Mayor frustrated with Detroit reps who helped defeat auto insurance overhaul

Duggan scored the largest margin of victory in a Detroit mayoral election in 20 years

Southeast Michigan business community a key cog in Duggan's growing influence

Mayor Mike Duggan's landslide re-election may give him a bully pulpit in a second term to unseat the fellow Detroit Democrats who helped defeat his auto insurance reform legislation five days before Election Day.

Two days before Duggan scored the largest margin of victory in a Detroit mayoral election in 20 years, Duggan telegraphed his strategy and frustration during a campaign stop at Historic Little Rock Baptist Church on Woodward Avenue in the North End neighborhood.

"Half of the Detroit delegation didn't vote with us. I intend to campaign against every one of them this August," Duggan told congregants, apparently unaware a Detroit News reporter was in the room to capture his comments.

Duggan's remark was aimed squarely at state Reps. Fred Durhal III, LaTanya Garrett, Sherry Gay-Dagnogo, Rose Mary C. Robinson and Stephanie Chang, who voted against the auto insurance overhaul he pursued with Republican House Speaker Tom Leonard. The bill died on a 45-63 vote.

The political machine Duggan had already been building before winning 72 percent of the vote Tuesday is likely to get stronger, especially given the support he draws from regional business leaders.

The Southeast Michigan business community has proved to be a key cog in Duggan's growing influence, both in terms of financial support for his re-election campaign and helping carry out his agenda.

Duggan put Quicken Loans Chairman Dan Gilbert and Lear Corp. CEO Matt Simoncini to work lobbying for the auto insurance bill after he and Leonard made their case to a group of Detroit corporate executives last month.

Simoncini sent an email to 5,000 of the Southfield-based auto supplier's employees in Michigan asking them to contact their legislators and urge them to support House Bill 5013. He made direct calls to legislators.

"I don't normally lobby," Simoncini told Crain's two days before the failed vote. "But this is an important issue for us."

Detroit business leaders see the city's highest-in-the-nation auto insurance as a stumbling block to recruiting talent to work and live in the city — and rebuilding a largely missing middle class in the poorest big city in America.

"What we hear mostly is from the folks who want to move downtown ... and then when they realize how incredibly expensive it is to insure a vehicle in Detroit," Simoncini said.

Gilbert held personal meetings with individual legislators at his online mortgage company's headquarters at One Campus Martius, according to Durhal and Gay-Dagnogo, who said they met separately with the billionaire businessman.

Quicken Loans lobbyist Jared Fleisher organized the meetings and worked behind the scenes for weeks to push for passage of the bill.

Gay-Dagnogo said the meeting with Gilbert and Fleisher went deep into the weeds about how Duggan's bill would have effectively shifted medical costs from the no-fault auto insurance system to Medicaid and employer-provided health insurance plans when a motorist hit the $25,000 maximum for post-hospitalization care.

"I asked Mr. Gilbert, 'So what impact are you willing to take or absorb when this insurance doesn't coordinate with your third-party health plan? Are you going to transfer their costs to your employees?'" Gay-Dagnogo said. "I don't think he made that connection."

"It seems like a lot of smart people were not very smart in this whole scheme," she added.

A Quicken Loans spokesman declined to comment on the nature of Gilbert's meetings with legislators.

Chang declined to say who she was lobbied by, but said there was "a tremendous amount of pressure" to side with the mayor.

A candidate for the Senate's 1st District, Chang had a three-word response to Duggan's threat to campaign against her next year. "Bring it on," Chang wrote on Twitter.

"I'll run my campaign and (Mayor Duggan) can do what he feels he needs to do," Chang told Crain's.

Duggan has suggested the Detroit lawmakers who voted against his bill are aligned with the hospitals and personal injury attorneys who have a financial interest in maintaining a limitless medical benefit with none of the cost controls that exist in other forms of health care.

Hospitals and trial attorneys are big donors to individual Democrats and the House and Senate Democratic caucuses.

The Michigan Health & Hospital Association and Michigan Association for Justice are Durhal's top two donors this year. Through Oct. 20, the hospital group's political action committee had donated $9,800 to Durhal's re-election campaign and the trial attorneys group had contributed $4,500, campaign finance records show.

"We stand for some of the same values. We don't want to limit (personal injury protection) benefits," said Durhal, who has his eyes set on being the House Democratic leader next term.

Garrett cited the finances of the Detroit Medical Center — where Duggan was previously CEO — in a statement Thursday defending her vote.

"I could not in good conscience vote for a bill that would have both eliminated lifetime benefits for children, as well as jeopardized the success of our Detroit Medical Center," Garrett said.

Even before the failed House vote, Duggan had begun aligning with legislators who support his position that relieving auto insurance rates requires letting drivers opt out of unlimited medical benefits.

During the televised Oct. 25 mayoral debate with state Sen. Coleman Young II, Duggan gave a shoutout to Sen. Ian Conyers and Rep. Sylvia Santana for supporting the legislation.

Santana, a first-term member from the city's west side, and fellow Detroit Reps. Wendell Byrd, Leslie Love and Bettie Cook Scott were the only Democrats who voted for the bill.

The next day, Santana announced her candidacy for the state Senate's 3rd District open seat next year and said she had the early support of Duggan.

On Thursday, Wayne County Commission Chairman Gary Woronchak joined that Senate race and was critical of the Duggan-Leonard auto insurance bill and how they attempted to ram it through the House in five weeks.

"It was kind of like, 'Here's our plan and we're going to dare you to vote against it,'" Woronchak . "The legislative process, by its nature, moves slowly. That's not what we witnessed."

This is one of several races where Duggan may try to influence the outcome over this one defining issue.

After his victory last Tuesday, Duggan addressed his comments from two days earlier suggesting political payback was in order for opponents of House Bill 5013.

"I'm going to work very hard to help elect Democrats who are willing to look past the special interests," said Duggan, mentioning "the hospitals and the trial lawyers."

"We need to get back to representing people," the mayor added.