Detroit taxpayers pick up $3.3 million tab for EM’s former firm

Kevyn OrrWhile retirees are at risk of losing their pensions and services are cut, the former law firm of EM Kevyn Orr already raked in $3.3 million in their first three months of work, records show.

Jones Day is collecting more than $1 million a month, with some attorneys getting as much as $1,000 an hour.
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The firm was supposed to make the money last six months.

So who’s checking the bills for excessive fees? A professional fee examiner, who’s making $600 an hour, paid for by taxpayers.

Although Orr said he has severed ties with Jones Day, one of the premier bankruptcy firms in the U.S., e-mails obtained by the Motor City Muckraker show a much more complicated relationship. Before hiring Orr in March, Gov. Rick Snyder and his executive team were consulting with Jones Day attorneys as early as January. On Jan. 31, a Jones Day attorney advised Snyder that bankruptcy clearly was the top choice – a position that Snyder adamantly denied in public.

So far, the firm has focused on 13 areas, including general restructuring advice, labor and pension analysis, debt restructuring, Chapter 9 contingency planning and water and sewer analysis.

Since Orr took office in March, some of his spending decisions have come under question. For example, the bankruptcy attorney hired a new police chief with a $225,000 salary. He also hired then-Council President Pro Tem Gary Brown for $225,000 a year.

The mayor’s salary, by contrast, is $158,000.

Orr defended the costs, saying the best lawyers and experts are needed because billions of tax dollars are at stake.
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Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.