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Thursday, October 8, 2020

Lawsuit filed on behalf of Flint children blames big banks for water crisis

Posted By on Thu, Oct 8, 2020 at 12:29 PM

click to enlarge SHUTTERSTOCK.COM

A new lawsuit filed Wednesday in federal court on behalf of 2,600 children accuses big banks JPMorgan Chase & Co., Wells Fargo, and Stifel, Nicolaus & Co. of enabling the Flint water crisis by financing a $220 million municipal bond sale to build the Karegnondi Water Authority pipeline, which resulted in lead being leeched into the city's water supply.

Children are most vulnerable to lead poisoning, which can cause heart disorders, lowered IQ, reduced kidney function, and learning and behavioral problems. As many as 20,000 children lived in Flint at the time.

"JP Morgan Chase, Wells Fargo and Stifel locked arms with the city of Flint. They locked arms with the Treasury Department. They locked arms with the DEQ. They locked arms so tight that it was impossible to tell one from the other," Corey Stern, a lawyer at Levy Konigsberg LLP who filed the lawsuit, told The Detroit News. "And in doing so, they violated every citizen of Flint's right to bodily integrity."

Stern said the lawsuit could be worth at least $2 billion.

The water crisis started when the city began using the Flint River as a temporary water source until it could build a new water treatment plant. But the city was at its debt limit and could not afford to participate in the sale of bonds, so instead, a scheme was cooked up to remediate a toxic sludge pit tied to the water treatment plant. According to the lawsuit, if not for the big banks, Flint wouldn't have been able to afford to switch its water supply and would have continued to buy water from Detroit, as it had done for decades.

The lawsuit comes months after Gov. Gretchen Whitmer announced a historic $600 million settlement for Flint water crisis victims, with the majority of the money, 79.5%, going to children.

"Flint residents have been beyond patient," Whitmer said at the time. "The uncertainty and troubles that the people of Flint have endured is unconscionable."

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