Czar wars

Nov 21, 2001 at 12:00 am

A gadfly named John Watson leans on the clerk’s counter in Hamtramck City Hall, shooting the breeze with city workers and old friends.

The topic of conversation this afternoon is Louis H. Schimmel, the banking wizard appointed by Gov. John Engler last November to take over the 2-square-mile city as emergency financial manager. In that role, Schimmel has total control over the finances in the quirky city of 23,000, nestled in the heart of Detroit, and under his authority the roles of the mayor and City Council are mainly ceremonial.

“We fought hard to get rid of dictatorships in the war, in Germany and in Italy,” grouses Watson, a World War II veteran. “This is worse than a dictatorship, when a man can come into a town and get rid of civil servants ... We’ve got a dictator here. I don’t understand how he has the authority. We need a grand jury to investigate him, and to investigate everything that’s going on.”

Approaching his first anniversary on the job, Schimmel has slashed budgets, fired some employees and bought out others, privatized city services and greatly reduced the size of union contracts. Now he’s trying to relocate City Hall and dissolve the Hamtramck Police Department.

He was the first person in Michigan assigned under a state law that allows the governor to declare an emergency and take over a dysfunctional municipality. Hamtramck had spiraled out of control after elected officials couldn’t pass a budget and spent millions more than it took in.

“It was a crazy city, and nobody was running it. Or everybody was, whichever you pick,” says Schimmel.

Hamtramck is known for its political battles and ethnic heritage. In its 1930s heyday, the city population exceeded 50,000. The city’s prominent Polish population warranted a visit from the Polish pope, John Paul II, in 1987.

The irony that Schimmel, an outsider of German heritage, has been granted absolute power is not lost on the locals, some of whom say Schimmel’s cancellation of Hamtramck’s annual Labor Day weekend Polish Festival was tantamount to treason.

Hamtramck is also known for its heavy union influence and constant influx of immigrants who come to work in auto plants. Its narrow streets are crammed with small two-story wooden homes filled with artists, young families, the working class and newcomers from Bangladesh, Yemen, Bosnia and elsewhere.

Watson’s family came to Hamtramck in 1919, three years before it became a city and 121 years after it was founded and named after Revolutionary War hero Col. Jean François Hamtramck. When the Watsons arrived, Hamtramck was 85 percent Polish. Now, it is less than 50 percent so, though City Hall is filled by people of Polish descent.

Watson served under seven mayors in various jobs, from policeman to court officer, before he was appointed Director of Public Safety. He quit that job after a fight with Mayor Gary Zych.

“I’ll put my foot dead up your ass if you scream at me,” Watson claims he told Zych. “I’ll put you out, quick.”

Things were ugly then. They are worse now, says Watson.

“He ought to get his ass back to Lansing,” Watson says of Schimmel. “Maybe he can screw it up there, too.”

At this moment, Schimmel himself walks up to the clerk’s counter. An awkward silence descends. Watson is congenial and accepts a greeting from Schimmel. Then he reiterates that Schimmel ought to go back to Lansing.

The dictator

Hamtramck City Hall was built as a hospital in the 1920s. Its rotting interior and small-town inhabitants could come straight off a David Lynch movie set.

When asked about their new boss, workers murmur “Oscar Schimmel” and speak of “Schimmel’s List” — a reference to cuts in budgets and staffing that Schimmel made just before Christmas last year.

Schimmel, 63, is not a popular man in City Hall. He’s gotten threatening calls at his Waterford Township home.

The bespectacled Schimmel says he’s heard the Nazi jokes, but if the hostility has any effect on him, he doesn’t show it. He moves through City Hall with a spring in his step, and offers a smile and a wink at the door to his office, where the mayor sat before Schimmel came to town.

The office carries the stench of wet ashtrays from decades of smoking civil servants. Schimmel winces as he surveys the old industrial desks and maps yellow with age.

Not a pen is askew on his desk, which, like his appearance, is tidy and minimalist.

His eyes sparkle with amusement as he explains that balancing the books and slashing costs in Hamtramck has been fun, like a chess game that he intends to win.

“It’s in my blood. I can’t turn down a challenge,” Schimmel says. “I’m one of those guys that plays football without a helmet.”

And despite what some workers may say behind his back, Schimmel says he’s treated with the respect he treats others with.

“I don’t think I’m the enemy or the out guy. I don’t feel at all like people hate my guts,” Schimmel says. “In this town, people say don’t leave, don’t leave. I try to keep it light.”

Schimmel is pleased with his accomplishments in Hamtramck so far. He’s negotiated four union contracts, survived lawsuits and grievances, reduced the work force by 17 percent and drastically cut spending. He estimates the new union contracts will save the city more than $3.6 million over the next three years, and he is halfway to erasing Hamtramck’s deficit, which Schimmel says was more than $3 million. (The city’s current budget is $16 million.)

It’s a long way from last Nov. 21, when state treasury officials called him at home and asked him to be the first person in Michigan to take over a municipal government, for a salary of $100,000. He was surprised.

“I never thought the state would take over a municipality — ever,” Schimmel says. “I remember walking up the steps to this building and thinking, ‘What have I gotten myself into?’

“It was so depressing. The physical facility itself is so depressing, so bad. And I really wondered if I’d made a mistake, agreeing to do this. I thought about going back to Lansing and telling them I just couldn’t do it.

“Everything was such a mess. There were 40 bank accounts. Financially, nobody knew where anything was. Nobody even knew what the deficit was. There were all sorts of funny arrangements with people for this or for that. The records were deplorable, and the city was losing tons of money, legally.”

He shakes his head.

“It’s lonely running a city by yourself,” Schimmel says. “You look at everyone and wonder if they can help you, or if you need to get rid of them.”

Schimmel jumps up and clicks his briefcase shut.

“Let’s get out of here. I hate this place. As far as I’m concerned, it’s a wrecking ball’s delight.”

Butcher of excess

A papal statue looms over Hamtramck’s main drag, Joseph Campau Street. Seventy years ago, it was said to be one of the busiest shopping districts in the nation.

Now the street is grungy. Plastic multicolored awnings flap over fast-food restaurants, Polish bakeries, pottery stores, smoky bars and discount shops. Women in babushkas still tread the streets, bags of groceries in hand.

Schimmel’s voice softens as he sits in a busy diner and explains how he reversed in a year what local politicians had wrought. He lopped what he called the fat from union contracts and privatized city services. He floated a $2.5 million bond to help pay bills.

“What I bring to this town is good management. If you don’t have good management, you lose money,” he says.

Weeks after his arrival, Schimmel fired nine people and eliminated 21 jobs that weren’t filled. Over the past year, he’s reduced the work force by 17 percent, from 162 employees to 135. The pacts he struck with police reduced their force by nine, while the fire department was trimmed by six. He’s hired private firms to pick up Hamtramck’s trash, repair its fire hydrants (all 95 were fixed or replaced in five weeks) and vehicles, trim the trees, plow snow and repair city streets and property. He auctioned off vehicles and equipment “no longer needed” for $186,000.

“The city will see services like it never has before,” Schimmel says. “We’ll contract out everything.”

City Councilman John Justewicz said Schimmel is a “privatization freak” who cares less about saving money than he does about reducing the size of government.

“He doesn’t care what it costs, because in his book, privatization is the only way to go.

“Basically, he has dismantled the city. Now, we’re totally dependent on private contractors for everything. Our police department has been debilitated. If a citizen has a complaint or a problem, instead of calling a city worker, you have to call a private contractor and pay his rates.”

The main problem with Schimmel, says Justewicz, is that he keeps city finances hidden from public view.

“As an elected official, we have a right to know. He’s supposed to be conferring with us. Conferring to Mr. Schimmel is him sending City Council a directive.

“He explained once to me, ‘You don’t understand. You’re out of business. I’m in charge now.’

“I don’t think any one person should have demagogue powers. We’re supposed to be a democratic government with checks and balances. I don’t think everyone is totally completely illiterate here. We should be able to be told what we’re doing and buying and paying for things.”

Chris Cornwell, who lost in the mayoral primary and is closing out his solo term on City Council, said he’s disappointed that unionists haven’t been speaking out.

“You see this happening everywhere. The lack of solidarity among union workers has been the detriment of unions, especially here. The fundamental foundation of what a union is, solidarity, isn’t working anymore. I asked myself, ‘Why aren’t the Teamsters here and the UAW, picketing over this union busting? It’s because people are caught up with their families and their lives, and there’s no solidarity anymore.”

Schimmel shrugs off the criticism and concerns.

“I’m delivering services. The trash is getting picked up, where it wasn’t before. Those guys couldn’t have done it anyway. They’d drive the garbage trucks through garage doors and into walls and over fire hydrants. They didn’t want to work. They’re not all bad, but there just never was a qualified person running the department.”

He’s slashed the budget of the district courts.

“I’ve taken these judges on. District courts can be a real pain. They act like little babies. Being judges, they think they’re infallible. I’ve taken them on, these judges, like a crusade, I guess, for everyone.”

As for the City Council, Schimmel says they are “crazy people.”

“I quit early on going to the meetings. I told them this isn’t productive at all for me to come. All they do is argue. All it is, is a big argument. The meetings go on for hours. They are unwilling to be fiscally responsible. Their motives are entirely different from mine.”

But, he says, Hamtramck’s small-town problems aren’t unique.

“Ecorse, River Rouge, Hamtramck, all these places have a strong mayor-council form of government. Actually, they have a weak mayor form of government. You really have nobody running these towns. You really need a strong mayor or a city manager. I’m really just a city manager, running the city how it ought to be run.

“What makes it worse in Hamtramck, you have a tremendous split between the mayor and council. Nothing gets done. It’s total gridlock. There’s no spirit of cooperation. Nobody works together.”

Schimmel contends that any good city manager could do what he does.

“I’m not political. I’m not elected. I have one responsibility, and that’s to clean up the financial mess. And I’m going to do what it takes. I’m going to do the right things.

“I’m not going to put someone on payroll because they’re a councilwoman’s brother-in-law.”

Buzz around town

“Schimmel has all the power that every politician wishes they had, which is absolute power,” says Mike Rehfus on a Saturday afternoon while brainy-looking people sip rich coffee and read books in his artsy café on Joseph Campau.

“It’s very unfortunate that we have this despot ruling the city. But when Hamtramck turned over all its power to the old vested interests, it gave up its right to elected officials to make changes. We gave up our right to vote.”

Rehfus has lived in the city for six years and is wrapped up in the political soap opera. Beneath his black-rimmed glasses, his eyes are intent.

He explains that a war between the “old guard” (the Poles and the city unionists) and the “new guard” (people who support Mayor Zych and city reforms) paralyzed Hamtramck, forcing the state to deploy Schimmel. The old guard “hates newcomers and hangers-on.”

Renowned for its wild political battles and Old European feel, a visit to Hamtramck any day, anytime, will find union toughs drinking beer and smoking cigarettes at countless bar counters across the city. Artists live here too. A few years back, the Utne Reader, the Reader’s Digest of the alternative press, labeled Hamtramck one of the 15 hippest towns in America, though a walk through downtown is more reminiscent of a working-class strip than a hipsters’ hangout.

Rehfus considers himself part of the new guard, but says that former foes have united against Schimmel.

“He is despised,” Rehfus says. “Schimmel is like the aliens in (the movie) Independence Day. He’s the indomitable force that we have to band together to fight.”

The governor’s man

More than a decade ago, Louis Schimmel sat in an office, hard at work as the court-ordered receiver of Ecorse, slashing costs, dissolving the unions, streamlining services.

An up-and-coming senator walked through the door with his entourage to ask questions.

“This is great,” Schimmel remembers the senator saying of his work as receiver from 1986 to 1990, when he erased Ecorse’s $6 million debt. The courts had put Ecorse into receivership, and a judge appointed Schimmel receiver. “We should have the ability to do this on the state level,” Schimmel says the senator remarked.

The senator went on to draft a measure that eventually became statute in 1990. The law allows the state to declare a city in a state of emergency and to appoint a financial manager, such as Schimmel, to balance its books.

The senator was John Engler.

Since then, Engler and Schimmel have worked together.

Schimmel spent 38 years in the bond business as executive director of the Municipal Advisory Council of Michigan, where he compiled statistics and gave advice to institutions buying bonds from Michigan cities and townships. He gave talks, did consulting work and authored numerous papers and publications on Michigan municipal bonds and privatization of city services.

“Government fascinates me,” Schimmel says. In fact, in recent years Schimmel became known, nationally, as an expert in the financial status of Michigan cities and townships, he said.

“The customers were big banks and major banking institutions,” Schimmel said. “People counted on me to tell them whether a municipal bond was sound or not. And I couldn’t know if the bond was sound unless I knew a lot about the municipality.”

In 1992, Engler appointed him to the Michigan Public-Private Partnership Commission, which submitted an extensive report on increasing government efficiency. Also that year, Schimmel became a member of the Board of Scholars at the Engler-backed conservative think tank, the Mackinac Center for Public Policy. The group advocates privatization and school vouchers in Michigan.

In 1999, Engler appointed Schimmel to the Michigan Commission on Public Pension and Retiree Health Benefits.

In his own words, Schimmel has become possibly the best-known proponent of privatization in Michigan. “I’m into replacing city employees with outside contractors,” Schimmel says. “I’m a big fan of privatization. The Mackinac Center, they love what I’m doing.”

Even if they don’t in Hamtramck.

Race makes a difference?

Schimmel leans back and puts his hand to his head. He’s struggling to compare his experiences in Ecorse and Hamtramck.

In Ecorse, “the people were different,” Schimmel says. In Hamtramck, “they’re very, very stubborn. They just sat and looked at me, like I was talking to a wall. The problems here were Polish people vs. Polish people. Gridlock like I’ve never seen. In Ecorse, they were united against me.

“Some of these Polish people don’t get my sense of humor. They are so intense.

“My conversations with black people and white people down in Ecorse, the ease of negotiation, it was much easier. I didn’t run into the solid ethnic wall of Polish stubbornness down there that I’ve run into here.”

He says he kept sweetening the deal with the Ecorse union negotiators until members agreed to disband.

“Basically, I bought them out.”

But in Hamtramck, “these Polish people, they want their jobs. You can throw money, any amount of money, at them, and they won’t hear of it.”

Schimmel says Hamtramck unionists could have taken home $30,000 apiece if they’d agreed to a buyout.

“They had no interest in it.”

Schimmel finally agreed to guarantee Hamtramck union workers their jobs, but told them, “‘You’re going to have to work. You have to put in an eight-hour day.’ They didn’t want that. They didn’t want to work.”

He says he always gets what he wants from the unions, because he sits down, talks and listens.

“This is more a personality job than a mathematical job. You have to have good dialogue with the unions ... They know I’m a tough guy. But I pride myself on always being fair. In my negotiations, I try to take back what’s been given away. The problem with the mayor and council is they give away so much, they end up with a guy like me, because they can’t pay it.”

Jimmy Hearns, a representative of the Michigan AFSCME Council 25, negotiated with Schimmel on behalf of Hamtramck’s city workers. Hearns said Schimmel “had a sincerity to him. I believe that he was deeply committed or concerned about people’s livelihood.”

Hearns can’t bring himself to provide a complete blessing, adding, “I won’t say he dealt fairly.” But then Hearns goes on to say in so many words that Schimmel was indeed fair. He just made the unionists agree to things they didn’t like.

“I’ll say there were difficult times in Hamtramck that called for difficult decisions to be made. He was willing to sit down with the union and talk about those decisions and how they’d affect our members. Nobody was happy with it. But based on those difficult times and difficult decisions, there were amicable decisions made.” As for Schimmel’s comments about union workers, Hearns laughs them off as “B.S.” and meaningless rhetoric.

Polka pain

At 11:15 a.m. on a Wednesday, a half-dozen people are smoking and drinking beers in the New Dodge Bar on Joseph Campau. It’s cloudy and dreary outside, but inside it gets heated as friends talk politics.

Today the debate is the Polish Festival, which Schimmel canceled after organizers didn’t get reports in on time.

The festival of beer tents, ethnic foods and entertainment was founded 21 years ago by Mayor Robert Kozaren as an effort to raise spirits after the Chrysler Corp. shut down the Dodge Main plant — the city’s biggest business for 70 years.

Schimmel thought the festival was a “big drunken brawl,” too expensive for the city to afford.

But Virginia Szymanski says it was the heart and soul of the city.

“We’re very upset. It was like no Christmas this year,” says Szymanski, owner of Jean’s Lounge (which she calls “Tight Fittin’ Jean’s”) down the street.

Her best friend, Cathy Gordon, owns The New Dodge.

Szymanski and Gordon are known as the Thelma & Louise of City Hall because of their hell-raising. They are inseparable.

Gordon will never forgive Schimmel for the Polish Festival cancellation. “I wish the man would do his job and leave the rest alone,” she says. “Just count your numbers and your nickels and dimes. Why he wouldn’t cooperate, I don’t understand. It’s terrible.”

Szymanski says the Polish Festival put Hamtramck on the map.

“It was more than polka bands,” Szymanski says. “There were Bosnian singers. This has become a very ethnic town, you know.

“If you ask me, it getting canceled, that’s the only reason the state fair showed a profit this year. People went over there instead. People were terribly, sadly disappointed.”

Gordon, who lives in Sterling Heights but comes to Hamtramck daily to run her bar and visit her 85-year-old mom, says she wants Schimmel to open his office to the public.

“In this city, people were very used to an open-door policy in that mayor’s office. Now, we can’t talk to Schimmel because we can’t get to him!”

Szymanski chimes in: “I understand you have to write a written report and give it to the assistant and then Schimmel will make an appointment. He’s very unapproachable.”

Gordon: “It’s a small town of people. It’s about people. Government is of and for the people. And now it’s become about dollars and cents, and I don’t like that. He’s a stranger in town. And he’s staying a stranger.”


A “No Smoking” sign hangs near the entrance to the Hamtramck Police Department, but smoke wafts through the hallway.

The mention of Louis Schimmel’s name sends an electric charge through the air.

Richard Betleja, president of the police union, says he can’t say much, because the union is still negotiating with Schimmel and battling him in court.

Betleja says the police will fight “tooth and nail” to prevent the Hamtramck department from getting folded into any other department.

“He looks at employees as commodities, not people,” Betleja says, agitated. “If you were an employee for 20 years, and he could get someone who could do it cheaper, you’d be out of here.

“And just because you can do it cheaper, doesn’t mean you can do it better.”

Around town, signs proclaim “Keep our Hamtramck Police.”

Schimmel says it makes no sense for Hamtramck to have its own police department. Last week, he met with union leaders to discuss a merger with Highland Park. That city, another municipal island surrounded by Detroit, was named by the state this year as the second city in financial crisis and now also has a state-appointed financial manager.

Hamtramck police are still smarting after Schimmel forced them to sign a contract that reduced the number of officers by nine, but gave them a 2.5 percent and 3 percent raise over the next three years. He also replaced the police chief.

“I bought out the old chief, who was useless,” Schimmel says. “It cost me $70,000 to get rid of him.”

Betleja scoffs at the suggestion that Schimmel has improved the department. “He just doesn’t know what it takes to run a police organization.”


Mayor Gary Zych talks on his cell phone after a design class he’s teaching as an adjunct professor at Lawrence Technical University. The mayor, a practicing sculptor, is hard to track down. Since Schimmel came to town, Zych is rarely seen in City Hall.

“I’m not collecting a paycheck,” the mayor explains, a couple of weeks before the election that put him in office for a third term by a total of five votes. He won his first term by nine votes, the second by 60.

With Schimmel in town, Zych has been rendered nearly powerless. The two men, friends at first, now adversaries, vie for credit on recent progress in the city. For instance, Zych says he’s to thank for settlement of a 1970s racial discrimination lawsuit. A judge found that Hamtramck illegally used federal dollars to reduce its African-American population by condemning and demolishing 50 homes in the late 1960s. Between the time of the ruling in 1971 and this year, the city was restricted in what it could do with its land and with grant applications because of the ruling against it. In the settlement signed earlier this year, the city agreed to sell $800,000 in bonds to pay for its share of rebuilding and remodeling homes as reparation. “That was my No. 1 priority,” Zych said. “I am very proud of that case.”

But Schimmel retorts, “He regularly takes credit for my work. If there’s a ribbon cutting, anywhere, he’ll be there. He’s a politician, all the way.”

Likewise, both men take credit for $2.5 million in grant money that will be used to improve the sidewalks and appearance of Joseph Campau.

Zych says Schimmel has done much that’s good, reducing costs and privatizing city services, but criticized him for getting involved in politics.

“Schimmel has succeeded in many of the needed reforms,” Zych said. “But, on the other hand, to do so with some sensitivity I think is preferable. I would have kept much of the city work force.

“I think if you hire people within the city you keep the tax dollars in the city and theoretically, the people in the city love their city and will do a good job to take care of their city.

“I would say he’s come up short on that department in a few occasions.”

But Zych doesn’t have much power now that Schimmel’s in town.

How much?

“None,” Schimmel says. “There are certain things the mayor and council can do, but it’s minuscule in nature. If it’s financial, they can’t touch it. We can’t let the mayor and council spend money any way they want to.”

In his most controversial move to date, Schimmel says he is moving City Hall into the current Department of Public Works building, located on the southeastern, industrial edge of town. Zych has united with some of his foes to oppose the move.

“I think he wants to leave something behind. That’s why he wants to move City Hall,” Zych says. “He has an enormous ego in that regard.”

The future

Schimmel estimates that he’ll wipe out the deficit and move City Hall by December 2002. When that happens, he’s leaving.

“I’m staying only long enough to get the job done. Once I get the financial situation in order, I’m out of here.”

Oddly enough, there’s nothing requiring the city to keep the reforms and cuts that Schimmel enacts.

“If they give that all back, it’s just going to be terrible,” Schimmel said. “All the efforts will have been wasted. We’ve restructured the town. If they take it back to its old structure, we’ll go back to the old deficits.”

He denies a rumor around town that he can’t wait to leave.

“I don’t like City Hall, the building. But I like the people. Even my adversaries. I like to have fun with it,” Schimmel says. “I wouldn’t do this if I couldn’t have fun.

“The thrill of it all is succeeding at turning a disaster into a good situation, which is very rewarding.”

The rat catcher

Locals gather in the Whiskey in the Jar bar on a sunny Saturday afternoon, drinking beer and watching the Michigan vs. Michigan State football game. Sausages of all kinds are roasting on a big grill outside, and daytime manager Paul Lash chats with customers while he smokes cigarettes and alerts the bartender to people who need drinks.

Lash, wearing a black T-shirt and black leather biker vest, flushes with laughter as he talks about trapping rats.

Before Schimmel came to town, garbage wasn’t picked up for weeks and “people were throwing trash in the alley,” Lash says.

“All of a sudden, there’s rats running through my yard. Big ones. I caught three. One of ’em was real big. I said, ‘Damn, he’s decent. He’s a big one.’

“They’re evil creatures,” Lash says of the rats. “The first one I trapped, it was going at the cage, coming at me.” Lash bulges his eyes out to illustrate. “People say they’re hard to catch, but a little peanut butter on a dog biscuit and you got it. I used to see people play with cheese, meat. But a little peanut butter’ll get ’em every time.”

Lash is irritated that Hamtramck has gotten a bum rap because of its prominent rat population. Any city has them, he says, especially if political paralysis keeps the garbage in the streets for weeks.

He blames the problem on Hamtramck’s mayor and garbage workers, who “cooked their own goose.” Mayor Zych wanted to privatize garbage service, but fighting over the matter got so intense that workers staged a sort-of months-long work stoppage.

Lash and the husband of bartender Katarzyna Sas Teschendorf thought it would be fun to stuff one of the rats and have his middle finger flip the bird. They’re calling him, “Ratalope.”

“We’re trying to put a positive spin on the situation,” Lash explains.

There are fewer rats now, since Schimmel contracted with Waste Management and garbage is getting picked up, says Teschendorf.

“Now it’s better,” says the young woman, who moved here from Poland two years ago. “Maybe Hamtramck needed someone like this, because it was so bad in winter, with the snow everywhere in the streets, and the garbage was everywhere.”

“Why be mad at Schimmel?” Lash asks. “He’s the evil that came from Zych, that’s the way I see it. Now, he’s just doing his job.”

Hamtramck’s changing every day. To learn more Hamtramck history, check out a temporary exhibit at the Detroit Historical Museum, “The Polish Presence in Detroit.” It runs through March 31.

Lisa M. Collins is a Metro Times staff writer. E-mail [email protected]