Wednesday, June 30, 2010

Ballard's Statement Of Economic Interest Lacking In Transparency

Mayor Greg Ballard has filed his 2010 statement of economic interest and it's still lacking in transparency like his 2009 statement, even if it may meet the technical requirements of the Ethics Code. “This is the end of Republican country-club politics,” he proclaimed on his stunning upset win over Mayor Bart Peterson in the November 2007 municipal election. That proclamation, however, did not preclude him from accepting free country club memberships. Like his 2009 statement of economic interest, Ballard discloses that he continues to accept free country club memberships to Highland and Woodstock, as well as a free membership to the Columbia Club, but he does not place a dollar value on those free memberships. According to an Indianapolis Star story last year commenting on Ballard's statement of economic interest, Woodstock sells memberships for a cost between $2,500 and $9,000, while Highland offers memberships for as high as $16,000. Members pay $1,500 to join the Columbia Club, plus monthly fees of approximately $150.

Ballard often accepts free tickets to Colts, Pacers and Indians games, the Indianapolis 500, concerts and other paid events. Although the value of these free tickets reaches well into the thousands of dollars each year, Ballard places no value on them. Ballard is allowed to accept gifts under the City's Ethics Code, but he is only required to disclose the value of any gift he receives that is worth more than $100 from anyone doing business with the City. City employees and appointees, who have far less power than the mayor, are prohibited from accepting gifts with a value of more than $25 from anyone doing business with the city-county government. Ballard's statements says he has not accepted any gift of more than $100 from a person doing business with the City. Apparently he doesn't see the Colts and Pacers leases with the CIB as a business undertaking. I can't think of any other business that hauls away more public money than these two sports franchises. "I use these tickets because I am an ardent supporter of our sports teams," he declares on his statement.

Ballard also discloses free Super Bowl tickets he received from the 2012 Super Bowl Committee, but he places no value on the tickets. Did the Super Bowl Committee also purchase his plane tickets, his hotel and other travel charges related to his trip to the Super Bowl? He accepted free tickets to the Final Four game in Detroit courtesy of the Indiana Sports Corporation where someone picked his pocket, but like the Super Bowl tickets, he doesn't place a value on them. It makes you wonder whose pockets are really being picked. Ballard took two international trips to Brazil and Europe last year courtesy of the Greater Indianapolis Progress Committee with wife Winnie in tow, but again he places no value on the trips. He insists those trips were related to economic development, and the Ethics Code exempts those trips from disclosure.

Ballard disclosed two free Globe bicycles he received from the Reginald Jones McMiracle Event that he valued at $400. Maybe the value of a single Globe bicycle is $400, but two? I don't think so. At least not according to the prices for different models I found on the Internet.  He got a rain barrel from Keep Indianapolis Beautiful worth $110. And he got some CDs, hat and T-shirts from the Bob & Tom Show he valued at $220.

Los Angeles Mayor Antonio Villaraigosa reportedly accepted free tickets to 80 events over the past 5 years for which he did not pay or report as gifts that may have been worth as much as $50,000 according to one conservative estimate as as much $100,000. A criminal investigation has been launched against the Los Angeles mayor to determine if he broke any laws. The city's ethics ordinance required the mayor to report gifts and who gave them, and limits the value of tickets he can accept to $420 from any one source in a year. Indianapolis places no limit on the amount the mayor may accept from one source, and he only has to disclose it if it comes from someone doing business with the city. Free tickets are exempt under L.A.'s ethics ordinance from those reporting requirements, however, if the mayor conducts official business or has a "ceremonial" role at the events. Mayor Villaraigosa is often seen sitting court side at L.A. Lakers games just like Ballard can be seen sitting in court side seats at Pacers games often. There is heightened concern in the case of Ballard's acceptance of these free tickets because he is considering offering the Pacers as much as an additional $18 million a year in public subsidies to cover the operating and maintenance costs on Conseco Fieldhouse. The team already gets free rent on the arena and gets to keep all of the game and non-game event revenues it collects. Ballard bragged recently that the Pacers allowed him to sit in their war room during the NBA draft, his greatest sports experience he said.

Based on anecdotal accounts of the number of free events Ballard has attended since taking office in January 2008, it is quite possible the value of those gifts could add up to as much as $50,000, particularly when you throw in the value of his free club memberships. I highly doubt that he is reporting the value of those gifts on his income tax returns as you or I would have to do; otherwise, he probably couldn't afford to pay his taxes. I think it is absurd that there is such a small limit on the size of gifts city employees may accept, while the mayor and other elected officials, including councilors, can accept gifts valued well into the thousands of dollars when they are the ones exercising the real power. Ballard promised to enact a strong ethics ordinance when he was a candidate for mayor, but the ethics ordinance he signed into law leaves much to be desired and he's the biggest beneficiary of that weak law.

No Deal Yet For Pacers

Mayor Greg Ballard is out of town on a family vacation and his negotiators at the CIB have not reached an agreement with the Pacers on the $18 million a year additional subsidy the Simon-owned NBA team has demanded to cover their operating and maintenance expenses on Conseco Fieldhouse. The Pacers had set a June 30 deadline for reaching an agreement with the City or the team would consider alternative options, including selling the team and moving it to another city. WISH-TV's David Barris had a balanced story on the debate on this evening's news broadcast that included an interview with me. Barris' report includes an item that is often omitted in local news coverage on the issue--the huge financial penalty the Simons would have to pay to the CIB in order to break its 20-year lease on Conseco Fieldhouse. Barris reports:

INDIANAPOLIS (WISH) - "Not there yet". That’s the word tonight as the Pacers and the Capitol Improvement Board try and hammer out a new lease for Conseco Fieldhouse. Wednesday was the Pacers' self-imposed deadline for a deal with the CIB.

But its likely, even if there is no deal Wednesday, the Pacers won't be leaving town anytime soon. It would likely cost the team tens of millions to leave.

Paul Okeson, a Capitol Improvement Board member is involved in the Pacers negotiations. Discussions says they have been productive.

"It's a very complex set of issues and its very difficult economic times to try and come up with the kind of relief that they think they need."

That relief is between $15 and $18 million a year, what the Pacers say is the cost to them of running Conseco Fieldhouse.

Gary Welsh, an Indianapolis Attorney who has blogged at length at Advance Indiana blog spot, against the CIB giving a new deal to the Pacers says there's a penalty clause in the current lease that would make it tough for the Pacers to pack up and leave town. He says he's seen the lease and the penalty is in the tens of millions.

"Where people differ is how much the penalty would be. Is it $50 million, is it as high as $150 million or somewhere in between."

Welsh says even if the Pacers could find a city that wanted them, the penalty might make a deal impossible to get done.

Larry DeGaris, spends a lot of time studying professional sports as an Associate Professor of Marketing at the University of Indianapolis. He agrees there isn't much demand for NBA teams right now, but he says the loss of the Pacers might mean shuttering Conseco Fieldhouse.

"It would be much worse off than they have it now, so it would be dormant. I wouldn't see any other alternative if the Pacers and the Fever leave. I don't see any other alternative than shuttering the building and boarding it up."
DeGaris' point on the upcoming collectiving bargaining discussions for the NBA is an important one; however, I disagree with him that the NBA should be involved in the specific negotiations between the CIB and the Pacers. Many NBA owners complain that salaries have gotten so high so many of the teams in smaller markets like Indianapolis simply can't turn a profit. Whether that claim is true is up for debate. The team owners don't make audited finacial statements for their franchises available to the public despite the huge public subsidies they receive from their host cities. The Pacers' problems are also self-inflicted. Many fans have stopped attending their games at Conseco after so many players got into trouble with the law and as the team contiues its long streak of losing seasons. The Pacers have one of the lowest attendance records in the NBA currently. I do agree with DeGaris that the financial picture for teams like the Pacers could change dramatically under a new collective bargaining agreement, which would make any deal between the Pacers and the CIB premature now.

More Durham Cars Seized

Aerial images from WISH-TV's Chopper 8 show more luxury automobiles being seized by the FBI at the large Geist estate of alleged Ponzi scheme operator Tim Durham this afternoon. The cars were removed from Durham's 30-car garage on the estate grounds. WISH-TV reports that Durham voluntarily relinquished control of the vehicles to the FBI, which began confiscating luxury automobiles from him last week. The sales proceeds from the vehicles will be turned over to the bankruptcy trustee for Fair Finance Company, the Durham-owned business in Ohio that took investors for as much as $200 million, largely as a result of loans Durham took out for other businesses he operated here in Indianapolis and elsewhere and did not repay to the Ohio company.

Has a grand jury finally been convened to consider criminal charges against Durham? An informed source tells me a number of subpoenas have been issued recently requesting testimony from witnesses. Stay tuned.

Indiana Supreme Court Upholds Constitutionality of Voter ID Law

The decision comes as no surprise. The Indiana Supreme Court upheld the constitutionality of Indiana's Voter ID law in a 4-1 decision, League of Women Voters v. Rokita, written by Justice Brent Dickson, rebuking a Court of Appeals decision that declared it invalid last year. The Court found that the law's photo identification requirement for in-person voters to be regulatory in nature as opposed to an additional substantive qualification to vote that would violate the Constitution's requirement for uniformity and reasonableness.

The Court also rejected the plaintiffs' claim that the law violated the state's privileges and immunities clause. "Given the scope of the undertaking embraced in the Voter ID Law's efforts in enhancing the integrity of the electoral process and its attempt to tailor its opera-tion to a significant variety of circumstances, we conclude that the possible absence of precise congruity in application to all voters represents a legitimate exercise of legislative discretion warranting our defe-rence," Justice Dickson wrote. The Court held out some small glimmer of hope for opponents of the law for a future case where the plaintiffs could actually demonstrate that someone was denied the right to vote under the Voter ID law, a particulartized as-applied claim, as opposed to the facially unconstitutional claim presented by the plaintiffs in this case. Justice Ted Boehm wrote the lone dissenting opinion. He would have remanded the case to the trial court and given them the opportunity to prove that the law as-applied unreasonably burdened some voters.

Today's decision is a vindication of sorts for Gov. Mitch Daniels, who was criticized for describing last year's Court of Appeals decision as "preposterous" and an "act of judicial arrogance." You can see my arguments for why the Court of Appeals got it wrong in this case by clicking here.

Monday, June 28, 2010

Biden Speaks, GE Exec Faints

No kidding here. Just as Vice President Joe Biden was speaking in Louisville today, GE's President of its Lighting and Appliances division, Jim Campbell, fell off his chair as Biden uttered the words, "A country that does not innovate, stagnates." Biden can be heard asking for a doctor after Campbell fell off the stage. Over the weekend, Biden made news when he told a custard store owner who had just given him a free custard to stop being a smart ass after the store owner asked him to lower his taxes. Biden is the gift that keeps on giving to his political opponents. Much to the delight of Ninth District GOP candidate Todd Young, Biden took his one man comedy act message across the river to Jeffersonville, where he made a campaign stop for U.S. Rep. Baron Hill.

Republican Council Approves $16 Million IT Contract With Shaky Company, Vaughn Abstains Due To Conflict

The Republican-controlled Indianapolis City-County Council wrecklessly approved at tonight's council meeting a whopping $16 million contract for a publicly-traded company that has been losing millions of dollars a year and was facing potential delisting as a publicly-traded company on NASDAQ for the second time because its stock has consistently traded below $1. As recently as March 31 of this year, Zanett, Inc. warned investors that debt-refinancing issues could force it out of business. The council approved Zanett's contract by a 15-11 vote with most Democrats voting against it. Only one Republican, Christine Scales, voted against it.

Zanett Inc.'s stock was trading for about $1.25 a share on the day the City announced it was awarding a $16 million contract to implement an enterprise management system using Oracle's PeopleSoft application. In March, the company's stock was trading well below $1 a share and facing delisting when it dramatically saw a 521% increase in its stock price in a single day of trading from 31 cents to $1.93, which was near the time the City of Indianapolis was putting final touches on the contract and preparing it for submission to the city council for approval. One recent commenter suggested a carefully worded press release from the company in the past had misled investors into believing the company had won a much bigger contract than it actually had won. Today, the stock's price closed at $1.52 a share, off its 52-week high of $3.74 a share. Its stock price dramatically jumped 70% to $2.62 a share after the City of Indianapolis announced it was awarding the contract to Zanett.

In yet another strange twist, which might explain why the Republican council was so willing to hand over millions of taxpayer dollars to an out-of-state company that is struggling to financially survive, City-County Council President Ryan Vaughn announced as the council took up the matter of approving the contract that he was turning the gavel over to Vice President Marilyn Pfisterer due to a conflict of interest. Vaughn announced to the council that he would be abstaining from casting a vote on the approval of the contract due to the conflict. When questioned by Councilor Vernon Brown about the nature of his conflict, Vaughn disclosed that he had recently learned that a client of his law firm, Barnes & Thornburg, had been awarded a subcontract to work under Zanett's $16 million contract. Vaughn did not disclose the name of the client. I would note that Vaughn refused to recuse himself from participating in the proposal to transfer the utilities to Citizens Energy despite the financial stake one of his firm's clients, Veolia, had in the outcome, not to mention the firm's clients, such as Crowe Horwath, that were being paid to advise the city on the proposed deal.

This is just another example of why the Republicans have forfeited their right to continue running this city. Your taxpayer dollars are simply being pissed away so that somebody's client gets taken care of. This represents a complete abrogation of the council members' duty to be good stewards of the taxpayers' money. It is simply beyond belief how corrupt this Republican administration and council have become. We're facing the worst economic times since the Great Depression and they're spending our money like drunken sailors. It's reached a pretty sad point when the only sober acting adult in that council assembly room is Crazy Larry Vaughn, even with his silly paper bag hat emblazoned with the N-word and his white clown lipstick that Councilor Pfisterer told him was rude to wear while he was speaking against awarding a contract to the financially-troubled company. She should have been wearing a paper bag over her head tonight as stupid as she looked and sounded during this debate. She couldn't answer why the company's financial woes were being disregarded so she asked the city controller to explain why it would be okay. Controller David Reynolds never really answered the question other than to say they checked it out and it probably wouldn't become a problem. We can only hope and pray.

Ballard To Seek Tax Hike Next Year To Fund Regional Transportation Authority

Proponents of mass transit for the Indianapolis metropolitan area envision a state-established regional transportation authority encompassing Marion County and all of its surrounding counties that would be authorized to borrow and spend billions in the coming years to build a system of rail, light rail, expanded bus service and tolled express lanes on area highways. Mark Miles of the Central Indiana Corporate Partnership told a recent meeting of the Indianapolis City-County Council's Economic Development Committee that efforts will be made to gain legislative approval of the proposed RTA during the 2011 legislative session. Miles told the committee it hopes to place a referendum on the 2011 November ballot in area counties to fund the RTA with either a local option income tax or a sales tax. He expects the legislature to recommend a local option income tax increase rather than a sales tax. Miles already is assuming that only Hamilton and Marion Counties are likely to approve it because they get the more immediate benefit from an RTA, but he said that's okay because taxes generated from those two counties will be sufficient to move forward with the regional transportation plan.

Because Ballard is already on record as saying he thinks we need to do what Miles is promoting, he will be put in the position of advocating an income tax increase at the same election he is asking voters to re-elect him to another four-year term. Ironically, Ballard largely got elected in 2007 based on voter outrage over Bart Peterson's 65% increase in the local income tax, a tax increase Ballard later made permanent despite his criticism of it and claims he made during the 2007 campaign that he would find cuts of $70 million in the city's budget to avoid the need for the higher tax. "There's a lot of fluff in that budget," he said at the time.

In addition to making the income tax increase permanent, raising hotel taxes to bail out the CIB and raising a host of fees on businesses, water and sewer rates have gone up substantially under Ballard's tenure and are expected to increase at least 100% and 300%, respectively, in the coming years. Ballard is pushing even higher sewer rates, a backdoor tax increase of sorts, by insisting that Citizens Energy pay the City $263 million in consideration for it assuming $1.5 billion in debt as part of a proposed transfer of the utilities to Citizens Energy. Citizens Energy has already said it will recoup that money, which it will have to borrow through the issuance of bonds, by raising utility rates even higher than already anticipated. Ballard wants to use that money, plus another $140 million in borrowed funds, to fund his Rebuild Indy program, a massive public works probject to fund street and sidewalk projects ahead of next year's election. And you thought Bart Peterson lied, who incidentally, also pledged not to raise taxes when he first ran for mayor. He argued that higher taxes would drive people out of the city and into the suburbs.

Second Amendment Limits State And Local Restrictions On Guns

The U.S. Supreme Court by a very narrow 5-4 decision authored by Justice Samuel Alito, McDonald v. Chicago, has once again struck a blow for the right of Americans to possess guns under the Second Amendment of the U.S. Constitution. Today's decision voids a Chicago ordinance that bans its citizens from possessing handguns. Two years ago, the Supreme Court ruled in a 5-4 decision, D.C. v. Heller, a similar D.C. ordinance violated Americans' rights to keep and bear arms under the Second Amendment. That decision left open whether laws enacted by state and local governments were subject to the same restriction imposed on the federal government. Four justices in the Heller decision said the Second Amendment only applied to a person's right to keep and bear arms in connection with service in a government militia. Internet traffic on the SCOTUS blog must be overwhelming today. I've not been able to get a connection to the site since the ruling was handed down. It is interesting that the Court's four most liberal judges, Stevens, Ginsburg, Breyer and Sotomayor, in the case of the Second Amendment, find themselves in the position of arguing that the Second Amendment does not apply with the same force to the states as the other rights enumerated in the Bill of Rights. They typically rely on the Fourteenth Amendment to extend the rights afforded by the Bill of Rights to have similar force and effect when applied to the states.

Justice Antonin Scalia offers a stinging criticism of Justice Stevens' dissenting opinion in his own concurring opinion on what provisions of the Bill of Rights the 14th Amendment does or does not incorporate and apply to the states:

Rights that pass his test include not just those“relating to marriage, procreation, contraception, family relationships, and child rearing and education,” but also rights against “[g]overnment action that shocks the conscience, pointlessly infringes settled expectations, trespasses into sensitive private realms or life choices withoutadequate justification, [or] perpetrates gross injustice.” Not all such rights are in, however, since only “some fundamental aspects of personhood, dignity, and the like” are protected. Exactly what is covered is not clear. But whatever else is in, he knows that the right to keep and bear arms is out, despite its being as “deeply rooted in this Nation’s history and tradition,” I can find no other explanation for such certitude except that JUSTICE STEVENS, despite his forswearing of “personal and private notions,”, deeply believes it should be out.

Sunday, June 27, 2010

City's Department Of Waterworks Wastes Money On Consulting Contracts

It's no wonder it costs the City of Indianapolis so much to operate the water company. The City pays Veolia $58 million a year to operate the utility and then spends another $2 million on consulting contracts over a recent two-year period just to watch over Veolia. I'm not sure what Matt Klein and his staff at the Department of Waterworks do other than rubber stamp whatever all of these consultants and Veolia tell him to do. Based upon the IURC's stinging criticism of the City's one-sided agreement with Veolia and the payment of questionable bonuses to the contractor, it doesn't look like these consultants are adding much value for their work. Citizens Energy could achieve substantial savings in the water company's operation by simply eliminating these consulting contracts. Didn't Ballard tell us that's the sort of fluff he would eliminate in the city budget when he took charge?

The consulting contracts I uncovered at the City's new contracts database for overseeing Veolia included the following:

  • Malcolm Pirnie, Inc.($400,000)
  • Shrewsberry & Associates ($430,000)
  • DLZ ($438,000)
  • Crowe Horwath ($100,000)
  • Kerry Heid ($200,000)
  • O.W. Krohn & Asociates ($80,000)
  • Christopher Burke Engineering ($20,000)

Lawmaker's Ownership In Welfare Call Center Reeks Of Corruption

Rep. Eric Turner (R-Cicero) is the Assistant House Republican Leader. He and his son also own a building in Marion, Indiana that is leased by Affiliated Computer Systems to operate a call center for the state's widely criticized privatized welfare system. He used his legislative clout to fight for the placement of the call center in Marion, and he has defended it from critics in his role as a state legislator. His daughter is the general counsel to FSSA, the agency that privatized welfare services in Indiana. And Turner never disclosed his ownership interest in the call center property on his statement of economic interest. That's what is revealed by a Fort Wayne Journal News-Gazette investigative report by Angela Mapes Turner. Turner says it's a non-issue, and the Daniels administration deflects blame saying it didn't enter into the lease; ACS inked the deal. Here's some of what the reporter learned:

A state representative who fought hard for a controversial call center created in his district as a part of Indiana’s failed welfare privatization effort has a financial stake in the building that houses it.

Rep. P. Eric Turner, R-Cicero, says his investment in the building owned by his son is a non-issue. But critics say the link should have been disclosed during the many public debates about problems with the IBM-led welfare changes . . .

In 2007, Indiana inked a $1.16 billion deal with IBM Corp. to modernize the state’s welfare system by providing more services by computer and telephone.

Central to the plan was the creation of a call center to serve the entire state. Instead of caseworkers assigned to clients who need help getting food stamps, Medicaid or Temporary Assistance for Needy Families, contract employees would handle applications submitted through a website and the Marion call center.

Subcontractor Affiliated Computer Services, tasked with creating the call center, entered into a lease in 2007 to rent the former Jones Middle School when the building was still owned by Marion Community Schools, according to school board minutes.

Nearly from the start, the hub was fraught with controversy. The state heard complaints that the call center workers were ill-trained and clients were not getting their benefits, such as food stamps and Medicaid.

By May 2008, 59 of Indiana’s counties had been brought into IBM’s system. Concerns about clients not being served well by the call center had caused state officials to halt the transition of Indiana’s remaining 33 counties.

That’s when Turner toured the call center in his role as legislator and told the Marion Chronicle-Tribune he was impressed.

Turner told the newspaper there could be legislative committees to look into the issues, but the cost of reverting to the old system would be “astronomical” and call center workers were doing their jobs.

At the same time, his son Paul Ezekiel Turner’s company was in negotiations to buy the former Jones Middle School from Marion Community Schools.

On May 5, 2008, the school board voted to sell the building for $350,000 to Mainstreet Capital Partners LLC, a joint venture between “Zeke” Turner and his father.

According to secretary of state records, Zeke Turner created a limited-liability company, MS Jones LLC, co-owned by Mainstreet, to buy the call center.

That company isn’t listed on Rep. Turner’s statement of economic interests required of all state legislators, but Mainstreet and several other joint ventures with his son are, including Turner Partnership, which is MS Jones’ other co-owner.

Turner considers having listed those companies to be sufficient disclosure, he said, adding that all the transactions related to the sale were carried out in public school board meetings and were common knowledge in Grant County.
Turner tells the reporter that he may have talked to his son about the business opportunity but that he generally performed his own analyses without his help. He insists his daughter, Jessaca Stultz, the general counsel of FSSA, had no part in helping out with the lease. I found the financing details of the building to be interesting. The story reports:

After taking out a $280,000 loan to buy the property in July 2008, it was mortgaged for an additional $200,000 in September of that year. This spring, his company took out a second mortgage on the property for $5 million, according to records from the Grant County recorder’s office.

Mainstreet Asset Management did not respond to a request for comment.

Zeke Turner’s portion was assessed for more than $7.1 million in 2009, according to the Grant County treasurer’s office.

Affiliated Computer Services is leasing about 53,000 square feet in the building, FSSA spokesman Marcus Barlow said. That company – not the state – created the lease and pays the rent of $14,400 a month, or $172,800 a year, he said.

The rent is similar to the cost of less expensive industrial warehouse space, not more expensive commercial real estate, Barlow said.
“They actually got a really good deal,” he said.
Speaker Bauer argues it’s hard to know whether something’s a good deal if it’s brokered privately, behind closed doors.
“We’re having trouble in general getting information out of these private contractors,” he said. “Let the people judge.”

It seems kind of odd that a building that was purchased for $350,000 two years ago from the school corporation would now be assessed at over $7 million and have more than $5 million mortgaged against it.
The privatization aspect also gives the Daniels administration cover for what the contractor, ACS, does under its contract. That's one of the problems I have with these privatization deals. The public doesn't really know who was told to do what after it gets turned over to the private operator. This blog was the first to point up the conflict in awarding the contract to IBM, which had partnered with ACS on the billion-dollar privatization deal. FSSA's Secretary at the time, Mitch Roob, worked for ACS prior to joining the Daniels administration as FSSA Secretary. It was common knowledge around town who was going to get the contract even before the RFP process had been conducted, leading some potential bidders not to even waste their time responding to the RFP. The Daniels administration cancelled the contract last fall with IBM but is continuing to use ACS for some services and is keeping the Marion call center open. IBM and the the state are suing each other in the aftermath of the contract's cancellation.

The story also notes a previous call by House Speaker Pat Bauer for federal Health and Human Services, the agency that doles out money that FSSA administers, to investigate a couple of leases for the state's welfare-to-work offices that are located in buildings owned by John Bales, the real estate developer the Daniels administration hired to broker leases for state agencies who is close to Marion Co. Prosecutor Carl Brizzi. Brizzi is a part owner of a building in Elkhart, Indiana that is leased by the Department of Children Services, and the lease was brokered by Bales' firm.

I'm telling you that Daniels has some big-time scandals brewing in his administration. The Obama Justice Department can bury any presidential ambitions he may have if they so desire to investigate these various scandals. I thought Mitch was smart enough to avoid this kind of corruption in his administration when he first got elected, but my once favorable impression of him is fading with the passage of every day. I'm not surprised by Turner's obvious self-dealing, and I doubt many others who've watched him over at the State House over the years are either. The ACS connections run deeper than Roob. Barnes & Thornburg's Bob Grand and Joe Loftus have lobbied the state and the City of Indianapolis for the firm. Their firm has also lobbied the state for Bales' Venture Real Estate. CIB President Ann Lathrop, who replaced Grand in that role, used to work at ACS with Roob and former Mayor Steve Goldsmith, who employed both of them in his administration. Lathrop now works for Crowe Horwath, which has several contracts with the City of Indianapolis. Lathrop personally inked a contract with the Ballard administration's budget office, which Lathrop ran during the Goldsmith administration. And I could go on but you get the point. It's just one incestuous cesspool.

Corrupt Zoning Official Gets Probation For Selling Abandoned Cars To OmniSource

I've often complained about how folks in the news media in this town have such a short attention span that it makes it impossible for them to connect the dots when it comes to public corruption. I found a little two paragraph snippet in the Star about a former city zoning official that reminded me of this. It reads:

A judge sentenced a former city zoning inspector to two years on probation and community service Wednesday for sending abandoned cars to a scrap yard rather than the auto pound and pocketing money the junkyards paid him.

Chad A. Frye, 38, Beech Grove, must pay $1,900 in restitution to the city of Indianapolis, which employed him, as part of his sentence. His overall sentence was four years, all suspended, court records said.
When Frye was arrested last December he was charged with theft, official misconduct and corrupt business practices. Police became suspicious after somebody complained about their car being towed by the city, the motor being removed from it and then the rest of the car being sent on to OmniSource to be crushed. The City's exclusive tow truck operator, Last Chance Wrecker, had claimed it never towed the car to the city impound. Instead, it had been towed to Two Little Bees auto parts, stripped and sent on to OmniSource. The police set up a sting and caught Frye not reporting a car that had been reported as abandoned to the city, Frye having the car towed to Two Little Bees and then police followed it to OmniSource. News reports at the time indicated that Frye admitted to police he got $20 to $50 for the scam and agreed to cooperate in the investigation.

According to this very brief story, Frye agreed to serve two years of probation and perform community service and repay the City $1,900 in restitution from money he had pocketed from sending the cars to the scrap metal yard. If he was only getting $20 to $50 per car, he had to have sent more than 40 cars to the scrap yard, and as I recall, he had been working as a zoning inspector for a short period of time before he was nabbed in the sting. The news of Frye's light sentence comes on a day when one of the Star's lead stories is about the reported number of stolen vehicles in the city falling due to better technology. It also comes just days after the Marion Co. Prosecutor's office confirmed a grand jury had been convened to hear evidence gathered in a police investigation of OmniSource, which formerly employed as many as 50 IMPD officers part-time as security workers before police raided several scrap yards operated by the giant scrap metal company more than two years ago as part of its investigation of stolen metal.

Frye's no jail time sentence in this case seems pretty light given the nature of the crime he committed. Perhaps he's helping police and prosecutors nail much bigger fish, and that explains why he received no jail time. Who knows? Again, the news reporting of his sentencing is too deficient to discern anything other than he got off really easy. I would just like to know why.

Saturday, June 26, 2010

Mutz Splits With Daniels And Roob, Wants Clean Job Numbers

In a major embarrassment to the administration of Gov. Mitch Daniels, former Republican Lt. Governor John Mutz is demanding that the actual job numbers from the Indiana Economic Development Corporation get cleaned up in the wake of a WTHR Investigates report by Bob Segall that suggested the job numbers touted by the agency were grossly inflated. Mutz sits on the policy committee for the IEDC and formerly headed up Indiana's economic development efforts when he served under former Gov. Robert Orr. Segall reports on what Mutz is saying about those job numbers:

For months, Eyewitness News has been asking IEDC where are all the jobs it's been bragging about? And now, the agency is asking that question, too.

John Mutz is a veteran politician and businessman. The former lieutenant governor now sits on the policy committee of the IEDC, and he wants to know Indiana's real job numbers.

"The transparency issue has to do with whether we clean up our data often enough," said Mutz. "I thought it was important to get it out on the table today and we talked about it."

The discussion took place this week, behind the scenes at an IEDC board meeting. It comes after 13 Investigates showed the agency has been inflating the state's job numbers by continuing to report jobs that never materialized.

"We're going to insist on an annual basis that this takes place; alter those totals every year," said Mutz.

Mutz says IEDC needs to be more accurate and transparent and its annual reports must reflect real jobs, not just a laundry list of promises and projections that may never come true.

"If you have a company that went out of business and they're not going to create the rest of the jobs they committed, so you take them off the list. You got a company that's down a little because of the recession, they don't create the jobs as fast they would, so you alter their estimates. It's those kind of refinements that have to take place," said Mutz.
Each year, IEDC gives away millions of dollars in tax breaks and incentives to help bring companies to Indiana and you're paying for it. This board members says that's why you deserve to get the truth - to see how many jobs you're getting for your money.

"I think it's important for the public to understand what this money has been used for to know if they grants have produced the results that the governor claims. That's a realistic thing to ask," said Mutz.

A few months ago, IEDC released revised job numbers but they still don't add up. That's because the agency does not acknowledge thousands of jobs that fell through at companies that decided to cut back. The former lieutenant governor says IEDC will now begin re-assessing all jobs previously reported by the agency, and that will hopefully result in much more accurate statistics.
Mutz' comments bolsters the efforts of House Speaker Pat Bauer and other Democrats to get IEDC to more fully disclose information it is shielding from public disclosure under claims of confidentiality on behalf of the businesses to which the agency awards incentives. This will also make it more difficult for the Daniels administration to claim the issue being raised by critics is all about politics. I can only imagine how peeved Daniels and Roob are with Mutz, but it's their own fault. Roob has made a complete mess of every management job he has ever held, whether it was during the Goldsmith administration or the current Daniels administration. Republican leaders continue to tout him as some boy wonder despite his horrendous track record and his knack for pissing off people through his condescending ways.

Ballard Wants To Build Another Sports Facility

Even though it has become abundantly clear that the City of Indianapolis cannot afford the sports facilities it already has and our parks department's budget has been decimated, Mayor Greg Ballard wants to build a new sports complex at the site of the old Central State Hospital. The IBJ's Anthony Schoettle discusses Ballard's new vision for the site:

City officials are exploring redevelopment options for the former Central State Hospital—including creating a 150-acre sports complex that could include facilities for everything from soccer and baseball to tennis and ice skating.
In preliminary discussions, Mayor Greg Ballard’s administration envisions the venue serving recreational athletes as well as elite athletes who would be housed on the grounds while training for national or international competitions.
“We’ve done a lot of research on that site and we’ve discussed a lot of things with neighbors out there,” said Paul Smith, real estate manager for IndyParks, the city’s parks department. “One idea that’s been discussed has been a sports complex, but it’s just an idea right now.”
City officials have taken the step of putting together preliminary drawings. And people close to the city’s sports movement say Ballard has indicated he likes the idea.
It’s not clear how much such a venue would cost, though sports business experts say it easily could surpass $10 million—a big obstacle at a time the economy is sputtering and property-tax caps are squeezing city revenue.
"Right now, there’s just no money for things like this,” Smith said. “The economy has not been a friend to what’s going on.”
I know exactly how Ballard plans to pay for it. He will use part of the hundreds of millions of dollars the City will be borrowing on the backs of the sewer and water users as part of his utilities deal with Citizens Energy to fund this completely needless project. There isn't a city in America as stupid as Indianapolis when it comes to diverting taxpayer assets to support sports-related activities at the expense of  other basic services that government provides. We have the worst public schools in the country, and all our leaders can envision for our future is building yet another sports facility. We have a skating rink downtown at Pan Am Plaza, which we just had to have in order to host the Pan Am Games back in the 1980s, that will be demolished to make room for new development. We're also demolishing that world class Indianapolis Tennis Center we just had to have to make room for an expanding NCAA. You guessed it. That new facility could replace both of those losses and then some. Schoettle writes:

It could replace the Indianapolis Tennis Center, which is slated for demolition on the southeastern edge of the IUPUI campus in August. It also could house the Indiana World Skating Academy, which expects to get evicted from Pan Am Plaza when its owners redevelop that site.

The site also could include facilities for baseball, soccer, track and field, and other sports, and offer housing, dining and training.

The logic in this town is sickening beyond belief. Our leaders are terminally stuck on stupid.

Friday, June 25, 2010

CPS Report Confirms Carmel High School Players Subjected Victim To Criminal Deviate Sexual Conduct

A newly-released investigative report from Child Protective Services concerning allegations that several Carmel High School basketball players sexually assaulted a freshman teammate confirms the veracity of the allegations made by a 14-year old victim, and it ignites new concerns that Hamilton Co. Prosecutor Sonia Leerkamp went out of her way to protect the accused from more serious sex charges during a grand jury proceeding that recommended only non-felony, non-sexual charges against the four players accused of sexually assaulting the 14-year old. The CPS report concluded that the victim's allegations of criminal sexual deviate conduct were substantiated by the investigation.

Robert Turner, an attorney representing the victim in a lawsuit against the school district, released the CPS report containing graphic descriptions of multiple sexual assaults of the victim by the accused, with the consent of the victim's parents; otherwise, the reports aren't generally released to the public. The CPS investigation began after the victim was taken by his parents to Clarian North Hospital's emergency room on February 17, 2010 for treatment of injuries he received when he was held down and anally penetrated on a school bus returning from a basketball game in Terre Haute by senior members of the basketball team, including Scott Laskowski, Brandon Hoge and Robert Kitzinger. The victim claims he was lured to the back of the bus that night by the accused where Laskowski grabbed his legs, Kitzinger sat on his head and together they pulled down his pants while Brandon Hoge anally penetrated him with his finger through his shorts. He said he yelled for help but the coaches sitting at the front of the bus apparently did not hear his calls for help. The report confirms that a video recorder on the bus captured the assault, including a claim by a police detective investigating the case that the video showed Hoge sexually assaulting the victim. That is contrary to a claim by Leerkamp that the video tape was too dark and grainy to discern what had transpired.

According to the report, the harassment and sexual assaults of the victim began months earlier. At first, the three basketball players from the bus that night and another senior player, Oscar Falodun, began by exposing their genitals and butts to the victim. As the incidents escalated, the senior players began grabbing the victim's genitals.  Eventually, the four on various occasions "gooched" him, which the report describes as the act of anally penetrating the victim with a finger. On one occasion, the players carried the victim into the school's locker room shower and anally penetrated him through his shorts. During each assault, the victim says he was penetrated by a finger through his shorts. The victim didn't report the earlier incidents because the senior players threatened to "beat his ass" if he told on them. A witness told investigators that he witnessed the accused sexually assault the victim in the school's locker room on multiple occasions.

Investigators attempted to interview the accused through contacts with their attorneys, but only Falodun agreed to be interviewed. He told investigators the senior players began harassing the victim after he made a claim that he had a sexual encounter with a girl in the locker room and the senior players didn't believe him. He admitted they sometimes shoved him and threw his belongings into the shower, but he insists that neither he nor the other senior players gooched the victim. He said the senior players often gooched themselves but never engaged in inappropriate sexual conduct with the victim.

An attorney for one of the accused, James Voyles, is angry that Turner released the CPS report and expressed concern about the prejudice to his client in his upcoming trial on misdemeanor assault charges. Voyles may seek a gag order prohibiting Turner from releasing any further information concerning his client's case before he is tried. Leerkamp's office is not commenting on the CPS report yet.

Based on the information contained in the CPS report, its seems incomprehensible that a grand jury would have rejected more serious sex charges against the accused in this case. A grand jury only has to find probable cause for charging the accused with a crime, not the proof beyond a reasonable doubt standard applied during trial on the charges. There have been rumors that Leerkamp put on witnesses in the grand jury proceedings favorable to the accused who said the victim consented to being penetrated. If Leerkamp allowed persons to testify to the grand jury who she should have had strong reason to believe were perjuring themselves to protect the accused, that would constitute prosecutorial misconduct. The detective's claim that the bus' video showed the assault on the victim and the penetration of him by Hoge raises concern about whether Leerkamp allowed the grand jury to see the video and why she told the media the video was too dark and grainy to discern anything. Taken together, I have to agree with Turner that the entire transcript of the grand jury proceeding should be released to the public. If Leerkamp has cleans hands, then she should explain to the public why she reached conclusions that are so at odds with this CPS report.

Star Continues To Mislead Readers On Utilities Deal

An editorial in today's Star once again blatantly makes misrepresentations about the proposed transfer of the sewer and water utilities to Citizens Energy in an effort to discredit the people raising concerns about the deal as proposed, including this blogger. In an editorial entitled, "Rescue operation within reach," the editors use the excuse of recent heavy rainfalls as a rationale for supporting a backdoor tax increase on sewer and water users to fund a massive public works program for street and sidewalk improvements. The answer to fixing the City's aging sewer system and improve drainage is the Ballard plan according to the editorial.

To cut into the city's enormous backlog of infrastructure projects, the Ballard administration has pushed an unusual but sensible plan to sell the city's water and sewer works to Citizens Energy for $1.9 billion. The city would net about $425 million from the transaction, money that has been promised for streets, sidewalks, bridges and neighborhoods vexed by abandoned houses.
The Star characterizes the transaction as a sale when it is simply a transfer from one public entity to another. The utilities are currently owned by a municipal corporation. If the deal is approved, the utilities will be owned by Citizens Energy, a public benefit trust that is collectively owned by the citizens of Marion County. Further, the cash transfer to the City from Citizens is $263 million payable over two years, not $425 million as falsely suggested by the editors. The editorial then goes on to suggest that people opposing the deal have no alternatives:
The deal is by necessity complex, leaving plenty of room for legitimate questions and appropriate concern.
But what opponents of the deal have failed to do in any credible way is answer how they would pay to fix the city's longstanding infrastructure problems in lieu of transferring the assets to Citizens.

Without the money raised through the sale, city leaders have only two realistic options: Continue to fall further behind in maintaining and upgrading basic infrastructure, or raise taxes. All sides should agree that the first option is untenable given the growing list of need. Opponents of the deal, however, have failed to embrace the second option, refusing to identify which taxes they would raise and by how much.

Until they do, it's hard to have a serious discussion about the city's alternatives to the Citizens transaction.
The Star pretends that this blogger and others who have raised legitimate concerns about the deal are opposed to transferring ownership of the utilities to Citizens Energy, which seems better equipped to manage the utilities compared to the incompetent and costly management the City has offered in recent years. I have no problem with the transfer; I and many others do oppose requiring Citizens to pay $263 million, not the $425 million the editorial falsely states, to assume ownership of the utilities and assume $1.5 billion in debt owed on them. Citizens does not have the cash to pay the City so it will borrow that money by issuing 30-year bonds. The principal and interest payable on those bonds will be passed on to ratepayers in the form of higher rates. Sewer and water rates are already expected to climb 300% and 100%, respectively, in the coming years in order to meet infrastructure needs and comply with a federal consent decree on the CSO.

Ballard wants to use the $263 million cash paid over the first two years by Citizens, along with a new bond issue of at least $140 million, to fund a massive public works plan he dubs "Rebuild Indy", an entirely different proposal than the original plan of simply transferring ownership to another entity better able to manage the utilities. Although water and sewer rate users will pay for those improvements through higher rates, none of those improvements are related to the maintenance of the water and sewer utilities. Most of the money will be spent paving streets and building sidewalks. Many of those projects have a life span of only 8 to 10 years, but we will be paying for those improvements with borrowed funds for at least 30 years.

The editors act as if the City isn't doing enough to address its infrastructure problems. Yet a story by Francesca Jarosz in today's paper discussing the problem with sewage handling in the city tells a different story. Jarosz writes:

Projects to stop the sewage overflows and eliminate septic tanks -- with a combined price tag of about $2.5 billion that's expected to come mostly from rate increases -- will take more than a decade.

Over the next 15 years, the city will spend $1.7 billion to build about 25 miles of limestone tunnels and double its treatment capacity to reduce the number of sewage overflows into bodies of water from about 60 times per year to a maximum of four.

About a third of the projects have been completed, said Steve Nielsen, deputy director and chief engineer for the city's Department of Public Works.

As major portions are completed in 2017 and 2021, problems will be reduced but not entirely fixed until the end of 2025, when the work must be completed to meet an Environmental Protection Agency mandate.

"With each and every project we get going, there's going to be some incremental betterment," Nielsen said. "By 2025, that's when you really see a difference."

Do you get that? We're spending billions on these infrastructure improvements already without another backdoor tax increase to fund pet street and sidewalk projects the mayor wants to tackle before next year's election. Even without the deal, Ballard says he plans to borrow the $140 million for these projects. If there is a need for more transportation funding, where's the mayor's proposal to raise taxes on motor fuel, or to impose a wheel tax, which are related to the transportation use? You don't see them because that's a tax increase waiting to happen after the next election when he will push for a new regional tax to fund transportation-related projects in the Indianapolis metropolitan area. The highway contractors who have contributed large sums of money to Ballard's re-election campaign couldn't be happier. Mayor Ballard can pretend he's giving you something for nothing, and the Star is backing him up on this false expectation one hundred percent. Again, just another reason so many people are ending their subscriptions to the Star. The newspaper simply can no longer be trusted to provide fair and balanced coverage to its readers.

Indy's New Lobby Law Has Few Takers

A new ordinance that took effect on January 1 of this year requires all persons who engage in certain lobbying activities of city and county officials to file a registration statement and to report annually on their lobbying activities, including expenditures made for this purpose during a calendar year, has produced few registered lobbyists. According to a new online database the City has made available, only 61 persons have registered to lobby city and county officials so far this year, and 15% of those registrants came from a single law firm, Barnes & Thornburg. More than ten times that number of persons are registered with the state's Indiana Lobby Registration Commission.

City-County Councilor Joanne Sanders reacted with skepticism to the number of registrations in a story in today's Star. "I think it sounds low," Joanne Sanders, the Democratic minority leader, told the Star's Evan Shields. "I'm not sure 61 is a valid number." "Sanders' doubts stem from her experience with the potential sale of the city's water and sewer works," Shields continued. "She said she sees plenty of lawyers working on the issue and does not believe they all have registered." On that point, the law firm of Baker & Daniels has been engaged and is being paid $2 million to assist the Ballard administration with its proposed transfer of the water and sewer utilities to Citizens Energy. Although several of its lawyers have appeared at City-County Council meetings and met with councilors on the issue, a search of the database produced no registrations from the law firm. Citizens Energy, according to the database, has hired Ice Miller's Lesa Dietrick and former Center Township Trustee Carl Drummer, to lobby for it, both of whom have registered as lobbyists.

The City says it has notified everyone who is registered with the Indiana Lobby Registration Commission of the City's new ordinance. Shields' story notes the $250 fine for not complying with the law may not be much of a deterrence to complying with the registration and reporting requirements. One law firm that is erring on the side of caution is Barnes & Thornburg, which employs City-County Council President Ryan Vaughn, who authored the new lobbying ordinance. According to the database, nine employees of the firm have registered to lobby, including former CIB President Bob Grand and a former Deputy Mayor under Steve Goldsmith, Joe Loftus. The firm lobbies for: Corrections Corporation of America, which operates Marion Co. Jail II; Microsoft; Emmis; Katz, Sapper & Miller; National City Bank; Holladay Partners-Midwest, Inc.; Malcom Pirnie, Inc.; The Hagerman Group; Republic Services of Indiana; Town of Fishers; ACS State & Local Solutions; Crowe Horwath; Schneider Corporation, Johnson Controls and the Smoot Corporation. A number of those registrations indicate the firm's lobbyists are lobbying the mayor's office. Both Grand and Loftus advise Mayor Greg Ballard under a contract for which they are paid more than a $100,000 a year, creating the potential for serious conflicts of interest.

The database indicates that some former city officials have began lobbying the City after leaving their government jobs. Former Public Safety Director Scott Newman, who is also a former partner at Barnes & Thornburg, is paid to lobby for ESG Security, the firm that provides security for the CIB's facilities. Former DPW employee, Kyle Walker, is lobbying for Commonwealth Engineers, Inc. after leaving his job last year. Kevin Taylor, the former head of the Bond Bank who recently left his city job to join City Securities as a Vice President, is not registered to lobby. City Securities has been involved in previous financial transactions, in particular, related to the water company's financing. Former mayoral chief of staff Paul Okeson also is not registered to lobby. He now works for Keystone Construction, which has numerous contracts with the city-county agencies to do construction-related work.

There are also a number of registrations of people closely related to the local parties. Frank Short, a former Democratic city-county councilor and Washington Township Trustee, is lobbying for the Indianapolis Convention and Visitors Association. Marion Co. GOP Chairman Tom John is lobbying for The Consultants Consortium. The software consulting business employs newly-appointed at-large City-County Councilor Angel Rivera. John played a key role in getting Rivera appointed to the council. Michael Biberstine, a former executive director of the Marion Co. GOP, is lobbying for National Heritage Academies, a charter school-related organization. Marion Co. GOP Vice Chair Jennifer Ping, who also serves on the local alcohol licensing board, is lobbying for A&F Engineering, Beam Longest & Neff, CSO Architects, Daniels Associates, Hannum Wagle & Cline and  L'Acquis Consulting Enterprises.

As a candidate, Ballard pledged to enact an ordinance barring lobbyists from serving on city-county boards, but in one of his first acts as mayor, he appointed Bob Grand to serve as president of the CIB. Grand has been succeeded by Ann Lathrop of Crowe Horwath. Her firm lobbies the City through Joe Loftus, Grand's partner at Barnes & Thornburg. Frank Short serves on the waterworks board while he lobbies for the ICVA and Ping lobbies for numerous business interests while serving on the alcohol board.

I found it interesting that nobody is registered to lobby for either Veolia or United Waterworks. Or for the Pacers or the Colts. Bose Public Affairs Group, one of the largest lobbying firms in town, also has no registrations. There are no registrants for Baker & Daniels, one of the City's largest law firms. Toby McClamroch of Bingham McHale, the general counsel for the CIB, is registered to lobby but his registration lists no clients. I found this to be the case with several of the attorney registrants. Also, former Mayor Steve Goldsmith has spent a considerable amount of time on the 25th floor in the mayor's office since Ballard took office. A firm that employed Goldsmith, Capital Source, won a nearly $1 million contract to advise the mayor on the transfer of the utilities. Goldsmith did not register as a lobbyist. He recently became a deputy mayor for New York City's Mayor Michael Bloomberg. He has been rumored to be involved in a number of initiatives undertaken by the Ballard administration.

Thursday, June 24, 2010

FBI Seizes Durham's Cars

Alleged Ponzi scheme operator Tim Durham amassed a collection of valuable cars worth several million dollars. According to an online report tonight on the Star's website, FBI agents served warrants and seized cars belonging to Durham in Indianapolis and Los Angeles. Acting U.S. Attorney Tim Morrison filed a forfeiture action last November against Durham-owned properties, including his valuable collection cars, last November after FBI agents raided his offices in Indianapolis and Ohio as part of its fraud investigation of Fair Finance, an Ohio company owned by Durham that has subsequently gone into involuntary bankruptcy. Morrison abruptly dropped the forfeiture action only days after filing it after receiving assurances from Durham's attorneys that his assets would not be converted or wasted.

Durham's attorney, Barnes & Thornburg's Larry Mackey, reacted with anger to the news of the seizure of the cars.  "If the FBI were as focused on investors as they are on creating headlines, they would know that today's (Thursday's) seizures were a total waste of taxpayer monies," Larry Mackey told the Star. Mackey says Durham turned over title to the cars to the trustee overseeing the bankruptcy of Fair Finance months ago. "(Thursday's) seizures were another unfortunate example of the FBI acting before they get the facts," Mackey said. "The honest taxpayer loses now as the FBI's actions today have only served to start a battle with the trustee; whose time to fight that battle will sadly reduce recoveries for the investors. Avoidable, embarrassing and regrettable."

Mackey would be correct in his assertion if the FBI seized the vehicles with the intent of keeping the proceeds of the sale of the cars for the government. It's not clear to me, however, that the FBI didn't act for the benefit of the investors in Fair Finance, who stand to lose as much as $200 million if substantial assets are not recovered from Durham. WISH-TV was on hand to witness the seizure of cars at a downtown garage owned by one of Durham's companies. WISH-TV indicates that the trustee for Fair Finance said the FBI gave him a courtesy call prior to carrying out today's seizures at three locations in two states.

UPDATE: An attorney for the bankruptcy trustee is now telling the IBJ's Greg Andrews that the FBI seized Durham's vehicles for the benefit of the Fair Finance investors. In that sense, the attorney tells Andrews that the FBI is not competing with the bankruptcy trustee. It looks like Mackey's disinformation campaign against the government just fell apart.

Grand Jury Looking At OmniSource, Yeah Right

Marion Co. Prosecutor Carl Brizzi tells WRTV's Jack Rinehart that he has convened a grand jury to hear testimony about allegations that scrap metal giant, OmniSource, knowingly purchased stolen copper, aluminum and other metals. What this typically means is that Brizzi is winding down an investigation for one of his friends and will close it without bringing criminal charges. OmniSource is represented by Barnes & Thornburg's Larry Mackey and Jason Barclay. I reported earlier how Mackey wrote a letter to IMPD's former police chief, Mike Spears, and Brizzi urging that Maj. Chris Boomershine, a lead investigator in the case, be disciplined, if not fired, for discussing allegations against the scrap metal giant with a member of the news media. Boomershine told local media of the investigation at the time:

Off-duty Indianapolis police officers allowed their part-time employer, OmniSource, to purchase suspicious or stolen metals at least 21 times in 2008, a city attorney said Friday.

The off-duty officers documented the suspicious purchases in reports that came to light during a hearing to determine whether the company should be granted a license to continue buying and selling scrap metal in Marion County.

But while they documented the purchases, they took no action to stop them at the time.

"They saw something wrong and felt it was wrong enough to document it, not knowing what would become of it," said Maj. Chris Boomershine. "That's not uncharacteristic of a lot of part-time situations where things come to an officer's attention."

Boomershine is the commander of a team of detectives who spent nearly a year documenting allegedly illegal transactions at OmniSource locations.
OmniSource employed about 50 IMPD officers as security officers, including officers who worked on investigating charges against other scrap metal yards that they had knowingly purchased stolen metal. IMPD made the police quit their moonlighting jobs at OmniSource and demoted another high-ranking police officer after the charges surfaced and the media and blogs began focusing attention on the case. Platt's Steel Market Daily had more details about information police learned after raiding the firm's scrap yards in Indianapolis. Platts reported that police recovered "folders on how to avoid anti-trust violations." The Platts report indicated that undercover police officers pretending to be auto thieves were able to sell items to OmniSource which had been altered to appear stolen. Platts also reported that OmniSource allegedly "wanted to target their competitors while employing [IMPD] officers." At the same time, Platts reported that "nothing of enforcement appeared to be happening at their yards." That triggered Mackey to write a letter to Boomershine's superiors. "Divulging confidential information in and of itself was wildly inappropriate," Mackey wrote. "Divulging it to Platts Steel Markets Daily constituted a purposeful effort on the Major's part to publicly damage OmniSource and its publicly traded parent."

Soon after allegations of wrongdoing by these police and OmniSource first surfaced, then-Public Safety Director Newman assured the public at a Mayor's Night Out meeting that nothing illegal had been done by any one, including police, even before the investigation had been concluded. Newman is a former law partner at Barnes & Thornburg where Mackey and Barclay work. Barclay tells Rinehart that he expects closure to the case soon. "We've done our own investigation during that time period, talked to witnesses, looked at evidence and we're confident there's no evidence of a crime," said attorney Jason Barclay. Barclay's biography at the firm's website boasts of obtaining an acquittal for a prominent Kentucky road contractor recently who had been accused by the FBI of paying bribes and rigging bids to win state highway contracts. "He recently served as trial counsel in the month long public corruption trial of a highway contractor who was fully acquitted in federal conspiracy, bribery, and obstruction of justice charges," his firm biography reads.

We recently learned that prosecutors failed to act on a forfeiture action in a timely manner, allowing OmniSource to recover as much as $273,000 seized from the firm's scrap yards at the time IMPD began investigating. it. This set off finger pointing between the prosecutor's office and high profile attorney Greg Garrison, who had been retained to work on a forfeiture action. Garrison insisted that he had been instructed not to take any action in the case.

Al Gore No Different Than Bill Clinton

An Oregon massage therapist's shocking allegations of sexual misconduct by Al Gore during his massage session in 2006 in his hotel room at Portland's Hotel Lucia suggests Bill Clinton ain't got nothing on Al Gore when it comes to being a sexual predator. The National Enquirer first broke the story, which has subsequently been confirmed by other media by the district attorney and as evidenced by the police report filed in the case. The story she later told to Portland police, contained in a police report, included detailed descriptions of Gore's boorish behavior and accusations of sexual transgressions by him against the woman while he was dressed in a bathrobe and nothing more:

She called him a "crazed sex poodle" and tried to distract him, pointing out a box of Moonstruck chocolates on a nearby table. He went for the chocolates and then offered her some, cornering her, fondling her and shoving his tongue in her mouth to french kiss as he pressed against her.

She said he tried to pull her camisole strap down.

She said she told him to stop it. "I was distressed, shocked and terrified."

She said she was intimidated by his physical size, calling him "rotund," described his "violent temper, dictatorial, commanding attitude" -- what she termed a contrast from his "Mr. Smiley global-warming concern persona."

Later, she said, he tried to lure her into the bedroom to hear pop star Pink's "Dear Mr. President" on his iPod dock. She said Gore sat on one end of the bed and motioned for her to join him.

Suddenly, she said, he "flipped me on my back, threw his whole body face down over a top me, pinning me down."

She said she loudly protested, "Get off me, you big lummox!"

The therapist said she injured her left leg and knee and sought medical care for several months.

The woman said Gore had been drinking when she arrived for his late-night massage, but she wasn't certain that he was drunk. According to the police report, the woman claimed Gore grabbed her hand while she was massaging him and placed it on his genitals. Gore's spokesperson declined to comment on the woman's accusations. The police report says that Gore repeatedly cancelled appointments with police to be interviewed about her allegations, telling them at one point the matter would be handled civilly. No criminal charges were ever brought in the case. It is unclear whether Gore reached a settlement with the woman to avoid a civil lawsuit. Gore and his long-time wife, Tipper, announced earlier this month that they had separated and planned to divorce. The Portland Tribune obtained a copy of the police report three years ago, but it decided against doing a story on it.

Wednesday, June 23, 2010

Ballard On Being A Whore For The Billionaire Sports Team Owners

Mayor Greg Ballard sits for an interview with the Star's Dan Lee on the role of sports in the city--one that will really turn your stomach sick if you have any concern that our city has become a big whore for the billionaire sports team owners. Well, you won't find a bigger whore for the Pacers and the Colts than Ballard. Although candidate Greg Ballard said three years ago that he thought our city was putting too much emphasis on helping out the sports teams, he's singing an entirely different tune today. Here's a few items from the interview:
  • On the Simons' extortionist-like demand that the City either pick up $18 million a year in maintenance costs for Conseco Fieldhouse or see the team move to another city, Ballard is reaching down to his knees. "Everybody wants a long-term deal done now," he says. "Everybody knows the Pacers have been going through a rough patch." "The business community wants this to happen." The Pacers bring us "international prestige." He says he's "confident" a "deal will get done", though it might be a short-term bridge agreement. This means the CIB plans to borrow the full $27 million from the state authorized by last year's bailout legislation to give the Simons at least $9 million a year for now. 
  • On the Super Bowl, he's not worried about a collective bargaining agreement failing to be reached with the NFL Players Association, which could jeopardize the City's opportunity to host the 2012 Super Bowl. He tells Dan Lee what he expects the City to gain from hosting the Super Bowl: (1) a world class image (didn't the Indianapolis 500 give us that decades ago?); (2) prosperity for the near east side (LOL); and (3) attract new businesses to the City (yeah, there he goes with phony job claims again).
  • On the demise of the tennis center, he says it's "unfortunate", but we still have the Veladrome he quickly adds.
  • His favorite sports moment is sitting in the war room with the Pacers management during the NBA draft.
Anyone who has observed Ballard since he became mayor understands how easily he can be bought by giving him free courtside tickets to sporting events, plenty of buffet spreads in the suites at Conseco Fieldhouse and Lucas Oil Stadium, gifts for him and Winnie, jobs for his kids, free country club memberships and lots of overseas and out-of-town junkets. He's sort of like former Illinois Gov. Rod Blagojevich in that sense but with even less class. The corrupt insiders with whom he's become so comfy laugh at him behind his back all the time. They know he is incapable of studying issues and reaching independent decisions. He relies on these people to supply him with BS he can spit out like a parrot on command to the common people. Unlike a parrot, though, he steps all over the words he's fed, looking and sounding like a child who suffers from a learning disability. The man has become such an embarrassment. I really believe he is so stupid that he could well become the first mayor to get caught with his hand in the cookie jar and sent to prison. You can bet the corrupt insiders would kick him to the curb now that they've gotten him to do every corrupt deal they put on his desk just like the political insiders have done to Blagojevich in Illinois.

Do Daniels And Ballard Expect Us To Take Them Seriously On Their Job Claims?

Gov. Mitch Daniels and Mayor Greg Ballard must really take the people to be fools. The Daniels administration own job claims have been cast in doubt after a WTHR investigation by Bob Segall showed the more than 100,000 jobs created claims were a fraud. Ballard has broken every major campaign promise he made when he ran for office three years ago and speaks with forked tongue so often that he simply can no longer be believed. He criticized the Peterson administration for being too generous with tax abatements to businesses, which has the effect of shifting the property tax burden to other taxpayers, as a candidate. And so it is with the pair's press conference this week to try and trick us into believing they are doing yeoman's work in bringing more high tech, high paying jobs to the City. The problem is that it's too much like the movie Ground Hog Day. A big job creation announcement is made. Tax abatements and incentives awarded. Jobs promised are never created. This time, Scott Olson at the IBJ was smart enough to go look at a press release from a couple of years ago. Here's what Olson had to say about a press conference by the two announcing new jobs and new incentives and tax abatements for Indianapolis-based Fusion Alliance:

A local tech company that fell far short of its job-creation goal after reaching incentive agreements with the state and city two years ago is ready to try it again.

Indianapolis-based Fusion Alliance Inc. announced Tuesday morning that it plans to create up to 107 jobs by 2014 by investing more than $2.2 million to lease and equip additional space at its northwest-side headquarters in Park 100. The Indiana Economic Development Corp. is offering the company up to $1.5 million in performance-based tax credits based on the job-creation plans. The city of Indianapolis will consider property-tax abatement at the request of Develop Indy.

The Web site and software developer currently has 175 employees in Indianapolis and 50 in Cincinnati.

However, the company claimed to have 190 local employees and 30 in Cincinnati in January 2008 when it promised to spend $2 million and create 110 local jobs by 2010 in exchange for $250,000 in training grants from the Indiana Economic Development Corp, as well as property-tax abatement from the city.

Fusion CEO Douglas Brown said Tuesday morning that the company actually only had 157 employees when it applied for the earlier incentives. He acknowledged the company fell far short of its job-creation target, but did create 18 jobs. He said the firm received $145,000 in work force training grants from the state for existing staff and another $55,000 in grants for new staff. He said the company did not receive a tax abatement.
Both Daniels and Ballard put out press releases on the announcement made this week, but when Olson tried to track someone down who would talk about them, he had trouble getting someone to return his call. He finally reached someone at IEDC who told him the company received more than $70,000 in training grant money from the state but not the full $200,000 it originally had been qualified to receive, even though the company's CEO had already told Olson the company had received $200,000 in training grants.

I may be a life-long Republican, but I will not have any part of supporting politicians who deliberately set out to deceive the public. Increasingly, politicians' public pronouncements are carefully crafted by campaign consultants with an eye towards the next election. The veracity of the pronouncements are irrelevant as long as it fits the campaign meme. Too often the media fails to pick apart their statements. Ballard's public statements on his plan to transfer the utilities to Citizens Energy and spend hundreds of millions of dollars on pork barrel projects ahead of next year's election have been replete with falsehoods, but the media won't take him to task on any of them because they've been led to believe it's the right thing to do.  Olson needs to be applauded for doing what a reporter is suppose to do: check it out.

UPDATE: These people really can't keep their stories straight. I just ran across a separate story in today's Star. "The IEDC had offered the company up to $250,000 in training grants for new and existing workers, but Fusion used only $50,000 of that money, Brown said, and added 18 jobs, the Star reports. Which is it? $200,000, $70,000 or $50,000? Although the company insists the jobs will pay above average for the IT field, Brown would not disclose to the Star the salary range of the jobs. "This is a good day for the brain gain in Indiana," the story quotes Gov. Mitch Daniels as saying. It sounds more like the brain drain to me.

Tuesday, June 22, 2010

Supreme Court Strikes Blow For War On Terrorism, U.S. Strikes Blow For Terrorists

In a big win for the U.S. government's war on terrorism, the U.S. Supreme Court yesterday upheld a federal law barring citizens and organizations from offering material support  to groups identified by the U.S. State Department as terrorists in Holder v. Humanitarian Law Project. The plaintiffs claimed that their freedom of association and free speech rights were unconstitutionally infringed upon if they couldn't offer humanitarian aid and support to terrorist associated groups, even if it was not their intent to support the overseas groups terrorist activities.The Supreme Court's 6-3 decision was written by Chief Justice John Roberts. The three dissenting justices included the three most liberal justices, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.

Before you cheer too loudly about that victory, take a look at what our own government is doing to aid the very terrorists who are killing our soldiers in Afghanistan. "The U.S. military is funding a massive protection racket in Afghanistan, indirectly paying tens of millions of dollars to warlords, corrupt public officials and the Taliban to ensure safe passage of its supply convoys throughout the country, according to congressional investigators," reports Karen DeYoung of the Washington Post.  "The security arrangements, part of a $2.16 billion transport contract, violate laws on the use of private contractors, as well as Defense Department regulations, and 'dramatically undermine' larger U.S. objectives of curtailing corruption and strengthening effective governance in Afghanistan, a report released late Monday said," she continued.

Who needs the law the Supreme Court upheld yesterday if our own government is going to use our tax dollars to support the very people we are supposedly fighting in this war?

Monday, June 21, 2010

IMPD's Zero Tolerance Policy On Excessive Force Use Faces Another Test

IMPD Officer Nhat Nguyen is facing charges that he unnecessarily choked a man while he was handcuffed after being called to investigate a reported domestic dispute. Amber Montgomery told WTHR's Steve Jefferson that Nguyen handcuffed her boyfried, Jimmie Bailey, on her front porch because he refused to return car keys taken from her that she wanted him to return to her so she could leave with her son. Montgomery claims Officer Nguyen began choking her boyfriend when he asked why he had been handcuffed.  Other police officers had to pull Nguyen off of  Bailey. "The situation got 'to the point where other officers arriving on the scene had to pull the officer off of him,'" said Lt. Jeff Duhamell IMPD."

IMPD recently fired a decorated police officer, Jerry Piland, after the department claimed he had used excessive force in arresting a 15-year-old boy, Brandon Johnson, who had interfered with the arrest of his brother and had resisted his own arrest by police officers. Nguyen's excessive force allegation occurred three weeks ago on May 31. The other officers on the scene reported Nguyen's actions to their supervisor according to Lt. Duhamell. Nguyen has been placed on administrative duty and had all of his police gear confiscated pending the outcome of the investigation. He has been on the IMPD force for three years.

Sunday, June 20, 2010

Star Continues To Minimize Serious Issues

One of my pet peeves with the Indianapolis Star is how it often deals with some of the most serious political stories dismissively as mere items in its "Behind Closed Doors" column in its Sunday edition. When the Star was still a Pulliam-owned newspaper and had some crack, award-winning reporters working for it, it often published in-depth political stories and columns that would take days, weeks and months for good reporters to research. With its staff slashed under Gannett's ownership and all of its award-winning reporters long gone, serious investigative journalism has almost disappeared from the newspaper. The "Behind Closed Doors" column under Pulliam featured political gossip and humor items for our weekly entertainment. Today, it features items already covered by local political blogs days and weeks earlier that the Star plops in this catch-all column simply to cover its butt. Yeah, we covered that. Right. Today's column offers several examples of this lame coverage.

This blog and other blogs disclosed the fact that Mayor Greg Ballard's administration had awarded a no-bid contract to Hirons & Co., where his son Greg, Jr. is employed, to promote the Mayor's proposal to transfer the utilities to Citizens Energy and to raise a bunch of cash to fund street and highway projects ahead of next year's election. This blogger reported last year on Hiron's similar contractual role in promoting the Wishard Hospital referendum, Ballard's push for its passage and his son's employment there. After extensive coverage of the current no-bid contract on local blogs, the Star inserts an item today discussing it in "Behind Closed Doors." "The mayor and his staff says the pick had nothing to do with Ballard Jr.'s employment there, but at least one government ethicist says the pick could cause perception problems for the city." Perception problems? Huh? By comparison, Chicago news media pounced all over the disclosure that Mayor Richard Daley's son and nephew had invested in a business that was awarded a lucrative city sewer contract after the contract had already been awarded. The media coverage was so intense it brought Mayor Daley to tears at a press conference. The FBI, which has helped send a roomful of Daley cronies to prison already for public corruption, soon launched its own investigation of the contract.

In another item today, the column talks about political bickering between Republicans and Democrats over satellite voting and Marion Co. Clerk Beth White's failure to timely notify GOP Chairman Tom John of two vacancies that occurred when Homecroft town officials resigned their jobs. "White, who previously has been the subject of John's criticism, waited about three months to provide notice about the Homecroft clerk-treasurer's resignation and waited a few weeks to notify John of a Town Council member's resignation in the same town," the column reports. "State law requires notice within three days." White blamed her error on the hectic schedule she was working to put on this year's May primary and dismissed John's criticism of her as "politics." This blog exclusively reported on former City-County Councilor Patrice Abduallah's failure to reside in his council district, which prompted his quick resignation. We later learned that White knew Abduallah didn't live in his district at the time he filed for re-election because his statement of candidacy noted an address outside the district. Although she notified Abduallah of his residency problem, she still certified his candidacy and remained hush-hush about it until this blog disclosed it. The Star completely ignored her omission in its coverage of the story.

In a third item, which gives this week's column its headline, "Prosecutor hopefuls try to outdo each other in transparency", and which is strikingly similar to my blog headline earlier this week, "Prosecutor candidates competing to be the most ethical", the column again trivializes a serious issue. "The candidates for Marion County prosecutor traded barbs last week in competing bids to be seen as having the most transparent handling of campaign contributions," the column opens. Trivializing this issue does the public no good, particular with recent revelations of special treatment being offered to criminal defense attorneys and their clients who made substantial campaign contributions to the current prosecutor, Carl Brizzi. The IBJ, by comparison, reported on the role big campaign contributions played in the prosecutor's race four years ago and has run circles around the Star with its ground-breaking reporting on Brizzi's self-dealing and ethical lapses as prosecutor. The Star sat on damaging information it has known about Brizzi for years that only recently came to light, including his drunken escapade on a golf course cart during a political fundraiser.

I really get tired of hearing newspapers whine about their diminishing viability when they give their readers every reason to drop their subscriptions and look to alternative news sources for their information. The dramatic decline of the quality of the Star's reporting and editorial content during the twenty years I've lived here is profound. I seriously believe unchecked public corruption is as rampant as it is because our community lacks a serious watchdog looking out for the public's interest among the mainstream media. TV news stations often do a better job of reporting than the Star, but too often they do hit and run reporting and don't stay focused on their earlier ground-breaking reporting, allowing the story to die down without action after the passage of a short time.

Saturday, June 19, 2010

A Bailout For Circle Centre Mall?

The IBJ's Cory Schouten writes about a growing concern that Circle Centre Mall could lose its two anchor tenants, Nordstrom and Carson Pirie Scott whose leases are up for renewal in a few months. As Schouten notes, the mall's manager, Simon Property Group, has a 15% stake in the mall with other investors. The land on which the mall is built is owned by the City, which issued bonds to provide more than 50% of the funding to build it. A group of about 20 businesses, including AT&T, IPL and the Indianapolis Star, own a stake in the mall as well based on their substantial initial investment in the project to make the deal happen because the Simons didn't want to put much of their own money into it--too risky you see. Simon Propert Group manages and leases out the space for a fee and returns a small profit to the investors each year. The investors pay no rent on the mall despite it being built largely with taxpayer dollars. Apparently Simon has told the City that it may need to step in and help if it wants to keep the two valued anchor tenants and the Ballard administration is saying it will "do whatever it takes to ensure the mall anchors remain." Schouten writes:

Meanwhile, city officials are preparing to step in and do whatever it takes to ensure the mall anchors remain, said Michael Huber, deputy mayor for economic development.

“Keeping Carson Pirie Scott and Nordstrom and a healthy, functioning mall is of critical importance,” Huber said. “We’re fortunate with the management of Simon Property Group the mall is doing as well as it is at a time when many downtown malls are not.”

Huber said he wasn’t sure exactly when the department store deals are up for renewal, but believes it’s next year.

It isn’t clear what incentives the city might offer since Simon has not yet made a request; the city originally enticed Nordstrom to open in the $319 million mall by offering a new building and tenant improvements at no upfront cost to the retailer. How much Nordstrom pays in rent is not spelled out in publicly available documents. Carson’s occupies part of the first three floors of the former L.S. Ayres flagship department store . . .
The downtown Indianapolis mall generated a profit of $8.9 million last year on revenue of more than $23 million, records show. Occupancy held steady in 2008 and 2009 at 92.8 percent, excluding the troubled fourth floor, which is only 59-percent occupied.

Because Huber wasn't around when the original Circle Centre Mall got inked like I was, I'll clue him in on some facts before he becomes too generous in giving away our tax dollars again. Former Mayor Bill Hudnut, who had the original dream for Circle Centre Mall, inked the original deal with the Simons, which allowed them to get a brand spanky new mall with very little skin in the game and a whole lot of money being dumped into the project by the taxpayers with borrowed funds. Mayor Steve Goldsmith, who could not stand Hudnut, assumed that Hudnut had negotiated a bad deal for taxpayers and wanted to open up the books on it before he agreed to proceed with the mall's construction and remove the blight of that giant hole that existed downtown for several years. What Goldsmith learned was that Nordstroms and Parisian, the predecessor retail company to Carson Pirie Scott, paid no rent for their space and received built out allowances to lure them to the new mall. Got that? They paid no rent. I'm surprised Schouten didn't learn that little bit of information when he was preparing this story. The two stores did, however, agree to pay their share of maintenance fees. Simon relies on the lease revenues and assessments generated by all of the other retail stores, movie theater and restaurants to turn a profit for the investors.

Simon insisted on the availability of cheap parking for mall customers. It also insisted that the City construct a large parking garage across the street, which would have a connector to both the mall and the convention center, allowing people to walk back and forth without ever going outside. Goldsmith figured out the City could also generate a chunk of change if it included retail space on the first level of that garage that fronted Georgia, Illinois and Maryland Streets. After the mall was built and the Simons figured out how well the City did in renting out space to the likes of Planet Hollywood, Houlihans and Steak & Shake, it wanted to control that retail space as well. As far as I know, the City never capitulated to that demand. The Simons nixed a plan to build a connector between the mall and Union Station, which pretty much nailed the coffin shut on it.

The mall turns a profit of about $9 million a year on revenues of about $23 million according to Schouten's story. What his story doesn't mention, although Schouten has previously reported on it, the investors agreed to divert dividends in the past that they earned on their investment in the mall to pay the bond debt on Conseco Fieldhouse where the Simon's Indiana Pacers get to play rent free and keep all revenues from both game and non-game events held there. The City is currently in negotiations with the Simons to pick up $18 million in operating costs the Simons claim they can no longer afford to pay because their Pacers are losing so much money.

Now think about the timing of this story and its implications. The Simons plant a story that Nordstroms and Carson Pirie Scott may pull out of the mall as the City prepares to host the Super Bowl in 2012. If the two giant retailers actually pulled out of the mall, it would probably be the end of the mall and appear as a huge black eye for the City during the Super Bowl festivities. Of course, the Simons have lease deals with these two big retailers all over the country because it controls more mall space than any other mall owner in the country. This gives them a lot of leverage most property owners don't have and the Simons are known to use that leverage to get what it wants. The Simons also stand to lose very little if the mall fails. The taxpayers and the other mall investors will be the ones stuck holding the bag. I don't know whether Nordstroms or Parisian eventually started paying rent when their leases came up for renewal in the past, but I doubt it. What I see is a play to make the City pick up the assessments the anchors pay as well so they don't have to pay a dime for their prime retail space, sort of like the CIB picking up the maintenance costs on Conseco Fieldhouse but the Simons continuing to maintain control over it. The problem is that, as usual, there is nobody sitting at the table representing our interests. You can bet Ballard will play right into the Simons' hands just like he's doing with the Conseco Fieldhouse negotiations.