A local Flint official with the controversial Genesee County Land Bank suggested that the root causes of the Flint water crisis were that black people don’t pay their bills, audio recordings obtained by Truth Against The Machine reveal.
“Flint has the same problems as Detroit—fucking ni**ers don’t pay their bills, believe me, I deal with them,” Phil Stair, sales manager for the Genesee County Land Bank said on May 26th during a conversation with Truth Against the Machine reporter and environmental activist Chelsea Lyons in Flint.
[EDITOR’S NOTE: The full 20-minute audio of Stair’s is at the bottom of this story]
He was driving to a restaurant with Lyons and another individual, who he’d met that night, when he made the comments, which were recorded and later obtained by TATM.
Stair did go on to try and clarify: “I don’t want to call them ni**ers, shit I just went to Myrtle Beach, 24 guys, and I was the only white guy; I got friends, I mean, there’s trash and there’s people that do this shit. They just don’t pay their bills. Well, Detroit, didn’t collect on their bills, so they charged everybody else, but- Flint- Flint had to pay their bill to Detroit.”
Stair, a government employee through the Land Bank, which, according to its website, is a “non-profit government organization,” went on to explain to the activists his theory on the water crisis—one that’s been parroted by Governor Snyder and many other state and local officials.
“Detroit was charging all its customers for the cost—they weren’t collecting from their residents, they were shutting water off, they were letting bills go forever, they were charging everybody else; Flint has the same problems as Detroit—fucking ni**ers don’t pay their bills, believe me, I deal with them.”
Flint, which is 56 percent African American, was forced to switch to the toxic Flint River because of Detroit’s price hikes, according to Stair.
“Now, they need a 3-year extension on their contract to get on the new pipeline [Karegnondi Water Authority] they’re building to Flint. Detroit said no, we want a 20-year agreement. Flint said no we’re building the new system or whatever, and they jacked em, they jacked the price up and they [Flint] couldn’t afford to pay it, so they said, well, we gotta go back to what we did in 1978.”
He continued: “They [Flint] had a water plant, we’ll take the [water] out of the Flint River and the reservoirs—there’s two reservoirs upstream—and we’ll just treat the water, because they had to maintain that plant because Detroit was supposed to have a second source- unless you have a backup you gotta- they had to maintain their plants. So they used to maintain their water plant, they treated their water, tested it, said it was good, and they’d dump it back in the river, because they couldn’t mix it with the Detroit water.”
Stair’s version of events doesn’t match previous records and reporting, which show Flint’s decision to switch off of Detroit’s water system—made by the unelected Emergency Manager appointed by Governor Rick Snyder—was not about saving money in the face of Detroit price-gouging.
Emails from before the 2014 water switch showed Detroit’s water and sewage department bending over backwards to retain Flint as a customer; after all, Flint was DWAS’s biggest customer other than the city of Detroit.
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In an email dated April 15, 2013, Sue McCormick, DWAS’s Director, offers Flint a 48 percent rate cut immediately, which compared to the KWA over a 30-year- period, would be 20 percent cheaper for Flint.
Flint’s elected officials also own a large share of the blame for the water crisis. Beginning in 2007, the city habitually overspent and underestimated their budget deficits. In a 2011 audit of Flint by the state of Michigan, it was revealed that the city had pulled millions from the water and sewage funds, transferring the money from the at-that-time solvent water fund to make up for an insolvent general fund. More importantly, the city also had increased water and sewage rates 35 percent in 2011—to make up for their own spending shenanigans.
Four years later, Genesee county circuit court Judge Hayman found that the transferring of funds and subsequent price hikes was illegal; he also declared the tax foreclosures many residents experienced—because they couldn’t afford the price-gouged rates— to be illegal. The city was ordered to issue a refund for the 35 percent hike, but, in reality, the credits applied to water and sewer bills didn’t fully make up for the rate hike, and the overall water and sewer rates continued to increase. Detroit Free Press found that Flint residents paid the highest water rates in America in a 2015 study.
So, Stair’s version of events, which points to Detroit’s unyielding price hikes as the catalyst for Flint deciding to temporarily switch to the Flint River while KWA being built, doesn’t match reality.
He later doubles down on the type of people he feels have caused the blight in Flint.
As his conversation with the environmental activists continued, they asked him to elaborate: “Is the east side [of Flint] the bad side?”
“Yeah,” Stairs begins.
STAIR: “Well, I call the south side, where we were, that’s the new east side cause we [land bank] tore most of it down; all them derelict motherfuckers have moved down to the south side. They’re destroying that.”
LYONS: “Who is?”
STAIR: “Fuckin’ deadbeats who, when they tear the houses down, they gotta go somewhere, they go on the south side. It just shifts- it just shifts the shit. The people are still the people, they fucked the houses up, then they leave and when we tear em down, they just go somewhere else and just fuck those houses up. I bought my house for $23,000 dollars in 1981, and they sold that house right there for $4,000 dollars about four years ago. So, 30 years it didn’t… but… it doesn’t owe me anything.”
LYONS: “So, like, did this used to be, like, a white neighborhood?”
STAIR: “It’s still white. Well, this street isn’t so much, but overall, it’s still pretty white” (editor’s note—as stated earlier, Flint is 56 percent African American).
This kind of raw opinion on, as Stair puts it, the “derelicts and deadbeats” residing in Flint, is disturbing considering, as sales manager, he and his colleagues at the Land Bank are supposed to be guiding the residents of Flint to economic recovery in order to “restore value to the community,” as stated on the Land Bank’s website.
Stair didn’t hold back on elected officials, blaming Michigan Governor Snyder for not doing enough to prevent the crisis.
“It was really a failure on the part of the Governor to step in,” he said. “So when Detroit jacked em [Flint], the Governor should’ve stepped in and said ‘you bankrupt city,” cause they were under negotiations; Detroit filed bankruptcy, you’re not going to jack a city like Flint; and you’re gonna, we’ll give give you a little increase, but you’re going to extend their contract. He didn’t step in so, what they do? They [Flint] had to go with the other thing [KWA] and they fucked it up. It’s just a total fuck-up. The Governor should have said, no, you’re going to give an extension for 3 years, and you’ll get a little increase from what you’ve been getting, and nothing would’ve happened. Now they’re afraid to get on the new pipeline because they don’t want to mess with the water again.”
On this part, Stair is both correct and misinformed. Detroit was indeed raising its water prices to Flint. But one of the driving reasons has barely been reported.
As Jacobin Magazine reported, Detroit, like other cities, got burned by betting their taxpayers’ money as the subprime mortgage house of cards was about to fall.
The water crisis in Michigan is also intertwined with the subprime mortgage meltdown, which is closely related to financial deregulation. In 2005–7, Detroit had the highest rate of subprime mortgage foreclosures in the United States. While increasingly deregulated banks were aggressively marketing adjustable-rate subprime mortgages to working-class African Americans in Detroit, they were also selling risky financial instruments to the city government. The Commodity Futures Modernization Act of 2000 allowed the swaps market to metastasize from $180 billion in 1998 to $6 trillion in 2004 to $57 trillion by the summer of 2008.
In 2005, during this “wild west” period for predatory lenders, Detroit entered into a $1.4 billion dollar deal with UBS AG and Merrill Lynch Capital Services (later acquired by Bank of America). The deal included two layers of speculative financial instruments, one of which was an “interest rate swap” to fund DWSD. The swap deal constituted a bet that interest rates would rise. After interest rates plummeted as a result of the 2008 crash, DWSD was forced to pay $537 million in swap termination payments to banks.
In order to pay the termination fees, DWSD increased water rates, and took out $489 million in further bond debt in 2012. That year, Bloomberg reported that “debt service has climbed to more than 40 percent of revenue” at DWSD. As a result, nearly half of Detroiters’ water payments were going to pay debt service to banks, inflated by the banks’ predatory swap deal. In April 2013, ongoing DWSD rate increases provided a public rationale for Flint’s emergency manager, Ed Kurtz, to switch from DWSD to the Flint River, although the actual reasons remain murky.
So, as you can see, it was more of a city-government-recklessly-placing-bets-with-other people’s-money kind of thing—and then price gouging its residents when they lost the bet—than a “ni**ers” don’t pay their bills” kind of thing.
But he’s correct in that Snyder should have stepped in to stop Flint from switching off of Detroit’s water system; he knew Detroit had offered to cut its rate nearly in half; he knew the Flint River had a legacy for being a toxic water body that plants like GM dump toxic waste in; he knew the water treatment plant in Flint was not updated or up to the standards needed to treat Flint River water; and he knew the EPA had warned the Michigan Department of Environmental Quality that, upon switching to the Flint River, not adding anti-corrosives to the lead pipes would cause lead to dislodge into the drinking water.
But alas, when your goal as Governor is to push privatization and fracking—which the KWA checks both boxes—you look the other way.
The Genesee County Land Bank was founded by Michigan Rep. Dan Kildee (D-MI 5th), who was the Genesee County Treasurer at the time. In fact, Stair claims he was personally hired by Kildee as the first Land Bank employee.
“I was the first employee they hired…he’s a congressman now, but he was the county treasurer,” he said.
“Who?” inquires an activist. “Dan Kildee,” clarifies Stair.
Stair also told the activists how the Genesee County Land Bank—which many Flint residents refer to as the Genesee County “Land Grab”—operates.
“Well they [residents] don’t pay their bills [water]. Because they [the city] don’t shut it off, so if they don’t shut it off, they just keep using the water; they [the city] lien it on their taxes, then they don’t pay their taxes, it gets wiped out, the house forecloses, the Landbank and the treasurer gets the house, and if it doesn’t get sold at auction, Land Bank gets the house, so we get 200 occupied houses a year, [Inaudible].”
“I mean it’s poverty, it’s poverty, you can’t fix poverty,” he said. Stair is incorrect when he says “they don’t shut it off”: thousands of residents have received water shut off notices in recent months—for poisoned water.
Only after residents continue to not pay for the undrinkable water is the water shut off, followed by a threat of a tax lien on a resident’s property. Recently, 8,000 residents received tax lien threats for unpaid poison water bills. The Flint City Council voted 8-1 to place a one-year moratorium on the tax liens; on June 14th, the Snyder-appointed Receivership Transition Advisory Board—essentially a shadow government that can overrule Flint Mayor Karen Weaver and City Council Members—will meet and vote whether to ratify the City Council’s vote.
In a later encounter, Stair doubles down on who he feels is to blame for the crisis.
“Long story short, Detroit was supposed to supply a second line that came up like through Troy to Flint as a backup because there was just a single line. Because there was just the one pipeline, Flint had to maintain their water treatment plant all the years that they had it. So, when Detroit wanted to jack em on the price because their contract ran out and they just wanted three years until the new pipeline, they said no. Flint couldn’t pay for it.”
As shown earlier, this is untrue—Detroit had offered a nearly 50 percent price reduction immediately to Flint.
“The governor should’ve stepped in and told broke-ass Detroit: you’re not gonna jack broke-ass Flint,” Stair continued. “You’re gonna give them the water, we’ll give you a little increase, and give them their time, don’t fuck with em, don’t do a- didn’t happened.”
When asked about why the state hasn’t done anything to help the Flint residents living in crisis, Stair responded
“They have. Oh, millions of dollars are coming here. Millions…to fix the fuck-up. If he would’ve just told Detroit: give them the water… nothing would’ve changed.”
“Now they gotta do the pipes and everything, it’s such a clusterfuck.”
As far as the “millions of dollars” coming to Flint, yes, there are grants on top of promises on top of lawsuits that all assured millions of dollars were coming to Flint. However, at every junction down the line, those millions of dollars got redirected and appropriated to other purposes. The most relevant number that demonstrates the funding going to help Flint: since the beginning of the crisis more than three years ago, fewer than 800 lead pipes—of the estimated 20,000 that are slated for removal—have been replaced in the city.
Corruption in Flint runs deep; as do the racist undertones of its officials. Government officials, both elected and appointed, have a habit of blaming Flint’s problems on the poorest and most vulnerable. In reality, the families trying to get by in a dilapidated city suffer through rate hikes, water shutoffs and tax liens while the taxpayer-funded employees get raise after raise after raise.
On Tuesday, Part two of this story will publish, consisting of other damning audio from Stair regarding certain illegal substances being used at government offices in Flint and other water-crisis-related audio from Stair.
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UPDATE June 4th, 9:15pm eastern:
In response to Truth Against The Machine’s exclusive, U.S. Congressman Dan Kildee (D-MI 5th) tweeted:
This behavior is awful and indefensible. Phil Stair should be fired or resign immediately. https://t.co/A7R6QjzlEP
— Rep. Dan Kildee (@RepDanKildee) June 5, 2017