When Detroit, the world's traditional auto capital, files for bankruptcy

Detroit's bankruptcy, the largest municipal bankruptcy filing in the US followed a declaration of financial emergency in March 2013. New York Times call Detroit as 'home to 700,000 people, as well as to tens of thousands of abandoned buildings, vacant lots and unlit streets'

Detroit city, better known as the world's traditional automotive centre, has become the largest city ever in the US to move for bankruptcy, with a liability running into $18 billion.


Detroit, which at one time had a population of about two million, has now reduced to just 70,000. However, the city's debt and unfunded liabilities has grown to over $18 billion. Detroit does not have the revenues to meet those obligations and provide an adequate level of services to its people, who pay the highest taxes per capita in Michigan.


In a video message posted on a website, Michigan Governor Rick Snyder said, “Today I authorised Detroit’s emergency manager to seek federal bankruptcy protection for the City of Detroit. This is a difficult, painful step, and it is one I would not be authorising if I felt any other viable option remained”. 


In 2010, the city had a population of 713,777, more than a 60% drop down from a peak population of over 1.8 million at the 1950 census, indicating a serious and long-running decline of Detroit's economic strength.


“The fiscal realities confronting Detroit have been ignored for too long. I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future,” the Governor said.


The decision allowed Detroit Emergency Manager Kevyn Orr to make a filing under Chapter 9 of the Federal Bankruptcy Law.


Chapter 9 protects financially distressed municipalities from creditors while their debts are resolved under the direction of a bankruptcy judge.


The ongoing decline has left its mark on the city, most notably in severe urban decay and thousands of empty homes, apartment buildings, and commercial buildings around the city.


More than half of the owners of Detroit's 305,000 properties failed to pay their 2011 tax bills, exacerbating the city's financial crisis.


The resulting elevated unemployment was compounded by white flight and middle-class flight to the suburbs (and in some cases to other states), and the city was left with a reduced tax base, depressed property values, abandoned buildings, abandoned neighbourhoods, high crime rates, and a pronounced demographic imbalance.


The state governor declared a financial emergency in March 2013, appointing an emergency manager.


“Bankruptcy is the only feasible option to fix the city’s finances and do what is right for the 700,000 people of Detroit,” Snyder said.


A White House spokeswoman said, “the US President and members of the President’s senior team continue to closely monitor the situation in Detroit.”


Justice Sathasivam sworn in as Chief Justice of India

Justice Sathasivam's major judgements include the Mumbai blasts case and that of Pakistani scientist Mohammed Khalil Chisti

Justice P Sathasivam was on Friday sworn in as the 40th Chief Justice of India (CJI) by President Pranab Mukherjee. He took over the post from Justice Altamas Kabir, who served as the CJI for over nine months.


Justice Sathasivam was elevated to the Supreme Court in August, 2007 and would demit office on 26 April 2014.


Justice Sathasivam said he would work towards reducing the backlog of cases by “fixing time limit for arguments, submitting written notes”.


Some major judgements by Justice Sathasivam include the Mumbai blasts case and that of Pakistani scientist Mohammed Khalil Chisti.


A bench of Justice Sathasivam and Justice B S Chauhan had upheld the conviction of actor Sanjay Dutt and several others in the Mumbai blasts case.


Justice Sathasivam, 64, took oath in the name of God in a brief ceremony at Darbar Hall of Rashtrapati Bhavan.


Prime Minister Manmohan Singh, Vice-President Hamid Ansari, UPA Chairperson Sonia Gandhi, Leader of the Opposition in Lok Sabha Sushma Swaraj, her Rajya Sabha counterpart Arun Jaitley, NDA Working Chairperson Lal Krishna Advani, CPI leader D Raja, several union ministers were present at the ceremony.


Are activists barking at the wrong tree on political parties being under RTI?

While some activists have started filing complaints before the CIC about political parties flouting its directions, few other activists feel that the Commission's jurisdiction over a 'complaint' is discretionary but its 'appellate jurisdiction' is statutory. Therefore, activists should first file an RTI and then complaint to the CIC

With the political parties defying the Central Information Commission (CIC)’s orders to appoint Public Information Officers (PIOs), Appellate Authorities (AAs) and implement voluntary disclosure of information under Section 4 of the RTI Act, by 15th July, several activists are lodging complaints before the Commission. However, contrary to this view, some RTI activists believe that since the CIC has exhausted its powers under sub-section 19(8)(ii) of the RTI Act, it would be better if activists first file an RTI and after not receiving information from political parties should file appeal before the Commission.


RTI activist Sarbajit Roy, who is also national convenor of India Against Corruption said, "...whereas the CIC's 'complaint jurisdiction' is discretionary in its application, its 'appellate jurisdiction' is statutory and compulsory in its application as upheld by the Supreme Court and various High Courts."


On 3 June 2013, a three-member bench of CIC in two complaints under the RTI directed as:


92 ... "The order of the Single Bench of this Commission in Complaint No. CIC/MISC/2009/0001 and CIC/MISC/2009/0002 is hereby set aside and it is held that All India Congress Committee (AICC)/Indian National Congress (INC), Bharatiya Janata Party (BJP), Communist Party of India (Marxist)-CPI(M), Communist Party of India (CPI), Nationalist Congress Party (NCP) and Bahujan Samaj Party (BSP) are public authorities under section 2(h) of the RTI Act.


93. The Presidents, General/Secretaries of these Political Parties are hereby directed to designate CPIOs and the Appellate Authorities at their headquarters in 6 weeks’ time. The CPIOs so appointed will respond to the RTI applications extracted in this order in 04 weeks’ time. Besides, the Presidents/General Secretaries of the above mentioned Political Parties are also directed to comply with the provisions of section 4(1) (b) of the RTI Act by way of making voluntary disclosures on the subjects mentioned in the said clause."


The time of six weeks given in this order elapsed on 16 July 2013, from the dare these six political parties were expected to comply with the directions (of CIC) to appoint their CPIOs to receive and deal with RTI requests from the citizens.


Upon the date of 16 July 2013 having come and gone without the parties having designated their CPIOs, a section of RTI activists have gone about submitting complaints to the CIC that the parties have flouted the CIC's directions.


According to some RTI activists, such general complaints, without actual RTI applications being submitted, are not maintainable under the provisions of the RTI Act for the following reason…


A) The CIC has already declared the parties to be "public authority" and directed them to designate their CPIOs and Appellate Authorities within a specific time. The CIC has therefore exhausted its powers under sub-section 19(8)(ii) of the RTI Act. There is nothing further the CIC can do in its complaint jurisdiction, if a political party refuses to comply with its directions to appoint a CPIO.


Therefore, Roy said, the optimum strategy for RTI activists now would be to proceed as though the political parties have complied with the CIC's directions and start lodging / sending their RTI requests to the Headquarters of the concerned political parties addressed to the "Central Public Information Officer / RTI Act". The same should be done immediately, as it is very likely that some party will obtain a stay order soon against the CIC's directions, or perhaps the RTI Act itself will be amended temporarily through the ordinance route.


The persons who have lodged their RTIs prior to the stay / ordinance are liable to treated as a separate class and will have liberty to approach CIC for relief / information despite a subsequent stay order.


According to Roy, the CIC's decision is poorly drafted and is unlikely to stand up to judicial scrutiny in the long run. "In particular, the CIC has not dealt with the contentions urged by the NCP and CPI, to the effect that political parties are bodies of private persons statutorily reporting to the Election Commission, and that all their information which is available to the Election Commission under any law can be accessed by citizens from the Election Commission or other state authorities under section 2(f) of the RTI Act. Any other interpretation would create an absurd situation whereby citizens can get information under RTI from public authorities beyond what is available to supervisory Constitutional authorities or even Parliament under statutes. That it is such poor quality decisions emanating from the CIC which caused the Supreme Court last year to impugn the Information Commissioners for their lack of judicial mind," he said.


Roy said on 17 July 2013, he sent an RTI request to the Congress Party (accessible here : ) asking for the following information related to the Party's Vice President Rahul Gandhi's widely reported statement of 14 April 2012 "I am a Brahmin...and General Secretary in the Congress Party".


(i) If it is true that Shri Rahul Gandhi was General Secretary of the party on 14 April 2012.


ii) If it is true that Shri Rahul Gandhi was a Brahmin on 14 April 2012.


iii) Provide me copies of all the supporting documents on basis of which these claims / statements were made by Shri Rahul Gandhi. In the alternative, the rejoinder, if any, to the newspapers concerned about their reportage and its veracity.


iv) Provide me the extract(s) from audited Account Books of INC party to show that Shri Rahul Gandhi (senior office bearer of INC Party) has been timely in depositing 1% of his annual income as required under the published Rules/Regulations of the Indian National Congress Party.


Roy said when the Congress Party evades replying to him, he intends to move to  the CIC under its Appellate jurisdiction to get penalties levied for 'repeated and wilful refusals to accept and deal with RTI requests' if the said information is not supplied.




4 years ago

To selectively borrow from a message printed on the bills of a Mumbai eatery that fell victim to recent Youth Congress and police vindictiveness in Mumbai: ‘As per UPA Govt, eating money (2G, Coal, CWG Scam), collecting donations from the public for dubious ‘relief’ funds, putting the interests of ‘top businessmen’ and foreign investors before the people of India, having the latter’s every thought, word and action policed by agencies that have repeatedly been used by the Congress to perpetrate atrocities against innocent citizens (e.g. States of Emergency, ’84 Pogrom etc) for which the guilty have repeatedly got away…All those are considered necessities. But, public scrutiny of UPA party-funding, now THAT is an outrage!
Any political party that refuses to allow public scrutiny of its funding should be barred, by Election Commission of India, from contesting elections.


4 years ago

One way or the other citizens of this country need to take on the political parties for refusing to heed the CIC's order of 3rd June 2013. How can be these parties frame laws in Parliament when they themselves are breaking the law . It is typical of the political class to arrogate themselves to above the law . However what is encouraging some of the regional parties are seeing the light of the day . ADR in it's latest press release has stated some of the regional parties have responded to it's RTI applications .

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)