Tuesday, November 30, 2010

Tom John Out As Marion County GOP Chairman

Marion Co. GOP Chairman Tom John will announce he is stepping down from his post tomorrow according to a Fox 59 News report tonight and other sources. His decision comes on the heels of the party's poor showing in the biggest national Republican wave election in decades. The party lost every single county-wide race. John was also publicly humiliated earlier this year when embattled Marion Co. GOP Prosecutor Carl Brizzi referred allegations by John's ex-wife that he had forged loan documents to a special prosecutor for investigation. A special prosecutor later cleared John of criminal wrongdoing. John suffered a major embarrassment during the 2008 primary when he filed to run for precinct committeeperson in the wrong precinct and then proceeded to lose the race. He appointed himself to a vacant position so he could continue serving as county chairman. The party re-elected him chairman despite the misstep. He even had the support of Mayor Greg Ballard, even though he openly scoffed at his campaign when he ran his uphill campaign against Bart Peterson in 2007.

Mayor Greg Ballard and the Republican-led council will stand for re-election in next year's municipal election. Although Ballard and Republican council candidates lambasted then-Mayor Bart Peterson and the Democratic-led council for raising taxes, a lack of transparency in the budget process and a series of ethical lapses, Ballard and the Republicans have governed no differently than the Democrats, raising taxes and fees, playing shell games with the budget, giving handouts to billionaire sports team owners, selling off city assets and allowing their council leader, Ryan Vaughn, to engage in a series of self-dealing activities for the benefit of his law firm's clients.

Speculation on John's replacement has so far focused on Kyle Walker. Walker is a political hack who ran the county party for John before joining the Ballard administration as an official at the Department of Public Works but still found time to engage in political activities. Walker parlayed his city job into a job working with a city contractor for his former government employer, a position that has allowed him to spend a considerable amount of his time collecting hefty political consulting fees from other candidates, such as losing GOP prosecutor candidate Mark Massa, and to hit up other card-carrying members of the Pay-To-Play Club for contributions to Ballard's and the party's campaign committees. If you asked him what the principles of governing are for the Republican Party, he couldn't tell you. Like John, he's only interested in government job seekers and government contractors having a role in party affairs. Technically, it's the precinct committeepersons who select the county chairman, but because most of them are appointed by John, it's highly unlikely any truly principled Republican could get elected chairman. Next year's municipal elections should prove as fruitful for Republicans in Marion County as this year's election. The leadership has managed to drive away virtually everyone responsible for the party's 2007 victories.

Here is John's resignation statement to committeepersons:

Fellow Republicans:

Initially, I want to thank you for the privilege to lead you as your County Chairman. I ran for Chairman in 2007 believing that Republicans provide a better vision for our city and county and that Republicans could still win in Marion County. Four years later, I know that we can win races and I am absolutely sure that we have the better vision for our community's future.

Since we won the Mayor's office and Council in 2007, it has been with great pride as I have watched Mayor Ballard and the Republican Council lead our city forward. The previous administration had plagued our city with wasteful spending, ethical clouds, and spiraling taxes. But Mayor Ballard and the Republican Council wasted no time in addressing these issues. They have ushered in a new era of balanced budgets, lower property taxes, unprecedented transparency in government, and much needed infrastructure investments.

Our city cannot afford to stop this progress now. It is critical that we all rally together behind these great leaders in the coming year. They have proven to be wise stewards with our tax dollars, effective managers of our city, and offer the kind of creative and thoughtful leadership the City of Indianapolis deserves.

As I reflect on our work of the past four years, we have seen many successes. In 2007, we won all of the Mayor's offices and councils in the County (Mayors Ballard, Ricketts, Wright and Thoman) for the first time in memory. In 2008, we also turned out 3,000 more straight Republican votes than in 2004 and, this year, we turned out 5,000 more straight ticket Republican votes than we did in 2006. Moreover, in the face of a difficult and abbreviated campaign, Mark Massa got nearly as many votes as Carl Brizzi did in 2006 (Massa-101,560 to Brizzi 103,777) while spending about a third of the money as Brizzi spent in 2006. While it is a tremendous disappointment to not have Mark Massa as our prosecutor, as Mark said, I believe that we "left it all on the court" and made a good showing in a race that was a very difficult given the circumstances. Finally, we had important victories this year by returning Larry Buell's House seat to the Republican column with the hard fought race by Cindy Kirchhofer and Wayne Township into Republican hands through the well run campaign of Andy Harris.

Notwithstanding the achievements of our organization, we have significant challenges. The Democrats continue to see a greater increase in their straight ticket voters, and continue to increase their overall voter turnout. This means that we must work even harder to turn out more of our voters and must be better at every aspect of campaigns to continue to put ourselves in position to win marquis races.

Reflecting on my time as Chairman, I am proud of many of our achievements. While I do believe that there were times I could have communicated better or acted more deliberately, I always took action that I believed was best for our party. Unfortunately, sometimes that even meant calling republicans to account, something which I did not do gladly, but I did it because it was right. Finally, I'm grateful for our team, Vice-Chairman Ping, the Central Committee, the tremendous staff, our dedicated team of area chairman, and all the members of the organization who have worked hard and have always been motivated by a single motive to get Republicans elected.

On a personal level, being chairman has its costs. Whether it is people upset with decisions you make or simply the difficulty of balancing the unpaid Chairmanship with work demands and family obligations, it is a difficult job that takes a toll. For these reasons, I have always believed that a chairman should not remain in the role too long. As I look at my personal priorities and the tremendously important year upcoming, I have decided to resign as your chairman effective upon the election of my successor.

This does not mean that I intend to walk away from our party or the fight facing our city. Quite to the contrary, I intend to stay actively involved and continue to help Mayor Ballard and our Council in every way that I can and to be an advocate for our city at every opportunity. I believe now more than ever that the Republican leadership of our community is essential and we must all give as much as we can in time, treasure and effort, to ensure that the visionary leadership of people like Mayors Ballard and Ricketts and Council President Vaughn, along with his tremendous caucus, continues to guide our city. I just believe it's time that I move to a different role and that someone ready to fulfill the chairman role, in a different way, step up.

In the coming days, there will no doubt be conversations about who is the best person to succeed me. This decision is that of the PCs alone and is one of the most important duties they carry as organization members. I do not presume to tell anyone who you should pick. I offer the following thoughts, however, as you examine those who may step up to be reviewed for the task.

First, as all previous chairmen and I know, this office is a heavy burden to carry when also working another job to earn a living. This is even truer in a municipal cycle. Thus, I suggest that our next Chairman be able to commit all or nearly all of their time to being chairman. Secondly, another important aspect of being chairman is that the chairman should know and understand our entire organization, whether that is from experience as a member of the organization or candidate or such other experience. Third, it is important to look for someone familiar with all aspects of the office's responsibilities, including running campaigns, raising money, and the very important nuts and bolts of ensuring we have poll workers and completely filled PC and Ward Chair positions. Finally, and in my mind most importantly, this person must have demonstrated a history of love of and dedication to our city and our party. Ultimately, that grit and passion will help them through the tough times and help us win elections in the face of significant challenges.

Once again, thank you for the honor of serving as your chairman and all that you do for our party and city. Now let's get out there and work to re-elect our mayor and ensure him a great partner in a Republican Council.

Tom John
I'm not sure what "wasteful spending, ethical clouds and spiraling taxes" have been addressed by Ballard and the Republican council. My property taxes have gone up, the largest income tax increase in city history was made permanent, other taxes and fees were raised, $33.5 million was handed out to a billionaire sports team owner, Mayor Ballard has accepted free country club memberships valued in the tens of thousands of dollars despite declaring the "end to country club politics", a Republican councilor was forced to resign after being charged with bribery and the Republican council leader has engaged in one self-dealing transaction after another, but I wouldn't want to confuse him with the facts. As for his mouthpiece over at the lowest rated talk show in town, I never cast a vote for John as county chairman. He handpicked a nominating committee to nominate his slate of officers, appointed most of the committeepersons eligible to vote, got Mayor Ballard's blessing to continue dismantling the party, and there was no vote taken as he was elected by acclamation, but again, let's not confuse them with the facts.

Bren Simon Can't Live On $58,000 A Week And More Simon Family Feud Matters

Most people would be content to earn $58,000 a year. Apparently Bren Simon is upset the trustee for her late husband's estate is limiting her to $58,000 a week while a Hamilton Co. Superior Court determines whether she is entitled to the lion's share of his estate as his second wife. WISH-TV reports:

Today in court, 24-Hour News 8 learned Bren is currently receiving $116,000 every two weeks for living expenses. Yet, her attorneys argue she should get 100 percent of the income generated from the [$1.8 billion] trust. The annual average income of the trust is estimated at $57 million per year.

Today's court appearance by attorneys representing all sides of the estate dispute generated more interesting gossip. It seems Bren hired a private investigator to snoop into the affairs of all of the beneficiaries of Mel's estate. Attorneys for Mel's children, who are contesting his last will, are asking that sanctions be imposed against Bren and her attorneys for failure to turn over documents gathered during the course of her snooping as ordered earlier this year. The Star has this news:

Bren Simon has turned over documents pertaining to a private investigator that she hired to collect information of beneficiaries of her late husband Melvin Simon’s trust.

Revelations about the investigation were disclosed in a court hearing today concerning a challenge to the Simon will . . .

Attorneys for Deborah Simon, who has sued her stepmother in the will dispute, said they want sanctions against Bren Simon for failure to promptly turn over the documents.

Bren Simon turned over those documents earlier this month; she was requested to turn them over last summer.

Barry Simon, an attorney for Deborah Simon, told Hamilton Superior Court Judge William Hughes that the documents are “rather shocking.”

He said the private investigator working for Bren Simon tried to collect social security numbers and driving records of trust beneficiaries and also of James Barkley, James M. Barkley serves as Secretary and General Counsel of Simon Property Group

Barry Simon said he wants to do a special deposition of Bren to ask her about the private investigation.

And there's more. The IBJ's Cory Schouten says attorneys for Bren Simon want Judge William Hughes to recuse himself because he hired attorneys at the law firm of Bingham-McHale to represent him in a disciplinary matter arising out of his arrest last month for drunk driving while vacationing in North Carolina. Bren's attorneys are concerned about getting a fair shake from Hughes since Bingham attorneys are also representing the interests of Simon Property Group in the estate dispute. Hughes tells her attorneys no recusal is necessary because he has since replaced those attorneys with other legal representation in the matter.

News that Bingham-McHale is representing Simon Property Group raises a more serious conflict of interest concern in my mind. Bingham-McHale's Toby McClamroch, who is also the firm's managing partner, serves as general counsel to the CIB. McClamroch drew up documents authorizing the CIB's $33.5 million, three-year deal to keep the Indiana Pacers playing in Conseco Fieldhouse. The Pacers are owned exclusively now by Herb Simon, who purchased Mel Simon's 50% stake in the NBA franchise earlier this year for an undisclosed sum. Herb founded Simon Property Group, is a major shareholder of the company and continues to serve on its board of directors. How do we know Herb isn't funneling legal work to Bingham-McHale in consideration for favorable legal opinion's from the firm on CIB matters pertaining to lease issues between the Pacers and the CIB? Based on my reading of the lease, I cannot say the firm has been fairly representing the CIB's interests in interpreting that lease agreement, particularly as it relates to the penalties to the Pacers if the team's owner chooses to break that lease.

This is not the first time we've had a serious conflict of interest when it comes to the CIB and the Simons. Former CIB President Bob Grand is the managing partner of Barnes & Thornburg's Indianapolis office, which also represents Simon Property Group and the Indiana Pacers. Grand signed a complicated Chinese wall agreement when he served as the board's president supposedly walling himself off from any discussions with the Pacers or the Simons concerning their lease on Conseco Fieldhouse. As soon as Grand's close confidante, Ann Lathrop, succeeded him as president of the CIB, she announced the $33.5 million taxpayer give-away to Herb Simon's Indiana Pacers. Lathrop formerly worked as an executive at ACS, a company for which Bob Grand and his law firm have lobbied for a number of years. Suffice it to say, there is nobody at the table representing the CIB's taxpayers' interests. It looks like the Simons have all their bases covered as usual.

Tea Party Activists Taking Aim At Lugar

The Star's Mary Beth Schneider takes a look today at the growing discomfort of grassroots activists with 6-term Indiana Senator Richard Lugar. It's still a ways off before the 2012 election, but Lugar is making it clear he intends to seek an unprecedented term come hell or high water.

Four years ago, Republican Sen. Richard Lugar was considered so unbeatable that Democrats didn't bother to field a candidate against him.

Now, he's facing the likelihood of a challenge from within his own party.

Tea party activists and other social conservatives are actively searching for a candidate around whom they can unite to beat Lugar in the 2012 primary election.

How remarkable is that? Lugar hasn't had a primary opponent since "Happy Days" ruled the TV ratings and "(Shake, Shake, Shake) Shake Your Booty" topped the charts. That was 1976 -- the year Lugar first went to the Senate.

But dissatisfaction -- and even downright anger -- has been building among some conservatives. They watched in dismay earlier this year when Lugar voted to confirm liberal Supreme Court Justice Elena Kagan. This month, they were at odds with Lugar when he defended congressional earmarks; backed a bill to help some illegal immigrants who came here as children earn a path to citizenship; and stood shoulder-to-shoulder with Secretary of State Hillary Rodham Clinton to push for a new nuclear treaty with Russia.

"He's bombarded us" in the past couple of weeks with reasons to oust him, said Diane Hubbard, an Indianapolis Tea Party organizer who was among 65 people who protested Lugar's co-sponsorship of the immigration bill -- called the DREAM Act -- outside his Indianapolis office Saturday.

The same day, a smaller group of tea party activists and conservatives from across the state calling themselves Hoosiers for Conservative Senate, met in Fishers to begin organizing a challenge. They plan to meet again Jan. 22 in a much larger public forum to discuss how to coalesce around one alternative to Lugar.

Monica Boyer, the 35-year-old organizer of the Kosciusko Silent No More tea party group, was among those at Saturday's meeting. She wasn't even born when Lugar first went to the Senate. And he already was a veteran there when she began casting her ballots for him.

No more, she said.

"I'm a die-hard Republican," Boyer said, "and I will never pull the lever for Richard Lugar again."
Schneider goes on to mention two potential primary challengers to Lugar, including State Senator Mike Delph and Richard Mourdock, although neither has committed themselves to running just yet. Lugar will turn 80 in 2012 when he seeks another six years after serving thirty-six years already. Whether you like Lugar or not, hasn't he reached the age when one should be considering retirement? You've been rejected by your fellow Republican colleagues for a leadership position on several occasions. Your presidential campaign went nowhere. And it probably doesn't help your case when the New York Times takes to defending you in its news pages against attacks from within your own party. You're now coming across as a bit of an embittered guy who is more interested in being a thorn in the side of people within your own party than actually getting anything accomplished for the common good.

Lugar's situation reminds me of that of former Arizona Sen. Barry Goldwater, who was once the darling of the Right. In later years, the public's perception of him waned, particularly after a damning investigative series by the Pulliam-owned Arizona Republic raised questions about his ties to organized crime figures. When Ronald Reagan and the Republicans were sweeping to power in 1980, Goldwater struggled to win re-election in the closest race he ever faced against a little-known Democratic opponent in a Republican state. He spent his last six years in the Senate poking fingers in the eyes of President Reagan and the religious right before riding off into the sunset. Perhaps Lugar has reached a point where he should retire from the Senate gracefully rather than set off a fight within his own party. Indiana has elected plenty of Democrats to the Senate in the past. And it's doubtful Democrats will give him another pass as they've done in past elections.

Sunday, November 28, 2010

Akron Beacon-Journal Series Puts Pieces To Durham Puzzle Together

The Akron Beacon-Journal has a great investigative journalism series it launched today looking into the demise of Fair Finance Company, the now-bankrupt company Indianapolis businessman Tim Durham plundered to bail out his losing business enterprises and to finance the lavish lifestyle he unabashedly flaunted over the past decade after acquiring the Ohio-based company. A lengthy introductory piece by Jim Mackinnon and Cheryl Powell, "Borrowed time finally runs out," retraces Durham's acquisition of the Akron-based company in great detail:

Fair Finance investors were stunned on Nov. 24 a year ago when the FBI raided the company's East Market Street headquarters and its corporate parent's offices in Indianapolis. The agents hauled away computers and boxes of files and Fair Finance, in business since the days of the Great Depression, never reopened.

For many, this was their introduction to Timothy S. Durham, a prominent Indianapolis buyout specialist who, along with business partner James F. Cochran, had purchased Fair Finance in 2002 from the Fair family.

Durham was well-known in Indiana as a successful, if highly leveraged, businessman and millionaire playboy. And he had a growing profile in Hollywood as the new chief executive of struggling entertainment company National Lampoon Inc., whose previous top executive — Dan Laikin, a friend and business partner — is now in federal prison after being convicted of manipulating the company's stock price.

Profiles of Durham in Indianapolis newspapers, magazines and public documents show he has been an aggressive businessman all his adult life.
Durham's real ticket to success, a fact not overlooked by these reporters, was marrying Joan SerVaas, daughter of wealthy industrialist and long-time Indianapolis City-County Council President Beurt SerVaas.
While practicing law, he was asked to review papers for Beurt SerVaas, an entrepreneur who made his money buying and selling businesses, most in the manufacturing industry, including rubber. Among his successful acquisitions were U.S. Rubber Reclaiming in Mississippi and an Indianapolis tire innertube plant once owned by Uniroyal.

SerVaas hired Durham in 1990 to run the Carpenter school bus company.

Durham married SerVaas' daughter, Joan, who was eight years older and had three children. Joan SerVaas Durham, a lawyer and businesswoman, runs Curtis Publishing, which owns the copyright to many Norman Rockwell paintings. News articles say Durham raised Joan's three children as his own; the couple also had a son together.

Over the next several years, Durham played a role in some of SerVaas' purchases and sales.

But in 1998, Durham parted ways with SerVaas and his daughter, and launched his own venture capital company with several friends.
Why Durham departed ways with SerVaas and his daughter is very instructive to what later became of Durham. One of the businesses SerVaas acquired while Durham worked with him was the Carpenter Bus Company of Mitchell, Indiana. SerVaas would later put Durham in charge of that business. When SerVaas decided to sell the bus company for a healthy profit to Spartan Motors, according to a source, he would discover that Durham had misappropriated the company's retirement funds for its employees. The source told me the mess Durham made of the retirement funds cost SerVaas many millions before he was able to successfully close on the sale of the business. Obviously feeling no shame, Durham moved on with his life and his way of doing business.

Fair Finance co-owner James Cochran, who worked with Durham in the school bus business, joined the venture. About eight years older than Durham, Cochran received his bachelor's degree in business administration from Southwest University and had a career in sales, credit analysis and leasing.

By setting up Obsidian Enterprises and raising $10 million, they purchased U.S. Rubber Reclaiming from SerVaas, then the small, publicly traded Danzer Co., a Maryland truck-body manufacturer.

Danzer's name was changed to Obsidian in 2001. Obsidian, revamped as a holding company for several of Durham's businesses, was now a publicly traded company that had to report earnings, or, in this case, mounting losses.

Meanwhile, Durham and Cochran were taking an interest in another friend, Dan Laikin, who had set off to take control of the company that owned the rights to National Lampoon, a struggling Los Angeles entertainment company.

They saw National Lampoon as undervalued, but their timing was not good. The prosperous decade that began in the early 1990s was about to end.

Durham and Cochran needed cash, and found it at a respected, family-owned company with what was arguably a license to print money: Fair Finance.

A business broker in Cleveland brought them all together, according to Don Fair, son of the Fair Finance founder and the owner at the time.

Don Fair needed to sell the business, he told the Beacon Journal earlier this year. He was in his 70s with no family member interested in succeeding him. Talks with Durham and Cochran started in 2000, Fair recalled, with an agreement reached in late 2001 and the deal closing in January 2002.

Fair Finance, which did business as Fair Financial, had a solid business model, Fair said. The company managed accounts receivable for other businesses and provided consumer loans. To provide the necessary capital, the company sold high-interest investment certificates to Ohio residents.

After the sale, Fair said he largely stayed away from the business, although he held a note for almost $4 million that would be paid about five years later.

At first, Fair said, it looked like Fair Finance was operating as it always had. But as the years passed and he looked again at the investment certificate circulars, he grew concerned.

The documents included disclosures about Fair Finance's loans, and suggested the company had changed from a consumer lender to a commercial lender. And where he had limited families to buying no more than $50,000 in certificates, the maximum had grown to $200,000.

This tale in many ways starts just 24 hours after Durham and Cochran finished their purchase of Fair Finance on Jan. 7, 2002. That's the date when their newly formed Ohio corporation, Fair Holdings, officially acquired Fair Finance.

Fair Holdings, in turn, was owned by Indiana-based DC Investments, another Durham and Cochran business.

The pending sale had been noted in Fair Finance's investment circular filed with the state in October 2001. A Dec. 21, 2001, circular noted the ownership changes, with Don Fair listed as ''chairman emeritus,'' Cochran as chairman and Durham as chief executive.

The circular also said ''new management contemplates there will be no significant change to the company's business plan or business procedures, however, there can be no guarantee that prior business procedures will continue to be followed by new management.''
The story goes on to detail how Fair Finance became a cash cow to bail out all of Obsdian's losing businesses and to serve as a source of funding for Durham's lavish lifestyle. In a separate story, an Ohio lawyer representing Durham assures us there was no fraud involved.

Dennis Concilla of the firm Carlile Patchen & Murphy in Columbus blamed the demise of Fair Finance on the economy and the federal government's intrusion into Fair's daily business.

''I haven't seen anything that leads me to believe there was fraud,'' Concilla said.

The bankruptcy trustee has not been able to prove wrongdoing, Concilla said.

''Yes, there were some personal loans that went to Durham, Cochran and others,'' Concilla said. ''The bulk of the money went to finance companies that made up the bulk of Obsidian Enterprises.''

When the federal government forced Fair Finance to close, the various Durham companies lost value and couldn't pay their obligations, Concilla said.

Durham has tried to cooperate with investigators since the Fair closing, as evidenced by his voluntary delivery of his motor vehicle and art collections for auction, Concilla said.

The civil litigation probably will take years to resolve, he said.
If Durham and his business partners committed no fraud, they sure have hired a bevy of very expensive lawyers to defend them against charges Durham seemed to confidently predict would not be brought against him in a recent interview with WTHR's Ann Marie Tiernon. Durham recently hired high profile Florida criminal defense attorney Roy Black to represent him according to the IBJ's Greg Andrews. Black first earned fame when he successfully defended William Kennedy Smith against charges he raped a woman after a night on the town drinking with his uncle, Sen. Edward Kennedy, and his cousin, Patrick Kennedy. Black later married one of the jurors who acquitted his client. Previously, Andrews reports Barnes & Thornburg's Larry Mackey had been providing legal assistance to Durham. Mackey is the former federal prosecutor who successfully prosecuted Oklahoma City bomber Timothy McVeigh in the government's whitewashed account of how that terrorist bombing went down.

Andrews wondered in his story where Durham is getting the money to hire someone like Black since he claims he is broke. Andrews learns Durham is getting help from friends, including his former father-in-law, Beurt SerVaas. Andrew's writes, "One of the people apparently helping is retired Indianapolis businessman and former City-County Council President Beurt SerVaas, the 91-year-old father of Durham’s ex-wife, Joan SerVaas." “I think he asked Dad for a loan. Dad might have lent him money,” Joan SerVaas told IBJ. She added: “If he gets through all this, he might be able to pay it back.”

Yep, it looks like SerVaas is still acting as Durham's enabler. SerVaas is one interesting character. He worked as an OSS officer during World War II as a close associate of Reagan CIA Director William Casey and has boasted of his continued CIA ties long after his spy dies supposedly ended. He served on the executive board of the veterans of the OSS (predecessor to the CIA), which some claim ran the agency for many years behind the scenes. SerVaas once owned Indianapolis-based International Investigators, a private investigator firm that was staffed with former CIA and FBI agents. In Dick Cady's Deadline: Indianapolis, he details how the spy firm received bugging equipment from the Indianapolis Police Department that it used to illegally wiretap foes of former Marion Co. GOP Chairman Keith Bulen, including former Indiana Sen. Vance Hartke.

More Damning E-Mails Show Cozy Relationship Between Duke And IURC

The Star's John Russell shares more damning e-mail exchanges between a high-ranking Duke official and former IURC Chairman David Hardy. In this case, the e-mails are between the second-highest past Duke official, James Turner, and Hardy.

James L. Turner, the second-highest-paid executive at Duke Energy Corp., liked keeping in touch with Indiana regulators, even on a long holiday weekend when he was riding in a boat.

On July 2, Turner sent an e-mail to David Lott Hardy, then chairman of the Indiana Utility Regulatory Commission, telling him he was heading out on a channel to Lake Michigan.

"Would the ethics police have a cow if you and the woman came up some weekend?" he wrote.

Hardy wrote back: "Probably -- we might 'be in the area' some afternoon, but I won't be doing this forever."

A few minutes later, he added that driving to the lake would be a fun outing in a high-performance BMW M5. "It would be a nice run in the M5 and a cheaper [Michigan] journey as usually we only go to [Michigan] so the woman can go to Nieman Marcus."

In dozens of e-mails, obtained by The Indianapolis Star under an open records request, the two men schmoozed and joked over all sorts of personal topics, sometimes trading messages eight or 10 times a day. At one point, Hardy offered advice on what kind of BMW Turner should buy. Another time, they talked about Butler University's basketball championship games. Several times, they had frank discussions on private personnel matters involving Duke officials and job candidates.

Taken together, the e-mails paint a picture of a cozy relationship that extended far beyond a professional association between a utility executive and a powerful state regulator.

They also show that the friendly relationship between Duke and Indiana regulators, which resulted in the firing of Duke's Indiana president, Mike Reed, in an ethics scandal earlier this month, extended all the way to Duke's headquarters in North Carolina.

Turner is one of Duke Energy's top executives, responsible for the company's regulated business segment, which is Duke's largest, and for legislative and regulatory strategy and rates. He oversees a vast portfolio, with responsibility for power delivery, gas distribution, customer service and several other functions.

Last year, Turner earned a salary of $650,000, plus stock awards, cash incentives and other compensation worth a total of $4.35 million. That made him second in total compensation only to Chairman and CEO James Rogers, whose package was valued at $6.93 million, according to the company's proxy filing.

That made him far better paid than Hardy, the man he spent hours cajoling by e-mail. Hardy made $109,000 as chairman of the Indiana Utility Regulatory Commission. He was fired in October by Gov. Mitch Daniels in what has become a major ethics scandal for the state, after the IURC's general counsel, Scott Storms, accepted a job to work for Duke as a regulatory lawyer . . .
The FBI is investigating, according to the IURC, and Daniels has ordered an investigation into all Duke cases that might have been tainted by Storms' activities . . .

Turner, once Indiana's utility consumer counselor, did not return a call made to his cell phone Friday to discuss his e-mails or his close relationship with Hardy.

As Russell's story mentions, Turner once worked as the utility consumer counselor for the IURC back during the Bayh years, which is why I think this investigation will go nowhere as long as U.S. Attorney Joe Hogsett has any say. Hogsett is close to top officials at Duke and to Kip Tew, a former Duke official and lobbyist for the utility. Tew still lobbies for Duke as an attorney at Krieg DeVault. Tew headed up Barack Obama's presidential campaign in Indiana and played a key role in Hogsett's appointment as U.S. Attorney. Practically everyone associated with Evan Bayh, including Bayh himself, have always been in bed with top Duke officials, dating back to the days when the company was known as Public Service of Indiana (PSI).

Make no mistake about it. The people at the IURC who should to be representing the public's interest were/are bought and paid for by the regulated. This has always been the case. The only people who ever get appointed to any position of significance with the IURC are tight with officials of one of the utilities. That is the way it has been under Republican and Democratic governors alike. Former Lt. Gov. John Mutz served as president of PSI Indiana after leaving public office. Last week, Russell had a story discussing applicants for the open position created by the firing of IURC Chairman David Hardy. Russell's story noted how three of the four current commissioners have ties to utilities:

James D. Atterholt, a commissioner since 2009 who succeeded Hardy as chairman in September, formerly worked as a lobbyist for AT&T Indiana, which is regulated by the IURC. He has a long political resume, having served as Indiana state insurance commissioner; a special assistant for U.S. Rep. Dan Burton, R-Ind.; and an Indiana state representative seated on the committee overseeing utility legislation.

Larry S. Landis, a commissioner since 2002, once worked at the former marketing firm of Handley & Miller, whose clients included AT&T Indiana. He also had worked as a campaign aide in Richard Lugar's first Indianapolis mayoral race, and later as a vice president for advertising at American Fletcher Corp., now part of JP Morgan Chase.

Carolene R. Mays, a commissioner since February, comes from a family with utility ties. Her father, the late Theodore Clarence Mays Jr., served on the board of directors at Vectren, an Evansville gas and electric utility. Her uncle is a principal in BMHH Energy Services, which was awarded a recent bid by the Indianapolis International Airport board to build and run an airport electric plant. BMHH includes Citizens Energy Services, a subsidiary of Indianapolis-based Citizens Gas & Coke, a utility regulated by the IURC. Mays was previously the publisher and president of the Indianapolis Recorder newspaper and the Indiana Minority Business magazine.

David E. Ziegner, a commissioner since 1990, has made the IURC a career. He previously served as a staff attorney for the Legislative Services Agency and was general counsel for the IURC.
Russell's story notes Hardy, a Fort Wayne attorney, worked for Duke while it was known as PSI before he was appointed by Gov. Daniels to serve as the IURC's chairman. Several of the 12 applicants for the open position created by Hardy's departure have ties to the utilities as well. Even Gov. Daniels once served on the board of Indianapolis Power & Light, a position that made him millions when the company sold out to an out-of state utility, AES. Whether Democrats or Republicans are in charge, it simply does not matter. Only the people who advocate for utilities have a voice at the IURC.

Friday, November 26, 2010

IMPD Brass Cleared In Scuffle With State Trooper

An investigation into the confrontation between a state trooper and IMPD Deputy Chief William Benjamin in Benjamin's office at IMPD headquarters has cleared Benjamin and Maj. Chris Boomershine of any wrongdoing. State Police, however, have suspended Master Trooper Wayne Billings for two days as a result of his action last August according to WRTV's Jack Rinehart. Billings went to Benjamin's office and accused him of leaving messages with him about a woman with whom he was personally involved. Benjamin had no idea who Billings was when he entered his office and confronted him with the allegations. Dressed in plain clothes, Billings told Benjamin he was a state trooper but did not produce his badge. When Boomsershine attempted to detain him for further questioning, he revealed he was armed. Billings was handcuffed and detained until state police investigators arrived. After he was detained, IMPD officers found his badge, as well as a tape recorder he had on his person recording the confrontation.

Fox 59 News' Russ McQuaid played the recording of the confrontation recorded by Billings during this evening's news broadcast, which confirmed the substance of earlier accounts that suggested Billings and not Benjamin or other IMPD officers had acted inappropriately. IMPD officers are upset State Police sat on the findings of their investigation for weeks and waited until the Thanksgiving holiday weekend to report on its findings in hopes the story would be lost among other holiday news coverage. Sources say a woman with whom Billings was having an affair used an I-Phone application to disguise her voice when she left messages with Billings instructing him to go see Benjamin. IMPD officers are extremely upset that Public Safety Director Frank Straub, who has been highly critical of the behavior of some on the police force, refuses to clear IMPD officers of wrongdoing in the matter despite the State Police findings.

FBI Asking Questions About IURC Ethics Flap

It looks like somebody at the FBI is asking questions of folks with knowledge of the circumstances surrounding the controversial hiring of the IURC's general counsel, Scott Storms, by Duke Energy, which resulted in quite an ethics blow up for the Daniels administration and led to the firing of IURC Chairman David Hardy by Gov. Daniels. Ed Feigenbaum reports in his latest edition of Indiana Legislative Insight:

[T]he FBI began interviewing a wide number of folks, principally at the Indiana Utility Regulatory Commission, to gain some perspective on the recent ethics maelstrom that resulted in the termination of David Lott Hardy as IURC chair, and of former IURC administrator (and Indiana Department of Transportation Commissioner) Michael Reed as president of Duke Energy's Indiana subsidiary – along with former IURC general counsel Scott Storms from a Duke Indiana legal job. And this is not the first time this year, we hear that utility-related folks have been queried on matters related to politics and government.

Our understanding is that the Feds are clearly taking a good, close look at the matter . . . asking different questions of the various people contacted, and, from what we've been able to piece together, apparently heavily focused on finding evidence of any quid pro quo.
Feigenbaum also reports there is a previously unreported ethics flap involving Hardy that would have resulted in the immediate firing of almost any other state employee. "Tales are also emerging of some other interesting issues and incidents from the Hardy days, including a reprimand in his file over a compound unrelated ethics issue involving family, state resources, and Commission clout that some suggest would have meant the immediate ouster of most other state officials," he writes. Unless this investigation is being handled by the Public Integrity Section in Washington, expect it to go nowhere just like multiple honest services fraud cases that have been ignored in the past by the U.S. Attorney's Office in Indianapolis because it is run by political hacks. U.S. Attorney Joe Hogsett won't touch Duke Energy. You can bet on it.

Wednesday, November 24, 2010

Marion County Traffic Court Judge Suspended For 30 Days Without Pay

In a rare move, the Indiana Supreme Court has entered an order suspending Marion County Superior Court Judge William Young from his position as traffic court judge for a period of thirty days without pay after he reached the agreement in lieu of a full hearing of the disciplinary case against him for his conduct in running the court. You can read the order here. The Indiana Law Blog has more here.

More Bad News For Daniels Administration On IURC Ethics Flap

A new report by the Star's John Russell suggests Daniels' own office knew more about the controversial hiring of former IURC general counsel Scott Storms by Duke Energy a bit sooner than had earlier been claimed. Russell writes:

More than a month before a state ethics panel gave a green light to the top lawyer at the Indiana Utility Regulatory Commission to take a job with a major utility, Gov. Mitch Daniels' chief of staff seemed to be raising doubts that such a move would clear ethical hurdles, according to e-mails obtained by The Indianapolis Star.

By early September, those hurdles disappeared.

In a series of back-and-forth messages in August, two key players involved in the revolving-door case discussed the doubts and how to handle them.

The messages concerned whether Scott Storms, then general counsel and administrative law judge at the regulatory commission, would face ethical issues by seeking a job at Duke Energy Corp., over whose cases he had presided for several years. Storms had played a key role in administering one of Duke's biggest ongoing cases before the commission, construction of the utility's massive $2.9 billion coal-gasification plant in Edwardsport.

Mike Reed, then president of Duke Energy's Indiana division, wrote an e-mail on Aug. 1 to David Lott Hardy, the chairman of the regulatory commission. Reed said he had recently played golf with "EAG," presumed to be Daniels' chief of staff, Earl A. Goode, and the subject of Storms had come up.

"EAG told me during golf he will be surprised if IG [inspector general] OK's SS to join us. Reason: Eport," Reed wrote to Hardy, using shorthand to refer to the Edwardsport plant.

A few minutes later, Hardy shot back his answer: "What a crock."

But Reed had an idea. "Now we know the challenge," he wrote to Hardy. "Let's not give up. Focus may need to be how to convince that we can wall him off."

He told Hardy that the commission's ethics officer, Loraine L. Seyfried, "must clearly spell out how (Storms) would be walled off from Edwardsport, and therefore meet the test."

A few weeks later, on Aug. 25, Seyfried sent a three-page memo to Storms, stating her opinion that his prospective employment with Duke would not violate the state ethics code, as he had not negotiated or administered a contract with Duke while with the IURC. She stated that Storms had screened himself from pending Duke cases after submitting his resume to Duke, and the cases were reassigned to other administrative law judges.
So who told Seyfried what she had to write to make Storm's hiring look kosher? And why is the Governor's chief of staff playing golf with Duke's president and discussing the hiring of IURCs top attorney by the utility? It all sounds a little too cozy to me.

Zoeller No Friend Of The Taxpayers

Fellow blogger and attorney Paul Ogden has filed a False Claims Act on behalf of the taxpayers of Indiana against 78 county prosecutors who are deliberately misapplying Indiana's civil forfeiture statute by retaining 100% of the assets forfeited instead of turning over funds to the Common School Fund after deducting law enforcement costs associated with a civil forfeiture action. Many Indiana prosecutors simply lump the entire cost of law enforcement for police into the cost of pursuing the forfeiture action, thereby assuring no funds are ever turned over to the Common School Fund as contemplated by the state statute. A few honest prosecutors, such as Wayne County's, limit the cost to the actual cost incurred in pursuing the civil forfeiture action as the statute provides and sends the rest to the schools. Indiana Attorney General Greg Zoeller could have intervened in the lawsuit on behalf of the taxpayers. Instead, he has chosen to defend the prosecutors in this unseemly practice. The Star's Heather Gillers reports:

The suit, which was filed by an Indianapolis law firm in Marion Superior Court, seeks repayment of two years' worth of money the firm thinks is owed to Indiana's Common School Fund, and to clarify how much of that money prosecutors are allowed to keep.

Zoeller, in a news release issued Tuesday, characterized the issue as a public policy dispute that could distract prosecutors from their public safety duties.

"The proper place to argue that Indiana's civil forfeiture law is too lax or too vague is the Indiana General Assembly," Zoeller said. "I would support legislative efforts to clarify the civil forfeiture law to provide more transparency and certainty, but that debate ought to happen in the legislature, not in civil court."

Paul Ogden, the attorney bringing the case, accused Zoeller of trying to curry favor with prosecutors and said he would move to strike any court appearance by the attorney general. Ogden argues that prosecutors are breaking a fairly clear law -- not misunderstanding a vague one.

How the attorney general would deal with the suit has fed speculation since it was unsealed Friday. The case arguably falls under two separate state statutes: One allows Zoeller to intervene on behalf of the defendant, the other on behalf of the plaintiff.

State statute instructs that when a prosecutor is sued in connection with his or her job, the attorney general must either make arrangements for private defense counsel or represent the prosecutor himself.

But the False Claims Act, which Ogden's suit cites, allows a citizen plaintiff to bring a case he or she thinks could benefit other citizens, in hopes that the attorney general will take it over. Zoeller rejected that option Tuesday.

"The plaintiff's framing the lawsuit in a way to claim to be representing the state will not keep me from my duty to defend prosecutors in court against civil lawsuits," he said. He said "a number" of prosecutors have already asked him to represent them.

Sorry, Mr. Zoeller, but the statute isn't vague. What Zoeller really should have said is that he is more interested in helping his attorney friends like Greg Garrison who are collecting a generous contingency fee from representing county prosecutors in these civil forfeiture actions. Garrison, who spends at least half of his time working on his radio talk show at WIBC-FM, represents several counties, including Marion County, in civil forfeiture actions on a contingency fee basis. As the Star has reported, Garrison has pocketed hundreds of thousands of dollars for work on some cases that really required little work at all on his part. The real leg work is done by the law enforcement officials in the course of their duties. Some have criticized prosecutors for using outside counsel rather than using in-house counsel, or at least pay attorneys on an hourly rate for their work as opposed to a contingency fee. Zoeller's actions won't help taxpayers, but it should be good for plenty of free air time on Garrison's radio talk show host to pretend to be an advocate for the taxpayers.

Tuesday, November 23, 2010

Where Are The Jobs?

WTHR's Bob Segal continues a story he has been tracking for the past year. Where are the jobs? He's talking about the more than 100,000 jobs the Indiana Economic Development Corporation claims have been created through the economic development incentive efforts of the agency. Segal has learned it is like pulling teeth getting Mitch Roob's agency to produce documents to back up the job claims. Waiting as long as six months to get some information, Segal finds information such as the positions created and the pay for those jobs have been redacted from the documents. His year-long story has led him to conclude as many as 40% of the jobs claimed to have been created never materialized. Looks like good campaign fodder for Mitch Daniels' opponents should he decide to run for president in 2012. The failed privatization effort at FSSA also provides good campaign fodder for opponents. Remember who was responsible for that deal? Yep, Mitch Roob.

Monday, November 22, 2010

Durham Watch

We're coming up on the anniversary of the date FBI agents descended on the business offices of Tim Durham's Fair Finance Company in Ohio and his Obsidian Enterprises office atop Indianapolis' Chase Tower. Law enforcement officers have remained quiet as an investor-initiated involuntary bankruptcy proceeding in Ohio has set about to account for nearly $200 million innocent small-time investors in rural Ohio invested in a company that promised interest rate returns of 9% on certificates of investment they purchased under Ohio's securities law. The U.S. Attorney's Office first initiated a civil asset forfeiture action against Durham's assets here in Indianapolis before abruptly withdrawing the case days later with little explanation. Durham's interest in his palatial Geist mansion and a collection of expensive cars and artwork have been turned over to the bankruptcy trustee; however, outstanding debts and attorneys fees will likely consume what little money is recovered.

So what's next? One source says an Ohio official close to the investigation anticipates that seven to eight individuals will be indicted before Christmas. Pardon me if I sound a little skeptical, but a similar rumor earlier this year suggested indictments would be forthcoming by the 4th of July. Suffice it to say that government investigators have offered little solace to the countless number of small fortunes of mostly middle class Amish and Mennonite families wiped out because of one man's greed and determination to prove to people he would become the richest man in the world.

During a recent interview with WTHR News' Anne Marie Tiernon, Durham professed his complete innocence. He confidently predicted he would not be charged and suggested the entire ordeal had just been a bad mistake by the FBI, which he believed was inadvertent. One of his attorneys, Gary Sallee, suggested a former business associate of Durham's, Tim Porter, a British citizen, had a hand in his client's woes. Sallee accused Porter of trying to extort money from Durham a short time before the raid occurred and when he wouldn't pay up, Porter may have gone to law enforcement with a tail of fraud and deceit. Porter denied attempting to extort money from Durham; rather, he only asked him to pay money he thought Durham owed him in a car-related venture. He admitted talking to federal investigators but he told WTHR he would have talked to them regardless of whether Durham paid the money he demanded from him. A number of observers were extremely disappointed by the absence of any tough questions by Tiernon, who seemed totally sympathetic to his financial plight. It must really be difficult having to share that palatial home in the Hollywood Hills overlooking Sunset Drive with rapper Ludacris, while the family of his porn star girlfriend occupies his other L.A. mansion.

There may be one silver lining to Tiernon's interview with Durham. Perhaps her non-threatening approach lured him to let his guard down. One observer closely watching the Durham scandal noted Durham's claim that his parents also lost money in the failure of Fair Finance. Durham's parents reside in Seymour where his father is a dentist. His father abruptly closed his dental practice recently without notifying his patients. His mother, who is estranged from his father, attributed it to just another example of his father's strange behavior. Her son, Timothy, she assured us is a perfect Christian man and blamed others' jealousy of his financial success on the negative perceptions. Of course it had nothing to do with his personal vanity. If Durham's parents lost money in Fair Finance as he suggested, that could pose a problem. Fair Finance was only authorized to issue certificates of investment to Ohio residents and in denominations not to exceed $200,000 in order to qualify for the safe harbor registration under Ohio securities laws. In a new offering for which Durham had sought approval from Ohio securities regulators on behalf of Fair Finance at the time of last year's FBI raid, the company suggested it reserved the right to issue securities in excess of the $200,000 individual limit, which prompted questions from Ohio regulators. Fair Finance withdrew that securities offering when it became apparent the company would be unable to get approval for issuing additional certificates of investment.

Durham blames the FBI raid and the inability of Fair Finance to issue additional securities on the failure of his business empire. The reality was that Durham had plundered earlier investments in the company through loans to his other business activities, virtually all of which were losing money. The likelihood of those loans being repaid was already in doubt before the FBI raided his businesses. Fair Finance lacked the capital to pay back investors as their certificates of investment expired, let alone continued interest payments on those investments. The company's only hope was to dupe more innocent investors to purchase another round of certificates of investment.

If charges are brought against Durham and other key figures, where are those charges likely to be brought? One observer notes recent filings by the bankruptcy trustee for Fair Finance have been copied to the U.S. Attorney's Office in Cleveland. It would make sense that is where the charges would be brought because of a mix of federal and Ohio laws that would be the subject of any criminal indictments.

Those of you who have read this blog know how much I distust the U.S. Attorney's Office in Indianapolis, which has historically been run by politically-connected appointees who have a tendency to protect people like Durham who have close ties to the political powerhouses in the state. Not surprisingly, I was quite disappointed when Sen. Evan Bayh recently named his close political ally, former Indiana Secretary of State Joe Hogsett, to fill the vacancy that had not been filled since Bush appointee Susan Brooks vacated the office in 2007. After reading Dick Cady's new book from his experience as a former Pulitzer-prize winning reporter for the Indianapolis Star, "Deadline: Indianapolis," my suspicions about Hogsett were only confirmed.

Cady's book recounts the stock fraud case involving Ski World in Brown County, a failed ski resort in which many innocent investors lost their money, and Hogsett's role in that investigation as Secretary of State, which administers a securities division that regulates private placement offerings not subject to federal securities regulations. Cady tells about getting a memo from one of the business reporters at the Star:

"Well, the message said, "attorney Rich Bell, who represents losing investors, told me off the record some very interesting stuff about Bayh and [Bayh's Chief of Staff] Bill Moreau. Bayh was secretary of state and head of the state securities division when the suits started six years ago, but he refused to investigate. You see, his close friends at Lewis, Bowman, St. Clair & Wagner were the attorneys who screwed up the prospectus for Ski World. Lewis, Bowman has since paid a hefty six-figure settlement. Along the way, Bell said Moreau came to him and asked him to drop the suit. Bell respectfully declined." . . . .

Bell was a Democrat who ran unsuccessfully for state auditor in 1986, when Bayh ran for secretary of state. Bell's law firm, Cohen & Malad, was only a block from the Star. On the phone, Bell talked without prompting. He just didn't want to be quoted in any story. I agreed.

The whole thing was pretty disgusting, he said. They had filed their lawsuit in 1987 and took a securities complaint to Bayh in the secretary of state's office. Bayh promised to do everything he could. Beyond some fact-checking, nothing was done. When Bayh's campaign manager, Joe Hogsett, succeeded Bayh, again no action was taken. "We're not going to do a goddamn thing," Bell recalled Hogsett telling him.

Why? Because Ed Lewis was up to his ears in the lawsuit, and Lewis was Bayh's political godfather.

"Did something happen with Bill Moreau," I asked.

"Moreau called me and asked me to dismiss the suit. 'The governor would like you to dismiss this lawsuit,' those were the words he used." I told him in no uncertain terms he was out of line."

Bell said he and his partners got nothing but heat from other Democrats. Moreau had a small amount of stock in Ski World, Bell added. He thought Bayh, at a minimum, had "shirked his duty."
As Cady began digging further into the story, he learned of the lawsuits' allegations of a "fraudulent racketeering enterprise." He learned the initial stock offering had been approved while Republican Ed Simcox had been secretary of state. Although Simcox was less than honest with Cady during his interview of him concerning the offering and his ties to Lewis, Cady eventually learned Lewis had helped raise a substantial amount of money for Simcox to launch his first run for secretary of state. Further stock sales were allowed after Bayh took over the office and named Ann Nobles as his securities commissioner. The persons behind Ski World had enlisted Lewis' legal assistance because of his pull in the secretary of state's office Cady writes. Bell also told Cady an $80,000 bribe had been paid to get a liquor license for Ski World. What's really funny is the grand opening Bell described to Cady:

During the grand opening, Bell said, Lewis' name had been carved in an ice sculpture. He said I would find that Simcox and Rex Early, now the state Republican chairman, had attended the opening festivities.
The more Cady researched the Ski World story, the more interesting the connections became. "But Lewis was a big part of [Bayh's inner circle]," Mary Beth Balika, the Star's State House reporter told Cady. "Sort of a patron. But I didn't know Lewis was a good friend of Rex (Early)," she continued. "I find that amazing. Politics here is such a small world, an endless circle of relationships that reminds me of those Russian Katinka dolls, one outside the next." He tells how Bayh's legal counsel at the time, David Hamilton, had represented Ski World while he was a partner at Barnes & Thornburg. He wondered what Hamilton knew about Lewis given his direct access to Gov. Bayh in his office on a regular basis and Lewis' role in getting persons appointed to key positions in state government. As Cady got closer to the truth, Bell suddenly stopped communicating with him and even wrote a letter denying he had ever told Cady he had been told by Moreau to drop the lawsuit. Hogsett told him there was no action his office could have taken in that matter. Yeah, right. This is precisely why I have no confidence in Hogsett aggressively pursuing any cases out of the Indianapolis office that touches anybody of importance in either the Republican or Democratic Parties.

Sunday, November 21, 2010

Murray's Story On 2011 Mayoral Race Belies Ballard's Real Challenge

Democratic political consultant James Carville is known for his famous line in the 2002 presidential campaign: "It's the economy, stupid." In the 2011 Indianapolis mayoral race, the line should be: "It's the numbers, stupid." That is the shifting demographics of Marion County in favor of the Democratic Party. The Star's Jon Murray previews the 2011 election today, but more important over whether Greg Ballard is liked or is perceived of doing a good or bad job are the unmistakable voting trends in Marion County over the past decade.

The Democrats' advantage in straight-party voting in this year's election underscores this point. Democrats held a more than a 20,000-vote advantage in straight party voting, winning 79,125 votes to 58,140 votes cast for Republican candidates out of 215,000 votes cast. Nearly two-thirds of the people who cast votes voted by party and not individual candidate, leaving only a little more than a third of the electorate in play. That meant a very well-funded Republican candidate for prosecutor in Mark Massa, who easily outspent his Democratic opponent, managed to get only 48% of the vote. In fact, not a single Republican candidate won a countywide race this year, including both statewide and countywide candidates. And lest we forget this was one of the biggest wave elections for Republicans in decades. Even in the 2007 mayoral election, in which there was a lot of anti-incumbent sentiment against the Democrats, Democrats managed to outpoll straight-party voters by about 2,500 votes with voter turnout up for a municipal election. Ballard won a bare 50.5% of the vote compared to Peterson's 47.2%, or a 5,300 vote margin.

If you compare the results in the 2003 municipal election when there weren't any big issues in the campaign, things look even more ominous for Republicans. In that election there were 16,000 fewer votes cast. Democratic straight-party voting favored the Democrats by 17,000 votes. Again, two-thirds of the votes cast were straight-party votes, leaving only about a third of the votes in play. Mayor Bart Peterson swamped his Republican opponent, Greg Jordan, by more than 37,000 votes, 92,763 to 55,354. A key point in Murray's story is this:

One wild card is whether Ballard can successfully transform his earlier insurgent anti-tax campaign into an incumbent's drive for re-election, given the decisions and compromises that come with governing.

Democrats already are targeting independent voters who flocked to Ballard last time, arguing he has done "things he said he would never do when he was running for office," as county Democratic Party Chairman Ed Treacy puts it.
How that one-third of the electorate that votes independently is the key. In 2007, Ballard overwhelmingly captured independent voters because of voters' anger over rising property taxes, crime and perceived ethical issues with the Democrats. Republicans, even on a shoe-string budget, were able to parlay the anti-incumbent sentiment to win a very narrow mayoral election and control of the council. There is absolutely nothing on the current political horizon to suggest any similar sentiments that will work to the advantage of Republican candidates. Indeed, Republicans have squandered their anti-tax message with  tax increases for the CIB, utility rate increases for the sale of the water company and a plethora of fee increases. The recent sale of the parking meter assets with its doubling of parking meter rates could really bite Republicans hard in the 2011 election. And Democrats have found an even larger poster child for the unethical in City-County Council President Ryan Vaughn than Monroe Gray offered the Republicans in 2007.

During the 2007 election, Ballard repeatedly uttered the refrain, "public safety is job one." He wanted control of the police, and his Republican-led council gave it to him. Since taking control of IMPD, the department has been plagued by one police scandal after another. Distrust of the police has increased significantly under Ballard's leadership. While Ballard enjoyed overwhelming support of police during his 2007 election, many police officers are openly at war with his administration, not unlike what we saw with Peterson when police were angered he had ceded control of the department to Sheriff Frank Anderson in the merger of the two department's law enforcement responsibilities. Ballard's administration cites crime statistics that purport to show an improvement in the crime problem, but to the average person, crime is worse than ever, particularly with the number of home invasions on the rise.

As someone who fought hard for Ballard and as an elected precinct committeeman, I can tell you that Ballard enjoys the support of very few of the activists who led him to victory in 2007. In fact, he has gone out of his way to alienate those key supporters. Most are no longer on speaking terms with him. Many have vowed to vote against his re-election. Even "Flipper", his reliable driver during the 2007 election, has vowed not to support him. When I receive better treatment from Andre' Carson than I do Ballard, after all of the aid I provided him on this blog when his own party leadership was working against him, it speaks volumes of his character and lack of loyalty. So much for Semper Fi, eh?

If you believe the 2011 mayoral election will be close, then it's worth considering the Libertarian factor. In 2007, the Libertarians nominated a guy to run who spent most of the year out of state and only returned to campaign towards the very end. Even with Fred Peterson's lackluster effort, he still managed to garner 2.3% of the vote, or 3,787 votes. Presumably, Libertarians will be more inclined to field a stronger field of mayor and council candidates. One elected at-large city-county council candidate, Ed Coleman, switched parties to become a Libertarian and will offer them something they haven't had before, a current officeholder with some name identification running for re-election. If the 2010 elections are any indication, Libertarians could easily capture 5% of the vote in the mayoral election, which could be enough to doom any Republicans' chance of winning in this county.

It's also pretty much a sure bet Democrats will regain control of the council, which Republicans currently control 15-13-1. Typically, the party which wins the mayoral election will carry the four at-large races. Republicans lost one of those races in 2007 because the party's leadership had written off the mayor's race and only backed one of its at-large candidates, Kent Smith. The Libertarian candidates siphoned off enough votes to deprive victory to the one lone Republican who lost, Michael Hegg. In the 25 district races, Republicans will have to work hard to hold five seats it currently holds, including seats held by Christine Scales, Mike McQuillen, Marilyn Pfisterer, Janice McHenry and Susie Day. Scales is the only one of those councilors who has sought to put some distance between herself and Mayor Ballard, in particular on controversial votes to bail out the CIB and to sell off the parking meter assets. Her district is one of the most competitive of all of those districts, and she is wisely seeking to separate herself from Mayor Ballard, although in a wave election, even that separation may not be enough to save a Republican in a vulnerable district.

Past elections have indicated among Democratic-held seats, the two Mahern seats and the districts represented by Angela Mansfield and Mary Moriarty Adams are competitive; however, those seats will likely be safe for their party if the Democrats are united behind a well-funded candidate. The forces that made those races competitive in 2007 aren't going to be present in 2011. In addition, Brian Mahern smashed Republican Scott Keller in 2007 because of his support for Bart Peterson's unpopular income tax increase. The Democratic Party seems to be close to reaching that point with many of its leaders supporting former Deputy Mayor Melina Kennedy, who narrowly lost to Marion Co. Prosecutor Carl Brizzi before he became plagued by personal scandals. My party seems only interested in its pursuit of pay-to-play politics, abandoning all of the principles on which it relied for its victories in 2007. Yes, Ballard and the Republicans will be well-funded, but as the 2007 election proved, all the money in the world won't matter if the issues aren't on your side, particularly when the numbers are definitely not on your side.

Friday, November 19, 2010

Scandal Rocks Wayne Township Schools

Fox59 New's Russ McQuaid reveals a major scandal developing within the Wayne Township School system involving sex and money. At the center of the scandal is John Maples, Chief of Operations for the school system, who abruptly announced his resignation effective at the end of the year and is on leave from his job. McQuaid reports of inappropriate relationships with students by Maples, as well as indications of financial misconduct. McQuaid reports on the unravelling scandal after a sexual harassment complaint was lodged against Maples:

John Maples' abrupt decision this week to retire as chief of operations for Wayne Township schools has led to revelations of other alleged misconduct.

District Spokeswoman Mary McDermott-Lang told Fox59 News that Maples' retirement becomes effective December 31st and he is currently on hiatus. Simultaneously, the district is investigating a sexual harassment complaint lodged against a supervisor by an employee.

A source familiar with operations in Wayne Township schools tells Fox59 News that it is common knowledge within the district that Maples often carried on inappropriate relationships with teenage girls, including visits to his home, Florida vacations, signing students out of classes to accompany him on his rounds and, in at least one case, provided a graduating student with a job within the operations department.

"Everybody knew about it. Former employees and people went to the administration several times and nobody would do anything," the source claims.

This source also indicates that Maples would utilize district employees and contractors to make improvements to his personal property and pad purchase orders to provide furnishings to relatives.

This source also claims some of these allegations have been known to Superintendent Tony Thompson who recently announced his plans to retire. District spokesperson Mary McDermott-Lang told Fox59 News that Thompson said he was unaware of the allegations.

Our source says many employees were afraid to speak out against Maples because of his perceived power in the district and his close relationship with Thompson.

When Fox59 visited Maples' home Thursday, a woman emerging from a recreational vehicle in the driveway said Maples was not there.

One source tells me complaints about Maples' activities to the Indiana State Police and the U.S. Attorney's Office in Indianapolis have been ignored in the past. Will they finally start taking this case seriously?

Thursday, November 18, 2010

Convicted Youth Minister Out And About With Mayor Ballard, Al Sharpton And Amos Brown This Week

A youth minister who pleaded guilty to criminal confinement charges arising out of allegations of sexual battery made against him last year by women who had applied for jobs with the nonprofit agency funded in part by Mayor Greg Ballard's crime prevention grant program appears to have violated the terms of his probation just days after reaching a plea agreement in his criminal case. WRTV's Jack Rinehart says Byron Alston showed up at Mayor Ballard's meeting with members of the concerned clergy this week, was a guest on Amos Brown's talk show and attended Rev. Al Sharpton's rally all while he was supposed to be home under house arrest.

An Indianapolis youth minister who pleaded guilty to charges in connection with a sexual battery case may have violated the terms of his home detention by attending a meeting between clergy and city officials this week.

Byron Alston, the former executive director of Save The Youth Ministries, pleaded guilty to felony criminal confinement and habitual offender charges in exchange for sex-related charges being dropped in the case.

Two women had accused Alston of exposing his genitals and offering them jobs at the organization in exchange for sex in separate incidents in June and August 2009.
Pending the approval of the plea deal, Alston was placed on house arrest last week, 6News' Jack Rinehart reported.

But on Wednesday, Alston went to Barnes United Methodist Church, where the 10 Point Coalition hosted a meeting with Mayor Greg Ballard, Public Safety Director Frank Straub and Chief Paul Ciesielski to talk about recent issues within the Police Department.

City officials and clergy members told 6News on Thursday they were shocked to learn that Alston, who had always maintained his innocence, had taken a plea, and that he didn't tell anyone at the meeting.

"I'm a little embarrassed and disappointed that he didn't let us know," said Deputy Mayor for Neighborhoods Olgen Williams.

"He probably wouldn't have been allowed into the church had we known" about the plea, said the Rev. Charles Harrison, president of the 10 Point Coalition. "I'm saddened that Byron has placed himself in this situation. He's done some good things for this community, but for him to get himself into this kind of situation, is disappointing to a lot of people."

Records show Alston attended the meeting wearing his home detention ankle bracelet.

Afterward, Alston went to a near-north side soul food restaurant for lunch and sat in as a guest on the Amos Brown radio show. Later in the evening, Alston was also seen attending a rally at the Eastern Star Church featuring the Rev. Al Sharpton.

Sylvester Coleman, the executive director of Electronic Monitoring Service, the company handling Alston's home detention tracking, said officials will investigate the incident.

"This issue came to light this (Thursday) morning," Coleman said. "I have no other choice but to address this. I don't like it and it's uncomfortable."

Alston beat some rather long odds growing up in Indianapolis. He admitted to selling drugs as a young gang member and went to prison several times in the `90s for armed robbery, theft and confinement.

But he then turned his life around and became and anti-gang activist and minister, receiving crime control funding from the mayor's office.

He resigned from the Save The Youth Foundation in November of 2009. The 10 Point Coalition said that Alston played a very limited role with the organization.

If the judge accepts Alston's guilty plea on Jan. 12, he will serve six months on house arrest and three years on probation.
Imagine Deputy Mayor Olgen Williams being embarrassed Alston hadn't disclosed his plea agreement. News of the charges against him are more than a year old. Some of us are embarrassed Williams, a convicted felon, is a deputy mayor, and how the Ballard administration continues its incessant political pandering to this group of ministers. I thought if you were wearing one of those ankle bracelets, it alerted the monitoring service of your whereabouts so it detects whenever the offender leaves his or residence. Sylvester Coleman at Electronic Monitoring Service tells Rinehart the service will investigate the incident. Great monitoring servicing we're funding, eh?

Amos On New Arbitron Ratings

Radio talk show host Amos Brown says the new electronic metering system utilized by Arbitron to measure the size of radio listening audiences has been challenging for black radio stations, but he is pleased with how his own show has fared thus far. Brown writes in his column in the most recent edition of the Indianapolis Recorder:

Not only have Black broadcasters faced challenges with the new system, so have radio talk shows. The new methodology shows that right wing talkers like Rush Limbaugh, Sean Hannity and Glenn Beck aren’t as dominant as the old measurement showed.

This has been the case here in Indianapolis, where under the new system; ratings for those programs have eroded.

But, here in Indianapolis, a Black-oriented talk show is thriving and surviving under the new system.

Our seven-year-old “Afternoons with Amos” on WTLC-AM (1310) continues as the second most listened to local radio talk show (behind a slipping Greg Garrison on WIBC-AM 1070) and the third most listened to radio talk show overall behind Rush Limbaugh and Garrison.

The city’s other locally-oriented talk show hosted by Abdul Hakim-Shabazz on WXNT-AM (1430) ranks last among the city’s weekday talk shows.

“Afternoons with Amos” received another top honor last Saturday when the Indiana Broadcasters Association honored the program with a Spectrum Award as the Outstanding Community Service Radio Program in Indiana. The second straight year the program has received this prestigious statewide honor.

Yep, Abdul is dead last in the ratings as Amos delights in noting.

Attorney General Accuses Southport Mayor Of Deception In Dental License Applications

More than a year ago, I told you how Southport Mayor and dentist Rob Thoman had been accused of deceiving the state Board of Dentistry by failing to mention former criminal charges he faced as a student in Colorado many years ago. WRTV is now reporting Attorney General Greg Zoeller has filed a complaint against Thoman alleging fraud and material deception in his dental license applications spanning two decades. Here is Rafael Sanchez's report on the complaint filed against Thoman:

Thoman, who has an office at 7007 U.S. 31 S. in Indianapolis, failed to disclose on his 1987 application that he had pleaded no contest to felony embezzlement charges relating to school funds in 1981, the AG's office alleged. At that time, Thoman was student body president at Colorado State University.

The complaint filed with the Board of Dentistry also claims that on a question asking about military service, Thoman answered "not applicable."

The state said Thoman served in the U.S. Army as an operating room specialist from 1977 to 1980 and that he "separated from the service under other than honorable conditions; administrative discharge conduct triable by court martial."

The AG's office claimed that Thoman also failed to disclose the Colorado incident when he filled out his application in 2003 to be able to administer anesthesia and sedation.

The Board of Dentistry was asked to consider sanctions against Thoman. He could face censure, a letter of reprimand, suspension or a revocation of his medical license, along with a maximum fine of $2,000. A hearing date was not immediately set.

Thoman told 6News' Rafael Sanchez that he was unaware of the complaint and will have his attorneys review it. Thoman's term as mayor has been controversial, including several disputes with councilors and other city officials.
As Sanchez' report indicates, Thoman's relationship with the council in Southport has been quite strained. Council members called for his resignation last year, but he refused to give up his post. News of Thoman's troubled past in Colorado and his dishonorable discharge from the military did not surface until long after his election as mayor. It likely will become an issue if he seeks re-election next year.

Star Whitewashes Death Of Corrupt Former IPD Chief

In the 1970s, veteran Indianapolis Star reporters Dick Cady, Harley Bierce and Bill Anderson  performed in-depth investigative journalism into the corruption of the Indianapolis Police Department won them a coveted Pulitzer Prize. The three men placed their lives in great danger and Anderson and Cady were even subjected to phony criminal charges cooked up by the corrupt department and former Marion Co. Prosecutor Noble Pearcy. This month the man at the center of that investigation, former Indianapolis Police Department Chief Winston Churchill, died earlier this month after suffering a long illness. A memorial service is being held in his honor. This was all the Star could muster up to write about the life of Churchill:

A memorial service for a former Indianapolis Police Department chief will be Thursday at the local police union hall.

Visitation for Winston Churchill will be from 5 to 6 p.m., followed by the memorial service and a flag presentation, at the Fraternal Order of Police hall, 1525 Shelby St.

Churchill died Nov. 1 after a long illness.

"He served the Indianapolis Police Department from 1957 until his retirement in 1977," said Sgt. Linda Jackson, an Indianapolis Metropolitan Police Department spokeswoman, in an announcement of the service. "He rose through the ranks, becoming chief of police on Feb. 23, 1968, and he led the department until relinquishing the position in March 14, 1974."

Mayor Richard G. Lugar asked Churchill to resign, praising his work, but saying a change was needed to "restore the good morale and proud posture" of the police force following charges of corruption.
Mayor Lugar removed him from his position "following charges of corruption." Was that all day after day of front-page news stories was about back in the early 1970s? I guess if you want to know the real story you'll have to buy a copy of Dick Cady's new book, "Deadline: Indianapolis" on amazon.com. As I've often mentioned before, the Indianapolis Star's reporters today don't believe in reading the newspaper's own archives when compiling stories. Apparently that takes too much effort. And there's nobody left in the newsroom who remembers those days. All are long gone following the newspaper's slow demise after the Pulliam family sold it to Gannett. How sad. Sen. Lugar is ever so grateful of the short memories at the Star. He certainly doesn't come out looking very good in Cady's book. He was hardly leading the reform to clean up one of the nation's most corrupt police departments when he was mayor despite the mythology you hear from the people in Indiana Republican politics who worship him today about his years as mayor.

Wednesday, November 17, 2010

Straub's Tough Love Speech

As many of you know, I've been a frequent critic of Public Safety Director Frank Straub. He has been back in the news after he delivered an impromptu speech to about 50 IMPD officers at the police training academy that got leaked to the press. Straub was apparently irked that the FOP was circulating a "no confidence" survey among its membership concerning his and Chief Ciesielski's leadership. Initially, the focus of the leak was on the revelation Straub had told the police officers last Friday before the end of the day one of their own would be arrested for strong arm robbery. As it turned out, the investigation was still in its infancy and not all the facts known to determine whether the allegations a stripper made against Officer Dwayne May could be corroborated. Five days later, still no arrest has been made since Straub made that impromptu speech to the police officers. The FOP leadership suggests no arrest will ever be made.

Regardless of the debate over whether Straub should have made those comments to the group of police officers on a pending investigation, it's hard to argue with what he had to say in that impromptu speech. You could also argue police officers should have kept his comments about the ongoing investigation confidential themselves as Straub argues. Call it tough love or whatever, it was a speech that needed to be made by someone. It was an excellent speech. It's not "all about us" as Officer Jerry Piland inappropriately suggested after being cleared of using excessive police force by the police merit board as Straub points out. It probably should have come from Mayor Ballard since he wanted control of the police department so bad when he ran for office in 2007 but now doesn't want to own the responsibility. Straub was reportedly miffed that his comments were recorded and leaked to the news media. Supposedly he has even launched an internal investigation to learn who leaked it to Fox59 News' Russ McQuaid. I actually think Straub should be thankful the recorded speech got leaked to the media. It is hard to argue with most of what he says in the speech. It had to be said by someone, and he just happened to be the guy who said it. If Straub really wants to improve relations between himself and the rank-and-file police officers, though, he should give up on his hunt to learn who leaked the information if it is his intent to punish that individual. The person did you a big favor, Mr. Straub. Let it go.

The Star has published a transcript of Straub's entire speech, which you can read by clicking here. Fox 59 News has also uploaded the entire audio recording, which lasts about 25 minutes, which you can hear by clicking here.

Tully Still Stuck On Stupid

Nobody will ever accuse Star political columnist Matt Tully of being a friend of the taxpayers. Whether it's raising income taxes 65%, levying double digit rate increases on utility users by pretending to sell a public utility to fund short-term public infrastructure improvements ratepayers will be paying off for 30 years or doubling parking meter rates and giving away hundreds of millions of dollars in potential tax revenues to a politically-connected company with a bad track record, Tully will conclude is just makes sense. Here's Tully's musings on the City's decision to turn over control of our parking meter assets to ACS for the next 50 years:

After listening to the final round of debate, I walked out of the meeting thinking the council had made the right decision.

Here are five reasons why:

1. First, look at what the deal tackles -- the city's massive backlog of unfunded infrastructure projects. As I wrote about the sale of the water and sewer utilities this year, the profit from which also will go to infrastructure, fixing roads, sidewalks, alleys and bridges is as crucial an issue as there is in this city. It's also a fundamental responsibility of local government.

Hold on, Matt, you used the excuse of increasing utility rates by double digits to fund those infrastructure projects already. Are you telling us that there is a backlog of infrastructure projects in Downtown or Broad Ripple? Because that's the only place the paltry sum raised from this deal will be used to fund.

2. Indiana has entered the era of property tax caps. I didn't vote for the caps, but most Hoosiers did. And whatever your view, the reality is clear. Local governments will have fewer property tax dollars to fund everything from pothole repairs to libraries. "We have to start getting as creative as possible with the assets we have," said Michael Huber, deputy mayor and Greg Ballard's point man on parking meters.

This deal will raise up to $620 million over the next 50 years. Without these types of moves, the city would be in for a long period of painful budget cuts. And here's a warning for the anti-spending crowd: There simply isn't much fat left in the city budget.
The opponents of the deal, Matt, proved the funds are sitting out there in TIF funds, which are property tax revenues, to be spent to upgrade our system with the latest and greatest in technology without giving up control to ACS. Furthermore, by keeping control, the City would reap at least $300 million above that $620 million you cite, which I believe is a fantasy figure made up by Huber and ACS to sell the deal, that will be returned to the City after ACS gets its hands on the parking meter assets.

3. Ballard's team listened to concerns about the deal. The plan now includes a series of termination provisions and indexes rate increases after 2012 to inflation. Penalties for the city removing meters were eased.

Huh? Are you that stupid, Matt? The termination fees ensure the City won't terminate the damn lease because it is so cost-prohibitive. The City would have to pay ACS more than it got from it simply to unwind the deal after the first 10 years. You call that listening to the public's concerns? Were they listening to the public's concerns when they waited until after approval of the Citizens Energy deal to tell us they were paying $29 million to Veolia to break up that privatization agreement, which is coming directly out of the taxpayers' pocket, a contract we were told before the fact couldn't be broken?

4. Council Democrats spent the meeting picking at the plan, and that's fine. They argued the city should upgrade the meters in-house, and that's fine. But most of the Democrats have been on the council for many years. And until Ballard came along, they ignored the antiquated meter system and the paltry revenue it produced.

At least Ballard had a plan and was willing to spend political capital to address the issue. It's easy to attack a person who offers an idea. Coming up with the idea is the challenge.

Sorry, Matt, but this isn't a Democrat versus Republican issue you make it out to be. I'm a life-long Republican. Paul Ogden is a life-long Republican. Aaron Renn is an urban planner with no political axe to grind. MCANA is a nonpartisan, neighborhood organization. We all reached the same conclusion. You blame Democrats for not forwarding a plan before now to modernize the meters? Sorry, Matt, but Mayor Ballard won the election in 2007 and the Republicans control the council. Instead of running the system into the ground so it would not generate sufficient revenues, why didn't they do anything to improve the system short of giving control of it to Ryan Vaughn's client? And if you're going to tell your readers they should all pony up double the amount they will need to pay to park to come downtown, at least have the decency to tell them you get to park for free. UPDATE: As a close observer reminded, the Peterson administration conducted a demonstration project in 2006 that showed the City could boost parking meter revenues by at least 15% simply be installing the smart meter technology. Why did Ballard's administration ignore their findings in concluding the asset had to be leased out?

 5. Nearly everyone agrees a meter update is needed. Rates haven't increased since the latter days of Elvis Presley. Extended hours for enforcement also will encourage turnover of parking spaces, which helps businesses.
Other cities have meters with wonderful new technology. Ours, however, are on the verge of becoming museum pieces. The private contractor will be charged with spending millions to upgrade the system and then managing it.

This change is necessary. And although valid questions were raised along the way, the mayor's plan makes sense.
Yes, other cities have implemented this technology without giving up control to a private company for the next two generations. And as a political reporter at the State House who has witnessed first hand the mess ACS and its partner IBM made of the state's welfare privatization you have not one issue with giving the company control of our parking meter assets? Did you read the D.C. audit? Do you study state lobbying records? Do you have a clue? Or is your head so far up Ryan Vaughn's ass you can't see anything wrong with him strong arming his fellow councilors to vote for a deal that will make hundreds of millions of dollars for his client, or have any concerns that the Mayor's personal paid adviser, Joe Loftus, is a lobbyist for ACS? Where do these journalists earn their degrees these days? For God's sake, bring back Dick Cady. This is insanity. And then they whine about people dropping their subscriptions to the Star. If this is as good as you can produce, then your newspaper deserves to go out of business. For good.