Pocketbook Issue in Cleveland Vote

The overwhelming (2-to-1) vote by Cleveland voters on Feb. 27 against the sale of their municipally owned light company was more than a rebuff to the arrogant ultimatums of the interlocked Cleveland Electric Co. and Cleveland Trust Co. It was a stunning declaration through direct urban democracy that elected governments, not the hidden unelected corporate governments, have the mandate to run cities.

Thomas Jefferson observed at this country’s founding that political democracies should counter the excesses of “the monied interests.” But in America’s cities today, banks, insurance companies, utilities and industrial corporations weave a private network of power over political puppets in City Hall who take the heat when situations deteriorate.

The workings of these commercial-industrial powers during the last decade in New York City were charted in Jack Newfield’s well-documented “The Abusive Power.” But in Cleveland, thanks to a determined mayor, Dennis Kucinich, the abusive corporate power was made more visible and the people did not like what they saw.

Kucinich inherited from previous administrations a financial mess, to put it mildly, which placed the city more firmly in the hands of several Cleveland banks, led by the largest bank, Cleveland Trust, and its boss, Brock Weir. In December, Weir’s bank split from five other banks and refused to participate in rolling over about $13 million worth of short-term notes for the city. It was made known to Kucinich that the municipal utility, Muny Light, would have to be sold for Brock Weir to consider relenting.

If sold, of course, Muny Light would be bought by Cleveland Electric (CEI), thus giving CEI a total monopoly over Cleveland’s electric utility consumers. CEI, Cleveland Trust and several coal companies are interlocked through directors and financial arrangements. CEI has a self-serving record of purchasing higher-priced coal compared to other Ohio utilities.

Cleveland’s large corporations had become accustomed to forcing the city to sell off its assets and to provide shockingly ample tax abatements for newly constructed corporate buildings and facilities. Nor had these companies actively fostered good government by blowing the whistle on past political corruption.

The corporate drive to devour Muny Light was alleged to be necessary to help Cleveland’s financial problems though the companies were never able to support this claim. Now, because of the citizens’ vote to keep Muny Light, the harassed utility will be able to continue its meritorious $330 million antitrust suit against Cleveland Electric’s predatory practices designed to destroy or seize Muny Light at a giveaway price. The Justice Department, drawing on a devastating Nuclear Regulatory Commission decision in 1977 detailing Cleveland Electric’s monopolistic practices, has filed a brief supporting Muny Light’s case.

The Federal Energy Regulatory Commission soon will issue adecision requiring that Cleveland Electric wheel cheaper out-of-state power to Muny Light on reasonable and reliable terms. This is very significant. It would permit Muny Light to buy power at about half the price presently being charged by Cleveland Electric. This right will help Muny Light to modernize and expand its facilities, provide fairer rates to the city for street lighting and give hard-pressed consumers a break.

Kucinich’s come-from-behind victory in Cleveland resulted when the local and national media moved away from describing. the controversy as a political squabble between him and the city council and began concentrating on the basic issues of economic justice and over-reaching corporate power. The vote was direct municipal democracy at work, and the results were good for consumers and taxpayers.

What happened in Cleveland will be studied by neighborhood, community and consumer groups in other cities. A mayor who stands on principles of justice, an electorate which has a chance to vote away its powerlessness and a fuller flow of information about the corporate governments that rule the cities make up the formula for citizen-based city halls.

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