Saturday, April 18, 2009

Conflicts Face Council Leadership On CIB Bailout

Under a $48 million bailout plan approved by the Indiana Senate, the Indianapolis City-County Council will be required to vote on a number of proposed tax increases, including the innkeeper's tax, alcohol tax, car rental tax and admissions tax. The bailout plan would also expand Indianapolis' professional sports development area to include the J.W. Marriott convention hotel complex. It could be the biggest issue to come before the council this year. Yet it's three top leaders, CCC President Robert Cockrum, Vice President Ryan Vaughn and Democratic Leader Joanne Sanders, all face conflicts of interest which should bar their participation from this critical decision.

Cockrum is the appointed member of the council on the Capital Improvement Board. Since becoming one of the nine board members, Cockrum has abstained from voting on some matters related to the J.W. Marriott convention hotel. Cockrum's son is an executive with White Lodging, the company which is building the hotel complex. Indianapolis is spending at least $60 million in economic development incentives for the project, including a connector between the hotel complex and the Indiana Convention Center. The CIB currently awards the Indiana Convention & Visitors Association ("ICVA") about $11 million annually. CIB President begrudgingly admitted the money is a grant after I challenged an answer he gave to Councilor Ed Coleman about the CIB's grants at the Municipal Corporations Committee excluding the ICVA money. Although the ICVA is a separate nonprofit entity, it gets most of its money from the CIB. In the 1980s, the Indianapolis Star had to sue the ICVA to force it to provide records it requested from it under Indiana's Access to Public Records law. Downtown hotels benefit from the ICVA's marketing efforts, which include incentives to lure conventions such as buying down room rates to make the City more competitive with other cities. As John Dora explained to the Municipal Corporations Committee, the ICVA will have to step up marketing efforts if the innkeeper's tax in increased to 17%, one of the highest in the country.

If the Indiana Senate plan is adopted, the J.W. Marriott will benefit from the CIB bailout plan, partly from the revenues it generates that would be diverted to the CIB. Can Cockrum participate in the bailout plan when his son's hotel company will derive a financial benefit from the tax increases and expanded PSDA? Cockrum attended the recent Municipal Corporations Committee meeting at which the committee discussed the bailout plan with the CIB's representatives. Cockrum lauded Grand for his work, dismissing Councilor Ed Coleman's call for him to resign because of his firm's representation of the Indiana Pacers.

Vice President Ryan Vaughn is employed by Grand's law firm, Barnes & Thornburg, as an attorney/lobbyist. In addition to the firm's representation of the Indiana Pacers, the firm represents Simon Property Group. Pacers' owners Herb and Mel Simon founded the publicly-traded company that David Simon now presides over as CEO. Barnes & Thornburg also represents the City of Indianapolis and performs legal work for a number of city-county agencies. According to the Star, Grand and another partner of the firm, Joe Loftus, regularly attend senior staff meetings Mayor Ballard conducts with his staff weekly. It would seem a given that Vaughn could not participate in the bailout given the attorney-client relationship of his firm with the Simons and their Indiana Pacers, but he has made no indication to his caucus members to date that he will abstain from voting on the matter.

Council Democrats are led by At-large Councilor Joanne Sanders. She is employed as an international representative of the International Alliance of Theatrical Stage Employees, the same union which represents workers at the Indiana Convention Center. Many convention workers showed up at the hearing in the Indiana Senate on the CIB bailout to show support for the higher taxes and financial support for the CIB. At Thursday night's meeting of the Municipal Corporations Committee Sanders touted a Democratic plan to bail out the CIB without raising taxes. That plan calls for a downtown casino and an expanded professional sports development area that would include all of the sales tax revenues generated from Circle Centre Mall. Whichever plan is finally adopted, Sanders' union will no doubt expect her to support a CIB bailout. The question is whether it's a vote she should make given her role as an employee of the labor union which represents convention workers.

By all indications, none of the council leaders intend to shy away from participating in the CIB bailout decision. Other council members may have to consider whether the interests of their leaders may cloud their judgment on what could be the biggest vote they cast during their current term on the council. Meanwhile, taxpayers are left asking who is representing their interests in this debate?


I know said...

Every contract at the State level and the City level has conflicts. The incest that has been allowed to breed in the doing everyday business of getting the wheels of "business and injustice" greased has caused so many good people to be told go home and don't come back.

It is really a shame that the people who plea to the masses forget what the result will be when those same people rise up again! When people forget where they came from they will get reminded!!!!!! It is the only way a civil society controls itself.

If a real investigation was undertaken the Federal Courthouse could not hold all of the indictments.

M Theory said...

So far it looks like the main person considering our interests is the Libertarian, Ed Coleman.

artfuggins said...

I dont understand the sudden interest by some in the conflicts of interest. Councilor Ryan Vaughn has a conflict with 2/3 of the issues voted on in the council......AI, I realize you have pointed it out but others seem blind to it.