Wednesday, May 31, 2006

IG's Report Notable For What's Missing

I have had the opportunity to thoroughly review the Inspector General's Report on the Indiana Criminal Justice Institute and have reached several conclusions. At the outset, let me say that what the Inspector General left out of the report is as noteworthy as what is included in the report. Having said that, I can say that the report confirms my earlier conclusions that Heather Bolejack and Michael McKenna were up to no good--perhaps even more so than I earlier believed. Criminal laws were clearly broken, and it is imperative that the wrongdoers be appropriately prosecuted for their crimes. The report lists no fewer than a half dozen crimes the IG believes may have been committed, including, official misconduct, forgery, obstruction of justice, deception, theft and bribery. As bad as that may sound, reading between the lines, there is a far greater scandal afoot than even the Inspector General is willing to share with the public.

To put Bolejack's and McKenna's actions into perspective, let's look at how this matter unfolded from the very beginning. Bolejack assumed the position as executive director of the ICJI in April, 2005 after being appointed by Gov. Daniels. According to the report, McKenna, who at the time was working as a criminal defense attorney in New Orleans, contacted Bolejack soon after she began her new job and expressed an interest in obtaining a grant from the ICJI. As the report details, by hook or crook Bolejack was much too willing to aid McKenna in getting a grant from the agency.

When news of this scandal first broke, the story we were told was that McKenna wound up in Indiana after being displaced by Hurricane Katrina. The fact is that McKenna began laying the groundwork for a grant well before Hurricane Katrina hit. In fact, McKenna legally established McKenna Consulting, LLC on August 2, 2005, a fact missing from the IG's report. McKenna named Bingham-McHale law partner Matt Troyer as the registered agent, with the law firm's business address at 2700 Market Tower listed as McKenna Consulting's registered office. Bingham-McHale is managed by Toby McClamroch, who also chairs the firm's Government Services Practice Group. He is a former Indianapolis city-county councilor who is very active in Republican politics. Bingham-McHale also employed Bolejack in her first job out of law school.

When McKenna filed his initial application for a grant in August, 2005, he listed Matt Troyer as a contact for the business, and he used Bingham-McHale's business address as the address for McKenna Consulting. Oddly, these details are missing from the IG's report, even though they can readily be discerned from the Secretary of State's records and from McKenna's initial application for a grant, which is attached to the report. How is it that McKenna, who at the time was still living in New Orleans, wound up hiring a major law firm to set up his business? Because Bingham-McHale also has a substantial government relations practice and is listed as a contact on the application, was McKenna steered to the firm for more than simply preparing the articles of organization for his limited liability company? If so, by whom? The report sheds no light on these questions.

The report discusses a meeting McKenna had with Indianapolis city-county councilor Isaac Randolph to discuss the SKIP program. Bolejack introduced McKenna to Randolph because he had experience managing a similar program for the Ten Point Coalition, a faith-based group for which he had previously been employed as an executive director. The report only tells us that Randolph "was clear in articulating that at no point did he or Ten Point Coalition give McKenna permission to use either the concept or the name of the program."

What the report doesn't mention is the fact that McKenna and Randolph initially planned to partner together to win the grant according to an Indianapolis Star report. In fact, Randolph told the Star he e-mailed McKenna the details of the Ten Point SKIP program (which he obviously did without the consent of his former employer), but that McKenna cut off communications with him thereafter. Randolph assumed that McKenna had dropped the plan; instead, he incorporated it as his own, proving the old adage that there is no honor among thieves. While the IG's report ignores the part of the Star's report about the plan for McKenna and Randolph to partner on the grant application, it quotes McKenna in the report from that same article as saying, "I had no knowledge of any other program. This is a legal and valid program that I worked hard on."

It is also interesting to note that Randolph is a full-time employee of the Indianapolis Fire Department. What exactly was he doing pursuing government grant money to personally benefit himself while employed full-time by the taxpayers to do another job? It is clear that the IG's report went out of its way to insulate Randolph from any political fallout for his inappropriate involvement in this matter.

The IG report also implies that the meeting between McKenna and Randolph took place a week before Hurricane Katrina hit New Orleans and the Gulf Coast. However, the report incorrectly states that Katrina hit on August 25, 2005; it actually hit 4 days later on August 29, 2005, so the date McKenna and Randolph actually met is unclear from the report. The report does say that McKenna and his family immediately relocated to Indiana (with the assistance of Bolejack) after the hurricane hit and "the effort to secure federal grant money took on a new urgency and importance" the report says.

Laying aside Randolph's untoward involvement with McKenna, what is clear from the report is that McKenna himself was not eligible to receive any grant money for two reasons. Firstly, McKenna applied for a grant available under the federal Juvenile Accountability Block Grant (JABG) program, which is administered by ICJI. Federal law provides that grants may only be awarded to the state or a unit of government. As a private entity, McKenna did not qualify to receive funds. Secondly, the deadline for submitting applications for JABG grant money was August 1, 2005, acccording to a June 21, 2005 Memorandum issued by Bolejack's chief deputy, Kate Gullans. The report makes it clear that McKenna did not submit his application until after August 1, 2005, and when he did submit it, the application was missing key information such as the "eligible unit of local government", the applicant's financial officer and the proposed project director. It isn't clear what the precise date of its receipt was because the agency did not date stamp its receipt as it should have done. It is clear that at least one other grant application from the City of Gary was turned down because it was submitted after the August 1 deadline.

The report includes an e-mail Bolejack's chief deputy Kate Gullans sent to the ICJI's Michelle Tennell in which she speaks derisively of McKenna's application. She referred to it as "not very strong" and "the parts that are in there . . . are stuff that "I" have suggested that Michael put in." Further revealing her lack of confidence in McKenna, Gullans said she would have to wind up writing the grant. "I actually had to send Michael reseach links so that he would put in statistics." She adds, "I think I am just very critical . . . especially as this grant has some 'connection' to ICJI . . . since it was intiated by our office (so to speak) with Heather calling a meeting with Michael and Isaac Randolph . . . so it is then imperative that the application and program be strong so as to not warrant any 'favoritisms'--so to speak."

The IG's report next details a trail of deceit Bolejack and McKenna engaged into to secure the eventual awarding of a $417,000 grant to McKenna to administer the Saving Kids of Incarcerated Parents (SKIP) program. Whatever is said of Bolejack and McKenna, they'll never be accused of playing smart at their game of deceit based upon the details in the report. After initially filing an application on behalf of McKenna Consulting, someone figured out that wasn't going to work since he wasn't a governmental entity. The application was later revised to show it as being submitted on behalf of the Department of Corrections; however, the report offers no details of who Bolejack, McKenna or anyone else at ICJI spoke to at Corrections about the grant, if anyone was spoken to at all.

Later, the application was prepared to show the applicant as the Marion Co. Prosecutor's office with McKenna listed as the contact person. The report makes it clear that Bolejack herself communicated on several occasions with the Marion Co. Prosecutor's office about the grant, but it doesn't tell us who she spoke to. It tells us that she became frustrated with the office in an Oct. 27, 2005 e-mail exchange in which she implied that future funding to the office by her agency might be jeopardized because of the delay in getting the grant approved. The Marion Co. Prosecutor's office replied that same day that the delay was caused by the ICJI at which point Bolejack named the ICJI as the grant recipient and awarded it as a sub-grant to McKenna the following day. Bolejack would sign the grant award letter herself, which still listed the Marion Co. Prosectuor's office as the sub-grantee but was signed by both Bolejack and McKenna as sub-grantees. Bolejack would later find herself in the untenable position of arguing that the grant had been approved by the Board of Trustees at its September 8, 2005 meeting, even though e-mail communications revealed she was trying to get it nailed down a month and a half later.

Implicit in the report is that had either the Department of Corrections or the Marion Co. Prosecutor's office been awarded the grant as had been planned at one time, McKenna would have played a large role as a sub-grantee of the grant recipient. But the report sheds no light on these discussions and who they involved. And the $417,000 SKIP grant was not the only grant from which McKenna was to benefit. The IG's report says, "Applications or contracts in progress at ICJI reveal three additional contracts or grants by which McKenna was to benefit." The report said those contracts totalled $336,000, $70,000 of which would have gone directly to McKenna. The report says, "These additional groups had not intended to utilize McKenna's services until intoduced to McKenna was Bolejack." Disappointingly, the report tells us nothing about who these contracts or grants involved. Why? Is the IG protecting other people?

The most damning part of the report entails the doctoring of board minutes to give the appearance of a grant which did not go through the 3-step approval process as having been legally authorized. A grant for the Department of Corrections for the SKIP program was included in a spreadsheet of proposed grants considered by a committee at its meeting on September 1, 2005; however, the committee deferred action on the grant. A second committee met on September 8, but it did not discuss the SKIP grant and took no further action on the deferred grant. That same day, the Board of Trustees met and it also failed to discuss the SKIP grant or take any further action on the deferred grant. By the December 5 meeting of the Board of Trustees, the minutes from the September 1 and September 8 meetings had been altered to show that a $417,000 grant award to McKenna Consulting for the SKIP program had been approved.

Another problem with the grant noted by the report was the requirement that there be a 25% state match, or approximately $100,000, for the grant. Bolejack arranged funding for the grant so that federal funds were being used for the state match portion, a clear violation of federal law.

When the state suspended the grant on May 3, 2006, McKenna had already been paid $80,000 and another $110,000 was on its way. Neither payments were proper the report concludes. After 7 months, McKenna had failed to provide services or counseling for any children. He was, however, earning his $95,000 a year salary and enjoying his leased car the grant afforded him.

At the beginning of this post, I noted that this scandal is going to be much bigger than the IG hints as there are obviously many matters the IG did not include in its report. On that the report simply says, "Other investigative findings are being submitted to the Special Prosecuting and U.S. Attorneys for review." If the reviewing prosecutors do their job, you can be assured they're going to turn up more criminal wrongdoing than what is detailed in the IG's report.

When prosecutors take a look at all grants being awarded by the agency, as they should, they need to pay close attention to any money going to sub-grantees. AI suspects this may not be an isolated event. From the board minutes it is clear that there was a common practice of grants being administered by sub-grantees. This raises serious questions about whether the federal law limiting the awarding of the grants to state and local governments is being circumvented through the use of sub-grantees, whereby the governmental agencies are acting as mere pass-through entities so that the funds can benefit private individuals and entities. It has already been pointed out that ICJI grant funds have wound up in the hands of a business which is owned in part by former Marion Co. Prosecutor Scott Newman in this fashion.

What troubles me about the IG's report is how it focused exclusively on building a criminal case against Bolejack and McKenna, while ignoring or smoothing over the actions of others who by all appearances were complicit, if not cooperative, in Bolejack's efforts to steer business McKenna's way. By the report's own account, the investigation was triggered when a whistle blower complained via the IG's website hotline report on February 3, 2006, so it was presumbably anonymous. Wasn't the person(s) Bolejack dealt with in the Marion Co. Prosecutor's office four months earlier not suspicious of what was transpiring with the grant, or the person(s) she dealt with prior to that at the Department of Corrections? And didn't someone other than Bolejack make a decision to authorize the state warrants to McKenna first for $80,000 and later $110,000 without appropriate documentation to support the payment? Hopefully, prosecutors will find answers to the questions the IG hasn't answered of which there are plenty. And hopefully the mainstream media will dig deeper than the cursory review they've given the IG's report since its release late last week.

4 comments:

BB said...

Great analysis Gary. I skimmed the report myself and had some of the same questions, you've really dug in and summed it up nicely. Some of the so-called "real" journalists (or perhaps their superiors whose priorities are seemingly elsewhere) ought to be a little embarrassed they were schooled by you on this. I think the "threat" to the prosecutors office by Bolejack of further funding drying up if they didn't cooperate on McKenna is pretty intriguing, and I hope someone has made a public record request for all the email back and forth between HB and/or anyone else at ICJI and the MCPO.

abdul said...

Gary,

Shoot me an e-mail if you can. I have a couple thoughts on your piece. Thanks.
Abdul

Anonymous said...

It is a great analysis. I really wish Gary would write for the star. The star likely wont spend the time to cover this because they dont do investigative reporting anymore. Abdul wont be unbiased and will never speak ill of any of the likely other "culprits" and Amos is too pro Bolejack. We need someone (aka Gary) who might really look into what Randolph, Newman, MCPO were doing. We all know there is more.

Anonymous said...

The IG's report doesn't say Bolejack falsified any documents. Various media and bloggers have reported that it did. Apparently there are some original minutes and then a subsequent set of more detailed minutes, neither of which Bolejack created, and both created months ago it would seem.

In my work environment we often have multiple versions of documents resulting from the draft creation of an original that wasn't finalized and later effort to finalize the document for distribution. Often the 'original' drafts still exist unless someone goes around to everyone's PCs and deletes the 'old' original, incomplete version. Version control of documents is an ongoing struggle in all offices these days. Just because two versions exist is NO SIGN of any wrongdoing. Not at all! If different versions exist it is usually no big deal and easily explained to people who WANT TO LISTEN! However, that seems to not be the case here as it seems the entire investigation was purposed for removing Bolejack and I'll let you ponder the multitude of reasons why but ask you to consider the possibility she was deemed a threat to the political aspirations of others and needed to go. Look, if she had falsified documents the report would have been VERY SPECIFIC about that. IT WASN'T AND SHE DIDN'T!

You will also note the IG's report mentions a subordinate putting expenses on their credit cards. If you'll recall the 'leaks' made to the media made a big 'hint' at a travel scandal associated with Bolejack. But there apparently was none so the IG, pressed to mention something in his report regarding her travel, had to find something to mention. I heard that there were a handful of times in which a someone from the office put expenses on their credit card that were hers. Never heard that the person was asked to do this but offered to do so and was reimbursed for those expenses. If you'll look closely at the report it doesn't say Bolejack made anyone do this, but again I've seen media reports and blog postings emphatically saying she did. In fact, there is even a reference to the agreeing or offering if one reads the report closely.

I work on the private side and can tell you that I too have put expenses of those traveling with me on my cards for the following reasons:
a) convenience - we're at an airport restaurant and want to get out quickly so we put everything on one card
b) for airline mileage - my personal credit card is associated with an airline and I get free mileage so I use it every chance I get to get those miles.
c) the person with me doesn't have a card or their card is maxed - this does happen
d) not every place accepts all cards so sometimes we have to dig in our wallets to find a card which is accepted

I think there are two questions we need to ask here regarding the travel matter:
a) Why was it so important to even mention this in the report and imply that Bolejack forced people to put expenses on their credit cards? There seems to be a clear intent to destroy and discredit her as the punishment (public character assassination) seems disproportionate with the concern.

b) Who at the State dropped the ball and didn't get the CJI staff travel cards so they didn't HAVE to use personal cards? On the private side I will say that most companies ask new hires to fill out forms for travel cards as part of their day one orientation. Travel cards get sent to new hires within a week.

Also, the IG's accounting of the grant is so bizarre I don't even know where to start but wasn't this program designed to deliver services to children this summer? Didn't the State interrupt the program several months before it was designed to deliver services, thereby preventing the services from being rendered?

Also, saying the program was never intended to provide services seems to be a ridiculous charge.

And finally, it is my understanding this type of program exists in other states, even under the same name?? so I don't know what to make about the IG's comments regarding the Coalition and Randolph, etc. Seems a bit 'tabloidish' for this kind of a report.