Tuesday, December 23, 2014

Chicago-Based Walsh Will Play Big Role In Criminal Justice Center Project

The Chicago-based Walsh Group will score big on yet another Indiana project if the Indianapolis City-County Council agrees to approve a 35-year, $1.75 plan to build a new criminal justice center project. Walsh Construction, a family-owned business with close ties to former Chicago Mayor Richard Daley and the Democratic Chicago machine, has been awarded numerous high-profile construction projects in Chicago and elsewhere over the years, including Millennium Park, John Stroger Cook County Hospital, O'Hare International Airport terminal expansions, the James R. Thompson Center and the recently-opened Maggie Daley Park in honor of the former mayor's late wife, to name just a few.

The WMB Heartland Justice Partners winning bid chosen by Mayor Greg Ballard is led by a French-based firm, Meridiam Infrastructure. This weekend, Advance Indiana reported that one of the leading partners in that winning team, Cofely Services, is at the center of a massive public corruption scandal in Spain in which dozens of local officials have been arrested for allegedly taking bribes in consideration for the awarding of more than $300 million in government contracts, most of which benefited Cofely Services, an international facilities management company which will hold the keys to Indianapolis' new criminal justice center if the City-County Council approves the proposed public-private partnership agreement.

Under that 35-year deal, city taxpayers will begin making payments of just under $50 million a year to Heartland Justice Partners. Meridiam holds a 70% equity stake in the project, while Walsh Investors, LLC, an affiliate of The Walsh Group splits the remaining 30% equity stake with Balfour Beatty Investments, LLC. The Walsh Construction Company, a subsidiary of The Walsh Group, will also serve as lead contractor on the project.  The winning team says it will meet or exceed the City's goals for local workforce utilization and minority participation. Heartland Justice Partners says it has hired Indiana Strategic Resource Group, which is owned by Aleta Mungal, to assist it in reaching out to minority contractors. [Note: Balfour-Beatty is a British-owned investment firm and construction industry titan that focused in a Texas debate a few years back when Gov. Rick Perry signed into law legislation written by lobbyists for Balfour-Beatty, which allowed it and other private investment firms to purchase public assets through deals in which the state would also act as lender under yet another P3 scheme.]

In addition to numerous Indiana highway projects awarded to Walsh over the past few decades, the administration of former Gov. Mitch Daniels awarded a bidding team led by Walsh Construction to construct two new bridges over the Ohio River in Louisville costing over $4 billion. The bridges are being built as part of a bi-state agreement with the state of Kentucky and will rely on tolls paid by motorists who use the bridges to pay for them. Although Indiana and Kentucky are splitting the costs, at least 70% of the costs for constructing the bridges comes from Kentucky's side of the border, and more Hoosiers travel daily into Louisville than Kentuckians travel into Indiana, meaning Hoosier motorists will pay a majority of the toll revenues. Even with the tolls, Indiana officials expect to come up close to a half billion dollars short in paying for the cost of the bridges, which will come out of state highway funds. In addition to the bridge projects, Meridiam and Walsh are among the finalists chosen by Indiana to build that totally unneeded Illiana Expressway, a tolled highway connecting I-65 in northwest Indiana with Illinois' I-57.

Walsh has not been without controversy. In 2012, the company settled a whistle blower lawsuit for $6.4 million in which one of its former construction managers accused the company of over-billing the federal government by falsely submitting inflated bills from subcontractors. The City of Chicago recovered about $36 million from Walsh after suing it and other contractors for defective construction work on the O'Hare International Terminal expansion project that experienced huge cost overruns.

Walsh and its subcontractors have been sued in the past by black employees over claims of race discrimination related to working conditions and assignment of overtime work. The lawsuits accused managers of referring to blacks as "niggers" and "coons" and being subjected to derogatory graffiti in workplace bathrooms. An EEOC investigation of the black employees' complaints concluded "there was reasonable cause to believe that Walsh and its subcontractors had discriminated" against a dozen employees who filed suit against the company through its hiring and layoff practices, and by subjecting its black employees to harassment and different terms and conditions of employment. The 7th Circuit Court of Appeals, however, denied class action certification which had been granted in the case by the district court in Chicago.


Anonymous said...

What is it about this lunatic mayor and his just-as-looney Councilors who just can't seem to find local talent for the big paying City job positions and the big paying City pay-to-play crony deals?

Aside from the fact that the Criminal Justice Center project is of itself "criminal" in the many false ways it was presented and in which its studies were awarded, why our idiot mayor cannot find anyone local other than Ersal Ozdimir to build his insider deals is astounding.

Anonymous said...

Thanks for your efforts to inform the public on this horrible deal. The local media is useless as usual.

Anonymous said...

I want to see the numbers of this deal drilled down deeply. There is no way in hell that you can convince me the City is actually going to spend less now than it does currently and get a brand new state-of-the-art jail, arrestee processing center and courthouse for 29 criminal courts and related offices, along with new parking garages. It's preposterous. There are clearly expenditures intentionally being withheld from the calculus to arrive at those estimates. It's just being reported as fact without any serious analysis just like every other bad deal that keeps getting handed to the public.

Anonymous said...


The ROC, now the Criminal Justice Center....It's time for us to get a REAL U. S. Attorney or call in the Public Integrity Section of the DOJ!!!

Anonymous said...

P. S. How can I get the contract for a "gift shop" in that facility?

Rusty Peters said...

Walsh was the contractor for Indianapolis Hyperfix where they didn't allow for proper bridge clearance's only to come back and get paid again to fix them right. It was never mentioned in our wonderful local media why trucks were being ripped apart by low bridges. http://www.urbanophile.com/2013/10/04/indianapolis-freeway-teardown-follow-up/

Gary R. Welsh said...

Yeah, I forgot about that. I don't think INDOT was very forthcoming about the reason those bridge clearances failed to meet federal standards after that costly hyperfix project.