Wednesday, June 05, 2013

Records: Snyder pledged to raise funds for Orr performance bonus


Lansing — Gov. Rick Snyder's administration initially pledged to raise private money to provide Washington, D.C., bankruptcy attorney Kevyn Orr with a "performance" bonus on top of his $275,000 annual salary to be Detroit's emergency manager, according to records disclosed Wednesday.

Emails obtained in a lawsuit related to the emergency manager appointment process indicate Snyder was ready to put Orr to work fixing the city's finances a month before his official appointment.

"Governor already asking me if you are ready to start yet," Snyder aide Rich Baird wrote in a Feb. 12 email to Orr. "Honestly … dog years!"

"Dog years" is Snyder's saying for the private-sector-style efficiency he's tried to inject into state government since taking office in January 2011.

Baird's email detailed an initial compensation package offered to Orr for an 18-month contract that included a $275,000 annual salary, security, a furnished apartment, commuting expenses for traveling back to his home in Maryland and the "intent to raise private funding for performance measures/outcomes bonus."

The bonus was not included in Orr's final contract, Snyder spokeswoman Sara Wurfel said.

Wurfel said the administration was courting Orr before a financial emergency was declared as a precaution.

"Everything was done on a contingency basis to be prepared just in case for any scenario," she said.

Orr made $700 an hour during Chrysler Group bankruptcy proceedings in 2009 and told The News in March that he was taking a significant pay cut to become emergency manager, but didn't disclose his annual compensation.

Records show Orr replied in a Feb. 12 email to Baird that he needed more time to "transition out" of his law firm, Jones Day, which landed a contract to provide restructuring legal services to the city before Orr was appointed emergency manager.

Baird, whose title is Snyder's "transformation manager," is not a state employee but works for the governor through his consulting firm, MI Partners LLC, which is paid a $100,000-a-year contract through Snyder's not-for-profit civic group, New Energy to Reinvent and Diversify, or NERD Fund.

Union activist Robert Davis released the records Wednesday following a court hearing related to his effort to get Orr's appointment voided.

Davis claims the Snyder administration violated the Open Meetings Act by offering Orr the job a month before a state panel hired him March 14 in a public meeting. The state's financial review team determined Detroit faces a financial emergency on Feb. 19 — one week before Orr and Baird's correspondence.

At a Wednesday morning hearing, Ingham County Circuit Court Judge William Collette said he wants state Treasurer Andy Dillon and other top state officials to sign sworn affidavits attesting they've turned over all documents in a lawsuit related to Orr's appointment.

Andrew Paterson, an attorney for Davis, said Wednesday the state has turned over just one email from Dillon, who played a key role in Orr's March appointment, yet he's separately obtained additional emails Dillon received through a subpoena of Baird's records.

Baird, who is a private contractor for Snyder and not a state employee, was recently deposed in the lawsuit and claimed an executive privilege for not releasing records related to 20 different individuals interviewed for the emergency manager job, Paterson said.

"He claimed executive privilege and refused to answer those questions on his deposition," Paterson said. "It's curious to me how somebody who's not a state employee can claim executive privilege, but so be it."

At a mid-day Wednesday news conference in his Lansing office, Snyder was asked under what authority Baird could invoke an executive privilege in the case.

"I'm not going to comment on ongoing legal proceedings," Snyder said. "With respect to hiring Kevyn Orr, we followed proper procedure, and he's doing a fine job."

Wurfel said late Wednesday the administration turned over 265 pages of Baird's emails but withheld records that named the other candidates for the emergency manager position to protect their identities.

At a Wednesday morning court hearing in Mason, Collette expressed frustration over the slow pace of the discovery process in Davis' lawsuit, which claims the Snyder administration violated the Open Meetings Act in appointing Orr to takeover City Hall.

"I want affidavits from the people involved," Collette told two assistant attorneys general representing Snyder and Dillon. "If in fact people are not turning over stuff and they file false affidavits, it's a very serious manner."

Affidavits are signed under the penalty of perjury.

Paterson said he's obtained eight pages of emails from Snyder aide Richard Baird through a subpoena that show Dillon was the recipient of other emails related to Orr's appointment. But those records were not turned over separately, said Paterson, who questioned whether the Snyder administration is concealing other records.

"Your honor, this is the first I've heard of this," Assistant Attorney General Michelle Brya told the judge.

The judge questioned how Dillon could have sent just one email to members of the Emergency Loan Board in the days and weeks leading up to the appointment.

"To anybody to expect that Mr. Dillon sent one email to one person on this issue doesn't seem realistic at all," Collette said.

The two sides were in Ingham County Court Wednesday morning for a show cause hearing Collette scheduled to determine whether Dillon, Orr and other state officials should be held in contempt over failure to produce records. Davis is suing Snyder, Orr, Dillon and members of the Emergency Loan Board, a three-member panel consisting of gubernatorial appointees who actually hired Orr.

Collette instructed the Attorney General's Office and Paterson to compare lists of which emails Davis has received in the case and appear back in his court at a later date. He also suggested Dillon and other state officials involved should review their records to make sure they haven't withheld something subject to disclosure under the Freedom of Information Act.

Brya also asserted emails Snyder sent or received are not subject to disclosure because the governor is exempt from provisions of FOIA.

Collette suggested he may have to take the case to trial, where Snyder could be subpoenaed to testify.

"It's been apparent for whatever reason it appears things are not being done here," Collette said. "At some point, Ms. Brya, people need to have the facts here."

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