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The murals by Diego Rivera and other works at the Detroit Institute of Arts would be safe from creditors under the plan before a bankruptcy judge Tuesday. (AP)

Detroit Bankruptcy Battle Begins In Federal Court

by Sarah Cwiek
Sep 2, 2014

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Sarah Cwiek

Detroit's historic bankruptcy case is entering the home stretch. The crucial, final trial phase begins Tuesday in a Detroit courtroom.

The trial will decide the fate of a plan to wipe out billions of dollars in debt, and help Detroit emerge from bankruptcy a new, revitalized city.

This trial is a big deal, but don't expect anything with lots of courtroom drama. For one thing, it's federal bankruptcy court — and there's no jury.

The case revolves around a document: Detroit's 400-page "plan of adjustment" laying out how, and how much, the city plans to pay off its thousands of creditors and restructure Detroit going forward.

Lawyers will dissect and argue the plan point by point. In the end, Judge Steven Rhodes will decide if it complies with Chapter 9 of the U.S. bankruptcy code, the chapter dealing with municipal bankruptcies.

One of the biggest issues is whether the plan is even feasible, says Laura Bartell, bankruptcy law professor at Wayne State University.

"That's going to be probably the crux of the confirmation hearing," Bartell says. "Does this plan work? Is the city of Detroit going to be viable if this plan is confirmed and implemented?"

In the months leading up to this trial, Detroit and its creditors have been working hard to hash out deals in mediation. In most cases, they've reached settlements that are now part of the plan.

A 'Grand Bargain' To Keep Art In Detroit

The biggest one, dubbed the "grand bargain," is a deal meant to protect the city's retirees and preserve its world-class art collection.

Inside Rivera Court at the Detroit Institute of Arts, digital tablets help museum-goers decipher what they're seeing on the walls: Diego Rivera's breathtaking murals depicting scenes from Detroit's industrial heyday.

The murals are among the biggest treasures in a museum chock full of magnificent art, some of it purchased many years ago by a much larger, wealthier city. Some of Detroit's biggest creditors insist that the city should either mortgage or sell those pieces to pay them off. But that's precisely what the grand bargain is supposed to prevent.

Private foundations, philanthropists and the state of Michigan have pledged more than $800 million toward the grand bargain to save the art. That money would be used to pay off Detroit's biggest creditor group: city retirees.

In return, retirees give up any legal challenge to the plan of adjustment, and the museum's collection is transferred to a charitable trust, where creditors can't touch it.

Most retirees would still have to take some pension cuts. But facing the possibility of much deeper ones, a majority approved the grand bargain.

But bond insurer Syncora voted against that bargain. It stands to lose hundreds of millions of dollars if the plan of adjustment is confirmed.

Bartell says in cases with dissenting creditors, the bankruptcy code requires the city to prove it doesn't "unfairly discriminate" against them. Bartell says the plan does clearly discriminate in favor of retirees, but the question is whether that's unfair. She doesn't think so.

"These are people who are not financial institutions," Bartell says. "These are city of Detroit retirees."

Other legal scholars disagree — though at trial's end, the only interpretation that matters is Rhodes's.

The Prospect Of 'Two Detroits'

Detroit's bankruptcy is resonating far beyond the courtroom. Bond insurers like Syncora aren't the only ones arguing that the city's plan is unfair.

Detroit made global headlines again this summer, this time, over water. The Detroit Water and Sewerage Department allowed more than $100 million in delinquent bills to accumulate.

The department recently launched an aggressive, controversial effort to shut off water to customers who owed more than $150 dollars. Critics worldwide slammed the move as inhumane.

To some, it was more evidence that the burden of Detroit's "restructuring" falls mostly on its majority poor, black population.

Civil rights lawyer Alice Jennings argues that it's part of a larger effort to "make Detroit into a more gentrified city," and worries about "two Detroits" emerging.

"A Detroit where there is poverty, where is sickness, where there is no ability to gain the basic requirements of life," she says, "and then a very affluent sector."

Later this month, Detroit Mayor Mike Duggan will likely take back control of the city from a state-appointed emergency manager. He's promised to steer clear of the old, bad habits that created the country's largest-ever municipal bankruptcy.

While there's no question that Detroit will emerge a changed city, there are concerns about whether the changes will be sustainable, and just who will benefit most from a new Detroit.

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An Afghan policeman searches a man at a checkpoint where a NATO soldier was stabbed to death in Kabul on Aug. 20. As U.S. and NATO troops are drawing down in Afghanistan, the Taliban have been stepping up attacks this summer. (AFP/Getty Images)

As The U.S. Draws Down, Afghan Fighting Is Heating Up

Sep 2, 2014

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Afghan policemen keep watch at the site of a suicide car bomb attack in Kabul on Aug. 10. Four civilians were killed. It's not clear whether the Afghan security forces will be able to keep the Taliban in check after U.S. and NATO combat forces leave at the end of the year.

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Sean Carberry

As U.S. and NATO troops draw down in Afghanistan, Taliban fighters are growing bolder. They have been massing in larger and larger numbers and taking on Afghan forces across the country.

NPR producer Sultan Faizy and I spent a recent day making calls to ordinary Afghan citizens in some of the country's hot spots.

First, we reached Ahmadullah, who like many Afghans, goes by one name. He's a shopkeeper in the restive Sangin District in the southern province of Helmand. Sangin has been one of the bloodiest and most contested districts in the country. A couple of months ago, an estimated 800 Taliban, unprecedented numbers, stormed the district.

"Still it's not stable," says Ahmadullah. He says fighting is ongoing, and it's not secure in the market area where his shop is.

"There is a great uncertainty because some days we are witnessing the Taliban coming in and some days the government is capturing back the district," he says.

He says the government isn't strong enough to retake the district and continue to hold it. That's why anyone who can is fleeing. He says some people are simply running off into the desert and building tents.

Ahmadullah says those who have stayed in Sangin are desperately short on food and water. He adds that he's lost two children and a brother in the fighting.

Next, we speak with Abdul Mumin, a farmer living in the northern province of Kunduz. He says after a 15-day offensive conducted by hundreds of Taliban, Afghan forces retook his district. He says it was the worst fighting he can remember there, and he's worried the Taliban will try again.

In eastern Afghanistan, we reach Juma Khan. He lives in the Charkh District of Logar Province, which sits just to the south Kabul. Khan is unemployed. Hundreds of militants attacked eastern Logar along the Pakistani border last week, and at least 100 militants are reported to have launched an attack in Charkh recently.

Khan says the Taliban now control remote areas of the district and keep staging attacks on the district center. He says the fighting is much worse this year than the last few years.

In other parts of the country, there are similar stories of large numbers of Taliban staging larger attacks than have been seen in recent years.

Publicly, NATO disagrees with that.

Maj. Gen. Steve Townshend, the commander of NATO forces in eastern Afghanistan, says violence levels are down this year. But, he acknowledges that assessment could also be a function of having fewer troops, and therefore fewer eyes, on the battlefield now.

"Clearly our ability to know what's happening out there for sure, is less," he says.

The United Nations and analysts in Kabul argue that violence is significantly higher this summer. Graeme Smith is with the International Crisis Group in Kabul. He's built a database tracking Taliban offensives against district centers.

"That's not really something you had to track in previous years," he says.

But, with the drawdown of NATO forces, and especially the reduction in air support, he says Taliban are massing in ways not seen since the early days of the war.

"The Taliban used small guerrilla style tactics because they really did have a fear of U.S. air power, and that fear is diminishing now," says Smith.

Afghan Maj. Gen. Afzal Aman, head of operations in the Ministry Of Defense says the government expected a big push from the Taliban this summer.

"The Taliban couldn't capture a single district, but they suffered great casualties and Afghan forces retook all those areas that were temporarily captured by the Taliban," says Aman.

He argues that Afghan forces are more than holding their own. But he does concede they are taking higher casualties than they did last year, which was a record year for Afghan casualties.

But, some Afghan officials around the country are less optimistic than Aman. They say militants are in fact taking and holding ground. Even the minister of defense has said publicly the Taliban are exploiting the uncertainty around the presidential election to carrying out operations.

The runoff election in June pitted Abdullah Abdullah, the former foreign minister, against Ashraf Ghani, the former finance minister. But the votes are still be audited due to allegations of fraud. It's still not clear when the winner will be declared or who it will be.

Either way, the next president will face serious security challenges.

"The government positions are slowly eroding at the fringes," says Smith.

He says the territory seized by militants isn't necessarily strategically significant, but it gives the Taliban political leverage in any future political talks.

"I think it makes it very difficult for the government to negotiate peace with an insurgency that feels increasingly confident," Smith says.

He argues that for Afghan forces just to battle to a stalemate, they will need billions of dollars more than the international community has currently budgeted. In the meantime, the U.N.'s Georgette Gagnon says civilians are paying the price.

"Fighting between Afghan forces and insurgents, have become the leading cause of civilian casualties," she says.

Gagnon says the increase in ground fighting is the main reason civilian casualties have reached record levels this year.

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House Majority Leader Eric Cantor. (AFP/Getty Images)

Eric Cantor Joins Wall Street Investment Bank

by Doreen McCallister
Sep 2, 2014

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Afghan policemen keep watch at the site of a suicide car bomb attack in Kabul on Aug. 10. Four civilians were killed. It's not clear whether the Afghan security forces will be able to keep the Taliban in check after U.S. and NATO combat forces leave at the end of the year.

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Doreen McCallister

Former House Majority Leader Eric Cantor this week begins working at the boutique investment bank Moelis & Company.

Cantor will serve as vice chairman and managing director, and will also be elected to the firm's board of directors.

Cantor, 51, and firm founder Ken Moelis announced the decision in a joint interview on Monday.

A statement on the Moelis website said, "Cantor will provide strategic counsel to the firm's corporate and institutional clients on key issues. He will play a leading role in client development and advise clients on strategic matters."

Cantor does not have a Wall Street background but was considered a friend of Wall Street while he served in Congress.

Cantor, who will continue to live in Virginia, will open a new office for the firm in Washington, D.C., in addition to having an office at the company's headquarters in New York City, according to The Wall Street Journal.

The Virginia Republican was unexpectedly defeated in a June primary by college professor David Brat, and stepped down as majority leader shortly after that.

The loss by the No. 2 House Republican shocked many political analysts and the congressman himself.

With the defeat, Cantor became the most prominent victim of the Tea Party.

Cantor is a native of Richmond, Va., and worked for his family's real estate development firm before being elected to Virginia's House of Delegates.

He was first elected to Congress in 2000.

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Moiré. (Courtesy of the artist)

Recommended Dose: The Best Dance Tracks Of August

by Otis Hart
Sep 2, 2014

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Each month, we listen to hundreds of new electronic music tracks, test the standouts on loud speakers and highlight the best of the best in a 30-minute mix.

You can stream this month's mix here or through NPR Music's SoundCloud account. If you'd rather just hear each song individually, check out the playlist below.

You can keep up with our favorite discoveries on Twitter by following @Sami_Yenigun and@spotieotis.

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NATO Secretary General Anders Fogh Rasmussen on Monday. (AP)

NATO To Create New 'Spearhead' Force For Eastern Europe

by L. Carol Ritchie
Sep 1, 2014

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NATO leaders are expected to set up a rapid-response force to deploy quickly to eastern Europe to defend against potential Russian aggression at their meeting in Wales later this week.

The force of about 4,000 troops will be ready to move on 48 hours notice from a station in a member country close to Russia, The New York Times reported.

The "spearhead" force would be defensive in nature and able to respond "to Russia's aggressive behavior — but it equips the alliance to respond to all security challenges, wherever they may arise," said Secretary General Anders Fogh Rasmussen in a speech on the NATO website.

The Obama administration supports the plan, but emphasized the force's defensive posture, National Security Spokesman Caitlin Hayden tells CNN.

The force is "not intended as a provocation, or as a threat to Russia, but rather as a demonstration of NATO's continued commitment to our collective defense," Hayden said.

Poland and other NATO members in eastern and Baltic states had expressed concerns about Russian actions in Ukraine, and had demanded a stronger response, says the Guardian. The new force will not help with the current situation in Ukraine, but may serve as a deterrent if Russia considers destabilizing the Baltic states.

"The spearhead group will be trained to deal with unconventional actions, from the funding of separatist groups to the use of social media, intimidation and black propaganda," writes the Guardian's Ewen MacAskill.

Russia is bound to view it as an act of aggression, MacAskill says.

The NATO summit, featuring some 60 heads of state, including President Obama, is set for Thursday and Friday at the Celtic Manor Resort, a luxury hotel complex in Newport, Wales.

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