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Detroit Medical Center CEO on possible mayoral run: 'I'm a turnaround guy'


By Bill Shea, Crain's Detroit Business
Posted: September 27, 2012 - 3:45 pm ET
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Mike Duggan, the powerfully connected CEO of Detroit Medical Center, is considering a run for mayor because he believes he can fix the city.

"I'm feeling like I'm watching the city go down and feel like I need to do something," he told Crain's this afternoon. "I'm a turnaround guy. I did it at Wayne County and with the SMART bus system. I believe the city can be turned around."

He also did it at the DMC, which had lost $500 million over the six years prior to his arrival in January 2004. Today, it has more than $2 billion in revenue.

Duggan, 54, filed paperwork today with the Wayne County election office and has formed an exploratory committee for a possible run at the November 2013 election.

His plan is to take the next 90 days to decide if he'll run. In that time, he's planning to attend 30 house parties, each attended by 15 to 20 people invited to talk about his possible bid for mayor.

"I'm going to get a chance to interact with people in every neighborhood in Detroit. We'll see how those go," he said. "I'm surrounded by a lot of political professionals and we'll see how people react."

Also driving his decision, he said, will be whether he can raise $5 million campaign donation pledges by the end of the year.

Raising money is nothing new for Duggan.

He's noted for his deep Wayne County and Detroit political and business community connections that date back to when he served as a deputy county executive from 1987 to 2000 under the late Ed McNamara.

Duggan was appointed interim general manager of the Suburban Mobility Authority for Regional Transportation from 1993-96 while he worked for the county.

He was a single-term Wayne County prosecutor from 2001 to 2003.

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Duggan was hired as DMC's president and CEO in January 2004. He said the system's ownership, Nashville-based Vanguard Health Systems Inc., is supportive of his possible run for mayor, and they're in talks of specifically when he would resign to campaign full time.

In January 2011, Vanguard completed its acquisition of the eight-hospital DMC for $1.5 billion, including $365 million in cash. DMC, which has become a for-profit system, has about $2 billion in annual revenue and more than 12,000 employees.

Duggan would take a significant pay cut if elected mayor, a job that pays $158,558 annually. He gets total compensation of $2.41 million from Vanguard.

"I've managed my money appropriately. The mayor's salary is very fair and I expect we'd be able to live on it," he said. "You don't do this for the money. You do it because in your heart because you believe you can turn the city around."

Duggan's total compensation from investor-owned Vanguard encompasses base pay of $497,250, bonuses of $603,842 and an estimated $1.3 million in Vanguard stock options if he continues to work at DMC over the next seven years.

A mayoral primary is scheduled for Aug. 6, 2013, followed by the general election on Nov. 5. The top two vote-getters advance from the primary.

Detroit mayoral ballots do not show political party affiliation.

Incumbent Detroit Mayor Dave Bing hasn't announced whether he'll seek a second full term.

Bing, a former Detroit Pistons basketball player and founder of Bing Steel, was elected in a special election in May 2009, and re-elected to a full four-year term in November of that year.

Two other Detroit Democrats serving in the state House have either filed papers to run, or said they plan to, The Detroit News reported today: Rep. Lisa Howze, D-Detroit, and Rep. Fred Durhal, D-Detroit. Other possibilities include prominent attorney Geoffrey Feiger, Wayne County Sheriff Benny Napoleon and City Council President Charles Pugh.

If he wins, Duggan would be first white mayor of predominantly black Detroit since Roman Gribbs in 1970-74.

Fueling months of scuttlebutt that Duggan would run for mayor was his purchase of a home last year in Detroit's historic Palmer Woods neighborhood west of Woodward Avenue at Seven Mile Road.

He said today that the move was inspired by the possible mayoral bid.

"There was a night last fall where I left DMC and the street lights were out on Mack, there were two shootings that day, and a huge line of people were stacked up waiting for buses. It felt like the city was slipping away," he said.

That night, he told his wife, Lori Maher, that he wanted to move to the city. They settled on Palmer Park, where he said Maher rode her bicycle as a teen.

Duggan's campaigning so far has been to establish his Detroit credentials.

"I was born in this city and worked here for the past 30 years, and have never seen things this bad," he said.

His first job out of college was in 1981 at a downtown litigation firm then called Solomon, Foley and Moran.

He has a bachelor's and law degree from the University of Michigan.

Duggan's committee chairman is Conrad Mallett, president and CEO of Detroit's Sinai-Grace Hospital, which is the biggest of the DMC's eight hospitals. Mallett is a former chief justice of the Michigan Supreme Court, on which he served from 1990-99, and COO of the Detroit Medical Center.

The campaign director is Tupac Hunter, a state senator whose 5th District includes northwest Detroit, Dearborn Heights and Inkster.

Bryan Barnhill is the campaign manager. He's the policy and legislative affairs director for the Detroit City Council.

Rebecca Williams is his campaign treasurer.

In addition to his campaign website at DugganForDetroit.com, Duggan's social media effort includes a Facebook profile, Twitter feed (which had a single welcome tweet as of Wednesday afternoon), still-empty YouTube, Flickr and Google+ accounts, and an Instagram profile that directs back to his web page, and a bare-bones profile on Tumblr.com.

Looming over everything is the city's $200 million budget deficit and the shadow of possible bankruptcy and a state-appointed emergency financial manager coming in to run Detroit — making the mayor and city council almost powerless.

In 2011, a state-ordered review team began examining the city's finances, working to determine whether an emergency manager should be appointed to run the city.

Though the team determined there is governmental financial crisis in the city, Gov. Rick Snyder didn't appoint an emergency manager. Instead, the city and the state settled on a consent agreement that specified reforms for Detroit and granted some emergency manager powers to Bing, and creating the position of a city program manager who is charged with carrying out the reforms.

In March, Duggan publicly spoke out to say that under no circumstances would he accept appointment as Detroit's emergency manager.

At the time, he called such a role a "tragic mistake" for the city.

The state's Public Act 4, which defines an emergency financial manager and his or her powers to solve financial crises in cities and school districts, has been temporarily suspended until a statewide vote on a measure (Proposal 1) that would uphold the law or strike it down in favor of an older, less powerful emergency financial manager statute.

Duggan said he'll vote for the act to be overturned.

"I just as soon see it repealed. I'll deal with it either way," he said, adding that the best way to make the law a non-factor is to run the city better.

Duggan as mayor would inherit the battle with the city's public unions over cost-cutting wage and benefit changes.

He also said that he has "zero interest" in his political mentor McNamara's old job as Wayne County executive if it becomes vacant. Current Executive Robert Ficano, a longtime Duggan political foe, has been embattled by an ongoing FBI investigation into his administration.

"I have no interest in any other job," Duggan said, adding that he would not leave the hospital system for any job other than the mayorship.


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