Detroit thread. Post Kwame, Monica, and $1 houses here.

[Savonarola]

But that would be stupid.

The pension fund was almost certainly stolen from (or at least criminally misused) by the trustees.  Plus the pension was never adequately funded in the first place.  Under those circumstances the pensioners would have been better off with a 401(k); (they may have been better off burying their retirement money in a jar out back.)

[Barrister]

But that would be stupid.

How so?  Detroit employees are going to get pennies on the dollar.  Once you get a 401k contribution, it's yours, no takes backs.  And there's no law of physics that says a defined benefit contribution has to be larger than a 401k contribution.

Guller: Your comment makes zero sense.  Zero Kelvin.  It's a black hole of sense.

Detroit city employees might take a hit, but it's extremely unlikely they'll receive 'pennies on the dollar'.

[Neil]

A 401k, while appearing to be worse, might actually be more stable.  After all, it's somewhat less likely that the whole US economy melts down than it is for the organization that employed you to be destroyed by mismanagement.  Neither is a sure deal, but what is these days?

[Savonarola]

Where's Charles Pugh? Kevyn Orr moves to halt his salary; lawyer accuses council president of misdeeds with teen


Detroit Emergency Manager Kevyn Orr's legal team is preparing an order to strip City Council President Charles Pugh of all his pay, benefits and responsibilities. Meanwhile, a Southfield attorney says he is preparing a lawsuit against the one-time broadcaster for alleged inappropriate activity involving a youth, including "disturbing" text messages.

Orr spokesman Bill Nowling said the order is being drafted because Pugh — whose whereabouts have been a mystery this week — missed a 5 p.m. deadline today to decide whether to resign or return to work.

Orr cannot remove Pugh from office under the state's emergency manager law. He can, however, set elected officials' compensation and duties.

"The deadline has passed. We are drawing up the order now," Nowling said in an interview at city hall shortly after 5 p.m. "I think he'd have to give a pretty compelling reason why Kevyn shouldn't sign the order."

Orr has signed several orders since becoming emergency manager, including one that kept Detroit council members at their current salaries at a time when emergency managers in other communities have slashed pay and benefits for council members. Pugh is paid $76,911 a year.

The normally not-shy councilman and former local news broadcaster has been largely out of sight for much of the last two weeks and has not responded to multiple requests from the Free Press and other media outlets for comment.

Pugh's disappearance from the public eye — which included the apparent removal of his public Facebook and Twitter social media accounts — came as the Detroit City Council today debated how to proceed with selecting members to replace those who've resigned. Councilman Kwame Kenyatta quit last week after a lengthy medical leave, and Council President Pro Tem Gary Brown announced his resignation this morning to take a $225,000-a-year position as a top restructuring aide to Orr.

The Detroit Public Schools confirmed that the mother of a recent high school graduate student at the Frederick Douglass Academy for Boys made a complaint against Pugh in early June, alleging the council president gave her son gifts of clothing, a cell phone and cash without her knowledge.

District spokesman Steve Wasko said Wednesday that the mother told school administrators that she did not want them to intervene.

"The parent approached the school's assistant principal with concerns regarding her son's mentor in early June," Wasko said, noting that no other accusations were made in her complaint. The mother told the administrator "she would prefer to handle the matter personally."

But attorney Ivan Land, who is representing the mother, said Wednesday that Pugh harassed the boy's mother after she confronted him, and, that the school failed to protect the boy, who is now 18, but was 17 at the time Pugh was mentoring him.

"We're alleging Mr. Pugh engaged in inappropriate behavior with our client," Land said at a news conference, charging that DPS, the academy and the city failed to protect the Detroit boy, who they would not name.

Wasko said the school sent a follow up e-mail to the mother earlier this week asking whether there were anything else administrators could do to resolve her concerns, but she did not respond.

Land and co-counsel Deano Ware, pressed for details, would not say what sorts of behaviors Pugh allegedly engaged in with the boy.

But Ware and Land held an inch-thick stack of photocopies of what they said were text messages and phone calls made by Pugh to the boy. They would not show the text messages in detail, but Ware said: "They're bad. They're disturbing."

Land said Pugh was allowed to take the teen out of school during school hours and gave him cash and gifts. Asked whether the relationship between the two ever became sexual, Land said: "I'm not at liberty to disclose that."

Land said he intends to file a civil suit against Pugh, the City of Detroit, the Detroit Public Schools and the academy. Land said a criminal complaint has not been filed. He said the mother was concerned that given Pugh's political position, the matter would not be properly investigated unless she first contacted a lawyer and made the case public.

Maria Miller, spokeswoman for Wayne County Prosecutor Kym Worthy, said the office had not been notified of the case as of late Wednesday.

Land said the boy's mother approached political consultant Skip Mongo after she brought the matter to the attention of administrators of the school, an all-boys academy located at the former Murray-Wright High School, Pugh's alma mater.

Given Pugh's disappearance from the public eye and the lack of detail about the nature of the relationship, questions continued to swirl Wednesday about Pugh, his whereabouts and his condition. City officials and close friends said they've heard little from him in recent days.

Pugh has missed two regular Tuesday meetings of the full City Council, which he chairs.

A close friend and supporter of Pugh said the council president denied anything untoward happened with the student. Rather, Pugh bought the boy clothes and a phone so that he would be able to get a job at a fast-food restaurant, said the friend, who worked closely with Pugh for several years and has spoken with him in recent days.

The friend also worked as a mentor at the academy with Pugh, who organized the mentorship program at the school.

The close friend, who asked not to be identified because he did not want to betray Pugh's confidence, said he never saw any inappropriate behavior between Pugh and the students and was taken aback by any suggestion the gifts were inappropriate.

The friend said Pugh acknowledged to him that he gave the boy and others gifts but said it was something he did for kids whose families were of limited means. Pugh, the friend said, told him that he gave the boy clothes because he didn't have outfits appropriate for a job he was seeking at a fast-food restaurant.

"It's what he did for these kids," the friend said. "A lot of parents would attest to that."

The friend acknowledged, however, that he and others had warned Pugh of the potential risk of giving gifts to students, telling him that some could question his motives.

Of Pugh's 2009 bid for public office after working at Detroit's WJBK-TV (Channel 2), the friend added: "I knew full well we would have to endure suspicion." Such allegations "put a cloud over the professional accomplishments over a lot of young people who worked through his office."

Officials at the Douglass Academy did not respond to phone messages and a visit to the school this afternoon. Several current students and parents of students would not comment publicly but said they were unaware of any allegations against Pugh. They said he has helped many students there get their lives on track.

Pugh's absence from work again Wednesday worried his colleagues. He did not show up at city hall, and city officials said they remained unsure of his whereabouts throughout the day.

Councilwoman Saunteel Jenkins said Wednesday she remains concerned about Pugh's well-being.

"I hope my colleague is OK," Jenkins said. "I hope that he's healthy and if he's not I hope he's doing what it takes for him to be healthy and whole again."

The upheaval over Pugh's absence only adds to the uncertainty over council's structure through the end of the year, when the four-year terms of all nine council members end.

The council's second-ranking member, Brown, announced his resignation Wednesday to take a job in the emergency manager's office. Former Councilman Kwame Kenyatta resigned last week. Kenyatta was dealing with medical issues and was unsatisfied with council's role under Orr.

Both the emergency manager and the remaining council members are exploring their options to maintain the council's day-to-day operations with fewer members. Although the council's power has been removed under Orr, the panel continues to publicly vet city contracts and discuss residents' issues, such as the recent controversy over piles of petroleum coke near the Detroit River.

On Tuesday, council debated a resolution to reduce the number of council subcommittees from five to three so that the remaining council members' workload is more evenly distributed. A vote on the resolution is expected by next week.

The council also discussed the process for appointing new council members to fill the vacancies left by Brown and Kenyatta. Separately, council is to vote Tuesday on which of the remaining members will replace Brown as the president pro tem, council's No. 2 position.

But Orr is considering forgoing the appointments of new members, even though the city charter directs council to make them. Orr can work around the city charter under the state's emergency manager law.

"We don't think we need to go through the process of appointing and interviewing people only to have them gone in a couple months," Nowling said.

Councilman Andre Spivey said Wednesday that he heard the news accounts about the gifts Pugh allegedly gave the teen-age boy.

"At this point, there are no laws that have been broken. My concern is for the protection and safety of the young man," Spivey said. "I know with my own children, if they receive something that I didn't give to them, I would want to know."

Spivey said he hopes Pugh is able to return to work. But council is prepared to move on.

"If he does leave, there are parameters in place to move forward so that leadership can be in place and there are no breaks in the day-to-day operations of the council."

Charles Pugh is a former local news anchor and the first openly gay city council member.  He became city council president by having the most votes, despite never holding public office before.  He usually comes down on the less crazy side of many the 5-4 votes; but only at the last minute and only after forcing long delays.

[DGuller]

Huh? Please invest our money in more diversified investments equals disband the union? They could have just put the pension fund into an S&P ETF you know. 

Can't buy off any of Kwame's cousins or former Supremes that way though.

I'm saying that 401k is not what you bargain for, it's at best a shit sandwich that you may be forced to eat.  Wholesale dependence on 401k for a pension scheme is a disaster of a policy, at least from the retirees' point of view.

[MadImmortalMan]

You're nuts. The 401k is maybe the best thing our government created in the 20th century. 

[CountDeMoney]

You're nuts. The 401k is maybe the best thing our government created in the 20th century. 

Fuck you.

[frunk]

'Father of 401k' disowns it

Argues that it has gotten too complex and difficult to understand from when it was first developed.

[CountDeMoney]

Instead of giving all to Wall Street, take it to Vegas.  It'll disappear quicker.

[Admiral Yi]

Seedy has constructed an indestructible position regarding the stock market.  If it goes down, it proves that investors are suckers.  If it goes up, it proves that the working man is getting shafted.

[garbon]

Seedy has constructed an indestructible position regarding the stock market.  If it goes down, it proves that investors are suckers.  If it goes up, it proves that the working man is getting shafted.

[CountDeMoney]

Seedy has constructed an indestructible position regarding the stock market.  If it goes down, it proves that investors are suckers.  If it goes up, it proves that the working man is getting shafted.

It's a game for the wealthy.  But I certainly hope the measly crumbs you've entrusted to the house are doing well.

[Admiral Yi]

It's a game for the wealthy.  But I certainly hope the measly crumbs you've entrusted to the house are doing well.

When a trade costs 7 bucks it's a hardly a game only for the wealthy.

[CountDeMoney]

When a trade costs 7 bucks it's a hardly a game only for the wealthy.

You want to play Day Trading Superstar, that's your business.  Simply scratch offs and daily Pick 3s for the smugly over-educated.

[Admiral Yi]

You want to play Day Trading Superstar, that's your business.  Simply scratch offs and daily Pick 3s for the smugly over-educated.

I don't.  That's Mimsy.