Thursday, January 31, 2013

Venture's Controller Believed Company Held Equity Interest In Elkhart Building

The IBJ's Cory Schouten reports on very damaging evidence the government offered in its prosecution of Venture Real Estate's John Bales and William Spencer from the company's former controller, Matthew Dyer, as a continuation of his daily coverage of the high-profile public corruption case taking place in a federal courtroom in South Bend. The defendants insist they never held an equity interest in the Elkhart building Indianapolis attorney Paul Page's company bought with money fronted by Venture; they maintain they simply loaned the money to Page's company because he was unable or unwilling to put up any money and they were urgently trying to get the deal closed to help DCS get into its leased office space in the building. Dyer contradicted the defendants' contention that it was a loan, telling jurors he understood it to be an equity interest.

"Equity means ownership," Dyer said Wednesday. "If it was truly a loan, I would have called it BAB Loan or BAB Mortgage." Dyer, who was responsible for managing the Elkhart property for Page, told jurors there was no repayment schedule for the money Venture invested into the building, which would be typical of a loan. During conversations he had with Bales, Dyer indicated that Bales and Spencer wanted their interest characterized as a loan. Dyer said Bales blamed Spencer, lamenting that he had "trusted" Spencer to protect him, and he "fucked him."

According to Dyer, he discovered in the summer of 2009 that Page had withdrawn $50,000 from L&BAB, the business which acquired the Elkhart building. When he alerted Bales to the withdrawal, Bales became concerned and sought belatedly to record his investment in the building as a mortgage interest. After Bales recorded the mortgage on the building, Page responded by firing Venture as the property manager for the building. That's new information that had not previously been reported, indicating that Page was willing to play hardball with Bales with the knowledge that he was aiding him in doing something prohibited under his contract with the state--once again reinforcing my point that there is no honor among thieves.

Dyer also discovered that Venture had failed to pay a $22,000 lease commission it owed to the state of Indiana. Instead, Bales had paid Venture the entire $88,400 commission to pay down the $362,000 down payment he made to Page to acquire the building. Dyer told jurors that Bales was dismissive of his concerns over payments owed to the state. "His boss' response, as Dyer recalled it: "F--k them," Schouten wrote. "They owe us money, so I can pay them whenever I want," quoting Bales.

Schouten says Bales' attorney, Larry Mackey, tried to discredit Dyer's testimony by suggesting that he submitted an insurance company a fraudulent claim for a stolen car. Dyer acknowledged the insurance company refused to pay his claim, but he told jurors police caught the man who stole his car.

The government called former Deputy Mayor Mike Huber as one of its witnesses against Bales. Huber worked for the Department of Administration when state first entered into the contract with Bales. Huber recounted discussions he had with Bales to lease storage space for the Indiana Stadium and Convention Building Authority. When Bales provided him a list of about a dozen choices, Huber asked him if he had an interest in any of the properties. Bales acknowledged to Huber that Venture held an interest in several of the properties. Huber asked and Bales agreed to omit discussing any properties in the future in which Venture held a interest.

If Huber had concerns about Bales, he must not have been very vocal in expressing them. When he later joined the Ballard administration, early on the administration entered into a similar exclusive real estate brokerage agreement for the City of Indianapolis' surplus property. Huber was handpicked by Barnes & Thornburg's Joe Loftus, who helped Huber land a job in the Daniels administration, to work in Ballard's administration. Loftus, of course, played a key role in helping Bales land contracts with both the state and the city. Huber has since left the city to go to work for the Indianapolis Airport Authority in a job that pays nearly twice what he earned as a deputy mayor. The Ballard administration quietly terminated its contract with Bales when it was tipped off the FBI was investigating Bales.

More damning evidence was offered by another former administration official, Steve Harless, who had originally believed Venture's claim that it did not own an interest in the Elkhart building until he read Schouten's report in the IBJ on Venture's dealings, which caused him to doubt their claims. Harless said he skepticism grew when Bales dodged answering questions he sent him via e-mail. Harless' testimony irritated Bales' attorney. On cross-examination, Schouten reports that Mackey asked Harless if he had a "hard on" for Venture. Harless said no.

One additional item of particular note is Schouten's report that defense attorneys objected whenever witnesses brought up Carl Brizzi's name in connection with the deal. He reportedly obtained a 50% interest in the building sometime after Page decided to go through with the purchase of the building. Defense attorneys insisted that Brizzi's name be stricken from the record according to Schouten.

Wednesday, January 30, 2013

NY Times On Menendez Under-Age Prostitute Scandal: He's Single and Prostitution Is Legal In The Dominican Republic

Prior to last year's election, the conservative Daily Caller had an exclusive story about purported trips New Jersey Sen. Bob Menendez (D) had taken aboard a large campaign contributor's private jet to an exclusive resort in the Dominican Republic where prostitutes were procured for his benefit. The report came during the midst of Menendez' re-election campaign and after one of his largest campaign contributors had already been indicted for making more than $20,000 in illegal contributions to his campaign through other family members and employees, who were later reimbursed by the contributor. Not a single mainstream media outlet picked up the Daily Caller report; instead, they provided him endless positive coverage, along with President Obama and New Jersey Gov. Chris Christie, for the government response to Hurricane Sandy, which we all know was even more lackluster than the government's initial response to Hurricane Katrina.

Within the past week, news surfaced that a senior investigative reporter for ABC News had learned of the prostitution allegations against Menendez as early as May of last year when e-mails of an ongoing FBI investigation that began  last August were made public months before the Daily Caller report. Those e-mails revealed that the investigation focused on Menendez' use of underage prostitutes. The Daily Caller indicated there were additional questions about whether Menendez had been skirting Senate ethics rules regarding disclosure of trips paid by third parties. When Menendez appeared for a lengthy interview on ABC' "This Week," the show's host didn't ask Menendez a single question about the reported FBI investigation of him. Can you imagine a Republican facing similar questions being given a complete pass by a member of the mainstream media? The mainstream media similarly downplayed reports that the Department of Homeland Security had delayed the arrest of an intern employed by Menendez' office, who was an undocumented alien and a registered sex offender, until after the election.

Even after learning FBI agents had raided the offices of Menendez' wealthy campaign contributor in Miami, the New York Times' Joe Coscarelli lamented about Menendez' friends making him look a bit shady and "a right-wing attempt" to bring him down. Speaking of the Daily Caller story, Coscarelli wrote dismissively of the allegations, noting that Menendez is single and that prostitution is legal in the Dominican Republic:
New Jersey Senator Robert Menendez easily won reelection in November despite a last-minute, right-wing attempt to bring him down. Most people just chuckled when Tucker Carlson's the Daily Caller floated a big exclusive — right after Hurricane Sandy — and then proceeded to call the Senator "Latin Lover" for allegedly, maybe, possibly paying for sex in the Dominican Republic (he's not married and it's legal there). But the issue isn't going away yet, and it's not the only questionable association lingering in the Menendez universe.
No shades of Bob Packwood here? Remember, he's the Republican Senator from Oregon (also single at the time), who feminists and Democrats on Capitol Hill clamored loudly about until they shamed him into resigning over allegations that he mistreated and sexually harassed women staffers and lobbyists, paving the way for a Democrat to replace him in the Senate. Senate Majority Leader Harry Reid (D-NV), who claimed during last year's election without any substantiation that Mitt Romney hadn't paid federal income taxes for years, dismissed the prostitution allegations against Menendez, choosing instead to attack the Daily Caller. “I always consider the source,” Reid said, referring to TheDC, “and all anyone here has to look at is the source where this comes from. It’s — it’s a source that has brought up a lot of non-issues.”

After yesterday's news that FBI agents had raided his wealthy benefactor's business in Miami, Menendez finally acknowledged he had taken three trips on Dr. Salomon Malgen's private jet but did not state where or when those trips were taken. He denied the prostitution allegations, blaming the Daily Caller for the unsubstantiated reports. His office said the reports "are manufactured by a politically motivated right-wing blog and are false." The Miami Herald reported that Dr. Melgen had  contributed at least $357,000 to politicians, including Menendez despite owing the government $11 million in unpaid taxes. "Despite his financial woes, Melgen lives a lavish lifestyle, including his own private jet which he frequently uses to travel between Florida and the Dominican resort town of Casa de Campo where the doctor is from," the Herald reported. Gee, where have we heard that before?

Late tonight, ABC News reports that Menendez reimbursed Dr. Malgen $58,500 for the full cost of two out of three trips on the donor's plane to the Dominican Republic. That's a heck of a lot of money for just two trips. The report adds, "There was no public disclosure" of the reimbursements. The Star-Ledger adds that Menendez didn't reimburse Dr. Malgen for the trips until this year--after the Daily Caller report and more than two years after they were taken. The disclosure also did not come until after a New Jersey Republican filed a complaint with the Senate Ethics Committee. Menendez' spokesman explained the sudden rush to reimburse the trips:
“In the weeks that ensued, after that very extensive review which was a time consuming laborious project, the issue of these two trips came up, and the senator had basically consulted with the campaign’s legal counsel and found that he had two options,” said Brubaker. “Basically he could, according to Senate ethics rules, use an exemption under the personal friendship rule, or simply pay the reimbursements for the flights. In order to just demonstrate full compliance he decided to pay the reimbursement.”
Senate rules, however, only allow members to claim the personal friendship exemption for gifts valued under $250. Otherwise they must seek written approval from the ethics committee.
Brubaker said that is not an issue because the senator chose to reimburse Melgen for the flights, even if it was more than two years later. Menendez's office said nothing in the law says the reimbursement must be immediate.
“In order to just demonstrate full compliance he decided to pay the reimbursements and then, having paid out of his own personal resources, did not have an obligation to make any kind of documentary report on that,” he said.
It makes you wonder just how often our elected politicians take all-expense paid trips that are never reported. It happens all the time here in Indiana with our elected officials. Many officials accept free trips to Florida to golf, fish or just relax, usually courtesy of well-heeled lobbyists and businessmen. Not a single one of them ever reported their trips on Ponzi schemer Tim Durham's private jet to stay aboard his yacht in Miami Beach. A friend of mine recounted boarding a commercial flight to Florida several years ago and encountering a young freshman lawmaker (who now works as a lobbyist) boarding the same flight with a couple of lobbyists to go on a fishing trip. That's why most prefer to ride on private jets. There's less chance of getting caught. By the way, doesn't Jerry Slusser have private jets? Just thinking out loud.

There Really Is No Honor Among Thieves

A defense attorney's description of his client's former co-defendant after he decided to plead guilty and testify as a government witness is precious. Bernard Pylitt, who is defending William Spencer in the real estate fraud case involving the state of Indiana and Huntington Bank as its victims, told jurors in his opening statement that Indianapolis attorney Paul Page was a "pig" and a "thief" because he pulled money out of the business to which his client fronted money to purchase and turned down offers to flip the property for a quick profit. Bear in mind that his client is accused of keeping his ownership interest hidden so he could make money not only as the state's exclusive real estate leasing agent but as an owner of the property despite a specific prohibition against said ownership in his contract with the state. Larry Mackey, the attorney for Spencer's co-defendant, John Bales, assured the jurors it was only Page who did the lying in the transaction. The IBJ's Cory Schouten describes the humorous musings of Pylitt:
In his opening statement, Spencer attorney Bernard Pylitt called Page a "pig" for withdrawing $50,000 out of an account tied to the Elkhart building, a "pig" for turning down reasonable offers to sell the building, and a "thief" for collecting more than $150,000 in income from a building he got for free.
Pylitt suggested Bales and Spencer had no choice but to deal with Page's demands so they could meet a deadline to secure safe office space for the Department of Child Services. Other developers had turned down the deal, and Page only wanted in if he didn't have to put up any money.
Bales attorney Larry Mackey noted that his client is the only individual to lose money on the deal. Bales invested about $362,000, while Page borrowed the rest—about $931,000, including funds for preparing the space for occupancy—from Huntington Bank. He told the bank he would be the 100-percent owner with no other debt.
"Paul Page lied to Huntington Bank," Mackey said. "We're not going to disagree with that. Bales and Spencer had nothing to do with that lie."
Schouten oberves that neither side mentioned in their opening statements that Page had pleaded guilty to committing a crime already. Typically, defense attorneys argue to jurors that government witnesses who reach plea agreements with the government have a motive to lie in order to receive a lighter sentence for their own criminal wrongdoing. Page's attorney, Robert Hammerle, likened the attack of his fellow defense attorneys to Lance Armstrong's treatment of his teammates when they first came forward admitting their roles in illegal doping to win competitions. "These types of childish accusations remind me of Lance Armstrong's personal dismissal of former teammates who, like Paul Page, came forward and told the truth," Hammerle wrote in an e-mail. "Once he was forced to come out from hiding, Mr. Armstrong now looks like a colossal cheating fool, and who can trust him?" Schouten observes that calling Page a "pig" was actually an improvement over Bales' choice of name for Page's front company for Bales, L&BAB, which allegedly stood for "lazy and broke-assed bitch."

Mackey's claim that state officials approved of his client investing money into buildings the state planned to lease in order to get deals closed more quickly hit a bit of a roadblock with the government's first witness, Carrie Henderson, who headed up the Department of Administration from 2006-09 and oversaw Bales' contract. She recalled her reaction to Bales' suggestion that he could invest money in buildings the state planned to lease. "I told him that was creative, but we absolutely couldn't do that kind of deal with the state of Indiana, even if fully disclosed," Henderson said. "I made a very strong statement to say we can't do that kind of deal here. You have to be transparent. You can't work both sides of a transaction." Ouch!

Schouten said the government was expected to call Matthew Dwyer as its next witness, a former controller for Bales' company. Schouten says the defense plans to impeach Dwyer with evidence that he submitted a false insurance claim on a stolen vehicle at the same time he was allegedly giving false statements to the FBI. Yeah, there really isn't honor among thieves.

Gov. George Ryan Released From Prison

 NBC 5 in Chicago has video showing former Illinois Gov. George Ryan after being released from the federal prison in Terre Haute where he has spent the last five and half years and entering a halfway house on Chicago's west side where he will spend an indeterminate amount of time. Ryan is accompanied by his son, George Ryan, Jr. and followed by former Illinois Gov. Jim Thompson, whose law firm defended Ryan during his prosecution in Chicago on public corruption charges arising out of a scheme by members of his administration when he served as the state's Secretary of State to sell driver's licenses to illegal aliens. Ryan had no comments for reporters. Thompson spoke briefly on his behalf.

UPDATE: Ryan's stay in the halfway house lasted only a few hours. The Chicago Tribune reports that he's now back at his home in Kankakee where he will be on home detention until the rest of his sentence is served.

Jim Nabors Gets Hitched To Long-Time Companion At 82

Jim Nabors, better known to older generations as the guy who played Gomer Pyle and sings "Back Home Again in Indiana" at the Indianapolis 500, got hitched to his long-time male companion in Seattle. Nabors married 64-year old Stan Cadwallader, a Honolulu firefighter. The two have been together since 1975. Although Nabors never officially came out of the closet, his sexual orientation was not much of a secret. Back in the '70s, Nabors and actor Rock Hudson were the victims of a cruel prank when a group of gay men decided to send out fake wedding invitations announcing their marriage at which Rock Hudson was supposed to become "Rock Pyle." "Mad Magazine" helped take the rumor mainstream when it parodied an item by famed gossip columnist Rona Barrett: "There isn't a grain of truth to the vicious rumor tht movie and TV star Rock Heman and singer Jim Nelly were secretly married! Rock and Jim are just good buddies! I repeat, they are not married! They are not even going steady! This is Rona Boring reporting from Hollywood!" Supposedly, Nabors and Hudson never spoke to each other again after the incident.

While we're on the subject of marriages, it's refreshing to see that 3-time Indianapolis 500 winner Dario Franchitti won't be serving as a prop for his wife Ashley Judd's planned run for the U.S. Senate in Kentucky next year against Sen. Minority Leader Mitch McConnell. The couple announced yesterday they are ending their 11-year marriage.

Tuesday, January 29, 2013

Bales Trial Underway In South Bend; Only The IBJ Is Covering

The fraud trial of the politically-connected real estate broker, John Bales, that began in a federal courtroom in South Bend yesterday should be big news in the state's largest city and seat of state government. After all, the key man on trial is someone that is oh so close to former Gov. Mitch Daniels and involves charges of serious public corruption in state government. Oddly, or perhaps not, only the IBJ is providing day-to-day coverage of the trial. The Indianapolis Star has had nada, and none of the local TV stations have reporters covering the story. The South Bend Tribune, the only major newspaper in the area of trial, is apparently unaware the trial is taking place a few blocks from its offices. The IBJ's Cory Schouten ticked off a list of names that Judge Robert L. Miller, Jr. read off to potential jurors as jury selection began, which reads like a who's who of Indiana politics and which underscores why coverage of the trial is worthy of media attention:
U.S. District Judge Robert L. Miller Jr. read a panel of 48 potential jurors the names of about 60 potential witnesses and key players likely to be mentioned during the case, including several Indianapolis power brokers.
Among them: former Marion County Prosecutor Carl Brizzi; former Indianapolis Deputy Mayor Michael Huber; former chief of staff to Gov. Mitch Daniels Earl A Goode; former Indiana Department of Child Services Director James W. Payne; Indiana Department of Workforce Development Commissioner Mark W. Everson; current DCS Director John P. Ryan; and real estate developer Paul Kite.
The judge wanted to know whether the potential jurors knew any of the people or recognized their names. They did not.
I'm frankly a bit surprised the trial is taking place after a key defendant, Indianapolis attorney Paul Page, agreed to plead guilty to wire fraud charges and cooperate in the government's prosecution of Bales and his business partner, William Spencer, as well as cooperate with the U.S. Attorney's Office in Indianapolis in an ongoing investigation that reportedly has former Marion Co. Prosecutor Carl Brizzi as one of its targets.

According to the government's case, Bales and Spencer, while acting as the state's exclusive real estate broker for leasing state property, fronted money to a company owned by Page (and perhaps Brizzi) to purchase a building in Elkhart in which they intended to enter into a long-term lease on the state's behalf  with the Department of Child Services. The plan was to have Page flip the building for a quick profit and split the net profits with them, along with repaying the money they fronted for the building's purchase and kicking back the developer's fee and brokerage commission earned by Page to them. The government also says the two schemers shorted the state money it earned from a commission on the lease, which it later paid to the state after the feds launched their investigation.

Bales has hired Barnes & Thornburg top white collar defense lawyer, Larry Mackey, to defend him, along with Jason Barclay of the firm. It's unclear how attorneys for the firm can represent Bales since it was attorneys for their firm who helped hook Bales' company up with the exclusive real estate brokerage agreement with the state and ran interference for them when veteran state employees balked at the company's actions and course of conduct while acting on the state's behalf. Barclay also worked in the Daniels' administration as the Governor's Special Counsel and Policy Director and had intimate knowledge of what Bales was doing on behalf of the state. It's unclear who they're defending: Bales or their law firm? Former Hamilton Co. judge Bernard Pylitt is representing Spencer. Robert Hammerle of Indianapolis represented Page in reaching his plea agreement with the government.

Mackey, who you may recall was the first criminal defense lawyer for Ponzi schemer Tim Durham when government prosecutors in Indianapolis were convinced to drop a civil forfeiture action against Durham before quietly fading away after that fete, told jurors in his opening statement that "there was no scheme to defraud the state of Indiana." "No matter how thin the pancake, there is another side," Mackey said. "Neither of these men did anything wrong or intended to harm anyone."Yeah, just like the "exercise of civic virtue" when Mackey's law firm engineered the awarding of the welfare privatization deal to its client. I'm still shaking my head over the lack of a prosecution by the U.S. Attorney's Office in that case, given that the federal government was snookered out of hundreds of millions of dollars in that debacle. Mackey claims that state officials knew what Bales' company was doing and didn't object to his actions, even though they clearly violated the express terms of his written contract with the state. The sad thing is that he's probably telling the truth. Some of these people who worked for Daniels saw it as their number one priority in state government to help make money for Daniels' political cronies. That's how Keith Bulen taught Daniels the business of politics was conducted back when he worked for his political consulting business back in the early days of Uni-Gov under Mayor Richard Lugar.

According to Mackey, the defendants' actions were based on a plan to save the state money on leases and procure as much money as possible for it from the sale of surplus state property. To hear Mackey explain it, Bales and Spencer were so concerned about getting a state office in place for DCS to protect abused and neglected children that it became necessary to cut corners and even dig into their own pockets to get the deal done. "This was a scheme, frankly, to help," Mackey explained. The prosecutors insist state officials had no idea Bales' company owned a financial stake in the building, and the bank that loaned money to Page had no idea it had fronted Page the money to close on the original loan and mortgage. According to prosecutors, Bales waited more than a year before preparing and recording a backdated mortgage executed by Page in his company's favor to secure his investment in the building, which also violated Page's original mortgage agreement with his lender. Bales and Spencer committed financial fraud on the state and the bank in doing so and then lied about it the government contends. Schouten said the defense plans to call several former state officials to provide positive testimony, including former DCS Director James W. Payne and and Indiana Department of Administration Director of Real Estate Steve Harless. I know. I laughed too!

Schouten says attorneys expect the trial to last through the end of next week. We'll look forward to catching Schouten's ongoing trial coverage.

Councilor Ben Hunter Accuses Taxpayers Of Getting Subsidies As He Votes To Hike Taxes Again

Get Microsoft Silverlight Perhaps no other member of the council exhibited more hostility to ordinary taxpayers as he voted to support two new tax increases on ticketed admissions to public events and auto rentals than Councilor Ben Hunter, who insists on attacking what he calls subsidies being paid to homeowners in the form of the homestead property tax credit. All homeowners combined receive a tax reduction of about $9 million annually on their property tax bill, which is paid out of local income tax receipts. Mayor Greg Ballard and Republican councilors proposed eliminating the homestead property tax credit to provide more funding for public safety in this year's budget, calling it a tax benefit that only benefits wealthier homeowners. An analysis of who receives the credit completely disproved their claim. In actuality, the homestead tax credit benefits homeowners with moderate and lower-assessed values disproportionately. Many higher-assessed homes have reached the tax cap and receive no benefit from the credit. Yet Councilor Hunter has persisted in claiming that the property tax benefit is nothing more than a subsidy for people who can and should be paying higher taxes.

The comments made by Councilor Hunter at last night's council meeting were made during a discussion of the admissions tax increase. Councilor Hunter says there is a continued need to resolve the ongoing problem with funding public safety. What he doesn't explain is that Indianapolis income taxpayers saw their tax rates raised 65% in 2007 to enact what was dubbed a public safety tax because it was said to benefit only public safety. Despite assurances the tax would allow at least 100 new police officers to be hired, that never happened. We now have fewer police officers on the streets than we had in 2007. Where did the money go, Councilor Hunter?

It takes a lot of nerve for Councilor Hunter to accuse taxpayers of receiving a subsidy for a tax credit they receive on their property tax bill payable from the income taxes they pay. Lest we forget that part of the sale to taxpayers for enacting a local income tax was to lessen local government's reliance on property taxes for their funding. A subsidy, Councilor Hunter, is the $6.5 million you supported giving to Ersal Ozdemir to build his new parking garage in Broad Ripple, or the $10 million a year you support giving to billionaire Herb Simon's Indiana Pacers. Sure Councilor Hunter supports raising the admissions tax. It's a tax that he doesn't pay because he's the first in line whenever a special interest representative or lobbyist is offering free tickets to councilors as a reward for the favorable votes they cast. Now that's a subsidy. Tickets and other freebies Councilor Hunter has accepted since becoming a councilor total in the thousands of dollars and would definitely fall into the category of subsidies for the Hunter household. Perhaps if special interests were forced to issue 1099s to all public officials who accept their gifts, there would be a whole lot less gift-giving. Better yet, why don't we bar gifts to our public officials altogether? Maybe then their judgment won't become so clouded when making decisions about whose taxes should be raised. I also wanted to point out that only two Republican councilors bucked the Mayor and the GOP leadership to vote against the two tax increases, Councilors Christine Scales and Jack Sandlin. The new GOP councilor from Bloomington, Jefferson Shreve, voted for both tax increases.

UPDATE: Showing his true colors, Councilor Hunter tweeted during last night's council meeting this derogatory comment about fellow Councilor Brian Mahern, who spoke out against the tax increase:
Mahern is talking. There was a baby crying in the chamber earlier, he should run & kiss it and let the 2 yr old know he's running for Mayor.
Hat tip to Jon Easter, and I concur with his assessment on his blog that councilors on both sides of the aisle were embarrassingly disrespectful to one another.

Monday, January 28, 2013

Council Votes To Hike Taxes For The Benefit Of The CIB Racket

Get Microsoft Silverlight Get Microsoft Silverlight The CIB's long running racket got another leg up at the expense of Indianapolis' taxpayers as the Indianapolis City-County Council voted to increase the county admissions tax 67% and the auto rental tax 50%. About 25% of that money will supposedly go to public safety, but we know that's never going to happen. The council promised taxpayers when they raised the local income tax by 65% in 2007 that it was a public safety tax that would be devoted to hiring at least 100 more police officers and to cover other public-safety related expenses in the city-county budget. Instead, we got more than 200 fewer police officers than we had on the day that tax increase went into effect.

A few councilors called out Mayor Greg Ballard for holding other county budgets hostage in order to pass off money to the CIB that he and his goons have already committed to giving away to the people who have been paying campaign cash bribes to him for the past five years. The Republicans' defense of the Mayor's terrorist-like behavior was sickening to this life-long Republican. Most of the Republicans on this council share zero philosophical views of the Republican Party and are indistinguishable from the Democrats. I wish they would just switch parties and stop masquerading as something they clearly are not. The idea that any councilor would have the audacity to try to pass tonight's tax increase vote off as a vote to help public safety is a flat out lie that is beyond reproach and exhibits just how corrupt the majority of the elected councilors are and how much contempt they have for their constituents. They only care about putting your tax dollars into the pockets of the pay-to-play operators who are stuffing money in their campaign pockets and who are showering them with all kinds of gifts, including free tickets to every Colts and Pacers game they and their family members wish to attend.

For weeks now, Councilor Brian Mahern has been trying to get the CIB to divulge just who all receives free tickets to sporting events controlled by the municipal corporation and the value of those tickets. The CIB has stonewalled Mahern's request. Many of the councilors don't want the information made public because they don't want their constituents to see how they are being bribed with free tickets to support more and more money for the CIB through higher taxes while other basic city services are cut. Councilor Mahern made a motion to delay the vote on the admissions tax increase until the CIB produced the easily-obtained data he requested. Not a single member would second that motion. Gee, I wonder why?

In another move that will cause even more harm to the budgets of city-county agencies than the continual drain of tax dollars by the CIB is the approval of a massive new TIF district that extends throughout much of Indianapolis' northside and encompasses some of the city's most affluent neighborhoods, including Meridian-Kessler and Butler Tarkington, in addition to the already over-developed Broad Ripple Village. The Democrats on the council rejected a TIF proposal by Councilor Christine Scales that would have created a TIF for one of the City's poorest and most blighted neighborhoods on the northeastside. Remarkably, even the African-American councilors of the Democratic Party turned their backs on these neighborhoods largely populated by blacks. Hey, they don't have money to stuff in their pockets so they can settle for the crumbs. Councilor Leroy Robinson, who has turned into one of the most nasty members during his short tenure on the council, continuously and rudely interrupted Scales in an effort to silence her criticism. CCC President Maggie Lewis once again demonstrated how incompetent and unqualified she is to preside over this embarrassment of a council. She's even worse than Monroe Gray, if that's possible.

The council even rejected an effort by Councilor Zach Adamson to remove from the Midtown TIF proposal the Broad Ripple parking garage that is being built with $6.5 million in taxpayer dollars for the benefit of Mayor Greg Ballard's largest campaign contributor. Despite already being half built, the proponents insist that the TIF district should get all future property tax revenues generated by it. As a consequence, Adamson pointed out that it will take the City 42 years to recover the investment it made in this private development. In short, the Midtown TIF will drive IPS into bankruptcy, which is the ultimate goal of those pushing for this massive property tax grab that will harm our schools the most in order to benefit a handful of developers who contribute generously to the Mayor and the councilors who pushed this TIF. All in all, we witnessed the state's worst elected council at work tonight. Marion County taxpayers weren't represented at the council meeting tonight, but a guy who's been living in Bloomington for the past 19 years got a seat on the council and was given an opportunity to vote to raise your taxes as his first order of business. Absolutely disgusting. Get Microsoft Silverlight

Shreve Denies Residency Problem But Admits To Delinquent Property Taxes

In response to an exclusive this weekend by Advance Indiana questioning whether newly-elected City-County Councilor Jefferson Shreve satisfies the 2-year residency required of any council candidate at the time of his election at a caucus held on Saturday, Shreve tells the Indianapolis Star that he has resided at the southside residence he owns for more than two years despite voter registration records showing that he didn't change his voter registration from Bloomington to Indianapolis until October 15, 2011, less than two years ago, after registering and voting in Monroe County for many years.

Shreve relies on the fact that he has owned his 725 E. Markwood Avenue in Perry Township within District 23 since 2003. Ownership of property alone, however, doesn't establish residency. Indiana's voter registration laws require a registered voter to attest under penalties of perjury where they reside when they register to vote, and to re-confirm that residency each time they cast a vote relying upon that registered voting address. The fact is that until October 15, 2011, Shreve had declared his residence for voting purposes to be in Bloomington, Indiana. Shreve tells the Star that he last voted in Monroe County in the 2010 general election. He says he cast that ballot by absentee ballot. So when he filled out that ballot, he swore under penalties that was his "true, fixed and permanent home and permanent establishment" to which he had the "intention of returning" whenever absent.

Interestingly, Shreve tells the Star's Jon Murray "that he and his wife have used the house as their primary residence since November 2010, when they completed a renovation and expansion involving adjacent properties." Murray continues, "Prior to that, he said, they used the Indianapolis house occasionally while living most of the time in Bloomington, where Shreve’s company Storage Express is based." How convenient. He claims he moved to Indianapolis the same month that he last cast a vote from his Bloomington residence and a date that will just satisfy the residency requirement by two months.

I'm also scratching my head on references to Shreve's wife. I have in my possession an e-mail communication Shreve sent to a precinct committeeperson in District 23 earlier this month on January 9, 2013. In that e-mail, Shreve refers to Mary Kelley as his fiance, not his wife, and he claims he moved back to Indianapolis two years ago, although he acknowledges that he maintains an apartment in Bloomington.
I decided to base my life back out of Indy rather than Bloomington a couple of years ago, as my Storage Express locations are so spread around Indiana.  Indy is a more central base, since I have to jump on the Interstates to get to my locations.  I di [sic] have Storage Express facilities in Bloomington, and an office and keep an apartment there.  But Indy is my home.
My fiance Mary Kelley is from Indy.   We've been together for some time, and are going to be married at St. Roch's this year.  So I'm getting a late start in life on the marriage front.    It'll be my first (and last) marriage.   Mary was widowed several years ago.   Neither of us have children.  At our age, I'm not sure that will happen, candidly . . .
I suppose they could have raced to the courthouse to get married today, but precinct committeepersons were under the impression he was engaged to be married but not yet married at the time he stood for election--based on Shreve's words. Sources say he introduced her to precinct committeepersons on Saturday as his fiance and said they had plans to marry this summer. Maybe he just had a Manti Te'o moment while speaking to Murray. [Update: The Star has now updated Murray's original online story to correct references to "his wife" as "his fiance."] I'm also curious if Shreve was residing at the home in the spring of 2011 why he wouldn't have been concerned enough as a resident and property taxpayer to register to vote and participate in the hotly-contested school referendum property tax debate for the Perry Township schools that took place in the May 2011 primary election.

Shreve told the Star that this blog's reporting made his "blood boil. “It just boils my blood to have people writing about this,” Shreve said, while acknowledging that “Bloomington is a big part of my life.” "He had lived there after attending Indiana University, his business is based there, and he’s now chairman-elect of the IU Alumni Association," Murray added.  Well, Mr. Shreve, the underhanded dirty play of you and the Marion Co. GOP leadership to hand this seat to someone who hasn't been a part of that community makes my blood boil.
Shreve pleaded ignorance about his delinquent property tax bills when Murray questioned him about them; however, he later acknowledged them being delinquent, referring to it as "a real embarrassing" oversight":
The flurry of questions did uncover delinquent property taxes on all three of Shreve’s Indianapolis properties. After The Star confirmed with the treasurer’s office that he owed $3,954.77 in taxes and penalties -- all from the installment due last November -- Shreve said that was news to him.
But after a quick check with an accountant at his business, Shreve said he learned the bills hadn’t been paid, calling it “a real embarrassing” oversight.
About an hour later, he provided a new receipt showing he paid the taxes today.
Murray reports that Michael Kalscheur, the Perry Township Advisory Board member who lost to Shreve at Saturday's caucus election, plans to challenge Shreve's election questioning whether he satisfies the 2-year residency requirement. While I'm pleased the Star decided to cover the issue, I'm a little bit disappointed that the reporter's story fails to mention numerous Internet references cited by this blog referring to Shreve as a Bloomington resident, or ask him whether his health and hospital board appointment in Bloomington required his residency in Monroe County. Apparently, he says that his service on that board has subsequently ended. Fortunately, Murray's story ties in Shreve's new-found love for the local Republican Party immediately preceding his election to the council:
In the last year, Shreve’s political contributions have included $3,700 to the Greater Indianapolis Republican Finance Committee. He said he was aiming to become active in local political circles, but his interest in a council seat arose only in December, after Gov. Mike Pence announced Cardwell’s appointment to a post in his new administration.
I'm sure the money had nothing to do with it. The bottom line is that Shreve knew he was being publicly represented as a Bloomington resident for the past 19 years. If he considered Indianapolis his true residence, he wasn't doing a very good job at communicating that to others until he decided he wanted a seat on the Indianapolis council. And Republican council members had the audacity to attack and vote against a Board of Zoning Appeals appointee tonight supposedly because she hadn't lived in the city long and didn't own property. What hypocrites. Here's the video of that discussion:

Get Microsoft Silverlight If you search the state's campaign finance website for the contributions Shreve has made in the past, you will note that he never listed an Indianapolis address until 2012. When making his federal campaign contributions, he slipped up a few times, listing Bloomington as his address as recently as last year.

Confirmed: Shreve Registered To Vote In Bloomington Inside 2-Year Residency Requirement To Serve On The Council

Advance Indiana exclusively reported to you over the weekend that newly-elected City-County Councilor Jefferson Shreve, who was chosen at a caucus of Republican precinct committeepersons in District 23 on Saturday to fill the seat of former Councilor Jeff Cardwell (R) had been a Bloomington resident for nearly the past 20 years and did not register to vote at 725 E. Markwood in Perry Township until October, 2011 shortly before the 2011 municipal general election. According to newly-obtained information from the Marion County Board of Elections, state voter registration records show Shreve was a registered voter at 530 E. Kirkwood in Bloomington, Indiana from May 15, 2007 until October 12, 2011. Interestingly, the 530 E. Kirkwood address is the same place Shreve instructed the Marion Co. Treasurer's office to mail property tax bills for his Marion County property:

Tax Bill ID: 88296452
Assessment Year: 2010
County: Marion
Parcel ID: 491136120029000574
Tax Payer Street Address: 530 E KIRKWOOD AV
Tax Payer State: IN
Tax Payer Zip: 47408
Tax District: 574

Under Indiana law (I.C. 3-8-1-25), "A candidate for membership on city-county council of a first class city must have resided in the district in which seeking election, if applicable, for at least two (2) years before the date of taking office." Shreve was elected at the caucus on January 26, 2012 and sworn into office immediately. Yet Shreve claimed to be a resident of Bloomington at least through the May, 2011 municipal primary election for voting purposes. Advance Indiana previously reported on legislation (SB 621) introduced by Sen. Mike Young, which would lower the residency requirement for city-county council candidates from two years to one year. That same bill would also reduce the residency requirement for Indianapolis mayor from five years to two years. If Shreve contends that he was actually residing at his Marion County residence the past two years and not his Bloomington address, then why did he wait until October 15, 2011 to change his voter registration to Marion County? If Shreve voted in elections at his registered voting address in Bloomington instead of his southside residence where he claims a homestead exemption, questions of vote fraud arise as has plagued plagued other candidates recently. Advance Indiana also wonders if Shreve's appointment to the health and hospital board in Bloomington is based upon his residency in Monroe County.

Residence for voting registration purposes is defined under Indiana law, "I.C. § 3-5-2-42.5, as: “[T]he place where (1) a person has a person’s true, fixed and permanent home and principal establishment; and (2) to which the person has, whenever absent, the intention of returning.” “A person who has a residence in a precinct retains residency in that precinct until the person abandons the residency by: (1) Having the intent to abandon the residency; and (2) Having the intent to establish a new residence; and (3) Acting as provided in this intent by establishing a residence in a new precinct.” “A person who knowingly . . . [a]pplies for or receives a ballot in a precinct other than that precinct in which the person is entitled to vote” commits a Class D felony under I.C. § 3-14-2-16. (emphasis added) “[A] person who knowingly voters or offers to vote in a precinct except the one in which the person is registered commits a Class D felony” under I.C. § 3-14-2-11 (emphasis added).

Think about it. Former Secretary of State Charlie White was convicted of several felonies and forced from office after a Hamilton County jury found him guilty of registering and casting votes from an address the prosecutors convinced the jury for a very short period of time he did not actually reside--his ex-wife's home. Former Sen. Richard Lugar was forced by the Marion Co. Elections Board to re-register at an actual residence he owned in Marion Co. after it was determined that he and his wife had been voting using a home he had sold nearly 35 years earlier. Why wouldn't the Marion Co. GOP leadership have properly vetted Shreve on this issue before pushing his candidacy at Saturday's caucus election over a long-time Perry Township resident and elected official like Michael Kalscheur? These serious questions of Shreve's residency cannot simply be ignored. In light of the evidence, Shreve should do the right thing and voluntarily step aside and allow Kalscheur to fill the council seat vacated  by Cardwell. The Marion Co. GOP and Shreve must address this issue before tonight's council meeting where two tax increase votes are scheduled to be acted upon.

Google Earth image of the 530 E. Kirkwood address where Shreve was previously registered to vote in Bloomington

Sunday, January 27, 2013

Jefferson Shreve's Eligibility To Serve On City-County Council Must Be Challenged

Perry Township Small Claims Court Judge Robert Spear Swearing In Bloomington Resident Jefferson Shreve as Indianapolis City-County Councilor
Former Indianapolis City-County Councilor Jeff Cardwell couldn't wait to post on his Twitter account this photo of the swearing in of long-time Bloomington resident Jefferson Shreve as his replacement as District 23 City-County Council member in Indianapolis. In e-mail communications with precinct committeepersons prior to Saturday's caucus election to fill the vacancy, Shreve readily admitted that it wasn't until "two years ago" that he chose to "base [his] life back out of Indy rather than Bloomington." Although Cardwell had encouraged Perry Township Advisory Board member and 2011 at-large CCC candidate Michael Kalscheur to seek his seat before he made the announcement public that he was stepping down to work in the administration of Gov. Mike Pence, Cardwell, along with the Marion Co. GOP leadership and Mayor Greg Ballard, backed the Bloomington resident over the only legitimately qualified candidate.

If the Marion Co. Republicans have any integrity, they will lay out for public inspection immediately any proof they have that will establish that Shreve was a resident of District 23 at least two years prior to his election at the caucus held yesterday. Michael Kalscheur is entitled to take this seat if it is shown that Shreve does not meet the residency requirement as the only other candidate considered at Saturday's caucus election. Right now we only have a voter registration record saying he registered to vote on October 17, 2011. It's an absolute insult to the residents of Marion County that someone could simply take up residency, start throwing thousands of dollars in campaign contributions around, and then be named as a City-County Councilor a short time later. At a recent City-County Council meeting, Republican councilors refused to vote for a Board of Zoning Appeals appointee of the Democrats because they said she hadn't lived in the city long enough. Will they tolerate the seating of someone who may not even meet the legal residency requirement to serve on the City-County Council, who then as one of his first acts will get to vote on two new tax increases proposed by Mayor Greg Ballard?

UPDATE: By the way, I've confirmed that Shreve has already stated that he gladly plans to vote to raise both the admissions tax and the auto rental tax for the benefit of the CIB as one of his first acts as a councilor. He'll vote just the way he's instructed to vote by the downtown mafia, from which he purchased his seat on the council. Apparently Kalscheur's mistake was to say that he would vote against those two taxes and had serious reservations about Mayor Ballard's multi-billion dollar, tax-raising mass transit plan. Fiscal conservatives are now officially banned from serving in public office in Marion County. Hell, let's just elect Democrats to every single office. They won't vote any different than the tax-and-spend liberals who dominate the Marion County Republican Party under Mayor Greg Ballard.

Saturday, January 26, 2013

Marion Co. GOP Imports Bloomington Resident To Fill Cardwell's Council Seat

UPDATED: Shreve Became Registered Voter in district less than two years ago!
Marion Co. GOP leaders imported a long-time Bloomington resident and businessman to fill the seat vacated by Councilor Jeff Cardwell (District #23), the southside businessman who recently resigned his council seat to join the administration of Gov. Mike Pence. Jefferson Shreve defeated Michael Kalscheur, a financial advisor and Perry Township Board member who ran unsuccessfully for an at-large council seat in 2011, at a GOP caucus held today to replace Cardwell.

According to easily obtained public records, Shreve has identified himself as a Bloomington resident for nearly the past 20 years. Shreve, who has contributed generously to Republican and Democratic candidates alike, always listed a Bloomington address until he started making very generous campaign contributions this past campaign cycle to the Greater Indianapolis Republican Finance Committee ("GIRFCO), the fundraising arm of the Marion Co. GOP.

Shreve is the owner of Storage Express, a self-storage business based in Bloomington that operates 65 self-storage properties in five states. According to campaign finance reports, Shreve always provided a Bloomington address until the 2012 campaign election cycle when he started listing a southside residential address as his residence. The Bloomington Hospital website where Shreve's biography is listed as a member of the hospital's board of directors identifies him as "living in Bloomington for the past 19 years." When he joined the IU Alumni Association Board of Managers in Aug. 2011, he claimed to reside in both Bloomington and Indianapolis. A Bloomberg BusinessWeek profile similarly identifies him as a Bloomington resident for the past 19 years.

The Indiana Election Division's website identifies campaign contributions Shreve has made to state and local candidates as far back as 2001. In the 2001-02 period, Shreve contributed $3,100 to the campaign of Democratic Mayor John Fernandez as a Bloomington resident. The only other candidate of either political party that he contributed more money to was Gov. Mitch Daniels, to whom he gave close to $3,500. Although most of the contributions Shreve has made have been to Republican candidates, he has not shied away from supporting Democrats. In 2009, he contributed $1,000 to Evan Bayh. He gave $250 to Democrat Linda Pence's losing 2008 campaign for Attorney General, a contribution he matched for Republican Greg Zoeller in 2012. This past year, Shreve donated $2,700 to GIRFCO and $2,500 to Richard Lugar's losing re-election bid. He also contributed $3,750 to the Indiana Republican State Committee this past year.

Interestingly, included in the power grab bill that State Sen. Mike Young filed in SB 621 at the request of Mayor Greg Ballard this session is a provision that would reduce the residency requirement for council candidates from two years to one year. It also reduces the residency requirement for mayoral candidates from 5 years to 2 years. Some observers say the politically ambitious Shreve may be eying a run for Indianapolis mayor in 2015. According to the Marion Co. Assessor's records, Shreve owns three very modest residents in the same neighborhood on the City's southside, including 725 E. Markwood, 731 E. Markwood and 734 Lawrence Avenue. Obviously, the Marion Co. GOP could give a damn less about a person's legitimate residency in this county to hold an elected position. Shreve is a resident of that southside council district in name only. Everyone in Bloomington knows that's where he truly resides. According to Jefferson S. Shreve's voting registration (DOB 9/24/1965), he did not become a registered voter at 725 E. Markwood Avenue in Perry Township Precinct #3 until October 17, 2011, shortly before the 2011 municipal election but less than two years prior to his appointment to the council seat. In other words, Shreve was ineligible to become a candidate at Saturday's GOP caucus unless he can prove he became a resident of District #23 at least 9 months before the date of his voter registration.

Search Results
Status: Registered Township: PERRY
Date Of Status: 10/17/2011 Precinct: PER 003
Additional Documentation Required: No Residential Address:
725 E Markwood Ave

Indianapolis IN

UPDATE: I've learned a little more about Shreve's stealth candidacy. Perry Township GOP leaders had no idea who he was until he started showing up for meetings a couple of months ago. Michael Kalscheur had been the odds on favorite to win. He is after all a member of the Perry Township Advisory Board and long-time Perry Township resident who ran unsuccessfully for one of the four at-large seats in the 2011 municipal election. Shreve's candidacy emerged out of the shadows just weeks ago, pushed by the Marion Co. GOP leadership and Mayor Ballard. After arms were twisted, promises made, etc., the previously unknown Shreve easily emerged as the winner in the vote of 20 precinct committeepersons in attendance and eligible to vote. Jeff Cardwell, one of those who voted at today's caucus, backed Shreve. So much for loyalty to Perry Township folks on Cardwell's part. Apparently Shreve was concerned enough about his residency in the district, or lack thereof, that he attempted to address having residences in both Bloomington and Perry Township.

UPDATE II: Here's something more interesting. The 7th District state convention caucus nominated Shreve to serve as one of its alternatve delegates at the Republican National Convention in Tampa last year. I was present at the caucus meeting. I had no idea who he was when they read off his name, but based on the comment made by an African-American delegate seated next to me I was under the assumption that he was a token minority choice since none of the other delegates or alternates were black. The delegates were Greg Ballard, Jennifer Ping and Jeff Cardwell. The alternates were Winnie Ballard, Robert Vane and Shreve. Only Shreve's name failed to identify his city or county of residence. It looks like Cardwell was in on the deal to weasel Shreve into a council seat long before he announced he was stepping down to join the Pence administration. Cardwell really stabbed Kalscheur in the back big time. I"m not surprised. Guys who wear their religion on their sleeve are the ones you have to watch the most closely.

I'm also learning more about what he communicated to PCs during his bid. According to a resume he distributed, he identifies himself as being appointed a PC in Perry #13 in 2012, which is outside the 23rd District. He is registered to vote in Perry #3. His resume claims he was elected as a delegate to the 2012 Republican National Convention when he actually was elected as an alternate delegate. He also stated in a communication to PCs that he did not choose to "base my life out of Indy rather than Bloomington" until "a couple of years ago." The house he claims for voter registration purposes is a home previously owned by his grandparents where they raised their children. The 47-year old says he's engaged to be married to Mary Kelley, an Indianapolis resident who was widowed several years ago. Neither of them have any children. Shreve's marriage to Kelley would be his first.

UPDATE III: Is Shreve delinquent in the payment of property taxes on the three residences he owns in Perry Township? It would appear so if the Marion Co. Treasurer's online property tax payment database is up-to-date:

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SelectNameParcelTownshipLocationCurrent Amount Due

Friday, January 25, 2013

Mahern Seeks Full Disclosure Of Gifts For Council Members

As City-County Council members prepare to enact a 67% tax increase on ticketed admissions to sporting and other public events in Marion County, Councilor Brian Mahern is seeking a change in the ethics code governing council members that will require them to report gifts received from anyone, including governmental entities, and to itemize the value of the gifts they receive. The current ethics code, drafted by Barnes & Thornburg and sponsored by then-Council President Ryan Vaughn, has a big loophole in the requirement that council members report single gifts with a value of more than $100 and combined gifts totalling at least $250 if the donor is doing business with the city or is engaged in lobbying the council and city-county agencies. That omits gifts of value the councilors receive from other governmental entities, such as the Capital Improvement Board.

Under the one-sided lease agreements the CIB entered into with the Indianapolis Colts and Indiana Pacers for Lucas Oil Stadium and Banker's Life Fieldhouse, the CIB and the Mayor's office are provided suites for entertainment purposes at no additional cost and free tickets to sporting and other events held at the facilities. Mayor Ballard's office and the CIB, in turn, hand out the tickets to whomever they choose. Council members are often the recipients of these tickets. In addition, every member of the Capital Improvement Board is provided two tickets per game. CCC President Maggie Lewis sits on the CIB as the council's representative and receives those free tickets. Some council members voluntarily disclose free tickets they receive from the Mayor's office or the CIB on their annual financial disclosure statement, but most do not, and the code specifically exempts them from disclosure since they are given to them by a municipal governmental entity. The team owners also have a cache of free tickets to give out to every game, but council members must disclose any gift they receive from the teams that exceed the gift threshold, which I believe should be lowered to $50, rather than the $100 level at which it is currently set. The $100 level is set because the ticket values are often in the $75 to $95 range below the reporting threshold.

I have long argued that council members are, in effect, bribed with all the freebies they receive when it comes to voting on matters pertaining to the CIB and the professional sports team. I also believe these council members should be required to place a value on the free food and drinks they receive when they visit the suites while using these free tickets. At the prices charged by caterers at the events, the combined drink and food tab per person could approach the cost of a ticket in some instances. A lot of these catering expenses at the suites are laundered through VisitIndy and DevelopIndy, the two city-funded nonprofits that promote tourism and economic development, respectfully, to avoid transparency. I've previously discussed how pay-to-play contractors launder money through DevelopIndy to help finance all of Mayor Ballard's out-of-town junkets, including numerous, very costly extended trips he's taken overseas. Pay-to-play contractors are chosen to accompany Ballard on these junkets where they can entertain him and his wife all they want outside the prying eyes of the media or a discerning public.

Councilor Brian Mahern tells the IBJ he is sponsoring the proposal because he believes "there should be greater transparency in the reporting of gifts, period." Mahern visibly irked members of the Administration & Finance Committee who recently voted to send proposals increasing the admissions tax and car rental tax to the full council for a vote when he called them out for supporting a tax many of them don't pay because they receive free tickets. Mahern had requested the CIB make public information about how many and to whom the tickets are being given, but the CIB said it was unable to compile the information prior to the council committee vote on the tax increase. Hopefully, they will have made that information available prior to Monday night's vote on the tax increase.

Just The Facts, Please, On Mass Transit

Once upon a time reputable news organizations made some attempt to separate hard news reporting by their reporters from the marketing efforts of their advertising department. Sadly, that's no longer the case. The Indianapolis Star is one of the worst offenders on this score. The newspaper's management has obviously sent out an edict that its reporters must report only facts favorable to those pushing a legislative agenda of creating an unaccountable metropolitan mass transit authority, which will have considerable taxing authority and which will be run by a handful of unelected persons. That's the only reasonable explanation one can provide for the litany of news stories, columns and editorials, all of which superficially argue the need for a multi-billion dollar investment in a regional mass transit system. Missing from all of this fluff are any hard facts that permit a reader to reach a well-considered opinion on the matter.

Fortunately, we have people in the blogosphere like fellow blogger Pat Andrews, who for no compensation, devotes hours and hours of time researching and studying local government matters before us to aid in thoughtful consideration of legislative and budgetary proposals. Despite a nearly four-year long campaign by the IndyConnect people pushing the regional mass transit legislation with the helping hand of a very generous grant from the Federal Transit Authority, Andrews has struggled to find any reliable financial data that supports the proponents call for approval of funding from a 0.3% local income tax, TIF revenues and other governmental sources to support this multi-billion dollar endeavor.

To underscore just how disingenuous the proponents have been in their fiscal analysis, Andrews notes that when a $6.7 billion regional mass transit vision was first laid out in 2010, the proponents pegged its cost per taxpayer at $180 annually. A few months later, the proponents rolled out a scaled down version of the original plan from $6.7 billion to a $2.4 billion, 25-year capital investment plan. The cost per taxpayer for the $2.4 billion plan was still $180 per year. The latest rendition as contained in HB 1011, currently under consideration before the Indiana House of Representatives, calls for a $1.3 billion capital investment spending plan. Yet the per taxpayer cost of $180 is the same as it was when the proponents unveiled a $6.7 billion plan. These contradictions Andrews found from prior news reports by a Star reporter. Yet local news reports don't discern these contradictions in their reporting.

Andrews also found contradiction in estimates on the annual operating costs for the proposed mass transit system. According to numbers the Star obtained from the Central Indiana Task Force in December, 2011, annual operating expenses were pegged at $151.7 million. Other more recent news articles have pegged that number as being $135 million a year. An LSA analysis of the fiscal impact of HB 1011, which provides little information because of the "bill's indeterminate fiscal impact," noted that IndyGo receives about 16% of  its operating revenues from fares paid by users of the bus system. Yet supporters of the regional mass transit system say that 19% of its operating revenues will be generated from fares. On what basis do they expect riders to provide a greater share of the expenses of operating a larger and more comprehensive system for providing mass transit?

HB 1011 contemplates that both Marion and Hamilton Counties will initially adopt a 0.3% income tax to finance the start-up of a metropolitan transit authority at a referendum. Although news reports suggest that referendum would occur at the general election in 2014, the bill actually permits the counties to conduct a special election this November for this purpose. The income tax in Marion County is expected to generate $51.1 million in 2014 compared to $33.6 million in Hamilton County, or a total of $84.7 million. The LSA analysis doesn't say anything about the TIF revenues that the authority plans to rely upon for additional revenues and that impact on other units of local government dependent on property tax revenues. Revenues currently collected by IndyGo would be absorbed by the metropolitan transit authority if it is created. IndyGo currently collects about $24 million in property and excise tax revenues; however, that number will top $30 million this year due to a special tax levy IndyGo's board approved last year to cover a shortfall in operating expense revenues. IndyGo's total revenues from all sources is about $65 million a year currently.

"Any taxpayer who wants to be informed about the costs of the mass transit proposal has to do a hell of a lot of digging on their own and then decide if the information is out of date," Andrews observes. That's for sure.

Secretary of State Connie Lawson's Insurance Policy

Gov. Mitch Daniels appointed then-State Sen. Connie Lawson last year to finish the unexpired term of Secretary of State Charlie White after he was convicted in Hamilton County on bogus charges brought by overzealous and unethical special prosecutors who claimed he committed vote fraud and stole money from the Town of Fishers by representing a council district in which he didn't reside. White is appealing the conviction of all the charges, and Connie Lawson isn't taking any chances on his likelihood of success. Lawson asked State Rep. Jeff Thompson, her state representative, to introduce legislation that would bar White from reinstatement to his office if his convictions are overturned on appeal. HB 1282 provides that a public officer who has been removed from office after being convicted of a felony is not entitled to be reinstated to the office to which he was lawfully elected if the conviction is reversed, vacated, set aside or reduced to a Class A misdemeanor or not entered because the trial court did not enter a guilty plea. Under current law, White would be entitled to reinstatement to his office if any of those events occurred. If Lawson's legislation becomes effective, she'll get to keep her job but White will be allowed to draw the salary he would have earned as if he had never been removed from office.

UPDATE: Indianapolis attorney Karen Celestino-Horseman, who represented the Indiana Democratic Party in the unsuccessful election contest challenging White's election as Secretary of State in 2010 based on issues pertaining to his residency, posted this interesting comment questioning whether Lawson's proposed law could constitutionally apply to White since he has already initiated his appeal. She also wonders if it's not intended to throw a bone to get White to drop his appeal:
"Under current law, if former Secretary of State Charlie White wins the appeal of his criminal conviction, he gets to finish the term to which he was elected. HB1282 would prevent White from returning to the taking office if he wins his appeal. Given that the appeal process has already started, I do not know if the legislature can remove White's right to reclaim the office. But they are throwing White the bone of collecting his salary for the entire term. In other words, Charlie, if you don't waste time challenging this potentially unconstitutional statute, we'll pay you off. HB1282 is sponsored by Representative Thompson. Thompson represents the district where current Secretary of State Connie Lawson resides. Lawson was appointed to finish White's term and she stands to lose the office if White wins and the law isn't changed."

Thursday, January 24, 2013

NBA Team Values Increase 30% Over Last Year

The next time you hear Pacers Sports & Entertainment President Jim Morris or Mayor Greg Ballard saying that additional public subsidies for the Pacers is needed to keep the team afloat, let them know just how full of it they are. Forbes magazine reports that the average value of NBA teams has increased 30% over the past year due to higher revenues from television, new and renovated arenas and a new collective bargaining agreement that reduced player costs from 57% to 50% of revenues. Smaller market teams like the Pacers also benefited from higher payments being made by the big market teams to the smaller market teams. The average team is now worth $509 million.

The Pacers, according to Forbes, are valued 24th in a league of 30 teams with a value of $383 million, a 28% increase in the value of the team as estimated by Forbes in 2009. The Simon brothers originally paid only about $12 million to purchase the franchise. That's quite a return on investment with no small contribution by Indianapolis taxpayers, who first built Market Square Arena, which was later torn down after taxpayers built a the $200 million Fieldhouse for the Pacers. Forbes also claims the Pacers realized a profit of $11 million, which runs counter to what Morris has been telling the public. He claims the team has lost more than $150 million since it moved into Banker's Life Fieldhouse with annual losses in the tens of millions per year. You can bet the team performed some fancy bookkeeping to keep those profits that low on paper.

Wednesday, January 23, 2013

Idiot Mayor Says They Won't Come If We Don't Build It

Every time I think Mayor Greg Ballard couldn't possibly say something more stupid, he opens up his mouth and spews more bile all over himself. His latest dribble came during testimony today on his multi-billion dollar mass transit plan that will begin with a nearly 20% increase in your local income tax so he can pass it out to all of the cronies who are stuffing his pockets with campaign dough and paying for his lavish overseas junkets and other freebies. “If we don’t build it they will not come,” said Mayor Ballard while making the case that it’s all about attracting corporate talent, “and if we don’t build it, the young people who grew up here, may not stay.” How full of crap can this guy possibly be? There's not a damn person who is going to decide whether to take a decent, high-paying job in this city based on whether they have a light rail or slick new bus to ride to work. That's total BS cooked up by the PR flacks who are getting paid with our taxpayer dollars to spew these baseless claims.

The proponents are still asking for their first of what will become many requests for taxing and spending authority at the same level, even though they now say they are dropping the light rail line that would extend from Noblesville to downtown Indianapolis, which the proponents conservatively estimated would cost a little more than half of the initial $1.3 billion they plan to spend. Now they tell us they're just going to offer us a better-improved bus system. Don't fall for it. It's a bait and switch. Up until now, they've been telling lawmakers that the light rail system is necessary because suburban whites won't ride the bus. Once the camel gets it's nose under the tent, all bets are off. They won't stop at just buses. The big money for the people behind this push is the massive investment of taxpayers dollars in a light rail system that will never generate the ridership necessary to even cover operating expenses, let alone service on the billions of dollars in debt that will be incurred to build it.

Who remembers the $1 billion new airport terminal the last mayor, who taxpayers voted out of office after our property and income taxes skyrocketed, told us absolutely had to be built if we wanted to become a world class city and attract the number and choices of flight destinations that every dynamic, growing city has? Since the airport moved into its shiny new billion-dollar terminal and expanded airport, the number of flights and passengers in and out of the airport has dropped every year. In fact, they're at their lowest point in ten years! And that included the year in which the city was swamped by flights coming in and out for the Super Bowl, the hosting of which we were told justified the construction of the $750 million Lucas Oil Stadium and the investment of about $50 million in taxpayer funds to put on the event. Yeah, "Build and they will not come!"
If you thought Indianapolis International Airport didn’t seem as busy in 2012 and that tickets were pricier, you’d be correct.
Passenger boardings fell by 2.2 percent last year, to 3.68 million, assistant treasurer Marsha Stone told airport board members on Friday. That’s a low not seen since 2003, according to airport records.
And it was nearly 6 percent less than what officials had projected for 2012.
Boardings at the airport peaked in 2005, at 4.26 million.
It's just a matter of time before the airport authority is going to be requesting a bail out. It cannot repay its long-term indebtedness at the rate it's going unless things turn around sharply in the very near future. And don't forget that Mayor Ballard kept in place the 65% increase in the local income tax pushed by his predecessor and opposed by him during his first bid for office. You were promised 100 new police officers, among other things, when that tax was enacted. Instead, you got 200-plus fewer police officers than you had before that tax increase took effect and even more tax increases for the CIB to hand out to the billionaire sports team owners, even after tapping a federal grant to fund 50 new police officer positions. Neighborhoods which want decent police protection now must resort to hiring their own private cops. Adding insult to injury, he's back at the trough seeking a new round of tax increases for the CIB, and he now says we need to finance a new soccer stadium downtown for the benefit of his biggest political crony in order to be a "world class city." Where did the money go, Greg? In short, Mayor Ballard has zero credibility when it comes to being a friend of the taxpayers, and any legitimate Republican should think twice about supporting anything he is backing that involves more taxing and spending authority.

Any Republican lawmaker at the State House who votes for this mass transit boondoggle deserves to be ousted from the legislature. I'm getting sick and tired of Republican politicians running around talking about what fiscal conservatives they are and how closely they safeguard taxpayers' money, and then they turn around and vote for every lame-brain tax-and-spend idea that comes down the pike. They'll tell us that they're not voting for a tax increase; rather, there just voting to give the people a chance to decide as they slip free sporting event tickets in their pockets given to them by the mass transit lobbyists--paid with our taxpayer dollars--and dine with them at St. Elmo's. Any special election vote's outcome is preordained and they know it. That's why they're trying desperately to ram it through in a special election this fall where voter turnout will be abysmally low and they'll have a multi-million dollar budget to get out to vote of the government takers to put the government payers on the hook for an even larger tax bill.

Speaking of lawmakers who talk out of both sides of their mouths, check out the list of Republican lawmaker who signed American's For Tax Reform's "No Tax Pledge:

James Baird (H-44)
Robert Behning (H-91)
Timothy Brown (H-41)
Woody Burton (H-58)
Robert Cherry (H-53)
Wes Culver (H-49)
Steven Davisson (H-73)
David Frizzell (H-93)
Bob Heaton (H-46)
Eric Allan Koch (H-65)
Jud McMillin (H-68)
Winfield Moses (H-81)
Timothy Neese (H-48)
Rhonda Rhoads (H-70)
Gerald P. Torr (H-39)
P. Eric Turner (H-32)
Timothy Wesco (H-21)

Guess who is sponsoring the mass transit bill? Rep. Gerald P. Torr (R-Carmel). The guy will actually tell you with a straight face that he's not voting for a tax increase by enacting this lousy piece of legislation he's sponsoring. Make no mistake about it. Rep. Torr is sponsoring the most massive expansion of local government taxation and spending in decades for our region. Let him know what you think, and ask him why he is breaking his "No Tax" pledge he made in his re-election campaign last year.