Sunday, May 31, 2009

IMPD's Dirty Cops

The federal trial of two narcotics IMPD officers who were allegedly stealing money and drugs from area drug dealers is getting underway at the federal courthouse in Indianapolis. The Star's Jon Murray gives a preview of the case here. If you want all the nitty gritty details of the allegations of the government against Robert Long and Jason Edwards, check out the government's trial brief and proffer of evidence here. According to a government informant, an ex-police officer, Long's and Edward's alleged illegal activity dates back 7 or 8 years when they started stealing items recovered during the execution of search warrants, thefts referred to as "cuffing." They started out with small-time stuff like jewelry, guns and flat panel TVs. My favorite story from the government's brief is the $125,000 stolen from a Bentley automobile at Lion's Gate Apartment:

During June 2007, several law enforcement agencies, including the FBI, DEA, ATF, and the IMPD executed arrest and search warrants in connection with the indictment in United States v. Shawn Young, et al., Cause No. 1:07-cr-068-SEB/KPF. Long participated in these raids.

There were rumors that the targets of the investigation had been tipped off before the raids.

There was also talk that the feds were looking for a Bentley automobile containing cash.

Long told Davis that his wife, Janice, had locked her keys in her car and needed to borrow Davis's slim jim. Long stopped by Davis's home to borrow the slim jim. Around this time, Edwards told Davis that they had something serious and proceeded to tell Davis about the Bentley. Edwards said they found the car at the Lion's Gate apartment complex and were trying to get inside the vehicle to take the $100,000 believed to be contained therein. Edwards also told Davis that the slim jim did not work on the Bentley.

Davis was outside Nashville, Tennessee on his way to Panama City, Florida, when he received a call from Edwards. During the call, Edwards said they got inside the car but were having difficulty gaining access to the trunk. Edwards said they needed a flat bed tow truck to remove the vehicle from the parking garage at Lion’s Gate.

One or two days later, Edwards called Davis and said that they got in the trunk of the Bentley and stole approximately $125,000. Edwards said they had recruited some young kids to assist and had paid them $5,000. The remaining money was split among Edwards, Long, Chavis Taylor, and another person.

Long used his share of the money to take his wife on a first class trip to Hawaii. Edwards used his share of the money by to travel, possibly to Mexico, and to purchase an interest in a boat with Jason Barber, a detective assigned to the Narcotics and Dangerous Drugs Section of the IMPD.
Imagine, the corrupt police officers couldn't figure out how to open the trunk of a Bentley so they recruit some kids to do the job for them and paid them $5,000. A sidebar to Murray's story details a half of a dozen other police officers charged for corruption over the past year.

CIB Still Has No Plan B

CIB leaders are so confident of their ability to wield control over Indiana lawmakers to get what they want--a $47 million bailout--that they needn't bother with a contingency plan. "There is no Plan B," [CIB President Bob] Grand said. "I won't talk about those scenarios until I face them. I don't have the time or money to pay lawyers to figure that out. If it falls through, there will be plenty of time for that." One thing that will not occur, regardless of what the legislature does next month during its special session, is the closure of Lucas Oil Stadium, a point I've made repeatedly on this blog. The Star's Brendan O'Shaughnessy writes, "The state would take over operation of Lucas Oil Stadium, because the Indiana Stadium and Convention Building Authority holds the roughly $1 billion in bonds for the construction of the stadium and expansion of the Indiana Convention Center."

The simple solution to the CIB's current funding woes is to return LOS to its rightful owner, the State of Indiana. "If the CIB stops operating the stadium, another operator would be put in its place," Kitchell said in an e-mail. "We could do this very quickly without interrupting scheduled events." What we'll discover after the state assumes control of LOS is that the CIB deliberately lied about the true extent of the higher costs of running the new stadium. The Daniels' administration will discover those costs to be well below $20 million. Significantly, the state will be able to tap existing revenues from the regional food and beverage tax, which are currently running ahead of expectations by millions, to offset some of those costs. O'Shaughnessy's article notes the reluctance of city leaders to discuss this possibility. As I've stated on previous occasions, the lure of having free tickets to dispense to local politicians for Colts games and other events at LOS is intoxicating.

O'Shaughnessy's story also discusses Sen. Mike Delph's suggestion that the CIB file for bankruptcy, an idea touted by fellow blogger Paul Ogden. "Delph said the threat of bankruptcy -- a scenario that could include a judge reworking contracts -- would change the balance of power with the Indianapolis Colts and the Indiana Pacers, who have so far not agreed to contribute the $5 million asked of each as part of several bailout scenarios," O'Shaughnessy writes.

Incidentally, I think O'Shaughnessy has been reached. No longer does he use the term "bailout" when discussing the CIB's efforts to get approval for tax increases and revenue enhancements to the tune of $48 million a year. He now calls it a "rescue plan." Hmmm.

If Gov. Mitch Daniels proposes a bailout plan for the CIB when he announces his new budget proposal tomorrow night, I believe this is one of those things that will not go unnoticed among the conservative blogs across this nation. Maybe that's of little concern to him, but if he is truly interested in a White House bid some day, that's not the sort of news he wants coming out of the Hoosier state about his administration. The best solution is for him is to tell the CIB to return LOS to state control and pledge to operate it smarter and more efficiently than the CIB. Asking taxpayers to dig deeper into their wallets to provide more subsidies to the billionaire sports team owners will not play well in the Hoosier state or among the Republican faithful across the country to whom he would look for support in a potential presidential bid.

Saturday, May 30, 2009

Daniels Delivers National Republican Response To Obama's Weekly Address

President Barack Obama used his national weekly radio address to bolster the credentials of his first Supreme Court nominee, Sonia Sotomayor. "Nobody brings the depth of experience she brings to the job," Obama says. "She has more experience on the federal bench than any other Supreme Court nominee." Obama's plea and expectataion of bipartisan support for his nominee strikes me as a little hypocritical. After all, this is the guy who voted against both of Bush's nominees, Samuel Alito and John Roberts, despite their imminent qualifications, and backed unsuccessful efforts to filibuster their nominations. It seems to me that Sotomayor no doubt possesses the qualifications to be a Supreme Court justice. The question is whether she has the judicial temperament to serve in that role. And the only reason we know about that issue is because activists on the Left dumped negative stories in the media questioning her intellectual capacity and temperament as a way of torpedoing her nomination before Obama nominated her.
Gov. Mitch Daniels had the task of delivering the Republican response to President Barack Obama's weekly national radio address. He chose to tackle Obama's "cap and trade" energy policy and its potentially negative economic impact. Here's the full text of his response:

"This is Mitch Daniels, governor of Indiana.

"The role of the loyal opposition is important in our democracy. It imposes a duty to wish for the nation's success, to express not just disagreements, but agreements where they exist, and to leave partisanship at the water's edge.

"I do wish President Obama well. I support his education reform ideas, anti-fraud
initiative in social programs, and the great example he and his family are setting for families across America. And I endorse wholeheartedly his stated commitment to 'government that works.'

"One policy being pushed by the President and House Speaker Nancy Pelosi is, I regret to say, a poster child for government that cannot work. The scheme to radically change the sources and the cost of American energy through a system known as 'cap and trade' may be well intentioned, but it will cost us dearly in jobs and income, and it stands no chance of achieving its objective of a cooler earth.

"The national energy tax imposed by Speaker Pelosi's climate change bill would double electric bills here in Indiana, working a severe hardship on low-income families, but that's only where the damage starts. In a state where we like to make things, like steel and autos and RVs, it would cost us countless jobs, many of them heading off-shore to China and India. Our farmers and livestock producers would see their costs skyrocket. And our coal miners would be looking for new work, while we leave affordable, homegrown energy idle in the ground.

"And all for what? Even if one believes the Administration's own computer models, which they claim can predict temperatures fifty years away, the CO2 reductions from their bill will not budge the world thermometer by a tenth of a degree.

"It's become clear that the Pelosi bill has little to do with a cooler planet and everything to do with raising money for the out-of-control federal spending now underway in Washington. Please excuse us Midwesterners for feeling a bit like the targets of an imperialistic policy, devised in places like California, New York, and Massachusetts for their benefit, at our expense.

"We have here a classic example of unwise government: The costs for all Americans will be certain, huge, and immediate. Any benefits are extremely uncertain, miniscule, and decades distant. Surely there is a better way.

"Here in Indiana, we are active in pursuing a better energy future and proving that we can protect the environment, lower energy costs, and create jobs at the same time - all without raising taxes. We have rocketed to national leadership in biofuels. We are the nation's leader in the new technology that can use coal more cleanly. We are serious about major advances in conservation; the best way to reduce both pollution and CO2 is to use less energy in the first place. And last year, we were the fastest growing state in wind power.

"There is tremendous risk in being pushed into an unfair and ultimately counterproductive national energy tax that will cost us dollars today and jobs tomorrow. Let's take a breath, slow down, and work together on conservation, the infrastructure to bring on more wind and alternative energy, and the new technology that will let us use our abundant homegrown coal in ways we can all support. That, Mr. President, would be 'government that works.'

"Thank you for listening."

Friday, May 29, 2009

Fitch Withdraws A+ Rating On Waterworks Bonds

Fitch Ratings assigned an A+ rating to two series of bonds the Indianapolis Bond Bank planned to issue earlier this month in the denominations of $51.2 million and $49 million, respectively, for waterworks projects. Fitch withdrew its rating after the Bond Bank decided to postpone the bond sale. Fitch's ratings for $842.5 million in outstanding water company bonds affirmed on April 23, 2009 remains unchanged. Bond ratings for the Indianapolis Water Company's indebtedness have been downgraded over the past year as its financial situation has drastically deteriorated, particularly due to the disproportionate share of variable rate bonds it had issued. The water company is now converting those bonds to long-term fixed rate bonds at a substantial penalty.

Federal Probe Of Visclosky Widens

Indiana's First District U.S. Rep. Pete Visclosky received more bad news from federal prosecutors this week. They've subpoenaed records from his congressional office, campaign committee and some of his employees as part of its investigation of a Washington-based lobbying firm, PMA Group, which has close ties to Visclosky. According to the AP, one out of every four dollars Visclosky raised for his campaign committee came from clients of the lobbying firm, most of whom are defense contractors. Visclosky's former chief of staff went to work for PMA Group a few years ago. The firm's clients were interested in Visclosky because of his key assignments on an appropriations for defense subcommittee, which is chaired by the corrupt Pennsylvania congressman, John Murtha (D) and Visclosky's chairmanship of the Energy and Water Subcommittee.

As Republicans in Indiana's Fifth congressional district ponder whether they want to return U.S. Rep. Dan Burton or elect one of four challengers taking him on in the primary next year, they should pay close attention to the role of lobbyists in corrupting Congress. One of Burton's challengers, Luke Messer, gave up his job as a state representative he said to spend more time with his family. Instead, he joined the law firm of Ice Miller as a lobbyist. Messer pushed gaming legislation supported by the firm's clients while he served in the Indiana House. A few short years later, Messer has decided he wants to run for Congress, which will take him far away from his family in Shelbyville and will be a much more demanding job than his former state representative job. In 2007, Ice Miller launched a Washington, D.C.-based affiliate to lobby Congress. The head of the firm's government relations practice, Lacy Johnson, has strong ties to U.S. Rep. Andre Carson, who represents Indianapolis' Seventh District. Johnson considered the late U.S. Rep. Julia Carson his godmother. Sending Messer to Congress should fit nicely into the firm's efforts to expand its Washington presence.

Keeping It All In The Family

Further eroding his credibility, IPS Superintendent Eugene White is adding yet another family member to the school district's payroll. His son, Reginald White, is being hired as a coach and behavior dean at Tech High. His daughter, Kim White, teaches at Marshall Community High School, which has been the center of controversy for the past couple of years. The Star says the IPS school board will "clarify the district's nepotism policy" to allow the hiring of his son and make it clear he will not be supervising him.

Thursday, May 28, 2009

Long Rules Out Gambling Expansion But Not CIB Bailout For Special Session

Senate President Pro Tempore David Long told reporters today that there would only be one bill heard during the special session, the budget bill, and it won't include provisions for expanded gambling in Indiana. Long, disappointingly, has no problem with sticking a bailout of the corrupt and mismanaged Capital Improvement Board in the budget bill as long as it is accomplished with higher taxes and not expanded gambling. House Speaker Pat Bauer countered Long's comments with the suggestion a CIB bailout could not be accomplished without considering "critical" gaming issues for different areas of the state. Let's see, that list includes:

  • Moving one of the Gary riverboat licenses to a land-based location in Lake County.
  • Financial assistance for the state's two racinos at Shelbyville and Anderson.
  • Financial assistance for the struggling French Lick casino.
  • Financial assistance for Michigan City's Blue Chip casino.

Any other suggestions? Is anyone on the side of the taxpayers who are fed up with handouts for the state's powerful and wealthy at their expense?

More Evidence Politics Played Role In Chrysler Closings

There is more circumstantial evidence suggesting that the Obama administration is playing politics in its handling of Chrysler's bankruptcy by targeting Republican-owned dealerships disproportionately for closure. Gateway Pundit points out that a string of dealerships in Missouri and Arkansas owned by Democratic big shots, Mac McLarty, a former Chief of Staff to President Clinton, and Black Entertainment Television's Robert Johnson, a big Obama supporter, were saved while dealerships owned by the chain's local competitors got axed. There is also the disclosure by the Washington Examiner that Obama auto czar Steven Rattner is married to a big-time Democratic fundraiser and former finance chair for the DNC, Maureen White. An analysis of the 789 dealership closings indicates that 90% are big contributors to the GOP, while less than 10% were big contributors to Obama and the Democrats. Indiana's Gene Beltz and Michael Leep, both big GOP contributors, were among the dealerships on the closure list.

Wednesday, May 27, 2009

Vaughn A No-Show At Washington Township GOP Club

I had the pleasure of serving on a blogger panel with fellow bloggers Paul Ogden and Sean Shepard at the monthly meeting of the Washington Township GOP Club last night. Three of the four candidates seeking to replace Sen. Teresa Lubbers in the 30th Senate District pressed the flesh with the Republican faithful, including Chris Douglas, John Ruckelshaus and Scott Schneider. Ryan Vaughn was a no-show. I'm told by regular attendees that Vaughn rarely attends the Washington Township event despite the fact that it is in his council district. Committeepersons in the Senate district will meet in the near future to select Lubbers' replacement.

A number of other elected officials were in attendance, including Sen. Mike Delph, State Rep. Cindy Noe, City-County Councilor Christine Scales and Marion Co. Superior Judge Lisa Borgess. Sheriff candidate Bart McAtee also was in attendance.

Congratulations to businessman and Washington Township school board member Greg Wright on his recent appointment to the Indianapolis EEO Advisory Board. Rep. Cindy Noe swore-in Wright to his new post last night. He will make a wonderful addition to a board that is badly in need of some adult supervision.

Tuesday, May 26, 2009

Did An Obama Enemy's List Play A Role In Decision To Close Chrysler Dealerships?

Indiana Chrysler dealers who recently got word that the bankrupt auto dealer had decided to close their dealerships should be pondering whether their past political donations to Republicans played a role in their fate. Blogger Doug Ross' analysis of the list of closed dealerships indicates that dealers who have contributed a lot of money to Republican candidates in the past didn't fare so well. Ross' initial post is supported by anecdotes published on other blogs. Indianapolis' Kevin and Gene Beltz are listed as contributing $18,500 to Republican candidates according to Ross. Gene Beltz Shadeland Dodge, owned by the Beltz family, is on the closure list. Michael Leep's South Bend dealership is being closed. He has contributed $19,500 to Republican candidates, along with a few thousand dollars to Evan Bayh and other Democrats, according to Ross. The reaction of some of the dealers on the closure list nationally suggests that there were factors other than the dealership's financial track record at play. Even very profitable dealers were axed. The administration of Barack Obama is exercising unprecedented power over the auto industry in the wake of Chrysler's and GM's financial meltdowns. Obama is dictating the terms of Chrysler's bankruptcy to the disappointment of many creditors and other interested parties.

Obama's SCOTUS Pick Is Sotomayor

I made the prediction weeks ago that President Barack Obama would pick Second Circuit Court of Appeals Judge Sonia Sotomayor to take Justice David Souter's place on the Supreme Court because she is both a woman and would become the nation's first Hispanic to serve on the high court. Today, AP sources say Sotomayor is his pick. I would note that Sotamayor received her first appointment to the federal bench by a Republican, President George H.W. Bush. President Clinton later elevated her to the Second Circuit Court of Appeals.

CORRECTION: I dubbed Sotomayor as becoming the first Hispanic to serve on the U.S. Supreme Court if she is confirmed. That honor actually belongs to Justice Benjamin Cardozo, who served on the high court with distinction in the 1930s. Sotomayor would qualify as the first Latino and the first Hispanic woman to serve on the high court.

Monday, May 25, 2009

Ice Miller Profits From Water Company Debacle

Ice Miller served as bond counsel to the Indianapolis Water Company and the Indianapolis Bond Bank in 2005 when it foolishly converted fixed rate bonds to variable rate bonds insured through interest rate swap agreements. Now that IWC is forced to pay prepayment penalties of at least $65-$70 million after interest rates on those bonds escalated from 3.5% to 9.5%, Ice Miller is being rewarded once again to provide bond counsel work for the water company on the transaction to convert the variable rate bonds to $540 million in fixed rate interest bonds.

During a recent meeting of the Board of Waterworks, only board member Jim Atterholt sought answers to the troubling problem of how this came to be that the water company finds itself in dire financial straits. Atterholt's questioning forced the bond counsel and the Bond Bank's executive director, Kevin Taylor, to place blame on the debacle on the downgrading of two credit providers who insured the 2005 bond deals, MBIA and Depfa Bank. At the time of the 2005 transaction, MBIA had received a AAA rating from credit rating agencies. When the rating agencies finally discovered that MBIA had a terrible balance sheet because of its risk exposure from the bond deals it had insured, its rating plummeted to single A. Depfa Bank fared even worse as its rating dropped to BBB-. Italian officials seized some assets of Depfa Bank last month after charging the bank with fraud for derivative bond transactions that cost European municipalities several hundred million dollars in losses.

Atterholt asked Taylor if either of the credit providers were potentially liable to the water company. Taylor answered "no" because the credit providers had met all of their contractual obligations. According to Taylor, the agreements did not require the credit providers to maintain a certain credit rating, although their credit ratings clearly impacted the interest rates the water company could achieve in the market. Taylor testified that the variable rate bonds posed three types of risks: market risks; counter-party risks; and interest rate risks. In this case, it was the downgrading of the counter-parties' credit ratings that posed the financial risk to the water company. Ice Miller's Brenda Horn, who served as bond counsel on that transaction, deflected blame, saying her firm only performed legal work on the transaction. Substantive decision-making, she maintained, rested with the water company and the Bond Bank. The key decision-makers she says are no longer employed by the City. It seems to me that Ice Miller's legal work was deficient if it did not require in the interest rate swap insurance agreements that the insurers maintain a minimum credit rating. Its failure to include that language allows the credit providers to profit at the expense of the water company from their financial downgrading.

A member of the public asked the board if it had considered whether any of the financial advisers should be held liable for the 2005 variable rate bond transactions. Chairman Sam Odle ignored the question and moved on, prompting Atterholt to ask Odle to address the citizen's question. Odle allowed Horn and Taylor to comment. Taylor said the Bond Bank obtained a new financial advisor for the latest transaction to convert the variable rate bonds to $540 million in fixed rate bonds that will not mature until 2038. Without elaborating, Taylor answered the question by indicating that discovery had begun to determine whether any entity could be liable to the water company for the financial debacle, which threatens its very solvency. Umbaugh & Associates performed the original role as financial advisor. Former City Controller Robert Clifford, a key person involved in the 2005 bond transactions, obtained employment with Umbaugh after leaving his city job. Taylor said the Bond Bank retained Lamont Financial as its financial advisor for the new bond deal and he was confident in their ability to provide financial advisor services. (Note: Lamont's website is still under construction) He also said Morgan Stanley, the same firm which employed the problem broker who caused major losses to the ISTA Fund, would serve as underwriter.

It is worth noting that Chairman Odle is a political crony of Ice Miller's Lacy Johnson. When Johnson served as President of the Indianapolis Airport Authority, he announced a deal to allow Mansur to develop a new hotel at the airport. An equity partner in the Mansur deal included Sam Odle, who runs Methodist Hospital for Clarian Health Partners. When the Ballard administration took over in January, 2007, it cancelled the hotel deal for Mansur; however, Johnson continued on in the role as Vice President of the Airport Authority and his law firm, Ice Miller, continues to provide legal advice to the authority. Self-dealing has it rewards in Indianapolis, even when it results in losses of tens of millions of dollars to the taxpayers. Odle acknowledged during the Waterworks Board meeting last week that the Board on which he served in 2005 had failed to ask questions about the risks of the variable rate bonds at the time it signed off on them. Atterholt should be applauded for asking the questions Odle wants to ignore to protect his sponsors.

Star Calls Out Bayh Conflict On Health Care Reform

Throughout his political career, Sen. Evan Bayh's wife, Susan, has used her husband's political jobs to parlay millions for the Bayh family. This has been accomplished from her service on a variety of corporate boards. Few would doubt that Susan Bayh would have never been appointed to any corporate board but for the fact that she's married to Evan Bayh. It's a form of legalized bribery. An editorial in today's Star focuses on one of those boards, health care giant Wellpoint. For her part-time service on Wellpoint's board, Susan pocketed $327,000 last year. Star editors believe it is impossible for Sen. Bayh to engage freely in the debate over health care reform in Congress given Susan's role with Wellpoint. A government-run plan, such as proposed by liberal Democrats in Congress, could effectively put Wellpoint out of business. Both Wellpoint's Angela Braly and Bayh's Senate office assured the Star that appropriate safeguards were in place to avoid conflicts, but as the editorial points out, the conflict of interest is unavoidable and limits Bayh's ability to lead on the issue.

Saturday, May 23, 2009

Rep. Jacque Clements In A Heap Of Trouble

Hoosier Access' Josh Gillespie picks up on the details of a lawsuit Clinton Co. Commissioners have filed against State Rep. Jacque Clements, the county's former auditor, and one of its computer software vendors, accusing the two of fraud and intentional interference with a contract based on reports in the Frankfort Times. Clements worked for Manatron, a software vendor for the auditor's office when she was chosen at a Republican caucus to fill the vacant office in 2004 according to the lawsuit. Clements never disclosed her relationship with Manatron on her statement of economic interest the county contends. Manatron's contract with her office for tax billing software ended in December, 2007, along with Clements' employment. At that point, the county claims that Clements negotiated a new contract with Nikish Software on her own that allowed it to convert Manatron's software program to Nikish's software. According to the lawsuit, Clements worked as either an employee or consultant of Nikish. Nikish's software doesn't comply with Indiana law the suit alleges, and the county has incurred damages as a result of its contract with Nikish. The county is now in the processing of converting the software back to Manatron's.

This isn't the first time Clements has been in trouble. The county dismissed her from her county job awhile back over "unauthorized personal use" of the county's e-mail system. Clements potentially faces criminal charges in addition to the civil lawsuit arising out of the alleged self-dealing activities.

UPDATE: See Clements' response to the lawsuit here.

Friday, May 22, 2009

Coroner Concedes Office Could Have Handled Case Better

Dr. Frank Lloyd has gone from defending his office's handling of the transportation of a 750-pound deceased woman to admitting that his office could have handled her case better. The Star's Kevin O'Neal writes:

"You know how you hoist a car on a flatbed with a chain? That's how they took her up there," David Johnson said Thursday. He had taken care of Smith for the past four years.

Coroner Frank Lloyd Jr. said Smith's body could have been treated in a more sensitive manner. He said his office hopes to get equipment to accommodate similar instances in the future.

"The last time we had to do this was in 1997," Lloyd said. "Having been through this once, there are some steps we can take."

Thursday, May 21, 2009

More On Downtown, Inc. And That Playboy Party

WRTV's Sara Cornell followed up on a post I had yesterday about Indianapolis Downtown, Inc.'s promotion of a race weekend party sponsored by Playboy at the Conrad Hilton featuring Ludacris and several Playmates. Cornell interviewed IDI's Vice President of Marketing Julia Watson to get her reaction to potential negative reaction to the taxpayer-financed organization's promotion of the racy (no pun intended) event. Watson's position is that IDI promotes events that take place in Indianapolis every weekend regardless of their content. I'm not quite sure why she pointed to it as an example, but Watson said IDI would be promoting Circle City Indy Pride, an annual celebration for gays in lesbians, in a couple of weekends. I guess her point was that a party with controversial rapper Ludacris and the Playboy Playmates was no different than a gay pride celebration from a moral perspective, except for the fact that the Pride event is open to the entire public to people of all ages and attendance at the event in University Park is free; the Official Playboy Party is an adults-only private party to which admission is charged.

Cornell followed up her interview of IDI's Watson with a short interview with me. I explained to Cornell that I have no problem with Playboy hosting the party at the Conrad Hilton. It's a private business trying to market its product, and its star-drawing status will no doubt fuel attendance at its party. My question is why IDI, a publicly-financed nonprofit organization, is promoting this private party over all of the official race-related events over the Memorial Day weekend. The Hulman-George family has taken the opposite tact in recent years as it increasingly changed the atmosphere surrounding the Indianapolis 500 to be a more family-oriented event. Race day at the Speedway is a fairly tame affair compared to what it was 15 years ago. I suspect the Star's story today on the lack of bookings at area hotels might have been an extra incentive for IDI to promote an event at a downtown hotel. Your thoughts?

Marion County Coroner's Office Back In The News

The Marion County Coroner's Office handling of a morbidly obese deceased person has the decedent's family asking questions. According to WXNT, Coroner's employees dragged a more than 700-pound deceased woman, Teresa Smith, from her apartment on a mattress, heaved her on a flat bed truck supplied by a local tow truck operator and threw a piece of carpet over her to cover her body as shocked family members looked on. One family member told WXNT that a blanket covering her body fell off and the workers didn't bother to cover her back up as they proceeded to drag the mattress. According to the WXNT report, former Chief Deputy Coroner John Linehan, who the previous coroner fired because he's white according to the findings of an EEOC administrative law judge, said the office has ambulatory devices to move persons up to 1,000 pounds. A few months ago, a source within the Coroner's office said Coroner's office employees mixed up the bodies of an African-American decedent and a Caucasian decedent when they were autopsied. The office did not become aware of the mix up until weeks later according to the source. Dr. Frank Lloyd succeeded chiropractor Kenneth Ackles to the office in January; however, Lloyd kept the same management team in place that worked for Ackles.

UPDATE: The story originated on WRTV. Click here for the full story and video.

UPDATE II: Jack Rinehart led off this evening's WRTV broadcast with a follow up story that included an interview with Dr. Lloyd. Lloyd defended the actions of his employees as "respectful", although when Rinehart asked him if he would allow a member of his own family to be transported in that fashion, he responded, "no." Rinehart also spoke to several different sources who confirmed availability of ambulatory devices to transport obese persons. Rinehart noted that the coroner's office had such a device and an SUV in which the body could have been transported available at the scene for use. I've also added exclusive home video footage Fox59News obtained of the unbelievable scene.

Wednesday, May 20, 2009

"Too Politically Sensitive," A Book By A True American Hero

True American heroes are easy to find if you just look for them. Terre Haute native and former Illinois State Police Special Agent Michale Callahan is one such man. Callahan has recently published a book, "Too Politically Sensitive," which recounts Callahan's years of fighting for two men wrongfully convicted of committing the brutal murder of a young, Paris, Illinois couple on July 6, 1986. Callahan knew that two down and out bar flies in Paris were framed for stabbing to death two newlyweds, Dyke and Karen Rhoads, and setting their home on fire. His fight for the truth ultimately cost him his career at the Illinois State Police, but he never gave up and he's still fighting for the free speech rights of public employees who dare to speak the truth about what they observe in their official jobs.

The case of Dyke and Karen Rhoads is one I remember vividly. I was in my second year as a staffer for the Illinois House Republicans in Springfield, Illinois when the couple were found dead in their home just 12 miles up the road in Paris from my hometown of Marshall, Illinois. The scuttlebutt in the local community immediately saw the killings as a way the town's most prominent businessman, long suspected of being engaged in illegal drug trafficking, took care of people who learned too much.

Paris, Illinois was no stranger to big-time drug connections. When I was finishing high school and beginning college at Eastern Illinois University, a federal prosecutor out in New York by the name of Rudi Giuliani was making a big name for himself prosecuting key figures in the Sicilian Mafia and the New York Bonanno crime family, one of whom operated a local pizza joint in Paris called, "Joe's Pizza." We knew Joe simply as Joe The Pizza Man. Our eyes were really opened in our small community when federal prosecutors descended on Joe's Pizza and took him into custody to stand trial in New York. I remember local police complaining that they had been left out of the loop. Federal investigators bluntly stated that local law enforcement couldn't be trusted with the sensitive investigation.

A local prosecutor in Edgar County quickly set his sights on laying the blame for the murders of Dyke and Karen Rhoads on local bar flies Randy Steidl and Herb Whitlock. I was convinced the two men were being framed at the time. One of the accused men's mother visited a local dental office in Terre Haute where my sister worked. The man's mother shared tearful stories with my sister about how she knew her son was innocent and that the corrupt State's Attorney, who I always thought was a real scumbag, was framing her son with the assistance of the Paris police department. Indeed, Callahan explores in his own book the evidence of prosecutorial and police misconduct he uncovered in his investigation of the murders, including intimidation, manipulation of the truth, exculpatory evidence that was never turned over by the prosecutors to the accused's attorneys, eyewitnesses who later admitted that their stories were fabricated and evidence pointing towards other suspects who supported the theory that the victims had been killed by persons involved in an illegal drug dealing ring. Callahan finds evidence that the real suspects are also possibly linked to other unsolved murders in the area.

Unfortunately, Steidl and Whitlock were convicted. A moratorium on the death penalty by Gov. George Ryan, who at the time was under investigation for racketeering and fraud and is now serving time in the Terre Haute federal prison after being convicted of those crimes by federal prosecutors in Chicago, saved Steidl from a death sentence. Steidl eventually won the right to a new trial but prosecutors refused to retry the case. He was freed after serving 17 years in prison, including 12 of those years on Death Row. Whitlock had to wait 21 years to be freed after the court determined that the state had committed irreversible error in withholding exculpatory evidence from the defense.

Callahan had been the two wrongfully accused men's toughest advocate for their innocence. The corrupt administration of Gov. Ryan blocked his efforts to reopen the investigation of the Rhoads' murder. His boss told him the case was "too politically sensitive." What made it politically sensitive was the fact that one of the suspects, the prominent businessman, had made big-time contributions to Ryan's campaign committee. When Callahan pressed the case, the talented investigator received a reassignment of his duties to mere patrol officer. Ironically, the election of Gov. Rod Blagojevich allowed him to re-open the investigation; however, his efforts were thwarted by people within law enforcement. Later, Callahan sued the Illinois State Police for retaliating against him for exercising his Free Speech rights. A federal jury found in his favor and the federal judge in the case concurred. The government subsequently appealed the case successfully to the 7th Circuit Court of Appeals, which reversed the trial court decision based on a recent U.S. Supreme Court ruling in Garcetti v. Ceballos, which said "when public employees make statements pursuant to their official duties, they are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline." Callahan is currently appealing last year's 7th Circuit decision to the U.S. Supreme Court.

The Terre Haute Tribune Star's Lisa Trigg features a story today on Callahan's recently released book. His book was released Monday at the Illinois Governor's residence in Springfield during a Defenders of the Innocent reception. He plans book signings in Terre Haute tomorrow and Sunday in Terre Haute. Trigg notes that Callahan's book "names names" but stops short of accusing those suspects of carrying out the murders. "The big question is why these people get excluded from the later investigation," he tells Trigg. Click here if you would like to buy a copy of the book from Land of Lincoln Press, Inc.

Downtown, Inc. Promotes Playboy's Race Weekend Party At the Conrad

Indianapolis Downtown, Inc. sent out an e-mail promoting race weekend events in Indianapolis, including a party sponsored by Playboy at the Conrad Hilton featuring controversial rapper Ludacris, who likes writing sexually-explicit lyrics which promote violence and disrespect for women. An online promo at urges you to "come party with the playmates and Ludacris" this Saturday night at the Conrad Hilton, which is converting its second floor , according to the Downtown, Inc. e-mail, to "the city's largest ultra lounge with a dance floor, DJ, cocktail stations and more." Dare I ask what "more" includes?

Colts Get Credit For Taxpayers Contributions

A couple of months ago, we learned that the IHSA was considering moving the high school football finals to another venue because it could not afford the higher costs they were being charged to hold the finals in Lucas Oil Stadium compared to the RCA Dome. Unlike the RCA Dome lease agreement with the Colts, the team gets to keep half of all non-game event revenues generated by the stadium built with taxpayers money. On top of that, the fees to hold events at LOS are anywhere from 25% to 40% higher. One of the reasons the CIB needs a bailout is because it needs additional grant money to offset the higher fees groups must pay to use LOS; otherwise, the groups will take their events elsewhere. Not to miss out on a public relations moment, the Colts put out a press release announcing that the team had come to the rescue and would now sponsor the IHSA's football finals. Naturally, the media took the bait hook, line and sinker. The Colts boast that they are the first NFL team in the country to step up and offer this type of sponsorship. Aren't you ever so grateful? Meanwhile, Mayor Greg Ballard will continue his tax and spend plan to bail out the CIB to the tune of $47 million a year so it can afford to make grants to other organizations so they can afford to host their events at LOS.

How Barack Obama Giveth And Taketh Away From Indiana

State Treasurer Richard Mourdock has harsh words for President Barack Obama for changing the rules of bankruptcy in the case of Chrysler, causing state funds invested in the company by the state's Indiana State Police Pension Fund and a road construction fund to be lost. State losses will total over $1 million. The Indiana Teachers' Retirement Fund racks up a loss of $4.6 million. Mourdock claims President Obama put the interests of others ahead of secured lenders like the state. As a consequence of Obama's action, Mourdock plans to discontinue any state investments in companies receiving federal bailout assistance. That would have been the wiser course of action even before this latest announcement.

Will Suburban Counties Let Tax And Spend Ballard Raise Their Taxes Too

Mayor Greg Ballard ran on a promise not to raise taxes and to cut government spending. "There's a lot of fluff in that budget," he said. After being elected to office, Ballard started peddling backwards on his campaign pledges and hasn't stopped yet. His predecessor, Bart Peterson, suckered the collar counties, except for Morgan County, into raising taxes to support Indianapolis' latest sports palace, Lucas Oil Stadium. Now Mayor Ballard wants those same counties to support a regional alcohol tax to bail out his grossly mismanaged Capital Improvement Board. The Star's Brendan O'Shaughnessy picks up on a story Fox 59's Russ McQuaid broke over the weekend.

Ballard expects the alcohol tax to raise anywhere from $8 to $12 million. A lot of room for error there, eh? He also wants to raise the auto rental tax, hotel tax and admissions tax, as well as expand the professional sports development area to siphon off more state tax revenues for the CIB. And he's hip to allowing for full-blown casinos at the Shelbyville and Anderson horse race tracks as long as the CIB gets a share of the haul, not to mention some of the CIB's board members. Ballard's chief of staff, Paul Okeson, says Ballard has reached this consensus after talking to "council leaders and area business leaders" in closed door meetings. Have you had enough of Greg Lies?

By the way, Mr. Mayor, voters in Morgan and Johnson Counties convincingly voted against raising taxes for school construction projects in three separate school districts. Voters are in no mood for higher taxes, even if it benefits schools, let alone your beloved Capital Improvement Board. By the way, Mr. Mayor, when do you plan to disclose how many free tickets to Colts and Pacers games you and your family have accepted since you took office?

Tuesday, May 19, 2009

McGoff Enters 5th District Congressional Race

Dr. John McGoff came closer than any other challenger to knocking off the 13-term veteran U.S. Representative in Indiana's Fifth District, Dan Burton, in the 2008 Indiana primary election, capturing 46% of the vote. The former Marion County coroner and emergency room physician is joining a crowded field of Republican candidates who have decided to challenge Burton as he seeks to extend his stay in Congress to 14 terms. Others in the race include Carmel's Brose McVey, who unsuccessfully challenged the late Julia Carson in the 7th District in 2002, former State Rep. Luke Messer of Shelbyville and Indianapolis' State Rep. Mike Murphy. Marion Co. Prosecutor Carl Brizzi has also formed an exploratory committee, but he is not expected to enter the race if Burton seeks re-election. Under a silly Indiana election law, candidates are listed on the ballot in alphabetical order. That means the Fifth District Republican congressional ballot would like this right now:

Dan Burton
John McGoff
Brose McVey
Luke Messer
Mike Murphy

By virtue of his name recognition, ballot placement and incumbency, Dan Burton has to be a heavy favorite to win re-nomination. I've always thought the alphabetical listing of candidates on the Indiana ballot disproportionately favors people with names beginning near the beginning of the alphabet. Indiana elects a lot of Bauers, Bayhs, Bosmas, Bowens, Carsons and Clarks as a consequence. Other states, such as Illinois, have a draw among the candidates who file their candidacies on the opening day of filing upon the opening of business for the day to determine their ballot placement. That seems more fair to me, particularly since my last name begins with a "W".

Politico has a different take on the 5th District race, seeing Burton as highly vulnerable. I would agree with Politico but for the fact that he faces not one, two or three but four primary challengers. I don't see Burton losing in that crowded of a field. Politico quotes Marion Co. GOP Chairman as labeling Burton as "out of touch" and touts Messer as an early front runner among the challengers. The article doesn't mention that John is a partner at Ice Miller along with Luke Messer. I think rank-and-file Republicans in that district have pretty much figured out what a phony Messer is. If someone other than Burton wins the primary, it won't be Messer. People aren't looking for a former lawmaker turned lobbyist in today's political environment to represent them in Congress. I don't care how much money he raises from his lobbyist friends. Among the challengers thus far, McGoff has the advantage because of his name recognition and residual good will from his 2008 campaign. Hat tip to Frugal Hoosiers.

Council Says It's Okay To Pocket Up To $1,000

It's an improvement but it still defies logic. It is an ethics ordinance, after all. The Indianapolis City-County Council agreed to a new ethics ordinance that will allow councilors to receive a financial benefit of up to $1,000 (it was $5,000) without disclosing and abstaining from participation in a vote that benefits the source of the financial benefit. One Democrat, firefighter Vernon Brown, voted against it, saying "you can't legislate ethical behavior any more than you can legislate Christian behavior" according to the Star's Brendan O'Shaughnessy. Brown would know. As the story notes, a city ethics ordinance applicable to city employees bars them from participating in any decisions that bring a financial benefit to them.

Councilor Ginny Cain, a non-practicing lawyer who chairs the Ethics Committee, said the council decided to lower the threshold due to public reaction to the $5,000 threshold. "Our point was there should be transparency without being tedious," Cain said Monday evening before the vote. "But we're trying to keep it from becoming a fishing expedition. It gives us a little cushion so we don't have to watch for every little $10 thing."

One councilor, Mary Moriarty, brings up another point that needs addressed. "Mary Moriarty Adams, a Democratic member of the ethics committee, said setting a threshold on benefits would allow council members to vote on several issues where they have received perks for years," O'Shaughnessy writes. "For instance, council members receive free airport parking." Why the hell should city councilors get to park for free at the airport? They should pay like everyone else. It's the same thing with free tickets to events at Lucas Oil and Conseco Fieldhouse. Councilors should pay like everyone else. That's one of the reasons people on the council have such a warped perspective on the CIB. They love the CIB because it gives them free tickets to Colts and Pacers games. As a consequence, they are incapable of fulfilling their duty to scrutinize the CIB's budget and other activities.

The council also approved the refinancing of those variable rate interest rate bonds the water company issued a few years back that could cost taxpayers as much as $90 million in prepayment penalties. There will be no investigation. The council simply says to move along, there's nothing to see here. The original bonds were issued as fixed rate bonds of approximately 5%. That's how it was sold to the City-County Council. Without asking any questions, in 2005 the City-County Council went along with the plan to refinance most of the water company's debt with variable interest rate bonds backed by interest rate swap notes. By doing this, the water company initially cashed out over $40 million that Bart Peterson wanted to hand out to political contributors for capital projects. The short-sighted move aided his re-election effort but screwed the water company users royally as interest rates jumped from 3.5% to 9.5%. Now, the prepayment penalties will be rolled into the old debt, piling up even more debt. A water company the city purchased for a little more than a half billion dollars (approximately double its real value) will ultimately wind up carrying a debt of close to $1 billion. That's why your city water rates will be hiked by double digits this year and for years to come.

Monday, May 18, 2009

Groups Charged 25% Or More To Use Lucas Oil Stadium

Under the terms of the CIB's lease agreement with the Indianapolis Colts, the team keeps half of the revenues Lucas Oil Stadium generates from non-game events. Groups who previously hosted events in the RCA Dome are experiencing fee increases of 25% to 40% to host their events in the Lucas Oil Stadium. Some of these groups have received grants from the CIB to host their events in Indianapolis. So guess what? Part of the reason the public is being asked to bail out the CIB is so the CIB can continue making grants to these groups to entice them to continue hosting their events in Indianapolis, notwithstanding the higher fees. The IBJ's Scott Olson writes:

Organizations hosting events at Lucas Oil Stadium already expected to pay more than they did at the RCA Dome, but some fear the Capital Improvement Board’s financial difficulties could drive costs even higher.

The concern is greater for not-for-profits operating on tight budgets that likely will pay at least 25 percent more to use the stadium compared with rates at the RCA Dome. In addition, some are receiving fewer grant dollars from the CIB, further straining financial resources.

Music For All, the former Bands of America Organization that relocated to Indianapolis from Chicago in 2003, will conduct its November Grand National Championships in Lucas Oil Stadium for the first time. CEO L. Scott McCormick anticipates that stadium costs will be higher than at other venues hosting Music for All events, such as the Georgia Dome in Atlanta or Alamodome in San Antonio.

“It has clearly become the most expensive of all the [stadiums] we use around the country, and that clearly was not the case with the RCA Dome,” McCormick said. “The challenge in this economy is, how do you navigate those waters?”

The Indiana High School Athletic Association did so by raising ticket prices. In 2007, the last year it held football championships in the RCA Dome, the IHSAA paid $152,000 in rental fees. Last year, in the new stadium, those costs climbed more than 40 percent, to $261,000, according to the IHSAA . . ,

The ICVA markets the CIB’s venues. ICVA Director of Communications Bill Benner declined to discuss the not-for-profit’s contract concerns.

To step up city marketing efforts, ICVA requested up to $5 million in additional yearly funding from the CIB that it has not received. The ICVA’s $10.5 million budget ranks below many of its competitors’. Only Minneapolis’ $9.6 million is less. In contrast, San Antonio’s visitors association receives $20 million.

Nice little shell game the CIB guys have going on, eh? The Colts demand and get one half of the non-game event revenues. Fees for these events are jacked. The groups that pay these fees come running to the CIB asking for additional grant money to offset the higher fees. The net effect is that the CIB uses its revenues from non-game events to pay for these grants. The Colts get to keep the extra money. The CIB doesn't have sufficient funds to pay the operating and maintenance costs for LOS. You're asked to pay higher taxes and use more of your tax revenues to finance their little shell game.

Sunday, May 17, 2009

$15,000 For Five Minutes With Obama

That's how much wealthy Democrats paid to hear Obama speak briefly at the Westin Hotel late this afternoon at a fundraiser benefitting the Democratic Party. People who paid $500 to $5,000 at a fundraiser for U.S. Reps. Andre Carson, Joe Donnelly, Brad Ellsworth and Baron Hill got to hear Obama for about 15-20 minutes. His entire trip in Indianapolis lasted less than half an hour. The Star's Bill Ruthhart reports:

His quick tour of the Westin hotel Downtown lasted less than half an hour, but the president managed to reel in hundreds of thousands of dollars in campaign cash for the Democratic National Committee and four incumbents in Congress. The precise amount raised was not immediately available.

After leaping onto a ballroom stage in front of 650 people who dined on honey chicken breasts, cheesecake and champagne orzo, Obama proclaimed, "It's good to be back in Indiana."

"It reminds me of why I like getting out of Washington so much: People are friendly," he said to a round of laughter. "It brings back a lot of memories from all those days out here on the campaign trail. So, I want to start out tonight by saying thank you, thank you to all of you here in Indiana. I know that I'm here tonight because of you." . . .

About 650 people paid between $250 and $5,000 to hear Obama's 15-minute speech and support the four congressmen.Yves Kongolo, 25, Noblesville was one of them.

"Every time the president gives a speech, it motivates everybody," he said. "I got a handshake and a hug from the first black president of the United States. So of course, it was worth it.

"Obama also made a brief appearance at a DNC fundraiser in a small conference room filled with 30 to 40 people. That event cost $15,000 per couple, and the president spoke for less than five minutes.

Ballard Now Pushing Regional Alcohol Tax To Finance CIB Bailout

In his continuing quest to completely renege on every campaign promise he made as a candidate, Mayor Greg Ballard has settled on a push for a regional tax hike on alcohol to finance his bailout of the Marion County Capital Improvement Board. Carmel Mayor Jim Brainard will love this little gift to help bail him out of the financial mess he has brought to his city with his reckless spend, borrow and build programs. Fox 59's Russ McQuaid reports:

Indianapolis Mayor Greg Ballard tells Fox 59 News he will announce this coming week that his latest plan to erase a $47 million budget deficit at the Marion County Capital Improvement Board includes an alcohol tax through the nine donut counties of central Indiana.

"I think the regional alcohol tax is something that should be in play," said Ballard. "Those taxes haven't been raised since 1981.

"Ballard's original proposal, which included a higher alcohol tax in Marion County, did not pass through the regular session of the Indiana General Assembly. That tax was opposed by alcohol retailers in Indianapolis who feared it would chase customers across county lines. This proposal would raise alcohol taxes through the metro area, allowing those counties to keep the additional revenue raised in their area, while raising money to fund the CIB which operates the city's convention business and sports venues. By proposing a tax that provides funding for the donut counties, Ballard is hoping local officials will lean on lawmakers from their areas to support the plan at the Indiana statehouse when the legislature meets in a special session to write a state budget.

"I think you'll see next week that we've got this thing corralled and there may be some options at the statehouse to do that," said Ballard.

McQuaid's report also indicates that talks are still alive for awarding table games to the racinos in Anderson and Shelbyville, making them full blown casinos. Several CIB members have financial ties to both race tracks and stand to gain financially from any expansion of gaming at the race tracks. Of course those self-serving board members have got a plan to put a few million in their pockets while pretending to be good public servants. The race tracks are generously offering to share $17 million a year with the CIB if it gets its expanded gambling wish.

I would have not thought it possible, but I am convinced now that Ballard has ushered in an even more corrupt city government than the one presided over by Bart Peterson. Just ask city contractors. Ballard's campaign has been hitting them up the past year to join he and his wife, Winnie, at St. Elmo's Steakhouse for private, intimate dinners with the mayoral couple for $5,000 a pop according to a reliable source. The source says Ballard's fundraisers are getting a little too pushy for the comfort level of some contractors. Ballard has nothing to fear. Indianapolis doesn't have a prosecutor who will deal with corrupt politicians. Let's see, who is a business partner with the owner of St. Elmos? And doesn't that same owner serve on the Capital Improvement Board? And isn't he the same guy who has an ownership interest in Centaur, the company that owns the Anderson racino? And doesn't another CIB member's family have a financial stake in the Shelbyville racino, which is represented by yet another CIB member?

UPDATE: Proving just how irresponsible his administration has been since it took over the CIB, Mayor Ballard is actually defending the payraises and new workers the CIB added last year knowing that it was about to run out of money. The Star's Brendan O'Shaughnessy reports that Ballard downplayed concerns about the issue. His CIB President, Bob Grand, had this incredible statement in response to the criticism:

CIB President Bob Grand defended the pay raises as reasonable at the time they were budgeted last year, before the agency had a clear understanding that its finances were crumbling. He also said the board voted for the raises -- the total cost is about $240,000 in a CIB salary budget of $3.7 million -- "knowing full well that they may not stick" because cuts were possible in the future.

"Why would I shut down the place and risk losing all the employees?" Grand said.

Since then, the board has made budget cuts as it attempts to trim costs in the face of a potential $47 million budget deficit next year. The cuts include furloughs -- six days of unpaid time off by June -- for the agency's 81 salaried employees.

"There are no raises now," Grand said. "The furloughs mean a cut in pay."

For many, that's undeniable. But the furloughs will have little effect on some of the bigger raises that a few CIB executives received.

For example, Stadium Director Mike Fox received a 36 percent pay raise. His salary last year was $94,507; now it's $128,242.

Notice that Grand tells O'Shaughnessy that the raises were reasonable at the time they were approved last year "before the agency had a clear understanding that its finances were crumbling." That's a flat out lie. Grand and the administration knew full well last year the CIB had no extra money in its budget for operating and maintaining the Lucas Oil Stadium and would run out of money and the agency had been running deficits for a decade. News reports for the past two years have made the issue of the anticipated shortfall abundantly clear. As I said when I first saw the published numbers for the CIB's budget, it was a padded budget. The CIB upped its budget 20% going into this budget year. The budget cuts it has made since then still translate into an increase over prior year's budgets. The CIB went out of its way to exacerbate its financial woes so it could get as big of a bailout as possible.

The Republican-controlled City-County Council is equally culpable. It has completely abandoned its duty to review these budgets proposed by the Ballard administration. "Michael McQuillen, chairman of the City-County Council committee overseeing the CIB, said the committee found the CIB's overall budget request reasonable but did not review each salary," O'Shaughnessy writes. "Reasonable?" It was a 20% hike at a time when other budgets were being cut or flat-lined. "We knew a problem was coming, but in the last few months, we realized it was a worse mess than imagined," McQuillen said. A City-County Councilor would have had to bury his head in the sand for the past two years not to see this financial crisis coming.

Saturday, May 16, 2009

Indiana Chamber Of Commerce Shows Its Hypocrisy

Indiana's business and labor leaders forged a bipartisan agreement to alter unemployment insurance benefits back when Frank O'Bannon was governor. After years of feuding, the two opposing camps decided that both sides should get their cake and eat it too. What they agreed to do was reduce unemployment insurance premium taxes paid by business while increasing benefits paid to unemployed workers. That set the state's unemployment insurance fund on a dangerous course towards eventual insolvency. Everyone knew it was going to happen but instead chose to ignore the problem as if it would simply go away.

When the current economic recession took hold, Indiana became one of the first states in the country to exhaust its reserves. Indiana has been borrowing $7 million a day from the federal government since late last year. Our state's current debt to the federal government tops a whopping $800 million. That number will likely exceed $1 billion by year's end, a little less than the state's entire rainy day reserve funds.

Senate Republicans and House Democrats set aside competing ideologies and views on unemployment benefits to work out a compromise plan to fix the current bankrupt system to avoid a federal take-over of Indiana's unemployment insurance program. Big businesses, represented by the Indiana Chamber of Commerce and the Indiana Manufacturers Association, excoriated lawmakers for approving the plan and urged Gov. Mitch Daniels to veto their legislation. The Indiana Chamber lamented the $700 million in premium increases that will be paid by businesses over the next two years. The Indiana Chamber called it "a focused attack on statewide businesses." It predicted the new law will lead to even more job losses and higher unemployment.

What the Chamber of Commerce didn't tell you is that they wanted to force small businesses to shoulder a greater burden of paying for the unemployed rather than larger businesses and charge a new unemployment tax on workers. According to a press release issued by Senate Republicans, business groups representing small business owners applauded many key provisions of the new law, including the National Federation of Independent Businesses and the Indiana Restaurant Association. As the Senate Republican press release notes, big businesses took advantage of the old unemployment system through frequent furloughing of workers. "Some businesses even factored in UI benefits in collective bargaining agreements, knowing that their planned annual furloughs would allow employees to draw more out of the UI fund in just one week than the company paid in premiums the entire year," the release said. The new tax on workers proposed by the Indiana Chamber would have made Indiana only one of two states in the nation with such a tax.

House Democrats had originally proposed a plan that would have hiked premiums paid by Indiana businesses $1.2 billion a year and lacked meaningful reforms. The Senate plan shaved the tax increase enacted by 75%. Senate Republicans sought to balance the higher taxes with cost-saving, needed reforms. Many of those reforms were supported by the Indiana Chamber, but without a new tax on workers, the Indiana Chamber opposed the plan. One of the reforms implemented requires unemployed workers to present evidence they have applied for jobs, not simply been looking for a new job. Workers who turn down "suitable work" will be penalized. The new law also makes it harder for workers fired for misconduct to collect unemployment benefits. A new training program will help retrain unemployed workers.

In a nutshell, the new system will set taxes paid by business based on traditional insurance plans. If you are a higher-risk driver, you pay higher auto insurance premiums. Similarly, businesses that lay off more workers will incur higher unemployment insurance tax premiums. "Because Indiana's unemployment insurance will be operated in the future like other insurance programs, close to 45,000 Hoosier employers who have never tapped the fund (that would include small business owners like me) may actually see slight decreases in premiums," says Senate Republicans. Even with the higher taxes many businesses will pay, their rates will still be lower than most of neighboring midwestern states. Senate Republicans believe their plan will put the state system back into balance by 2012.

The Indiana Chamber of Commerce's attacks on the unemployment insurance plan signed into law by Gov. Daniels have been led by its president, Kevin Brinegar, a permanent fixture on the State House lobbying scene. Brinegar is no friend of the taxpayers. He's all for big business and what's good for big business. He could care less about small businesses and average taxpayers. If you don't believe me, you've got to check out a letter to the editor he penned to the Star this weekend supporting the bailout of Marion County's Capital Improvement Board. Brineger, arguing that the CIB bailout must be a part of the special session agenda, writes:

While the CIB is responsible for operating Indianapolis' sports facilities and the Indiana Convention Center, those venues are critical to the state's economic vitality and image. We would not want to envision Indiana without the top-level sports franchises that are important to the quality of life for current residents and an attraction for newcomers.

Conventions are a crucial piece of the pie. The Downtown hospitality industry is responsible for 60,000 jobs and $3.5 billion in annual impact.

That's why it is so important that the legislature gets the ball rolling by giving the City-County Council the authority to pursue the necessary solutions. All of Indiana will be the beneficiary.

Is this guy joking or what? "All of Indiana will be the beneficiary?" "Important to the quality of life for current residents? "60,000 jobs and $3.5 billion in annual impact?" Brinegar completely strips himself of any credibility he has as an advocate for Indiana businesses. While opposing the plan to shore up Indiana's bankrupt unemployment insurance trust fund making up for all of those tax cuts and benefit increases he negotiated years ago that facilitated the current unemployment system's insolvency, he now wants to ask the little people in Marion County to dig deeper into their pockets and pay higher taxes to bail out the grossly mismanaged Capital Improvement Board. This is the same Kevin Brineger who has advocated the elimination of inefficient township governments and other local government reforms proposed by the Kernan-Shepard Commission. Yet he wants to reward a local government entity that has been running deficits for a decade and has largely operated in the dark with little transparency. What a total hypocrite.

The problem with Kevin Brinegar is that he's one of those guys who can attend a Colts or Pacers game any time he wants. Brinegar doesn't have to pay a dime. He can sit in a corporate suite, enjoy free food and drink and entertain lawmakers on the dime of his business organization and its big business members. He doesn't have a clue what it costs average game-goers to attend a Colts or Pacers game. The only quality of life Brinegar is concerned about losing is his own; his support of the CIB has nothing to do with the quality of life of every day Hoosiers or he would be demanding an investigation and more accountability from the CIB before taxpayers are asked to pay even higher taxes that will largely go to subsidize the state's two wealthiest families, the Irsays and the Simons. I used to really respect Brinegar, but his antics this past session have permanently marred his reputation.

Churn 'Em and Burn 'Em

A consultant's report explaining the meltdown of the ISTA Trust meltdown says it all as reported today by the Star's Bill Ruthhart:

In their report, Noble's consultants noted that:

>> Over nine months in 2008, more than 4,000 investment trades were made, "an extremely high volume for a portfolio of this size."

>> "Despite large losses in the portfolio," Williams approved a 50 percent fee increase for Karandos.

>> In addition to receiving overall fees for his work, Karandos also charged full commissions in a sample of trades analyzed by Noble.

>> Williams and Karandos controlled all investments. Williams, who resigned Thursday, could not be reached for comment Friday. Karandos, who works in Morgan Stanley's Carmel office, declined comment.

Any questions?

CIB's Barney Levengood Paid $221,000

The hits just keep on coming as the City of Indianapolis continues to seek a $48 million a year bailout from the state, financed through higher taxes and more state subsidies. The IBJ's Cory Schouten takes a closer look at the CIB's payroll. Previously, WTHR's Mary Milz pointed out that big pay raises had been doled out to the CIB's key personnel within the past year, except for its CIB executive director, Barney Levengood, and 3% raises had been approved acrossed the board elsewhere. It turns out Levengood didn't need a pay raise because he's one of the highest paid public officials in the State of Indiana, making over $221,000. Levengood also padded the CIB's budget with 30 new employees. Schouten writes:

He’s also become one of the state’s highest-paid public employees. Levengood, 54, earns a salary of $221,325—more than the governor and the mayor combined. He also gets a $500-per-month car allowance.

Some observers are wondering whether that’s too much, particularly considering that CIB is pleading for new taxes to keep it afloat. The quasi-governmental board is facing a $47 million annual deficit.

Before asking the mayor and state legislators for a bailout earlier this year, Levengood added 30 employees, boosting CIB’s head count to 172—a 20-percent increase. He also handed out 3-percent raises to most employees, and
some got much more; stadium director Mike Fox’s salary jumped 36 percent, to $128,242 . . .

Levengood said he hadn’t realized the full extent of the CIB’s budget troubles when he approved the raises.

“In hindsight, this may have not been the best decision but we honestly didn’t believe there would not be a solution,” he wrote in an e-mail. “We wanted to continue to operate and still do today as if we are a viable organization.”

Levengood didn't realize the full extent of the CIB's budget troubles when he approved the raises? Hmmm. CPA and veteran CIB member Pat Early has no problem with that:

Early said Levengood is not to blame for the CIB budget mess. The board has been operating with deficits every year since 1999, but Early said those shortfalls never made much of a dent in CIB’s reserves until now.

And he defended Levengood’s decision to give the CIB staff raises in January. Levengood didn’t get a raise this year, but last year he got an 8-percent boost. (The board sets the salary for the executive director, who determines salaries for the rest of the staff.)

“I’ve worked with Barney for 17 years,” Early said. “He picks up paper clips off the floor instead of buying a new box. He’s as fiscally responsible a manager as we possibly could have.”

A spokesman for Mayor Greg Ballard, who appoints six members on the nine-member board, said he would defer to the judgment of the Capital Improvement Board on whether salaries are appropriate.

The job is complex and challenging and requires a well-paid leader, Early said. “You can get someone to do brain surgery for less than a brain surgeon makes,” he said, “but you just might not be happy with the result.”

I've become convinced that it could be reported that the CIB has been secretly killing babies for the past ten years and it wouldn't make a dime's bit of difference in this bailout debate. Our elected officials received their marching orders from their true masters long ago that they would finance this bailout by hook or crook. What the taxpaying public thinks or what the facts show mean little to our out-of-touch elected officials.

Elsewhere in the IBJ, propagandist in chief for the downtown elites, Bill Benner, pens a column telling us just how bad things would turn for the worst if, God forbid, our beloved Pacers moved out of town. Benner picked up on blog reports about a rumor the team could be bought and moved to Vancouver, although Benner is sticking to the party line that these team owners never threaten to leave town if city leaders to fork over to them their ever increasing demands:

As I drove to work May 12, I listened as local talk-show radio host, WXNT-AM 1430’s Abdul Hakim-Shabazz seized on a blog report that the owner of the National Hockey League Vancouver Canucks was considering a bid to purchase the Indiana Pacers and move them to the Canadian city.

There was nothing to confirm that the report was credible and, we must emphasize, Pacers co-owner Herb Simon has been steadfast in his stated desire to keep the franchise in Indianapolis.

Nonetheless, Hakim-Shabazz used the report to pose a question to his listeners: If the Pacers left, would they even be missed? Most replied they would not.

Now I listened to perhaps only a half-dozen callers before I reached my destination, and it would be nonsense to suggest they were a representative sampling . . .

About an hour after Hakim-Shabazz’s radio show concluded, Streett got a call from his boss, Shepherd Executive Director Jay Height. Height told Streett the Pacers had called, and needed someone from Shepherd to be at Conseco Fieldhouse by 11:30 that morning. Height wasn’t given a reason, just told to have someone there, and he asked Streett to go.

Streett knew that the Pacers had called a news conference to announce that forward Danny Granger was to be named the NBA’s most improved player.

What he didn’t know was that the award is sponsored by auto manufacturer Kia, and that a vehicle—either a Borrego SUV or a Sedona minivan—would be awarded to the charity of Granger’s choice.

Granger had selected Shepherd Community Center. So, much to his surprise and delight, Streett was handed the keys to a new minivan at the news conference.

“This is a tremendous gift,” said Streett, still looking a bit shocked. “Transportation is one of our biggest issues. This is a real blessing to us.” .
. .

So, back to Hakim-Shabazz’s question: Would we miss the Pacers if they left?

Perhaps not. But don’t tell it to Tim Streett who, courtesy of Danny Granger, walked out of Conseco Fieldhouse with keys to a new vehicle that can provide a lift in ways beyond mere transportation.

What a real tear jerker, Bill. How do you look at yourself in the mirror spewing such bullshit on a daily basis as part of your job? This is how these guys operate. They plant a story in the media that a professional sports team, which just happens to be seeking an additional $15 million a year subsidy from the taxpayers, may be bought and moved to another city. Remember Jim Irsay's Colts and the LA rumors? The team naturally denies the rumor, but their paid mouthpieces make sure it gets circulated far and wide in the community to scare key leaders into taking the desired action. Your propaganda won't fly here, Bill. You should go back to doggie school and learn some new tricks, Rover, or excuse me, Bill.