Wednesday, August 13, 2014

Where Did Ballard Find More Than $10 Million To Blow On Criminal Justice Center P3 Project?

Transparency in budgeting was something Greg Ballard promised when he first ran for mayor in 2007, along with putting a end to wasteful, no-bid services contracts he described as "fluff" in the city-county budget. Those days are now long gone. Having a taste for the better things in life that come from using taxpayer dollars in campaign payola schemes is now his mode of operation. Yesterday, we told you about Mary Milz' discovery that Ballard had inked no-bid contracts with his campaign contributors to the tune of $10 million for work on his proposal to privatize the building, operation and maintenance of new, half-billion dollar criminal justice system. It turns out that figure is actually more than $12 million. Buried in that $1.5 million legal contract with Bingham Greenebaum Doll is another $2.5 million legal contract with a Los Angeles-based law firm, Nossaman, LLP.

Just who the hell is Nossaman? It all goes back to that much-criticized Long Beach courthouse project undertaken as a P3 that took taxpayers to the cleaners. Nossaman partnered with KPMG on that and other projects in the past. KPMG has been awarded a $3 million, no-bid contract by Ballard to provide financial services advice on the criminal justice center  project. As we previously pointed out, one of the three finalists chosen by Ballard for consideration of the P3 project is Meridiam, a foreign-owned business which was awarded the Long Beach courthouse project. Ballard has also awarded a $100,000 no-bid contract to John Klipsch, who has made a ton of money from consulting on various CIB and other local capital projects, and a $50,000 contract to Bickmore, a risk-management consulting firm.

Now comes the question of just how Ballard is able to piece together funding for all of these no-bid contracts at a time he's pleading the City is broke and needs another big general tax increase to pay for basic city services. The Democratic-controlled council's chief financial officer, Bart Brown, tells the IBJ that the Ballard administration has violated the state's procurement laws by entering into the contracts, which to date have been the legal basis for paying out over $800,000 to the various consultants. To free up money to pay for the consulting fees, the Ballard administration deferred payment of one month's rent to the Marion Co. Building Authority, which maintains the buildings in which city-county government is operated.
Brown contends that the contracts were signed in violation of state procurement law, which requires council approval for multi-year obligations that aren't already funded. He said the administration has only $2 million available for the contracts, and that money wasn't expressly appropriated for consultants' fees.
Brown called it a "bait-and-switch." Ballard spokesman Marc Lotter couldn't speak to the legality of the contracts, but he said the city won't be on the hook for the full amount. Lotter said the city's consultant fees will be reimbursed by whichever development team is chosen to build the justice center. That's assuming the deal goes forward.
"You don't necessarily need an appropriation when you're going to have it reimbursed on the back side," Lotter said. He added that getting an appropriation from the council would have been difficult. "They don't necessarily move at the speed of business," he said.
Where did the mayor's office find $2 million? Brown said the city deferred a rent payment to the Marion County Building Authority by one month, from December to Janauary. The maneuver freed up money in the city's 2013 budget, which follows the calendar year, but it was neutral to the building authority, which follows a July 1 fiscal year. The building authority is an entity that was created to own and manage the City-County Building.
Brown said he's discussed the procurement-law issue with City Controller Jason Dudich, who signed off on the contracts. Brown said he doesn't know what, if anything, the council will do now that they're in place.
So it turns out the $20 million, ill-fated long-term and one-sided lease the Ballard administration locked taxpayers into paying for the Regional Operations Center to reward one of the mayor's campaign contributors was no fluke. It's part of pattern and practice employed by the most corrupt mayor in modern Indianapolis history. You see now, Terry Curry? When you refuse to do your job and prosecute the lawbreakers in this administration, the public pays the price. The administration's spokesman, Marc Lotter, told the IBJ that Council President Maggie Lewis signed a memorandum of understanding with the administration last December under which he says she agreed with allowing the administration to incur up to 2% of the project's projected construction costs. It's unclear how Lewis could unilaterally bind the council to anything without a specific appropriation approved by the council, but it's further evidence that Democrats can't trust her to conduct business with this administration on her own. The IBJ tallies the consulting contracts to date at $12.65 million, which would assume a total construction price tag of $632.5 million, more than 20% higher than earlier projected costs for the project.


Anonymous said...

There is no Mayor, Gary. Ballard is the puppet for the moneyed interests. They cook up the schemes; plan the execution, and hand them to Ballard for his signature.

The same moneyed interests sit atop both Ballard and Curry, so don't expect action unless someone in the cast is no longer willing to play his part correctly.

Anonymous said...

I don't want another penny spent without full ccc votes on these expenditures. If Ballard can't back out of these commitments I consider his conduct to be theft of taxpayer monies. This justice center is just way over the top and I want the chance to talk to my councilman further before he votes on these expenditures. Perhaps we need outside counsel to obtain a court order to stop M ayor Ballard from further action. I don't think he, or Maggie Lewis for that matter, have the authority to do what they've done.

Anonymous said...

I really think that this may be the straw that broke the camel's back. I sincerely hope that some body is paying attention to the sheer illegality and lack of transparency in the Ballard approach....if not the US Attorney, then perhaps the Marion County Prosecutor. And if either one of these offices takes a pass, how about the FBI? How about the state board of accounts, since the state's procurement laws and procedures have been alleged to been violated. And will the Democrats on the City County Council start using their right to sue and use the courts to stop this blatant illegal action. Is anyone home?

Flogger said...

This could just be a return salvo by the Democrats for the Salvo fired at Hogsett by Marion County GOP.

These Salvos are blanks, lots of noise and flash for the Media. The local Media will hype all this to perpetuate the fable that we actually have two political parties in Marion County.

I expect the ROC Investigation to at some point disappear.

Anonymous said...

As Barnes and Thornburg goes, Marion County goes. It's as simple as that really. The Mayor is a paid figurehead for the agenda of that law firm.

Anonymous said...

Just FYI, John Klipsch consulting is an LLC run by the guy who was the CIB executive director during the Lucas Oil project, and spent like 15 years working as an owner's rep for the city, overseeing circle centre mall, Conseco (Bankers Life) and many others.

Not sure what you're getting at with the "has made a lot of money..." comment, but yeah, he has, by rendering a lot of services. And he charges by the hour.

I know it was a benign detail of a real story, but lumping Klipsch in a paragraph whose main purpose seems to be to establish a negative connotation isn't fair or accurate. It's a project requiring a management consultant, and Klipsch provides that service at a competitive price, because he's worth it. Simple as that.