If you don’t believe that water is the “new oil,” just ask Flint, Michigan

This is a cautionary tale for not only those in Michigan, but also for all Americans, and many citizens of countries around the world. We are running out of fresh, drinkable water. This may, or may not, be news to the general “prison population” (which is most of us). Your government and the corporations that control your government were aware of this many years ago. It’s high time for the rest of us to catch up, or else we will, quite soon, also be held hostage to those who control the Earth’s water supply.

Flint, Michigan’s toxic water situation is an unintended consequence of the silent movement around the world to control who controls our water supply. And make no mistake about it…the only thing “unintended” was that Flint’s plight became a media frenzy. Those who are in charge of the decision making and control of our water are only pissed off that they got put under the media spotlight; however, the vast majority of the current investigations, Freedom of Information Act requests, and subpoenas aren’t looking in the right places. Subpoenas for information and past communications from Governor Rick Snyder’s office which only date back to 2011 are far too narrow and won’t cut it. They may be getting (slightly) “warm,” but they’re not even close to being “hot.”

By choosing to rob his state of Michigan blind (until he yanks on the Golden Parachute which awaits his impending downfall), Governor Rick Snyder simply falls into lock step with the Koch brothers (who are his benefactors) and multinational corporations who actively seek to embed themselves within the fabric of public works projects that most of us take for granted. And we’re all in their crosshairs. Snyder’s brutish and methodical break up of long-standing public systems in Michigan was done fairly quickly, however, in his case, there were such horrific consequences that alarm bells have been rung. Even if you’ve never been to Michigan (I have not, personally), you should be very, very concerned because chances are that the key players in this “game” of gutting and privatizing public works and snatching up key resources is happening under your nose as I write this.

Rick Snyder cemented his control over democratic processes in several Michigan cities through legislation which super imposed emergency managers where and when he saw fit. Writer Connor Coyne, who is also a Flint resident says it best in Vox:

“The stage was set on March 16, 2011, when Michigan Gov. Rick Snyder signed Public Act 4. This measure broadened an earlier law that provided an “emergency financial manager” for financially distressed cities and school districts. Under the new law, “emergency financial managers” became “emergency managers” with the power to cancel or renegotiate city contracts, liquidate assets, suspend local government, unilaterally draft policy, and even disincorporate. (It is worth noting that Michigan emergency managers have done all of these things except disincorporate, which was entertained by a manager in the city of Pontiac.)

The need for an emergency manager was determined by a series of highly subjective criteria. Almost every city that got one was a poor, African-American-majority city devastated by a shrinking industrial sector: Flint, Pontiac, Detroit, Highland Park, Benton Harbor, and so on.

Flint was one of the first cities to be assigned an emergency manager in 2011, and over the course of four years had four such managers. One of the first manager’s first acts was to suspend local government, and this remained essentially in force until the departure of the last emergency manager in 2015.”

The imposition, and then, when repealed by referendum, re-imposition of emergency managers by the Snyder administration, who reported only to the Governor, are also squarely to blame for the lead poisoned water in Flint; however, there are two seemingly disparate pieces to this puzzle that need to be factored in to truly understand what’s going on. The first one involves systemic assaults on the very structure of Michigan’s public utilities.

The Karegnondi Water Authority (or KWA) water pipeline project was the trigger for the Flint water crisis, and is absolutely not in the best interest of the public. It’s a blatant fleecing of the County of Genesee and, particularly, the City of Flint.
After years of attempts to launch an alternative to Detroit’s water system, in fall of 2010 (just weeks before Rick Snyder began his tenure as Governor), the Karegnondi Water Authority (or KWA) was formally created. The native Huron-Petun people referred to Lake Huron (which is where the water already did, and eventually will, come from) as Karegnondi, which means “big lake.” But don’t let that nod to the natives lull you into feeling good about the KWA. You should think of it as something that Satan would hatch and nurture like a litter of bastard, rabid, mutant dogs ready to control the huddled masses trapped within the fiery Gates of Hell. Okay. Maybe that’s a little verbose, but you get my point.

According to KWA’s 2010 Articles of Incorporation, this municipal corporation was established to build a new pipeline and water treatment facility from Lake Huron to serve customers in the City of Flint, the City of Lapeer, the County of Genesee, the County of Lapeer, and the County of Sanilac. These future (and hopeful) customers are referred to as Constituent Municipalities. Keep in mind that the City of Flint is within Genesee County and the City of Lapeer is within Lapeer County, so we start out with a few onion layers of stupid right from the start.

The big surprise, for me at least, was that this Water Authority and pipeline project, which led to Flint having to temporarily switch its water sourcing to the Flint River, was NEVER, ever about cost cutting, despite what was being said at the time. And conflicts of interest are scattered like fairy dust throughout this mess. In the end, before Flint was forced to sever its ties to the Detroit Water and Sewerage System (DWSD) which it had used since 1966, DWSD offered the City of Flint savings on future water purchases which would have amounted to $800 million dollars over the long term, and which was at least 20% less than their cost to build the KWA pipeline from Lake Huron. Of course, it should go without saying that if Snyder and his emergency managers (who are now busy destroying the Detroit public school system) had made the obvious and correct choice, Flint would never have had their water poisoned in the first place and the whole issue would be moot.

In examining KWA’s Articles of Incorporation (which read like a megalomaniac’s wet dream), it’s easy to see how this wasn’t going to end well for Flint. You can be read the Article of Incorporation below. If the image is too small, just click on it to enlarge. I’ve highlighted some salient parts.

Notice the language used to describe what KWA’s “scope” includes, which is about as wide and all-encompassing as the Grand Canyon. This was my first clue that there was something rotten in Denmark.

The current flurry of subpoenas and requests for further information directed at the  Governor Snyder’s office (which have been prompted by the situation in Flint) must focus further back in time to at least 2006, and should close in on the people and organizations involved in this KWA deal, particularly on the Genesee County Drain Commissioner, Jeffrey Wright, who also served as KWA’s first CEO.

Jeffrey Wright is one shady character.
In 2005, Jeffrey Wright, who is as corrupt and as corruptible as they come, came under an FBI investigation for money laundering and corruption related to one of his campaigns to be the Genesee County Drain Commissioner. The allegations and subsequent investigation remain clouded in secrecy, with convictions of Wright’s associates and Wright himself being “flipped” by the FBI and serving as a Confidential Informant against one of his associates in an FBI bribery and corruption case against Detroit political consultant Sam Riddle. When speculation arose about why Wright would choose to be a CI, former Genesee County prosecutor, Arthur Busch said, “I’m sure of one thing. Jeff Wright didn’t do it out of civic duty.”

Very early on in the process, the KWA project is courting other suitors to buy its water.
KWA went through several early structural changes (via Resolutions, Agreements, and Amendments) laying the groundwork to alter its basic intent (which was initially “supposed” to be about selling water to Michigan communities) to, ultimately, being able to sell water to anyone it chooses, not just to constituents or municipalities. The legal jargon in one of the KWA’s earliest Agreements, which I have included in the iFrame below, is odd. It implicitly defines these outside water Buyers (they capitalize the word Buyer) as more than just components or customers of the whole project (which is what they should be). Instead, the Buyers are more like partners, or “drivers,” of the entire project, even pegged to pay for the up front environmental studies, permits, consultants…everything.

To be sorting out other water Buyers who KWA wants to sell water to (and in insanely huge amounts which are sometimes not going to be counted in total water sold), and who they are planning to charge for the early paperwork, studies, and permitting is very odd. Remember that at the time this outside Buyer Agreement was drafted (February 2011), there weren’t even any actual cities or counties attached to the project, and yet, hundreds of millions of both dollars and gallons of water are being decided upon already.

Exhibit E at the very end of this potential Agreement is of particular interest:

Again, look at the dates and timing here. KWA was incorporated on October 26, 2010 with no actual municipalities committed to using it yet. Meanwhile, across the state, Snyder was actively breaking up public utilities projects. The water company that HAD supplied water to Flint and many other cities and towns, which was the Detroit Water and Sewerage Department, was being split apart with an eye to privatization. The formation of the KWA, which ended up severing Flint and Genesee County from DWSD, and which at least initially claimed the support of other cities and counties, dealt the final blow to DWSD, making way for its demise and probable privatization.

Moreover, in reading through KWA’s outside Buyer Agreement, I can’t tell if the Buyer (or Buyers) are perhaps the French company Veolia Water, which is the world’s largest private water company, or if they’re also referring to the fossil fuel industry (possibly for fracking by companies like DTE Energy). I suspect they’re making accommodations for both, but only time will tell. The KWA documents outline both the bottling of Lake Huron’s water for resale, and an enormous amount of “exempted” water usage for other industrial purposes, like fracking or power plant cooling. I would like to tie in another impending issue which makes corporate control over water and other natural resources extremely timely. If the Trans Pacific Partnership is approved here in the US, multinational corporations such as Veolia (who have used trade agreements to sue other countries before) will not only control our precious natural resources, but they will sue us and they will win if we try to change the agreement or if we limit, in any way, their profitability. That’s how the Investor State Tribunals “work,” as in work for the corporations, and not for the people.

It’s really strange that the outside Buyer (or Buyers) of Lake Huron’s water are seemingly slated to pay for all the environmental studies, designs, permits, etc. for the pipeline project. All of it. Like it was being done for them. Right from the start.

Jeffrey Wright takes his show on the road, desperately trying to sell the KWA pipeline’s water, using the same Snyder/emergency manager tactics of attacking dissenters.
Jeffrey Wright ends up spending the next few years after KWA is incorporated in 2010 trying to sell KWA’s pipeline project to cities and municipalities. It’s almost as if his life depends on it, which it might. Despite the fact that the KWA project is not in the best interest of Flint or the County of Genesee (where Wright also serves as its Drain Commissioner), emergency managers and Snyder cronies end up being the only ones signed up to be a part of this thing and purchase the pipeline’s water. Hundreds of millions of dollars in bonds are issued, leaving Flint, with its dwindling population of largely poor citizens, responsible for an insane portion of the eventual price tag. This is, by the way, well before the decision was made to temporarily switch to the Flint River for water until the KWA pipeline is complete. By now we all know how THAT bad decision turned out.

The City of Flint and the County of Genesee have little control over the KWA project.
The City of Flint, with its population of only around 99,000 people, then became responsible for 34% of the entire KWA pipeline project, which will end up costing roughly $450-500 million dollars.  While many people are now blaming Flint’s City Council (who voted in favor of buying water from KWA by a  7-1 vote in March 2013), in fact, their approval meant nothing. It was Snyder’s emergency managers who were responsible for both the commitment to KWA and the temporary switch away from Detroit’s water which led to the corrosion of Flint’s pipes and the leaching of lead into their drinking water. It’s like they did it on purpose or something. I’m left to think that because the simple end of a contract to purchase water from DWSD did not mean that they were being, literally, “cut off” from their water source. Other cities and municipalities continued to receive water from Detroit without an active contract. In the end, Snyder’s emergency managers, and by extension, Rick Snyder, decided to purchase 18 million gallons of water per day from the KWA’s future pipeline and this is what prompted the temporary switch to the Flint River. It was a criminal decision made by hand picked emergency managers reporting only to Rick Snyder, and not a decision or choice made by democratically elected officials.

The County of Genesee, which Flint is part of and which is the only other entity committed to the KWA project (financially or otherwise) has also been signed up, thanks again to Drain Commissioner Jeffrey Wright (who you will recall also helped create the Karegnondi Water Authority). Genesee County will purchase 42 million gallons of water per day. The KWA pipeline project and water treatment facilities were designed to provide a total of 85 million gallons per day of water. 60 million gallons per day will now be the responsibility of Flint (18 million gallons per day) and Genesee County (42 million gallons per day), which is probably a gross over-commitment as those populations are decreasing. And they are being stuck with the financing and down payments with nothing to show for it except, in the case of Flint, toxic water from the Flint River.

Moreover, and consistent with the raping and pillaging of that city, Flint has virtually no “voice” on the KWA Board even though they’re now responsible for a third of the project.

According to KWA’s Articles of Incorporation, the KWA’s five Incorporating Board members must consist of:

1) the Genesee County Drain Commissioner (representing the County of Genesee):

2) the Lapeer County Drain Commissioner (representing the County of Lapeer);

3) the Sanilac County Drain Commissioner (representing the County of Sanilac);

4) the Mayor of the City of Flint;

5) the Mayor of the City of Lapeer (who doesn’t need to be here).

PLUS, 10 other hand-chosen Board members, referred to as Additional Board Members. The way that KWA was created means that Flint, Michigan can, and may, have only one Board member. Voting is by majority rule. Keep in mind that this means that Flint has 34% of the financial responsibility with only 6.7% of the actual “voice.” They should have, at the very least, 5 Board members out of 15 (total), although, with a simple majority necessary, even 5 voting members may not be enough. Genesee County also has only one dedicated Board member and they have 66% of the financial burden. These are not insignificant details. The KWA project and the financial commitments it created, will endure for decades, further crippling an already decimated county.

Flint’s immensely disproportionate amount of financial “burden” comes with absolutely none of the potential short or long-term “gain.” With insufficient representation on the KWA Board of 15 members (remember that the City of Flint has only one definite Board member) and with only a simple majority needed to pass resolutions and approve spending, the people actually paying for the project have very, very limited “say” or control. This is, of course, consistent with Governor Snyder’s rule by brute force and attempt to destroy the City of Flint, if it hasn’t already happened.

The outside audit of KWA’s first full fiscal year is also telling. It was completed in March 2015 and it covers the period from KWA’s formal inception (October 2010) to the end of its first fiscal year (September 30, 2014). I think it speaks volumes. You can read it below. Again, I’ve highlighted some important points. Keep in mind that Flint and Genesee committed to this project just before KWA’s first fiscal year ended which is what triggered this audit and the beginning of pipeline contracts and construction:

The Karegnondi Water Authority was never a good idea, on any level, for the City of Flint or Genesee County and it is what led to Flint’s lead water crisis.
KWA’s pipeline is, at its core, not about cost cutting or about providing water for the citizens of Michigan. It’s a blatant resource “grab” ultimately for private interests. Let me restate that: there is zero doubt that KWA is not cost effective, not a well-conceived or efficient project, and, most important, not in Flint or the County of Genesee’s best interest. It is being built to service some entirely different purpose, or “client,” which is perhaps the fossil fuel industry or Veolia Water (more on them later).

The creation of the Karegnondi Water Authority manages to kill at least two birds with one stone. In addition to hobbling the financial infrastructure of the City of Flint for decades to come, it also managed to deal a mortal wound to Detroit’s DWSD by depriving it of an important customer base. This resulted in it being cleaved into two entities, the Great Lakes Water Authority and DWSD’s newest incarnation as a smaller provider to the City of Detroit. Running throughout this narrative are blatantly discriminatory practices and egregious abuse of power. But most of us had that icky feeling all along, didn’t we?

There is a very deliberate and methodical genocide and overt class warfare taking place throughout Michigan at the hands of Governor Rick Snyder. It’s clustered around vulnerable cities like Detroit and Flint, but they are not alone. It’s being perpetrated by an unconstitutional, unnecessary, and undemocratically institutionalized system of emergency management which the citizens of Michigan do not want, nor do they need since it does not serve their best interests. It’s also a blueprint for other regions where a push for the privatization of basic services are being attempted with potentially similar disastrous results. Now is the time for all of us to join together, regardless of our zip code or our country code, and put a stop to the ultimately non-partisan concept of privatizing profits while socializing risks.

 

NEXT: The 2nd piece of this puzzle involves powerful corporations now having a clear path to control dwindling fresh water supplies. What’s happening in Flint may already be happening where you live.

 

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7 comments

  1. Thanks for this article. Wright and Karagnondi have been on my radar for quite a few years. Snyder is no good, but there is a lot more to this story. Once again, thanks.

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  2. Good conspiracy theory. Your evaluation is far from the truth. I’ve lived in Genesee County for over 15 years and DWSD has raised rates at least 10% a year. We are paying for their mismanagement and crumbling ageing infrastructure in Detriot. We also subsidize 30% of city residents who refuse to pay their water bills and don’t get shut off. The surrounding communities had enough as well and did the same with the GLWA. Had your article considered any of the motivations to get off of DWSD and still made an intelligent case against KWA you may have gained some credibility. This article is just an ignorant rant probably politically motivated.

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    • “We are paying for their mismanagement….” You’re paying for a lot of stuff, aren’t you? And it’s only going to get worse (unless you’re in on the gravy train of KWA) once Genesee and the rest of your state and the federal government pays for emergency manager mismanagement, over reach, and general corrupt practices and fucks ups in Flint.

      In Detroit, as you must know, you’ve got rampant corporate welfare and kick backs. The biggest single debt to DWSD, if I remember correctly, was the actual State of Michigan (roughly $5 million dollars owed), but of course there were those pesky public golf courses (privately managed) which owed over $700,000 in water payments, and the Joe Louis Arena ($80,000), Ford Field ($55,000) yada yada.

      And don’t forget that bankers made out like thieves in Detroit, which was no gift to the people of Michigan. If you look at this article in Bloomberg (http://www.bloomberg.com/news/articles/2012-09-13/detroit-shows-wall-street-never-loses-on-bad-swaps-muni-credit) and then scroll down to the header “costly swaps,” well, KWA is similarly unprotected. Almost as if they hadn’t learned a single thing from anyone along the way, but you, David, will be the one to take up the slack from that one.

      DWSD made several attempts to keep Genesee and Flint. That would have been prudent, but, no deal. And, of course, bad decision making by emergency managers and Snyder will result in serious financial setbacks, just not for corporations who always get their payments. Like I wrote, privatize profits and socialize risk.

      Good luck to those who got conned into thinking GLWA was about anything other than handing over Michigan’s precious resources to Veolia. Oh, and the same bunch of crooked asshole attorneys who protect KWA are on the take from the GLWA, too. I saw millions and millions of dollars paid out to the same assholes from the GLWA bank account and for what? Nothing, except future trouble. It’s going to be privatized and the people who are grabbing the reins don’t really give the slightest damn about you or your clean water. But you must know this already if you’re as smart as you think you are unless, of course, you’re a shill. What I write isn’t “political.” The politics of Michigan have no impact on me. I’ve never been to Michigan. What pisses me off is the injustice of it all. The fleecing of normal, everyday people, regardless of their state or country.

      I know what the “motivations” were to get off DWSD and it had nothing to do with literally anything you said. Either you’re uninformed or you’re just playing stupid. Either way, sort yourself out and if you don’t like my rant, fuck off and turn your attention elsewhere, like one of those Detroit golf courses I mentioned.

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