year. Budget untiltys 2023 would be dedicated to health care. 720 out of a billion Dollar General fund buzz it budget would be dealing with backwards facing opposition. The city would have to contract. 3. 5 billion was unfunded pension obligations. The certificates of participation, that was engineered in 2005, 2006, supposedly as a solution to underfunding. What it did was set the city back with almost 2 billion in debt. Was unsecured pension obligations. It was quite severe in terms of debt service. I remember doing the math. I came up with a figure. If you took all of the citys for anyonary income fourth of july celebration, city concerts, and dedicated it to pay off unsecured debt, it would be 60 years. You clearly could not do it. We recognized the sentiments expressed, that it was unfair. I received invective. One of the statements in court was that Governor Snyder was the plantation master and i was his uncle tom overseer. But we tried to work through it and focus on the problems at hand. Ver time, people saw the effort as an honest broker some of the noise started dying down. Young was the mayor of the city, first black mayor of detroit, for five terms. What impact did he have on the city . Kevyn there are studies. The free press did a study. Coleman young was a good mayor. He left the city in good financial condition. There was concern he had focused on building the city downtown, sometimes perceived at the expense of neighborhoods. But he came on board, took on Police Practices perceived to be oppressive. She took on a Fire Department which, for a long time, had a lack of diversity in hiring practices. Coleman young was a pretty good mayor. When you look back on it, these were some tumultuous times. Likewise, Dennis Archer was a good mayor. The irony is there left the city in fair condition. 2010 2010,ears particular 2006 to 2009 that the mischief started. The demographic trend lines of people leaving the city. 2000 and 2010. The city went from 1. 2 million to 800,000. Mischief ofe the mayor kilpatrick, that exacerbated it. As one city councilman told me, the white population began to leave with the busing crisis. The black population left in the millennium. Brian is it true that 40 of the street lines lights did not work . Kevyn that is true. March, first came in in we recognized that much of the work going on with the city, the detroit review commissions were supervised by the Governors Office and had already developed a wealth of knowledge about the status of the city. We pull back together in the june 14, 2013 proposal for creditors. Million in deferred pension payments at an 8 interest rate. 18 billion in debt. If you look at the document, it is a compendium of the ills affecting the city. We did that so people would get a true snapshot of what the city was like. No one has taken issue with what we said. Brian what is the difference between detroit being 18 billion in debt and the United States having a debt of 18 trillion . Kevyn you look at gdp over debt service. 16 trillion. That is not a bad thing. A lot of money, certainly in our lifetime. The gdp used to be in the singledigits. But is it manageable . Yes. Think of it this way. If detroit had taken 1. 5 billion in 2005, 2006, when the stock market went down 6700 and just invested in a Dow Jones Industrial index, the stock market is now trading three times what it was. They would not only have tripled their money, they could have paid attention in full. And gotten back to the practice of giving pensioners a 13th check at the end of the year. It could have fixed itself if there had been sober management going forward, just like any organization in the United States. If you have strong and focused leadership, you can resolve the problems. But it takes a lot of effort. Brian in september of 2013, we were talking about Coleman Young, here is Coleman Young the second talking about you. [video clip] in lansing got to be. They are licking their chops. They do not know who we are. They do not know what detroit is. They do not know detroit is home of rosa parks. Detroit is where Martin Luther king first gave his i have a dream speech. Detroit is the place where the first radio broadcast, the first road was built. We made a soundtrack for a generation with motown in the city. This is the city of detroit. Where the battle of the overpass to place. Where the five dollar work lace day took place. Right here in the city of detroit. After all that, you think we are going to be beat by some governor, by a man who thinks we have gotten lazy . The people of detroit are not dumb and lazy they are overworked and underpaid. Brian do you remember that . Kevyn i remember that. Brian what was he doing . What difference does it make the rosa parks was there, that Martin Luther king gave a speech . Kevyn everything he said was true. Moved to detroit after receiving death rets threats in the south. I honor and respect my forefathers, including my grandparents and my father, so i just want to be sure everyone understands i am aware of the trajectory of history. From 1640 when john punch was an indentured servant sentenced to life for running away, while two white men got an additional four terms. All three of them got 30 lashes, but he was sentenced to life in virginia. Understand the volubility of congressman young. And some of the emotions there would be a takeover. But i would like to think that after they have seen the result, the city is above projections. Anxiety that was expressed, the invective directed personally, perhaps it was not well taken. Brian how did a white man get elected mayor of detroit with an 82 black population . Kevyn people sat down. I know mayor doug and and his opponent. I went to law school with mayor doug and duggan. He got his papers in a day late. Moved to get him disqualified from the ballot and he was. The thought at that point was that he was not going to run. That would have meant his opponent would win. But during a write in campaign, some say some members of the opposition got a gentleman by ugan. Ame of mike do he had not been involved in but the cynical opinion was that they were not recognize the difference. But they did. They wrote in mike duggan, the white guy. And his opponents decided they would try to get him disqualified on ballot count. They sent it to the state. State did a recount and found out mike duggan had more votes in the original count. Midcity emocracy in the city and Voting Rights at a high level. The first white mayor in 35 years. This is a testament to the people of detroit. They put aside race and thought, who is the best guy with the best track record . Mike was ceo of detroit medical center. Who has the best record . We think it is that guy. That is who they voted for. Guest when was the election . Kevyn in the fall of 2014. Detroit event in not sure how old you were at the 1967 clarence talked about his involvement in this. Lets watch this. Fill in the blanks. [video clip] i remember vividly the 1967 riot, in part, began a few blocks from my house. My mother, father, and my sisters and i had been in canada. It started on a saturday night. We had spent all day in canada. People cross the bridge and go fishing. When we got back, there was a fullblown riot going on. I was probably 12 or so. Nobody was inside. At one point, my mother and sister and i, walked out to the main intersection. There were hundreds and hundreds of people. After being there for a while, a car drove up. Two white men got out and fired at the corner. Corner was hit. Probably about 20 people. Everyone was hit except for me. My mother and sister were shot. Brian 43 people killed, 400 injured. What impact did that have on the condition you found detroit in . Kevyn the issue of Racial Division some would say is pioneered in detroit. If you look at government policy. And the board of realtors, the concept of redlining, was pioneered in detroit. If a black person bought a house in a previously white neighborhood, there was a red line drawn around the neighborhood. The bank would no longer offer conforming loans for the community. There was a study that shows the greatest transfers of wealth from the federal government has been with home mortgages to disproportionately white homeowners. The american board of realtors, if you sold a home that represented a black buyer, this in theas chronicled origin of urban crisis, which goes into stark detail ab