Friday, February 27, 2015

Rahm's Re-Election Nightmare: Chicago's Bond Rating Lowered Just Two Clicks Above Junk Bond Status

This cannot be good news as Chicago Mayor Rahm Emanuel faces a run-off election with Cook Co. Commissioner Jesus "Chuy" Garcia on April 7. Moody's Investor Service downgraded the city's bond rating to Baa2 with a negative outlook because of the city's inability to rein in the soaring cost of its workers' pensions. Emanuel's office is pointing to the fact that two other rating agencies, Standards & Poor and Fitch, affirmed the city's credit rating; however, S&P warned it still might lower its rating more than one notch. Some recent pension reforms undertaken by the city face legal challenges in the court, and the credit agency is weary of more than $550 million in additional pension payments the city will be forced to make starting in 2016. His opponent quickly seized on the news as evidence of his "lack of fiscal stewardship."

Former State Senator Sue Landske Dies

Just saw this note from Suzy Barnhart on Facebook on the passing of former State Sen. Sue Landske (R-Cedar Lake):
It's been a very sad morning to learn of the home going of former Sen Sue Landske. She was kind, helpful yet strong, smart and a TRUE public servant. Her home community of Cedar Lake had a nice, well attended Appreciation Dinner for her last year attended by Republicans and Democrats alike. 
She was a good political friend to my son & I early on. In the years my son paged for Sen Brandt Hershman, she would come & ask how I was doing. She would then pull a Indiana flag pin out and place it on his shirt or suit jacket. 
Many visits at the State House I would bring her a jar of my homemade jam and we would sit in her office and talk politics for a little bit. It became a tradition of ours. Her favorite was my homemade strawberry or pear honey jam. I don't know if I looked forward to the visit more or if she looked forward to my homemade jam more. 
She will be sorely missed!
The Northwest Indiana Times has more here.

Missouri State Auditor, Gubernatorial Candidate Takes Life

Schweich and home
The Missouri 2016 Republican gubernatorial race took a sad twist when the leading candidate, State Auditor Tom Schweich, took his own life yesterday by self-inflicted gunshot to the head. Schweich had called reporters for the Associated Press and the St. Louis Post-Dispatch to come to a press conference at his home in Clayton, Missouri yesterday morning shortly before he took his life. Schweich, a highly-regarded politician known for fighting corruption, was reported to be upset about a Republican political consultant and incoming state GOP leader raising his Jewish ancestry in a way he viewed as anti-Semitic and planned to address that issue at the afternoon press conference with the two reporters. From the St. Louis Post-Dispatch:
“What we know at this point suggests an apparent suicide,” Clayton Police Chief Kevin Murphy told reporters in a news conference Thursday afternoon. He said there was “nothing to support anything other than that at this point,” and said Schweich died from a single gunshot wound . . .
Earlier in the day, a police source told the Post-Dispatch that Schweich’s wife was in another room of their house when she heard her husband making phone calls, followed by a gunshot. Schweich had been shot in the head, the source said.
A 911 call was made from Schweich’s home at 9:48 a.m., seven minutes after Schweich had left a voicemail requesting an interview with a Post-Dispatch reporter.
Schweich was taken to Barnes-Jewish Hospital where he was pronounced dead, Murphy said.
Schweich, 54, had a cadre of mentors and supporters in his gubernatorial run that included former U.S. Sens. John Danforth and Jim Talent, both Missouri Republicans, and friend and wealthy campaign contributor Sam Fox, the former U.S. ambassador to Belgium. “I was never so surprised in my entire life to find out this happened,” Fox told the Post-Dispatch Thursday. “This guy was brilliant. This guy was unique. He had so much talent.”
Fox said he had scheduled a fundraiser at his house for Schweich. “He was raising money,” Fox said. “The money was pouring in.”
He said Schweich had not expressed any signs of personal or professional turmoil.
“None whatsoever,” Fox said. “Not to me nor to any friends that I’m aware.” . . . 
On Tuesday morning, Schweich confided in Post-Dispatch Editorial Page Editor Tony Messenger that he believed that John Hancock, the newly elected chairman of the Missouri Republican Party, had spread disinformation about Schweich’s religion. That topic was what Schweich wanted to discuss with reporters for the Post-Dispatch and the Associated Press Thursday.
In several conversations via text and phone in the days leading up to Thursday morning, Schweich told Messenger that Hancock mentioned to people in passing that Schweich was Jewish. Schweich wasn’t Jewish. He was a member of the Church of St. Michael & St. George, an Episcopal congregation in Clayton.
Schweich told Messenger he believed the mentions of his faith heritage were intended to harm him politically in a gubernatorial primary in which many Republican voters are evangelical Christians. He said his grandfather was Jewish, and that he was “very proud of his connection to the Jewish faith.”
“He said his grandfather taught him to never allow any anti-Semitism go unpunished, no matter how slight,” Messenger said in a written statement . . . 

Fort Wayne Mayoral Candidate Mitch Harper Cites Overly-Generous Tax Abatement For School Funding Woes

It's refreshing to hear more straight talk from a politician about why some of our schools are really struggling to pay for the cost of educating our state's children. Fort Wayne mayoral candidate Mitch Harper says tax abatements have contributed to the problem in spite of a reporter for a local TV station insisting that property tax caps are to blame.
This all stems from the state constitutional amendment that put a cap on the property taxes you pay.
Republican city councilman and Fort Wayne mayoral candidate Mitch Harper says the city and county have been so eager to attract businesses that they've granted too many tax abatements.
That means those properties can't be taxed, which means less available money for schools.
"We're rapidly approaching in Allen County in terms of tax abatements nearly a half billion dollars' worth of assessed valuation that's not being made available for assessed valuation," Harper says.
He says his mayoral campaign will include putting more controls in place for new tax abatements.
"One of the great victories we've had over the past year is actually being a little more vigorous in auditing that companies that have applied for tax abatements in the past have carried out what they've said they were going to do," he says.
The reporter also talks about legislation being offered by State Sen. Liz Brown (R-Fort Wayne), which would allow Fort Wayne schools to tap TIF funds to help pay for school transportation costs. "One of freshman Republican State Senator Liz Brown's bills would provide additional funding for Fort Wayne Community School bus service, " the report says. "The money would come from property taxes collected in certain economic development areas called TIF districts." "Brown says she knows it's not a perfect solution, and hopes new legislation next session could provide a more permanent revenue source for schools."

High-Flying Illinois Congressman's Days Numbered

Aaron Schock is pictured. | Getty
This Aaron Schock character from Peoria, Illinois has demonstrated to me the corrupting influence of our nation's capital embracing the Kardashian Culture. The attractive and buff 33-year old congressman had become the darling of the Washington media, which found any excuse to show us pictures of the well-dressed politician who seems to have always been more about form over substance, including shirtless pictures to show us just how buff and beautiful he is. After building up the show horse into mega celebrity status, the powers that be have now decided to throw him under the bus. It began with a report about him lavishly decorating his Capitol Hill office inspired by the "Downton Abbey" British television series, which led to an ethics complaint being filed against him.

That was followed by an Associated Press report questioning hundreds of thousands of dollars on questionable expenses he made using his congressional budget and campaign account for travel and entertainment charges. The AP pieced together Schock's travel itinerary by tracking the frequent Instagram photos he uploaded to the Internet to keep his fans and followers up to do date on his globetrotting. There was a lot of flights on private planes of corporate donors, concert tickets for him and his staff to a Katy Perry concert and even a large tab at a massage parlor. Whoa!

Today, Politico reports that Schock, who is single, took one of his male congressional staffers rumored to be more that along with him on a trip to London in 2011 that included stops at Windsor Castle, Buckingham Palace and a swank nightclub but failed to report any gifts on his financial disclosure form. Schock supposedly made the trip as the guest of a friend who was invited by the Prince of Wales Foundation to attend several elaborate dinners in London, including dinner with Prince Charles and Camilla. Guests received customized china as a gift at the end of the affair. Congressmen supposedly aren't allowed to accept gifts valued at more than $50, including food and beverage. The Prince of Wales Foundation head declined to say who invited Schock to come along to the ritzy affair as a guest. Last September, he hosted a fundraiser at a private golf course in Maryland owned by a wealthy political supporter but never reported any expenses for hosting the fundraiser. The fundraiser raised $125,000. The owner of the golf course is William Stone, who owns SS&C, a computer software company. Stone contributed $50,000 to Schock's PAC shortly after the fundraiser.

Schock has reportedly hired two high-profile attorneys in Washington to conduct an internal investigation of his office expenditures and campaign expenditures, as well as defend him in a potential ethics investigation. So how is it playing in Peoria where Schock has been very popular? If the local newspaper is any indication, not good. The stories have been front-page fodder as of late. A story in today's Peoria Journal-Star talks about him being mentioned on the Daily Show but not in a good way. I have a feeling this guy isn't going to survive his two-year term to which he just go re-elected last fall. The best defense Schrock can muster up, "Haters are going to hate." Yeah, gotcha.

UPDATE: More bad news for Schock. The AP reports Schock reimbursed the government $40,000 for re-decorating costs for his Capitol Hill office. Actually, his interior designer, Annie Brahler of EuroTrash, reimbursed the government for fees she had already been paid as of December 31, 2014, and Schock repaid her out of his persona account. Schock's office originally told reporters the designer had donated the services for free.

Thursday, February 26, 2015

Ballard Giving Away City Hall To Private Developer

The Indianapolis Star is giddy today because your precious public assets are once again being gifted by our generous mayor to a private developer. This time it's our treasured former City Hall, one of the finest and best built buildings in the City of Indianapolis that is currently sitting vacant. Rather than use it for the governmental purpose as it was intended, Mayor Greg Ballard would rather just give it away to a private developer for use as a boutique hotel.
A sleek, new boutique hotel, rising eight to 10 stories with about 150 rooms, will be built on a parking lot north of the old City Hall on Alabama Street as part of a multimillion-dollar redevelopment. 
The old City Hall will serve as hotel lobby and public art gallery, said Adam Thies, director of the Indianapolis Department of Metropolitan Development. It also could house several arts and community groups, although no agreements have been signed. 
"We really are interested in this project becoming a symbol for Indianapolis as an arts and culture hub," Thies said.
The most important information from the standpoint of taxpayers is missing from the story: How much will it cost us?
The city will continue to own the old City Hall and will provide the building under a long-term lease to the hotel developer, a small specialty chain called 21c Museum Hotels LLC, based in Louisville, Ky. 
Thies declined to say Wednesday how much will be spent on the project. Nor did he say what kind of incentives the city, state and federal governments plan to give 21c, saying that information would be released Thursday. 
Stephanie Greene, a spokeswoman for 21c, declined Wednesday to give details or even confirm the project, referring questions to city officials. "The mayor's office is handing this," she said.
Yes, the mayor's office handles all development in the City of Indianapolis these days it seems. You can bet the terms of the deal aren't favorable to taxpayers; otherwise, why hold back the most important details--at least if you care about taxpayers?

UPDATE: The Star's John Russell has a new story online, "Big splash, big price tag for old City Hall project," It says half the $55 million cost will come from a mix of government support, including a $9 million loan from the city backstopped by the downtown TIF slush fund. The terms of the long-term lease of the old City Hall building aren't disclosed in the story, presumably because the developer will pay a nominal fee of like $1 a year. There's also no mention of the price tag for the extremely valuable city-owned surface lot on which the new hotel will be constructed at the corner of Alabama and New York Streets, presumably because the City will simply donate the land to the out-of-town developer. The feds are providing a loan of $9 million, while the project will qualify for $4 million in federal tax credits. The Central Indiana Community Foundation will kick in a donation to the project as well. Nice use of charitable contributions, eh? I'm in the wrong business. I need to get a gig where the government just passes out tens of millions of dollars to me to play real estate developer.

Billboard Lobbyist Bankrolling And Running City-County Council Committee Chairman's Campaign

The stench at the City-County Building is competing with the sewer gases emanating from the State House dome these days. We already knew that lobbyists for the billboard industry had started flooding key members of the City-County Council with campaign contributions over the past year as they set about to turn the zoning process on its head by having the council to approve a zoning ordinance allowing for digital billboards to send to the Metropolitan Development Commission with instructions to approve, but it's much worse than that.

As Advance Indiana exclusively reported, a lobbyist for the billboard industry, Carl Drummer, was allowed to appoint a bunch of mummy dummy precinct committeemen shortly before the Democratic slating convention held earlier this month to outvote the elected precinct committeemen in District 1 who supported the re-election of their long-time council member, Angela Mansfield, and win the party's backing as its slated candidate in District 1. LeRoy Robinson, an at-large member of the City-County Council, moved from the home on which he's claimed a homestead exemption since he purchased it more than a decade ago, to an apartment in Washington Township simply to run against Mansfield in the Democratic primary. Robinson is the chairman of the Metropolitan and Economic Development Committee which is hearing the controversial billboard ordinance.

Fellow blogger Pat Andrews reports that Robinson held a fundraiser for his campaign the day after he released the agenda for his committee's November 17 meeting, the first time Proposal 250 appeared on the committee's agenda for consideration. About a third of the tens of thousands of dollars the billboard lobbyists plowed into councilors' campaign committees went to Robinson. Andrews notes that Proposal 250 languished for more than three months before it was placed on the committee's agenda in violation of council rules.

Andrews further reports a recent change in Robinson's campaign committee. He filed a statement of organization on January 20, 2015, which was executed on January 7, 2015 naming Greg Hahn of Bose Public Affairs Group as his committee's treasurer. Hahn, of course, is one of the key lobbyists hired by the billboard industry to pass Proposal 250. "That's right - a billboard lobbyist doing business before the Council committee that Robinson Chairs - is now the keeper of Robinson's campaign cash," Andrews writes. "Hahn is kind of a one-man band - donating, throwing fundraisers, and now logging the checks." Hahn, along with Ice Miller's Lacy Johnson, hold sway over the Marion County Democratic Party and were instrumental I'm told in the decision to recruit Robinson to move into Mansfield's District 1 in order to take her out because of her independent streak on issues, including her opposition to digital billboards and the criminal justice center project, two matters for which Hahn and Johnson are lobbying.

Wednesday, February 25, 2015

Retired Barnes & Thornburg Partner Unloads On Indy Eleven Soccer Stadium Deal And Former Colleagues

Tom Huston
When an Advance Indiana reader forwarded to me a column Tom Huston penned over at Indiana Policy Review's blog, I had to do a double take. Huston's scathing critique of legislation authored by his nephew, State Rep. Todd Huston (R-Fishers), to force taxpayers to finance a nearly $90 million, 18,500-seat soccer stadium for Ersal Ozdemir's Indy Eleven minor league soccer team could have been written by me, but I assure you I had no part in authoring it. Huston, a retired Barnes & Thornburg partner whose practice area focused on real estate development, had particularly harsh words for his former colleagues' role in aiding the passage of HB 1273.

State Rep. Todd Huston
Huston opens his column by telling readers not to "believe a thing you are told by its proponents or their mouthpieces at the Indianapolis Star." "They are in a Putin frame of mind, and if you are inclined to believe that the Legislature has the slightest interest in protecting taxpayers from the rapacious grip of Ersal Ozdemir and his fellow schemers, you have lost contact with reality," he writes. And that's just for starts.

Huston doesn't mince words in describing the amendment authored by his former colleague at Barnes & Thornburg, State Rep. Ed DeLaney, which DeLaney claimed would put Ozdemir on the hook for half of the debt. Huston's analysis of the DeLaney amendment mirrors mine. "Actually, his proposal won’t do any such thing since there it incorporates no requirement that the guarantor possess assets of a minimum amount," Huston said. "Unfortunately, DeLaney has spent his legal career as a litigator, and he doesn’t understand the fine art of theft through public-private deal-making." Ouch! "As to these statements, I simply blanch in embarrassment for my friend and former law partner: DeLaney said he didn’t ask for a 100 percent guarantee because he wanted a 'fair and measured approach' . . . DeLaney is oblivious to the reality that the only obligor/guarantor who is going to be of interest to buyers of bonds issued to finance the stadium is the deep-pocketed Capital Improvements Board," Huston said. "Any guaranty from others will be simply window-dressing for boobs."

Huston isn't buying assurances from the stadium's proponents of transparency in financing the stadium and then takes aim at Indianapolis' mayor: "Mayor Greg Ballard has refused to turn over documentation relating to either the special operations center lease or the financing structure for the proposed criminal justice center (both multi-million dollar deals) and has conducted as much of the public business in secret as his handlers thought he could get away with." Huston continues, "I am undecided whether those pushing this scheme are in on the action or are simply reading from a script prepared by the lobbyists (which, incidentally, include every major lobbying outfit in Indianapolis)." That team of lobbyists hired by Ozdemir includes some of his former partners at Barnes & Thornburg. Huston also includes some specific, spot-on analysis of the tax-shifting implications of the expanded downtown TIF and the creation of a new White River Revitalization District to sweeten the pot.

In concluding remarks, Huston say, "It is certainly true that the measure before the House is merely 'enabling' legislation: it will enable Ozdemir and his cronies to continue the rape of taxpayers that Mayor Ballard has enabled over the past seven years and which, apparently, the new Democratic administration of Joe Hogsett intends to also facilitate." He continued, "Millions of dollars in fees and commissions will continue to flow to favored law firms and their engineering and construction company clients. In the meantime, the legislators who expedite this fraud upon the public will continue to profess their commitment to free-market principles." He closes, "Lady Liberty weeps." I couldn't have said it better myself.
Ersal Ozdemir (Indianapolis Star/Danese Kenon Photo)

House Speaker Reveals For First Time He's On Ersal Ozdemir's Payroll As Well

Well just how many state lawmakers are on Ersal Ozdemir's payroll? Advance Indiana exclusively reported to you that State Rep. Greg Steuerwald (R-Avon) has been on Ersal Ozdemir's payroll as his attorney of record in contentious litigation Ozdemir is engaged with a former business partner, Jason Ellis, who alleges Ozdemir defrauded him out of his 20% interest in his construction and real estate development business. Despite that conflict of interest, Rep. Steuerwald supported and voted for legislation authorizing the public financing of a new stadium for Ozdemir's Indy Eleven minor league soccer stadium when it came for a vote before the House last year. Steuerwald reversed course and abstained when the legislation came before the House this year following Advance Indiana's report of his conflict of interest. Even more disturbing is a very cavalier disclosure today by House Speaker Brian Bosma that he too has performed legal work for Ozdemir, prompting him to join Steuerwald in abstaining from a vote on the passage of HB 1273.

The troubling disclosure of Bosma's conflict of interest is tucked away in an online story on the Indianapolis Star's website concerning the passage of HB 1273 on a 73-21 vote this afternoon. "House speaker Brian Bosma, R-Indianapolis, did not vote on the bill Wednesday, the Star's Mark Alesia and Tony Cook report. "He disclosed after the vote that he had done legal work for the Indy Eleven and has remained neutral." "That work involved trademarks and contract negotiations." "I don't have an (ownership) interest in it," Bosma said. "Honestly, I'm just trying to set the example for others and felt it was appropriate for me to file a letter (with the House ethics committee) and be excused."

He's remained neutral? Hah. This man controls the calendar and all bills heard in committee and called up for vote on the floor. His unilateral action can block a bill from being heard at any point along the way. By not disclosing at the beginning of the legislative session his conflict of interest, he has opened himself up to a heap of criticism that he has helped engineer passage of this bill for his client. This is even more troubling if the legal work he performed for Ozdemir occurred prior to consideration of last year's legislation. More interesting is the fact that Bosma's practice area at his law firm does not traditionally include trademark work. According to the firm's website, Bosma describes his practice area as follows:
With an extensive background in engineering, business, law and government, Mr. Bosma’s practice is concentrated in the areas of complex business and municipal transactions, municipal finance and environmental matters. He chairs the Government Practice Group of Kroger Gardis & Regas, and serves as general or special counsel to dozens of municipalities and business entities throughout the State of Indiana. 
An engineering graduate of Purdue University, Mr. Bosma represents both public and private sector clients in real estate and construction projects, public sector joint ventures and Brownfield redevelopment. He has served as lead counsel for more than fifty public and economic development projects ranging from small facilities to major public private utility projects. He is nationally recognized bond counsel and an active member of the Indiana Municipal Lawyers Association and the National Association of Bond Lawyers.
His government-related work alone raises all sorts of red flags since he has rarely disclosed a conflict of interest in participating on any matters before the General Assembly. Unlike Steuerwald, Bosma did not actually abstain from the vote; rather, he simply didn't vote on HB 1273. Steuerwald actually stood and requested permission to abstain from voting ahead of the vote, whereupon he was instructed to state the reason in writing for his abstention. Is there any wonder why those of us on the outside looking in see nothing but a public auction taking place over at the State House where financial benefits to lawmakers are regularly traded for favorable consideration of legislation before the General Assembly?

Last month, federal prosecutors in New York indicted the Empire State's long-time Assembly Speaker, Sheldon Silver, on multiple public corruption charges accusing him of accepting legal referral fees from clients with matters pending before the state legislature in exchange for favorable legislative consideration. Silver was accused of failing to disclose the sources of his income on state ethics statements. Indiana's weak ethics laws do not require lawmaker attorneys to disclose clients with matters pending before the legislature. In fact, both Bosma's and Steuerwald's financial disclosure statements claim attorney-client privilege and the rules of professional conduct governing attorney conduct prohibits them from making such disclosures.

UPDATE: A vote yesterday was also taken on HB 1540, the big gaming bill all of the high-powered gaming lobbyists have been working the hallways hard this session to pass. It allows riverboat casinos to become land-based casinos, and it allows live dealers at the state's two racinos at the horse race tracks in Anderson and Shelbyville, effectively turning them from the "slots at the tracks" to full-blown casinos. The recorded roll call vote shows that only one lawmaker present did not participate in the vote. That lawmaker was Mr. Speaker. Does that mean Speaker Bosma is also doing legal work for the powerful gaming interests? The public has the right to know. I understand the Speaker often doesn't vote in Indiana, which I've always found a bit odd, but if the Speaker doesn't explain his non-participation, how would the public know whether he was not voting because he's the presiding officer or because of a conflict of interest. When are the useless State House reporters going to actually start doing their jobs and reporting on the rampant corruption taking place under their noses?

House Foolishly Votes 73-21 To Pass Indy Eleven Soccer Stadium Deal

The House of Representatives just voted 73 to 21 with virtually no debate to pass the Indy Eleven soccer stadium legislation that will force state and local taxpayers to subsidize a nearly $90 million, 18,500-seat stadium for a minor league soccer team owned by a shadowy Turkish immigrant about whom little is known other than he seems to have bucket loads of money to lavish on politicians to extract public financing for his private business endeavors to the tune of hundreds of millions of dollars. That's an even larger margin than it passed last year, proving just how thoroughly corrupt your state lawmakers have become.

Only State Rep. John Bartlett took to the floor to speak in opposition to the legislation, noting that Indianapolis is the 9th poorest major city in America with many unmet needs that should have a higher priority than another sports stadium.

Our corrupt mayor, Greg Ballard, visited the State House today for the first time this session to personally lobby on behalf of Ozdemir. Obviously, the Carmel resident is Ballard's master, not the city of the people he supposedly represents.

Rep. Greg Steuerwald (R-Avon) again recused himself from participating in the vote--only because Advance Indiana exclusively reported he's been on Ozdemir's payroll for the past few years representing him in contentious litigation with his former business partner. The only hope lies in the Senate, where Senate President David Long says the legislation is not a priority.