Rebuild Indy 2 Should Easily Cover The Cost Of The Mayor's Re-Election Campaign

Mayor Greg Ballard has been pitching the idea of funding Rebuild Indy 2, a plan to spend about $350 million over the next three years on streets, sidewalks and whatever other projects he can imagine, such as a sports park to play cricket. The first $150 million in spending would come from a bond issue. Ballard's original Rebuild Indy spending program was funded by close to $500 million the City netted from the sale of the water and sewer utilities to Citizens Energy, which ratepayers have been paying for in the form of repeated, double-digit rate increases.

By coincidence or not, city contractors who received Rebuild Indy contracts contributed about $1.5 million to his campaign committee over the past four years. The top ten contributors were all engineering firms which received no-bid contracts. Interestingly, their contributions accounted for over $700,000 of the $1.5 million raised from Rebuild Indy contractors even though they collectively represented only about $78 million of the nearly $500 million spent. Construction companies, which received the bulk of the Rebuild Indy money, contributed much less to Ballard's campaign committee, perhaps because the contracts they were awarded were subject to public bidding requirements. The top ten are listed below. The number in parenthesis is the amount of contracts awarded to the firm, while the second number is the amount of contributions the firms and their key employees made in campaign contributions over the past four years.

1.   American Structurepoint, Inc. ($37,203,475)--$129,700
2.   RW Armstrong & Associates ($13,554,892)--$90,000
3.   United Consulting Engineering, Inc. ($9,066,041)--$101,250
4.   Bernardin Lochmueller and Associates, Inc. ($7,406,845)--$83,500
5.   Christopher Burke Engineering ($5,722,494)--$38,500
5.   Butler, Fairman and Seufert, Inc. ($3,847,164)--$63,550
6.   V.S. Engineering, Inc. ($1,957,866)--$41,000
7.   M.D. Wessler and Associates, Inc. ($1,835,236)--$30,250
8.   First Group Engineering, Inc. ($1,282,052)--$36,250
9.   Janssen & Spaans Engineering, Inc. ($1,384,600)--$42,500
10. DLZ Indiana, LLC ($736,250)--$88,905

I don't fault these engineering companies and their key employees for contributing so generously to Mayor Ballard's campaign committee. They know how the game is played. Either they pay up or they won't play. After all, that's why they call it "pay to play," and pay to play is the Ballard way. A special shout out to the reader who took the time to compile this data to be shared with the public.

UPDATE: The original top ten list of contributors omitted the actual 5th place finisher, which was Christoper Burke Engineering, and which was awarded $5,722,494 in consulting contracts and contributed a total of $38,500 to Ballard's campaign committee.

Tales From Tampa

Mayor Greg Ballard with lobbyists John Hammond (standing) and Bob Grand (bald guy)(Howey Politics Photo)

 

White House Doors Open To Those Who Contribute The Most

A New York Times analysis comparing Obama campaign donors to the Obama White House visitor logs finds that the people who contribute the most to him are the most likely visitors to the White House and often its most frequent visitors:

. . . Although Mr. Obama has made a point of not accepting contributions from registered lobbyists, a review of campaign donations and White House visitor logs shows that special interests have had little trouble making themselves heard. Many of the president’s biggest donors, while not lobbyists, took lobbyists with them to the White House, while others performed essentially the same function on their visits.

More broadly, the review showed that those who donated the most to Mr. Obama and the Democratic Party since he started running for president were far more likely to visit the White House than others. Among donors who gave $30,000 or less, about 20 percent visited the White House, according to a New York Times analysis that matched names in the visitor logs with donor records. But among those who donated $100,000 or more, the figure rises to about 75 percent. Approximately two-thirds of the president’s top fund-raisers in the 2008 campaign visited the White House at least once, some of them numerous times.

The reasons someone might have gained access to the White House and made a donation are wide-ranging, and it is clear that in some cases the administration came down against the policies being sought by the visitors. But the regular appearance of big donors inside the White House underscores how political contributions continue to lubricate many of the interactions between officials and their guests, if for no other reason than that donors view the money as useful for getting a foot in the door . . .

When Los Angeles officials wanted White House backing for a program that would speed up local transit projects, they turned last spring to a California political operative, Kerman Maddox, a top Obama fund-raiser and party donor. “We thought he could help our outreach in Washington,” said Richard Leahy, chief executive of the Los Angeles County Metropolitan Transportation Authority.

In an internal memo justifying Mr. Maddox’s hiring, the authority wrote that he had “direct access to the Executive Oval Office” and cited his position on the Obama campaign’s National Finance Committee. Mr. Maddox’s company Web site prominently features photographs of him with the Obamas.

One day after the authority signed off on his contract, Mr. Maddox made a $10,000 donation to the Obama re-election effort; he donated an additional $6,000 in June. In August, Mr. Maddox landed a meeting for himself and the authority officials with Melody Barnes, then director of the White House Domestic Policy Council, one of several meetings the officials were able to get.

The administration had previously been supportive of Los Angeles County’s efforts to accelerate its transit projects, but the following month, Mr. Obama also announced, as part of his jobs package, a proposal to significantly expand a Transportation Department loan program. The plan, which has drawn bipartisan support, is something Mr. Maddox’s clients had sought. Mr. Maddox, soon donated an additional $11,250 to the victory fund. He said in an e-mail that his donations were tied to fund-raising events and had nothing to do with visiting the White House . . .

Did the folks from the Times really expect that Obama would do things any differently than any other Chicago politician?

Is Ersal Ozdemir's Attorney Board Shopping For Controversial Zoning Variance For Broad Ripple Parking Garage?

An attorney for Keystone Construction sought and obtained a one week continuance on a hearing for its requested variance for the controversial Broad Ripple parking garage project being financed by taxpayers as a payoff to one of Mayor Greg Ballard's largest campaign contributors. A previous study indicated that the site chosen was not well suited for a parking garage. Since the Ballard administration announced the awarding of $6.3 million to Ersal Ozdemir's company to build the parking garage, the developer has sought and obtained numerous variances that were not originally proposed. The latest variance petition seeks approval to build four feet below the flood plain, a move that is opposed by city planners.

Indianapolis taxpayers were told they were getting a 350-space parking garage. After the deal was announced, the public learned that it would include significant retail development on the ground level that will require the use of many of the parking spaces in the publicly-financed garage. As a consequence, the project will do little to alleviate the parking problem in Broad Ripple by adding even more retail development within an area some feel is already over-developed. Despite taxpayers kicking in $6.3 million for the private development project, Ozdemir's Keystone Construction will get to keep 100% of the revenues generated by the developed property.

Community activist Clark Kahlo strenuously objected to the request of Joe Calderon, Ozdemir's attorney, for a one-week continuance. Kahlo argued that Calderon was simply board shopping. The recent public corruption trial of former Indianapolis City-County Councilor Lincoln Plowman revealed testimony from an undercover FBI agent who secretly recorded Plowman where Plowman described the practice of zoning attorneys requesting a continuance if you believed you did not have the votes to obtain approval of a petition pending before one of the three board of zoning appeals so the case could be reassigned to a board the attorney viewed as more friendly to his client. By requesting only a one-week continuance, Calderon succeeded in getting his case transferred from Board II to Board III.

According to the city's website, Board III currently only has two board members both appointed by Mayor Ballard, Fred Hash and Mindy Westrick compared to the five-member board make-up of Board II. At least three votes are required for approval, which means floating members would be assigned to fill in for any vacant board spots on Board III. Hash is Vice President of Great Lakes Capital Fund, a private equity fund that helps finance real estate development projects for low-income housing throughout the Midwest. Hash also serves as President of Riley Area Development Corporation. Westrick is a lobbyist/attorney for Faegre Baker Daniels and is reportedly a friendly acquaintance of Ozdemir through her political involvement in the Marion Co. Republican Party. Ozdemir serves as finance chairman for the Greater Indianapolis Republican Finance Committee. During Plowman's public corruption trial, the City-County Council's clerk, Melissa Thompson, appointed by then-Council President Ryan Vaughn, was called as witness and claimed credit for Westrick's appointment to the BZA, although Plowman sponsored the resolution approving her appointment. Thompson claimed she met Westrick while working on former Marion Co. Prosecutor Carl Brizzi's campaign staff. You're asking for nothing but trouble when you appoint political hack lobbyists to zoning boards, something Ballard promised he wouldn't do when he was first elected mayor in 2007.

Calderon resisted Kahlo's implication that he was board shopping. He claims Keystone is prepared to break ground on the project within the next couple of weeks and cannot afford to delay the project until Board II's next meeting. Cough, cough. It's so obvious what is taking place here. The Board II members should be holding their heads in shame for allowing this last-minute continuance. Keystone's attorney has known about this hearing for a long time. This issue just didn't surface. Pat Andrews has been blogging about this variance request since she first learned about it two months ago.

The bottom line is that Ozdemir purchased a $6.3 million gift from Indianapolis taxpayers in consideration for about $50,000 in campaign contributions to Ballard and a six-figure job for Ballard's former chief of staff, Paul Okeson, to boot. He's now using the enormous power he exerts over the Ballard administration to reduce his own financial risk in this project as much as possible. By hook or crook, he'll get what he wants. Mayor Ballard and Deputy Mayor Mike Huber will make sure this project is carried out completely on his terms regardless of how much they screw the taxpayers. Pay to Play, after all, is the Ballard way.

UPDATE: Sure enough it turns out that Board III is the go-to board if you're wanting a variance. Those who track these matters say the denial rate for Board III is less than half the denial rate of the other two boards and the board most likely to ignore staff recommendations.

UPDATE II: A helpful reader has provided an updated link with Board III's current members, which you can view here. The three additional members are: Sally Cook, Jennifer Keefe and Sarah Lyons.

UPDATE III: I just received word that Mindy Westrick has recused herself from participating in the hearing next week on the pending variance petition for Ozdemir's Broad Ripple parking garage project. The staff has informed the interested parties that it believes there will be a sufficient number of members present at next Tuesday's hearing to decide the petition without her participation. In an e-mail to the board's staff, Westrick wrote: "While my firm does not represent the petition in 2012-DV2-006, my firm does represent Keystone Group and Keystone Construction Development. Due to the connection with the Keystone groups and the petitioner, I am recusing myself from a vote on the variance. In addition, I will not preside or participate in a vote for a continuance or a transfer to a different board if one party sho chooses to make a request."

IBJ Glorifies Rise Of Ersal Ozdemir

Those of us who believe in honest, transparent government which is neutral when it comes to the success or failure of those in private business want to puke when we read stories like the one that appeared in the latest edition of the IBJ, which glorifies the rise of Ersal Ozdemir, a Turkish immigrant and U.S. citizen only since 1999, as "one of the city's most powerful developers."  The article titled, "A bid deal in a hurry," has a smiling Ozdemir pictured in front of Carmel's $60 million Sophia Square, financed in part, thanks to a contribution of $13 million from Carmel's taxpayers after Ozdemir showered Carmel Mayor James Brainard, like other politicians who dole out taxpayer dollars to his private developments, with campaign contributions. Cory Schouten's story opens:

Ersal Ozdemir seems to have vaulted, pretty much overnight, from a rising star in Indianapolis real estate to a powerhouse developer.

The 37-year-old Turkish immigrant is a civil engineer by training, a builder and developer by profession. He's smart, creative, earnest and he works 12-hour days.

But competitors wondering how he has come so far so fast shouldn't underestimate a few of Ozdemir's other talents: as a salesman and schmoozer with a knack for building profitable relationships with politicians . . .

"A knack for building profitable relationships with politicians?" I'd say. That's an understatement to say the least. In addition to the $13 million gift Brainard gave him courtesy of Carmel taxpayers for his Sophia Square project, Mayor Greg Ballard gave Ozdemir $6.35 million, or nearly one-third of the upfront payment the city of Indianapolis got from its badly-negotiated 50-year lease of the city's parking meter assets with ACS. Months after announcing the multi-million dollar gift to Ozdemir, who had showered Ballard's campaign committee with tens of thousands of dollars in campaign contributions over a several year period, took a junket with him to Europe and provided office space for his re-election campaign, we learned that the parking meter deal was generating less than half what had been promised and the city's honestly balanced budget is at least $50 million in the hole. We also learned that Ozdemir's parking garage to help ease the parking shortage problem in Broad Ripple was simply a ruse to allow Ozdemir to develop more than 10,000 square feet of new retail/commercial space that will consume most of the parking in the city-financed garage that will be owned entirely by Ozdemir and will share no revenues with the city.

Ballard's generosity towards Ozdemir with your tax dollars hasn't ended there. Ozdemir will control purse strings for the new CityWay project, which has taxpayers on the hook for more than $100 million for a mixed use project that Eli Lilly wanted but no bank would finance because the risk of failure is so high. And the diversion of your tax dollars to Ozdemir's personal wallet is far from over. Ozdemir hired Mayor Ballard's former chief of staff, Paul Okeson, to help raid taxpayer dollars for his benefit. Deputy Mayor Mike Huber unabashedly admits the mayor and his top staff meet regularly with Ozdemir. "He has built up a reputation for being willing to take risks," Huber said. Hah! Yeah, take risks with your tax dollars for his personal benefit. "The bottom line is he just goes for it," Huber added. Huber insults our intelligence by claiming the city isn't "playing favorites" in the awarding of these deals. "Our goal is a competitive and transparent process," he claims. Schouten notes that Ozdemir was on hand at Ballard's re-election victory party to be among the first to congratulate him on his win. "One could argue [Ozdemir] had as much to celebrate as the mayor," Schouten writes. No kidding.

The perception of Ozdemir in Indianapolis is strikingly similar to the reputation Tony Rezko built up in Chicago by schmoozing Chicago politicians like Rod Blagojevich and Barack Obama after immigrating to the U.S. from Syria before his big downfall. Like Ozdemir, Rezko started out working as a civil engineer. As Rezko told Chicago Magazine, "I met with people who were running for office, some elected, some not. I always worked with people I developed chemistry with. People I liked, they liked me, so we developed a relationship." Rezko helped Obama land his first job out of law school at a Chicago law firm where Obama did work for his company. "Rezko threw an early fundraiser for Obama at his North Shore house, and that fundraiser was instrumental in providing Obama with seed money for his U.S. Senate race in 2004," Chicago Magazine wrote. Rezko donated hundreds of thousands to the campaigns of various Chicago politicians and quickly rose to become one of Chicago's biggest real estate developers thanks to generous taxpayer financing of his projects. The last I checked he was sitting in a jail cell facing a lengthy prison sentence, along with one of his chief benefactors, former Illinois Gov. Rod Blagojevich. Rezko received a prison sentence of 10 1/2 years for the kickbacks he made to Illinois politicians in a scheme the federal judge described as "selfish and corrupt."

The funny part of the story is how Ozdemir boasts that his mentor is Beurt SerVaas. That would be the same former City-County Council President, OSS officer and CIA contractor who mentored his former son-in-law, Tim Durham, to the top of the Indianapolis business community. Durham showered Indiana politicians with nearly $1 million in campaign contributions before the feds finally caught up with the Ponzi schemer and charged him with bilking rural Ohio investors out of more than $200 million. And who took over as finance chairman of the Marion Co. Republican Party when Durham stepped down? You knew it. Ozdemir.

I'm not quite sure what to make of the claim in Schouten's story by Ozdemir that he's never missed a loan payment. Maybe he's made all of his payments to the bank, but I'm not sure that's comforting to all of his subcontractors or the insurance company that issued him a performance bond for work his Aymir Construction Corp. performed on several public construction projects. A 2010 court decision in the federal district court for the Southern District Court of Indiana found the company owned by Ozdemir and his former wife liable to U.S. Fidelity and Guaranty Company for more than $1.2 million the bond company had to pay to subcontractors for work Aymir failed to pay them for their work on three public library projects that had been awarded to Ozdemir's company. Those projects included the Irvington branch library in Indianapolis, Kokomo South Branch library and Tippecanoe Public Library. The court granted summary judgment in favor of the bond company after Aymir defaulted on the contracts and the bond company had to pay the claims of the subcontractors and hire new contractors to complete the unfinished work. I guess we're only talking about Ozdemir's Keystone Construction Corp. in the IBJ story.

"He's a great American story, " Brainard told Schouten about Ozdemir. I'll have to hand it to him. Immigrants like Ozdemir are quick studies of the weaknesses and shortcomings of our political system. They learn quickly that "pay to play" is the way to get ahead and get ahead they do. They learn that MBE certification allows the politicians to discriminate against long-established local companies which can't claim to be minority-owned so the politicians can boast that they are helping out minorities when nothing of the sort is actually occurring. Whatever works. Merit and sweat equity are so passe in America today if you hadn't figured that out yet.

East Chicago School Treasurer To Plead Guilty To Bribery Charges

The former treasurer for the East Chicago public school system, Francisco Ramirez, has agreed to plead guilty to charges of taking bribes from a building contractor in exchange for awarding construction contracts to a company owned by Geraldo Lozano just days after the U.S. Attorney for the Northern District of Indiana announced those charges. The Northwest Indiana Times has the particulars:

Lozano, who owned Green Tree Builders, is charged with paying a bribe to an agent or local government receiving federal funds, while Ramirez was charged with receiving that bribe. In 2008, East Chicago's schools received more than $10,000 in federal funding.

That same year, Ramirez hired Green Tree Builders to perform landscaping work at East Chicago's high school in preparation for a political candidate's arrival for a speaking engagement, according to court records.

After the project, Ramirez spoke to Lozano about additional work with the school as a trade-off for doing home improvements on Ramirez's home, records state.

"We also agreed that he could inflate the bills to cover his costs," Ramirez said in the plea agreement.

Lozano allegedly performed a slew of services at the home, including cleaning the deck, installing insulation in the attic, tearing out the concrete driveway and pouring a new one, renovating the kitchen and installing a tile floor.

While Ramirez paid for patio pavers and some kitchen materials, he said Lozano provided the other services and materials in exchange for the school jobs . . .

Green Tree Builders received about $173,000 in authorized payments from the school district through Ramirez between May 2008 and November 2008, records state. Ramirez obtained benefits of between $5,000 and $10,000 from the scheme, according to the plea agreement.

The story notes that Lozano also performed construction work for the city of East Chicago during the tenure of its former mayor, George Pabey, who was convicted of charges he used city workers to perform remodeling work on a home he owned and charging the city for materials used in that home. Lozano also appeared as a witness in Pabey's criminal trial. Prosecutors said they would recommend a lighter sentence for Ramirez because of his agreement to cooperate with the government. The charge against him carried a maximum prison sentence of ten years.

IBJ Discloses Depth Of Cozy Relationship Between Bales, Barnes & Thornburg & Top Daniels Administration Officials

BALES' LAWYER CLAIMS STATE APPROVED OF CLIENT'S DOUBLE-DEALING
Folks, fasten your seat belts and get prepared for a wild ride. The IBJ's Cory Schouten uncovered years' worth of e-mails totalling in the thousands that shed light on what is increasingly becoming a major public corruption scandal that could permanently tarnish the reputation of Gov. Mitch Daniels and result in more criminal charges against more very high profile individuals on the Indiana political scene. The U.S. Attorney's Office in the Northern District of Indiana's indictment of top Daniels political supporter, John Bales, for defrauding the state on a lease agreement for state office space in Elkhart, Indiana might just well be the tip of the iceberg to rock the Daniels ship.

What emerges from the e-mails Schouten uncovered is a picture of conscientious state employees raising legitimate concerns about Bales' business practices, only to feel threatened with retaliation if they didn't play ball as Bales demanded. A top official in Gov. Daniels own office, Betsy Burdick, whose brother is a partner at the law firm which represents Bales, Barnes & Thornburg, joined in sending less than thinly-veiled threats to state officials who messed with Bales' business dealing with the state. Check out this example of Burdick intervening on Bales' behalf:

The deputy chief of staff for Gov. Mitch Daniels intervened on Bales’ behalf in late 2009 after officials with the Indiana Department of Administration encouraged the state’s quasi-governmental agencies to hire the real estate brokerage Resource Commercial over Venture.

Venture had offered a lower per-square-foot commission rate, but IDOA officials saw the company's attempts to carve out side deals representing quasi-governmental agencies as a conflict with the state deal. It’s not clear whether Betsy Burdick was aware of IDOA's rationale in recommending Resource.

“I hope what I am hearing is wrong with respect to the way IDOA is doing business here,” Burdick wrote on Aug. 28, 2009. “If this is true it is unacceptable and further discussion needs to take place. If what I am hearing is correct—this is not how we do business.”

According to Schouten, Bales was less than bashful at throwing out big names that he would involve to assist him if state officials didn't do as he demanded of them. "At one point, a deputy to Bales threatened to call in the chair of the Indiana Republican Party and two partners at the powerful law firm Barnes & Thornburg if the state wouldn’t reimburse Venture for disputed expenses," Schouten writes.

Kevin Ober, the Department of Administration’s deputy commissioner at the time, pushed back when Venture sought reimbursement for more than $200,000 in expenses not pre-approved by the state, as required by its contract.

That did not sit well with Venture.

The firm’s chief financial officer, Greg Rankin, responded with an email threatening to seek intervention by Barnes & Thornburg partners Brian Burdick and Joe Loftus or even J. Murray Clark, then the chairman of the Indiana Republican Party. All three have close working ties to Gov. Mitch Daniels, whose deputy chief of staff is Burdick’s sister.

Ober bristled at the name dropping by Bales’ top deputy in an email he sent to his boss, IDOA Commissioner Carrie Henderson, and the chief of staff to Gov. Mitch Daniels, Earl Goode.

Schouten found that Bales was near the center of other embarrassing recent episodes for the Daniels administration for which his role had not been previously disclosed, including the leasing of lavish new office space for the Hoosier Lottery and the growing IURC scandal involving Duke Energy. There's this revelation on the Hoosier Lottery:

In 2010, Venture brokered the deal to move the Lottery into a 35,000-square-foot headquarters at Meridian and 13th streets. Bales earned more than $250,000 in commission on the deal, which ultimately cost Hoosier Lottery Director Kathryn Densborn her job.

She resigned in October amid controversy over lavish fixtures at the new headquarters including an employee gym with $25,000 of exercise equipment.

Bales' commission was based on the project's total value, including the cost of building out the space.

Schouten also learned that Mike Reed, the former IURC Daniels' administration official embroiled in the scandal involving the hiring of the IURC's general counsel, Scott Storms, after he went to work for Duke Energy heading up the utility giant's Indiana operations, played a role in getting Bales to hire a relative.

The hiring process at Venture could move quickly if you were related to a top state official.

In October 2009, then-INDOT Commissioner Mike Reed sent an email to top officials at the state, including IDOA Commissioner Mark W. Everson, touting his son-in-law Ben Jones as a “quality individual” with “a work ethic, maturity and desire to be successful not often seen in younger people today.”

Deputy IDOA Commissioner Rob Wynkoop on Oct. 19 forwarded the resume to Bales, noting “this is Mike Reed’s son-in-law. Not sure if you are looking for anybody like this. Everson asked me to forward it on.”

That was at 2:21 p.m.

At 2:55 p.m., Bales responded: “Hiring him.. Call me”

At the time, one of Venture’s assignments was working with the Reed-led INDOT on the disposition of the agency’s surplus real estate.

At the heart of this week's indictments against John Bales, his business associate Bill Spencer, and attorney Paul Page, is the federal prosecutors' contention that Bales held a financial stake in the Elkhart office building Paul Page acquired with former Marion Co. Prosecutor Carl Brizzi when he was suppose to be working exclusively for the state of Indiana as its real estate broker in the deal. Schouten found e-mails where Mike Huber, now a deputy mayor under Greg Ballard, had raised concerns about Bales' side deals while he was still working at the Indiana Department of Administration.

The records show former Deputy IDOA Commissioner Michael Huber—who joined Bales for happy hour on several occasions and mostly offered support for Venture in emails—at times had reservations about the company’s methods. Huber oversaw the Venture contract from January 2007 to January 2008.

Huber was not pleased, for example, when he heard Venture was pitching the Hoosier Lottery on a tenant-representation agreement outside the purview of its contract with the Department of Administration. The arrangement ran counter to Huber’s mission of consolidating and simplifying the state’s leasing functions.

“I have tried to give your team maximum flexibility and access to the right people throughout state government and want to continue to do so, but we need to make sure that we are on the same page,” Huber wrote in an email to the principals of Venture on Oct. 27, 2007.

Whatever reservations Huber may have had about Bales while working in the Daniels administration, it didn't stop him from hiring Bales' firm for a similar sweetheart real estate deal with the City of Indianapolis after Huber left the Daniels administration to join Ballard's new administration as a top official. Huber was tapped by Barnes & Thornburg's Joe Loftus to join the Ballard administration, who likely ordered Huber to ink the deal with Bales, one of his clients. Loftus, Bob Grand and others at Barnes & Thornburg have dictated to Ballard who is hired for key jobs with the city.

Grand and Loftus, who exercise considerable influence in the Daniels administration, are also paid advisers to Ballard. The law firm firm has been awarded millions of dollars worth of legal work with the city since Ballard took office four years ago. Barnes & Thornburg's clients have also been the beneficiaries of sweetheart deals with the city, including the 50-year parking meter lease with ACS, a firm Barnes & Thornburg has long represented in business transactions with the state and local governments in Indiana. The firm helped lobby the Daniels administration on behalf of ACS to land the controversial welfare privatization deal with FSSA. When the lead partner's contract in that deal, IBM, was nixed by the state, ACS was allowed a continuing contractual relationship with FSSA. Incredibly, Gov. Daniels hired the law firm to represent the state in a lawsuit with ACS's former partner, IBM, despite the firm's obvious conflict of interest.

The City of Indianapolis later cancelled its contract with Bales for failing to perform according to Huber. It is more likely the deal was nixed after the Ballard administration was tipped off that Bales' activities were being investigated by the FBI. Bales is represented by another Barnes & Thornburg partner, former Justice Department prosecutor Larry Mackey, in the criminal case the federal government has brought against him. Naturally, Mackey insists his client is innocent. Given the law firm's ties to the corrupt deal that led to the indictment, federal prosecutors should ask that the firm be disqualified from representing Bales in this criminal case against Bales. At least that's what the rules of professional conduct dictate, but as we've seen with the firm's representation of the state in the FSSA litigation, the rules don't seem to apply where Barnes & Thornburg is concerned. One particularly troubling aspect of Schouten's story is a claim by another Barnes & Thornburg attorney representing Bales, Jason Barclay, that the state gave its blessings to Bales having an ownership interest in the Elkhart office building he brokered for the Department of Child Services after he first disclosed it to them. That contradicts the express terms of Bales' exclusive real estate brokerage agreement with the state.

The e-mails Schouten uncovered showed that Bales' small company was incapable of handling the many leasing matters it had on its plate. One e-mail suggests Bales had involved another firm on his own to aid with his work. Other e-mails show that Bales played hardball with prospective landlords, insisting that he earn 100% of the brokerage commission and not split them with the landlord's broker as is the standard practice when both parties are represented in a leasing transaction by a broker. Bales would tell prospective landlords deals with them wouldn't happen unless they agreed to let him receive 100% of the commission. Quoting a 2008 email exchange between a state official and one landlord: “Requiring us to pay an intermediary that we do not choose or lose the contracts seems like extortion.” Schouten found e-mails where senior administration officials had shared their concerns about Bales with Daniels' top deputies. “I don’t discount the effect hard bargaining can have on one’s perception of the other side,” John Okeson wrote. “That said, how any ‘agent’ of the Governor handles a matter reflects directly on him, so I thought it important to forward what I’m hearing to you for consideration.” Okeson died suddenly a year later after a brief illness. His brother, Paul Okeson, served as chief of staff to Mayor Greg Ballard before joining Ersal Ozdemir's Keystone Construction, which has received a number of sweetheart real estate deals with the Ballard administration, including a controversial parking garage for Broad Ripple that includes a $6.3 million gift of public funds to the company. Keystone and Bales' firm have also partnered on many deals.

Schouten also wonders if campaign contributions have not played a role in Bales' success in landing business with the Daniels administration. Earlier reports suggested Bales had given as much as $31,000 to Daniels' campaign committee. A more thorough research of other entities controlled by Bales reveals that he gave $52,000 from 2003-2008. It once again points up the role Pay To Play has in Indiana. Neighboring Illinois has seen scores of officials and and political insiders prosecuted for honest services fraud and other public corruption crimes by federal prosecutors, while federal prosecutors in Indiana, particularly in the southern district, have seldom brought such cases despite the prevalence of these activities. Many observers were surprised that the indictment against Bales was brought by the northern district's federal prosecutor instead of U.S. Attorney Joe Hogsett in Indianapolis since the state agency involved in the transactions with Bales is located here.

Hats off to Schouten and the IBJ for once again demonstrating to us how good investigative journalism should be conducted.

Marion County Judge Gets Slap On Hand For Improper Campaign Solicitation

The Indiana Commission on Judicial Qualifications has given Marion Superior Court Judge Becky Pierson-Treacy a slap on the hand for sending out an improper fundraising solicitation that suggested those who donated to her campaign would receive favorable rulings from her court. Although the Commission determined that the solicitation warranted a formal disciplinary investigation, it issued an admonition of her instead because she "cooperated", acknowledges "she violated the Code of Judicial Conduct, and apologizes for engaging in conduct unbecoming of a judicial officer." The formal admonition reads:

The Commission admonishes Judge Pierson-Treacy for making inappropriate statements in a campaign fund-raising invitation which was distributed to Indianapolis area attorneys, judges, business persons and other professionals in August 2011. The objectionable material gave the appearance that specific campaign contributions could result in particular rulings.

Notable in the Commission's decision is their determination that the prominent Democratic attorneys whose names appeared on the solicitation had no knowledge of the solicitation's content before its distribution. Judge Pierson-Treacy and her husband, Marion Co. Democratic Party Chairman Ed Treacy, took full responsibility.

Instead, Judge Pierson-Treacy and her husband, Edward Treacy, created the fundraiser solicitation." Specifically, Judge Pierson-Treacy added the legal monikers to the "suggested contributions" section in an effort to make the invitation more interesting. Judge Pierson-Treacy then authorized the distribution of the invitations, and her husband's staff mailed them out.

The Commission's decision noted that the solicitation gave the appearance that "justice was for sale" in the judge's courtroom. Because Judge Pierson-Treacy cooperated in the investigation and acknowledged her misconduct, the Commission says she "will not be formally charged with ethical misconduct."

Taxpayers Continue To Fight Losing Battle Against Ballard's Pay To Play Parking Garage For Broad Ripple

Without any watchog prosecutor looking over their shoulders, the corrupt administration of Greg Ballard is moving full speed ahead with its plan to give $6.35 million to one of his largest campaign contributors, who employs Ballard's former chief of staff, to build a new parking garage in Broad Ripple. A carefully orchestrated public forum on the controversial parking garage deal, which is intended to reward Ersal Ozdemir's Keystone Construction for his generosity to Ballard's campaign, was conducted last night by the Ballard administration. Questions posed by the general public were screened just like the administration does at every Mayor's Night Out event. If the Ballard-appointed moderator doesn't like your question, he tosses it out or rephrases it to the administration's liking to the point the question doesn't even remotely look like the question originally posed by the questioner. WRTV's Kara Kenney, one of the few media watchdogs in the local media, was there to look out for your interests:

Some taxpayers are raising new concerns about Indianapolis' plan for a $15 million mixed-use parking garage in Broad Ripple, claiming the city contributed to the parking problem by granting too many parking variances to businesses.


Taxpayers will pay $6.4 million for the parking garage, 6News' Kara Kenney reported.

"(The parking garage) addresses the symptoms. It doesn't address the root cause of the problem, which is the liberal dispensing of zoning variances over the last two decades," said Clarke Kahlo, of Meridian Kessler Neighbors Helping Neighbors. "That falls squarely in the lap of the city administration over the past two decades."
Kahlo referred to a 2007 study from Walker Parking Consultants that found parking issues arose mostly after 11 p.m. on Fridays and Saturdays. Kahlo contends that the parking garage is not needed.

"If you visit Broad Ripple after about 9 to 10 p.m., it's almost like 'Animal House,'" Kahlo said.

Deputy Mayor of Economic Development Mike Huber said he disagrees with the contention that the parking garage isn't needed . . .

Some attendees questioned the safety of the Broad Ripple Avenue and College Avenue location, while others wanted to know more about the appearance of the garage.


Other questions were similar to those raised by the 6News Watchdogs in a story last month, including campaign donations by the developer to Mayor Greg Ballard, why taxpayers will not share in the revenues of the garage and what some call a lack of transparency.

The city and developer have not revealed the purchase price of the property.

"I feel we're being as transparent as we can for a few reasons. All seven competitive bids are all online," said Huber. "I do feel looking at just the parking revenues the city can collect is short-sighted. We feel it's better if it's privately owned and managed, put back on the tax rolls, because that formula generates more taxes for the city."

Some taxpayers disagreed.

"I think that's very problematic. There's no city control and no city ownership or stake in the project after it's been initiated," said Kahlo.

Conrad Cortellini said the garage will discourage people from walking, biking and taking mass transit to Broad Ripple.

"It's the proverbial putting lipstick on the pig," said Cortellini. "We don't want the pig. Art is not going to make it more acceptable."
"The parking variances is something we definitely need to look at, but it's also something that's been happening over many, many years," Huber said. "What we're trying to do is respond to this need that's existed for a long time within Broad Ripple for a structure."

Kahlo's point about the Broad Ripple parking problem being self-inflicted by city and business leaders is well taken. Fellow blogger Pat Andrews took a look at zoning variances that have been granted in recent years in the Broad Ripple business district that have allowed businesses to open without the required number of parking spaces. She found 7 variances that have been granted just in the last few years that permitted new businesses to open up without providing adequate off-street parking. In those 7 variances alone, a deficit of 226 parking spaces was created within the business district beyond what would have been permitted had the variances not been granted. As we speak, Kilroy's has a plan to open up another bar/restaurant at a busy Broad Ripple intersection that would take dozens more parking spaces out of use.

The City allows new businesses to be established that are not providing sufficient off-street parking and then tells the taxpayers there is a problem they must pay to fix. You are then required to give $6.35 million to one of the Mayor's largest campaign contributors to build a new garage from which he will receive 100% of the economic gain. Indianapolis is the most anti-taxpayer city in America. Ordinary taxpayers are nothing but slaves to an elite group of insiders who line the pockets of the politicians, who then turn around and hand out your taxpayer dollars to them like candy as a reward for their participation in Pay To Play.

The Ballard administration's refusal to release the financial details of Ozdemir's insider deal is an outrage. Even worse is the refusal of the state's Public Access Counselor to force the adminstration to release this information. It claims the information involves trade secrets, but the administration gave the media similar financial information that had been furnished by the other bidders competing for the garage deal without claiming the information was a trade secret. Anyone with a brain could tell you there is absolutely nothing a court of law would ever consider a trade secret in those documents tendered by Keystone Construction. It's total bullshit. They're hiding the information because it proves just how bad this deal is for taxpayers. If we actually had a federal prosecutor in this town who wasn't part of the currupt poltiical culture that runs this city and state, all of these characters would be hauled before a federal grand jury and questioned under oath about how this deal came about to reward one of Ballard's largest campaign contributors with $6.35 million of your taxpayer dollars.

State Election Division Attorneys Offer Legal Memorandum To Help Defeat Ft. Wayne Ordinance

Opponents lobbying to defeat a proposed ordinance in the City of Ft. Wayne to bar city contractors from making contributions to city candidates get more help from attorneys with the Indiana Elections Division. Councilor Tim Pape (D) shared with the Journal-Gazettte's Benjamin Lanka a memo the Elections Division's co-counsel penned against the proposed ordinance:

Dale Simmons and Leslie Barnes, co-counsels for the state division, wrote a four page memo dated Monday providing detailed reasoning for why the proposal does not comply with state law.

"We believe the proposed ordinance unlawfully attempts to exercise the 'power to conduct elections,' which is a power expressly withheld from municipalities by the General Assembly," they wrote. "If this were not so, it would be easy to anticipate the confusion wrought in the administration of elections by numerous and conflicting local campaign finance regulations."

The reasons cited by the election division are similar to those cited by critics since the proposal was first discussed: mainly, state law prevents local communities from enacting their own election or campaign finance restrictions . . .

Pape sent the opinion to Council Attorney Joe Bonahoom and asked for his reasoning to decide the bill was appropriate.

Bonahoom said home rule allows a city to exercise any power not denied by the state. While state law does withhold the power to conduct elections, Bonahoom said this bill seeks only to regulate city contracts, not political contributions.

"This is really an effort to regulate local purchases and local contracts," he said.

Bonahoom said while a judge might disagree with him, generally when there is doubt to whether a unit of government has the authority to regulate an action, the government gets the benefit of the doubt in the matter.

Simmons and Barnes said arguments to characterize the bill as a contract issue instead of a campaign law fail because the bill revolves around campaign contributions and prohibitions, penalties and reporting requirements.

"In sum, the ordinance attempts to alter, supplement and contradict state election law regarding political contributions," they wrote.

Bonahoom said attorneys are notorious for having varied opinions on difficult legal matters, and the state election board has a vested interest in keeping control of all election powers.

"While I respect their opinion, it would seem to me that they have an interest in protecting their sovereign authority based on State law," Bonahoom wrote in response to Pape's request.

It's curious that the State Elections Division has done nothing to nullify a Jeffersonville ordinance enacted in 2006 which limits campaign contributions by city contractors to $200 a year if it believes such ordinances violate state law. It also confirms Secretary of State Charlie White's contention that he really has no power over the State Elections Division to administer election law in this state.

Wyss Fights Ft. Wayne Ordinance Banning Contributions From City Contractors

State Sen. Tom Wyss, not known for supporting ethics reform during his long tenure in the Indiana Senate, is openly opposing efforts by Ft. Wayne City Councilor Liz Brown (R) to ban Ft. Wayne mayoral and council candidates from accepting campaign contributions from city contractors. Wyss asked and received from the Legislative Services Agency and the state elections board opinions stating that the proposed ordinance was not authorized under state law according to the Journal-Gazette's Benjamin Lanka. Wyss, who lives in a home he owns on Indianapolis near northside while representing his Ft. Wayne district in the Senate, is now asking Indiana Attorney General Greg Zoeller to weigh in with a similar legal opinion.

State Sen. Tom Wyss wants Indiana’s attorney general to issue an opinion on the legality of the bill before Fort Wayne City Council that would ban city contractors from making political donations to city politicians.

In a letter dated Thursday, Wyss, R-Fort Wayne, asks Attorney General Greg Zoeller for an opinion on the bill written by Councilwoman Liz Brown, R-at large, just a few days after a divided council voted to introduce the legislation for discussion.

After being contacted by Councilman Tom Didier, R-3rd, about the issue, Wyss said he did some initial investigations to the bill’s legality. He checked with Indiana’s Legislative Services Agency and the state election board, both of which told him the bill is not permitted under state law. The request for an attorney general opinion is intended to help his constituents avoid having to pay to defend a lawsuit if the bill is challenged, Wyss said.

“I don’t want to see taxpayers pay stupid tax money to defend a suit,” he said.

Bryan Corbin, spokesman for Zoeller, confirmed the office’s receipt of the letter but said the attorney general has not yet decided whether to offer a legal opinion on the subject.

He said the opinions are not binding but are given to assist state government clients in navigating their way through complex intergovernmental questions.

Lanka has more on what Brown's proposed ordinance provides:

It would prohibit a company, company owner, company owner spouse, company subcontractor, subcontractor owner or subcontractor owner spouse from doing business with the city if that person made political donations to city candidates or elected officials during the previous year.

A company that violates the proposal would have the opportunity to have the contribution returned to avoid penalty. A company that does not remedy its violation is subject to having its contract canceled and being banned from any city contract for three years.

Opponents have argued that Brown’s bill not only has First Amendment problems but also violates state law that prohibits communities from enacting their own election or campaign finance laws.

In a separate story, Lanka picks up on the fact that another city, Jeffersonville, has had an ordinance on the book for years that severely limits the amount of money city contractors can contribute to city candidates without any legal challenges. Lanka describes the Jeffersonville ordinance that was adopted in response to the influence contributions by city contractors was having over city government:

In 2006, the Jeffersonville City Council approved an ordinance limiting how much city contractors could give to municipal candidates and elected officials. Unlike the Fort Wayne proposal, however, the law does not prohibit such political gifts.

Jeffersonville Councilman Keith Fetz, D-3rd, championed the proposal after noticing a number of no-bid contracts awarded to companies who made political contributions to the mayor at the time.

“We were all concerned it was sending the improper message that campaign contributions equal government contracts,” he said.

The law broadly addresses many areas of ethics, but Section 2.14 deals with contributions to elected officials. It essentially limits contractors who have done business in the preceding four years or are seeking a city contract from donating more than $200 to a political candidate in a year.

Larry Wilder served as Jeffersonville's counsel at the time it enacted the ordinance. He explained how the city carefully crafted the ordinance to lessen free speech concerns:

Larry Wilder, chief litigation counsel for Jeffersonville Mayor Tom Galligan, helped write the bill in 2006 when he also worked for the council. He said giving money to candidates is viewed as a form of free speech, so the city was careful not to ban political gifts outright. The council tried to determine what level of contribution would still be significant to a local race but could not finance it completely, he said.

In the city of nearly 45,000 people, Wilder said, council races can cost as little as $5,000 while mayoral candidates can spend up to $100,000. Fort Wayne’s mayoral race is expected to cost up to $1 million this year.

Wilder said he would be concerned the Fort Wayne law would be challenged because it prohibits all political donations by contractors.

Jeffersonville worked under the premise that the city could pass a law adding restrictions to state law but could not reduce state restrictions. He compared it to the fact cities can lower speed limits on state highways within their limits.

As this blog has pointed out on numerous occasions, Pay To Play is the way of doing business in Indianapolis and throughout the state with few restrictions on who can make campaign contributions. Mayor Greg Ballard receives nearly 90% of his campaign contributions from Pay To Play contractors and their employees. These are the same people who help finance his overseas junkets and provide him free meals,  and free concert and sporting event tickets. Ideally, the state would enact a uniform law that would restrict campaign contributions by government contractors, but the Jeffersonville ordinance is certainly a step in the right direction.

Don't expect any changes in Indianapolis any time soon though. Our City-County Council President, Ryan Vaughn, is a lobbyist for the state's largest law firm, Barnes & Thornburg, that lavishes large campaign contributions on state and local candidates. Vaughn's law firm effectively controls Indianapolis city government by exercising total control over the council's business through Vaughn and through its order-taker mayor, Greg Ballard.

Journal-Gazette Wonders If Campaign Contributions Influence City Government

Politicians throughout Indiana are bought and paid for by a relatively small group of contractors and law firms that receive the lion's share of contracts dispensed by the politicians to their benefactors. Government in Indiana is as corrupt as neighboring Illinois. The only difference is that the corruption that takes place in Indiana is not prosecuted as it occasionally is in Illinois. It doesn't help in Indiana that the news media has proven to be incompetent as watchdogs for the taxpayers. The Journal-Gazette's Benjamin Lanka makes a feeble attempt to discuss the role of pay to play in the Ft. Wayne mayor's race in a story entitled, "Do contractors' gifts taint politics?".

Money influencing politics is nothing new. People have been giving to politicians for centuries.

Yet whether the amount of money given to city politicians is problematic, especially by those seeking to do business with the city, is not an easy question, according to numerous officials.

Some argue the cure is worse than the perceived disease.

All four major mayoral candidates took contributions from people or businesses that also make money from city government, although incumbent Mayor Tom Henry hauled in by far the biggest share . . .

Henry has been successful in raising money for his re-election campaign, thanks in large part to donations given by companies – and their employees – that do business with the city.

Since the start of 2010, Henry has raised $427,750, according to campaign finance reports. A study of those reports by The Journal Gazette showed about 60 percent of that money came directly from firms working for the city or people working for those firms.

While Lanka's story mentions that 60% of his contributions came from city contractors, the story names no names. If you study contributions made to state and local officials in Indiana, you very quickly learn that the bulk of their money is coming from the same group of contractors that receive contracts from Republican and Democratic elected officials alike. So powerful is the influence of these contractors over our elected officials that it is a complete waste of time for ordinary citizens to even discuss matters that bear on these government contractors' business.

Watch any public meeting televised on Indianapolis' public access station, WCTY, and you will constantly see the voices of the public shot down in favor of the ruling class. God bless folks like Pat Andrews for attending Indianapolis city council meetings and asking the right questions, but the points she raises are met with outright lies and deceptive responses from elected councilors and members of the Ballard administration who defend their corrupt actions. Media watchdogs are nowhere in sight to hold them in check. As Andrews speaks, the camera catches the influence peddlers turning up their noses and making snarky comments to one another. They know they've bought the outcome they seek and smugly wonder why any ordinary taxpayer would think their voice could possibly matter in a public debate.

I suppose I should be thankful that at least Lanka and the newspaper that employs him asks the question of whether the contrators' money taints our governmental processes. The Star's editor, Dennis Ryerson, has declared that there is no such thing as pay to play politics and forbids his reporters from writing any stories that question the motives of the contractors who finance our elected officials' campaigns despite the overwhelming evidence of just how much it has corrupted the process. Candidate Greg Ballard four years ago bemoaned the influence government contractors had in helping then-Mayor Bart Peterson raise millions for his re-election. Back then he had to scrape together a couple of hundred thousand dollars from individual citizens who were concerned about the direction of city government. Today, he sits on a multi-million dollar campaign war chest financed almost exclusively by the same contractors who were financing his opponent's campaign. Are we to believe those people who found him so objectionable four years ago now favor him for any reason other than the fact that he's the one passing out public dollars to them?

A Case Of Actual Mortgage Fraud

For the benefit of the special prosecutor in Charlie White's case who seems to have a creative imagination of what constitutes mortgage fraud, I point to a case of a condo-flipping transaction involving federally-financed affordable housing dollars and a congressman's daughter in Chicago as Exhibit A. From the Sun-Times:

In 2008, a 25-year-old man named Volodymyr Kuchmiyov — a Ukrainian living in Chicago on a student visa — took out two mortgages totaling $675,000 and bought a couple of brand-new condos in a building on the city’s Northwest Side.

Now, Kuchmiyov is enmeshed in a mortgage-fraud case that federal authorities brought after a Chicago Sun-Times investigation last year revealed that a Chicago congressman’s daughter bought an “affordable housing” unit in the same development — even though she and her husband were making more than $90,000 a year. She then flipped the condo at a profit of 55 percent — after owning it for 14 months.

According to the FBI, Kuchmiyov was able to qualify for his bank loans by lying about his income, falsely claiming he was a U.S. citizen and failing to disclose his ownership in both properties.

Kuchmiyov, now 28, was arrested last Nov. 18. He is expected to be indicted this summer as part of a broader federal investigation of mortgage fraud, according to court records and interviews.

Kuchmiyov bought the two condos in a four-unit development built in Humboldt Park by a man named Roman Popovych, who got the zoning change he needed to build the project by agreeing to set aside one of the condos in the complex as an “affordable” unit that would be sold at a deep discount. That was a requirement set by then-Ald. Billy Ocasio (26th), who, as the local alderman, wielded great authority over the zoning change Popovych needed.

Popovych got the zoning change and eventually sold the discount-priced condo to Omaira Figueroa, the daughter of Ocasio’s political mentor, U.S. Rep. Luis V. Gutierrez (D-Ill.).

Figueroa bought the two-bedroom, two-bath condo for $155,000. She took out a $140,000 loan, at 4.75 percent interest, from her parents — the congressman and his wife — in June 2008 to pay for it.

Little over a year later, Figueroa sold the condo for $239,900 — $84,900 more than she’d paid to buy it.

The 55 percent profit that Gutierrez’s daughter turned by flipping the condo was one of a handful of affordable-housing deals uncovered by the Sun-Times that city officials said appeared to be not in line with the aim of the program. The city’s housing department asked city Inspector General Joseph Ferguson to investigate the deals, asserting that affordable housing should be reserved for “moderate-income” buyers. When Figueroa bought the condo, she and her husband were making more than $93,000 a year from their government jobs — she with the state, he at the city Aviation Department.

Figueroa, Gutierrez and Ocasio haven’t been charged with any wrongdoing. The only person involved in the condo development at 1834 N. Kedzie who’s accused of any crime is Kuchmiyov.

The FBI and U.S. attorney’s office in Chicago declined to comment on the case, as did Ferguson’s office . . .

Kuchmiyov appears to have had ties to Roman Popovych beyond buying the two condos from him, according to government and court records and Kuchmiyov’s lawyer, DiNatale, who says it’s his understanding that his client once worked for Roman Popovych’s development company, which is called V.P. Interlink.

“I believe he worked there some time back,” DiNatale says, adding that, at the time, “He was going to some business college, trying to learn real estate and investment.”

Also, Kuchmiyov, who is a licensed notary public, notarized documents regarding a property transfer in June 2010 between V.P. Interlink and Bogdan Popovych, who’s listed in state records as an employee of V.P. Interlink.

Gutierrez and Ocasio have both said that the sale of the discount-priced condo to Figueroa was properly handled.

Six months before Gutierrez’s daughter bought the condo, his congressional campaign fund received a $1,000 contribution from Roman Popovych, records show.

Ocasio’s aldermanic campaign fund got $13,500 in contributions between 2004 and 2009 from Roman Popovych and V.P. Interlink.

Ocasio left the Chicago City Council in 2009 to take a $125,000-a-year state job as a senior adviser to Gov. Pat Quinn on social justice issues. He left that job last month for another post in state government, as the $110,000-a-year director of community affairs for the Illinois Housing Development Authority, which finances affordable-housing projects.

Ocasio says he has never met Kuchmiyov or spoken with Popovych since last year’s Sun-Times reports. And he says federal authorities haven’t contacted him about the condo development.

Gutierrez’s press secretary, Douglas Rivlin, says “neither the congressman nor anyone in his family has been contacted regarding” 1834 N. Kedzie.

Yep, the Chicago media is heads and shoulders above the Indianapolis news media when it comes to uncovering fraud being carried out daily by elected officials to line their own pockets. It actually requires investigative journalism work, something that is foreign to the many of the media in this town, particularly those who work for the Indianapolis Star. According to the Star's executive editor, Dennis Ryerson, there is no such thing as Pay To Play much to the delight of the political insiders who are becoming multi-millionaires from insider deals financed with your tax dollars.

Broad Ripple Parking Deal Partner Paid By City To Prepare Parking Study

A company that is part of a partnership that was awarded $6.35 million in taxpayer dollars by Mayor Greg Ballard to develop a $15 million parking/retail structure for Broad Ripple Village was hired by the City of Indianapolis' Bond Bank in 2007 to prepare a parking study. The findings of a study prepared by Walker Parking Consultants actually undermines the arguments the Ballard administration presented earlier this week in explaining why taxpayers would be funding 42% of the privately-developed project. In announcing the deal, Mayor Ballard, City-County Council President Ryan Vaughn and Village board member Tom Healy touted the deal:

"Broad Ripple Village has long needed a garage of this magnitude to alleviate parking issues and allow for implementation of a residential parking permit system on neighborhood streets," said Mayor Ballard. "Visitors to the Broad Ripple area will have a safe, secure, well-lit area to park their cars, while residents and their guests will more easily be able to find on-street parking near their homes."

"The City of Indianapolis received several proposals for this project and found this proposal offered the best solution to address the Broad Ripple Village's needs for daily and monthly parking," said Council President Vaughn. "We have worked with the Broad Ripple Village Association and other partners over several years to arrive at a plan that offers great retail space that will be an additional amenity for the community."

"This high-performance mixed-use structure will transform an eyesore into an asset and stimulate much-needed infrastructure improvements," said Broad Ripple Village Association Board Member Tom Healy. "We look forward to working with the developers and the City to create a dynamic Village gateway."

Walker's 2007 study actually criticized the proposed site of the parking/retail structure in recommending the construction of a parking garage to address parking issues in Broad Ripple Village. Surprisingly, the study found that there was no shortage of parking in the Village. What it found was that within a relatively small portion of the Village at some peak times demand for parking forced visitors to walk less than ideal distances to their destination after finding a suitable parking space. Pat Andrews succinctly summarizes that finding at her blog, "Had Enough Indy?":

PARKING SUPPLY - the study concluded that of the 40 blocks of Broad Ripple Village, parking was adequate for almost all areas, at most times of the day, night, and week, in 2007 and as projected into the future. There were 16 blocks that were shown to exceed 85% capacity at 11 pm on weekends. A particular 6 block area was calculated to have a deficit of 132 parking spaces at 11 pm on weekends (adequate at all other times) and projected to have a deficit of 180 parking spaces at 11 pm on weekends in the future.

The Walker study suggested a parking structure in the area of the proposed site to address the shortage of parking spaces during the peak period of demand for the heart of the entertainment area within the Village. Walker preferred a parking garage be built behind the Vogue, although it acknowledged the site chosen for this week's announcement at the corner of College and Broad Ripple Avenues as an alternative site. The report explains why it preferred a parking garage of approximately the same size as being proposed today at the site behind the Vogue nightclub:

Site A is an odd-shaped corner parcel that once served as an active gas station. This site is currently blocked off and not used as for any particular purpose. The location is less than ideal for parking, as patrons would have to cross College Avenue to reach the main entertainment area of Broad Ripple, and the odd shape does not provide the most efficient area to layout a parking. We estimate 102 spaces could fit on the site based on 400 square feet per space. The site measurement and assumptions are shown in Figure 7. Because this site does not provide sufficient space, and is most likely not the best use for this prime location, we do not recommend developing permanent parking on this site.

Site B is located in the parking lot behind the Vogue nightclub and west of Carrollton Avenue. The dimensions of the potential parking structure are 125’ x 216’. Based on 360 square feet per space, we estimate 75 spaces per level could be added on this site. The site measurement and assumptions are shown in Figure 8. The site would displace about 95 existing spaces. A four level parking structure with 300 spaces would effectively add about 205 spaces due to the displacement of existing surface spaces. The structure would have a height of about 48 feet for elevator and stair towers.

That's not all that is troubling. The study suggested a parking garage of this size would cost approximately $4.5 million excluding land acquisition and demolition costs as opposed to the $15 million structure being proposed today. Andrews summarizes:

COST OF CONSTRUCTION - the study noted the rising cost of concrete and cost of construction of parking garages over the previous 4 years, rising about 17% over that time span. They concluded that it would cost $4.5 million to construct a 4 story, 300 space, parking garage. They note that additional spaces would cost $21,878 per space. Using that figure, a 350 space garage would come to $5.6 million - not including acquisition of land or demolition costs.

Pat Andrews' research also uncovered the fact that the owner of one of the lots being used for the project is owned by an entity known as "6286, LLC." The agent for this entity is listed as J. Todd Morris, who coincidentally is listed as the "Parking Manager" for Newport Parking, one of the partners in the city-awarded deal headed by Keystone Construction, which is owned by a large Ballard campaign contributor, Ersal Ozdemir, who employs Ballard's former chief of staff, Paul Okeson.

What is particularly bothersome is the City's refusal to produce to the public the construction and operational costs each bidder was required to submit in response to the City's Request for Qualifications for the project. "My request was denied with the citation of an Indiana State statute that trade secrets may be held from public disclosure laws," Andrews writes. "I will, of course, take this up with the Indiana Public Access Counselor's office later this morning," she adds. The public must demand this information. It's total bullshit for the Ballard administration to withhold this information when it expects taxpayers to finance 42% of these private developers' project. What's really sad is that it takes bloggers to request this information because the media in this town could give a damn less. They can only repeat verbatim the talking points of the self-serving proponents of this deal and editorialize in favor of it.

I also heard nothing in the media to suggest there were any competing proposals considered by the City. Is this like so many of the bidding opportunities in this state and city where the word leaks out on the street well in advance who has the inside track on the bid so nobody else wastes their time submitting proposals? It's all about Pay To Play. I'm telling you that there is no better place in America to do business if you are a crook. Our politicians are all for sale, and there is absolutely nobody but the foxes guarding the hen house. To hell with Chicago. C'mon down to Indy where the red carpet is rolled out for every sleazebag willing to stuff the politicians' pockets with money. 

UPDATE: WRTV's Kara Kenney had a good report during the 6:00 p.m. newscast Friday night examining the deal from the standpoint of taxpayers, which included interviews with Democratic council candidate Zach Adamson and me. Kenney hit on the Walker study's findings, the gift of more than $6 million to the private developers without any financial return to taxpayers and the mayor's ties to the lead developer, Ersal Ozdemir of Keystone Construction. She pointed out Ozdemir had contributed more than $25,000 to Ballard's campaign committee and hired the mayor's former chief of staff, Paul Okeson, in a top position with his firm. I'll provide a link to the story when it's made available on WRTV's website.

 

Here is the text of Kenney's story on WRTV. The video can be viewed here.

 

A $15 million plan for a mixed-use parking garage in Broad Ripple raised questions among some community members who said private interests were being put before the public.

Taxpayers will be expected to foot the bill for $6.35 million of the project at the southwest corner of Broad Ripple and College avenues, but won't they share in any of the parking revenues generated from the garage, 6News' Kara Kenney reported.

Gary Welsh, an attorney and political blogger, said that taxpayers should get a cut of the million-dollar investment.

"The city's not going to get any return on that investment in terms of a share of the proceeds and has no ownership," Welsh said. "The city should have used that money to own and operate its own parking garage and return those benefits back to the public at large."

Zach Adamson, a candidate for city-county council, agreed.

"I do think if the taxpayers are footing the bill we should get at least a portion of those revenues to benefit the taxpayers," Adamson said.

6News found a 2007 study by Walker Parking Consultants that called the site "less than ideal for parking, as patrons would have to cross College Avenue to reach the main entertainment area of Broad Ripple."

The Walker study suggested a parking lot behind the Vogue nightclub and west of Carrollton as a better option.

Records show Keystone Group LLC, the developer selected to build the garage, donated at least $28,000 to Mayor Greg Ballardin 2008.

"It doesn't pass the smell test when you have someone who has given that much money to the mayor," Welsh said.

6News also learned Paul Okeson, Ballard's former chief of staff, is the vice president of business development for Keystone.

The city chose Keystone Group LLC, Walker Parking Consultants, Keystone Construction Corp., Newpoint Parking and RATIO Architects as the winning bid out of seven proposals.

Ballard was out of town on Friday, so 6News' Kara Kenney met with spokesman Marc Lotter, who said money and connections had nothing to do with the winning bid.

"Absolutely not," Lotter said. "They were evaluated by a community group. Of the seven proposals, you look at this one and it required the least amount of public dollars and did not require a tax abatement."

Lotter explained that a public-private partnership is in the best interest of taxpayers because private companies will assume the risk for the new parking garage.

"This is a project that's been talked about in Broad Ripple for more than 30 years and has not been able to get off the ground because of the financial burden," Lotter said.

Lotter also said the new parking garage will contain retail, which means it needs to be near foot traffic.

"It's my understanding the (Walker) study in 2007 was looking at a parking garage only," Lotter said.

Even though the city won't share in the revenues generated from the garage, Lotter explained the city will maintain oversight over the parking rates charged to drivers.

The $6.35 million provided by the city will come from proceeds as part of the city's privatization of parking meters by ACS Parking, which must be used to fund infrastructure projects in the downtown, Mass Avenue and Broad Ripple areas.

Adamson works downtown and said he hopes the Broad Ripple parking garage and ACS deal are not a trend.

"I hope when they do parking structures downtown, we don't find ourselves in a similar deal," Adamson said. "That's my fear: we're seeing this pattern start to evolve."

A public hearing will be held July 19 at 7 p.m. at the Indianapolis Art Center, 820 East 67th Street.

Construction on the new parking garage is scheduled to begin in the fall and wrap in 2012.

 

 

Ballard Giving $5 Million To Another Private Developer

It's an election year and city tax dollars are flowing straight into the pockets of the fat cat political contributors that are financing Mayor Greg Ballard's re-election campaign. Earlier this year, it was nearly $100 million for the North of South development. Monday it was $6.35 million for a new parking garage in Broad Ripple Village. Yesterday, it was exclusive towing contracts for politically-connected towing operators. Today, it's $5 million for new apartments at the site of Bush Stadium, the former home of the Indianapolis Indians. From the IBJ:

Officials said a final agreement is near for the redevelopment of the historic Bush Stadium site, which is wedged between 16th Street and the White River near Harding Street.

Developer John Watson will build 268 units around the stadium façade, which will be preserved, and near the baseball diamond where the Indianapolis Indians played until 1996. Rental rates for the units will range from $480 to $1,400 per month. The project is expected to be complete by August 2013.

The city is contributing about $5 million to the $23 million project, including tax dollars generated in the area and more that will be transferred from the consolidated downtown tax-increment financing district. Watson said he also is seeking a federal loan to help finance part of the project.

Indianapolis also will invest another $2.7 million in public money to renovate Indiana Avenue from roughly 10th Street to 16th Street with new landscaping, walking paths, bike lanes and other streetscape elements designed to brand the area. That funding will come from initial proceeds from the sale of the city’s water and sewer utilities to Citizens Energy Group.

Note that funding for the give-away includes money "that will be transferred from the consolidated downtown tax-increment financing district." Yes, it comes from the Mayor's slush fund. The developer also plans to tap the federal government for funding as well. I'm betting he lands a 1% loan to finance what part of the project taxpayers aren't paying for locally.

More than $5 billion of assessed value in the city has been taken off the tax-producing rolls for other units of government and earmarked specifically for slush funds operated by the Mayor. This slush fund is supposed to be used exclusively on projects within the downtown TIF district, or so we're told when people wondered why Ballard could tap a downtown TIF fund to help fund the CIB's $33.5 million give-away last year to the billionaire Simon's Indiana Pacers but not share any of the money with IndyGo or the libraries. Now the CIB is flush with funds and is even picking up the cost of more capital improvement costs at Conseco Fieldhouse that are supposed to be paid by the Pacers than was included in last year's $33.5 million deal. That little detail seemed to slip the attention of reporters covering this week's CIB meeting. And Ballard has plans to add even more TIF districts throughout the city to further enlarge the size of the slush funds available to give away to fat cat contributors, while other taxing districts, including schools, are pressed for funds as more and more of the tax base is removed from their reach.

Years ago, politicians would be sent to prison for looting the public treasury in this fashion to reward political contributors. In Indianapolis, it has become an accepted way of conducting business. Even the news media pats them on the back for enriching their political friends while raping the taxpayers. Until you stand up and demand changes, it's only going to get worse. We truly are being governed no better than a banana republic in a third world country.

Commissioner Who Took Free Flight From DLZ: "I Goofed"

A Porter County Commissioner who accepted a free plane ride from DLZ for herself and her husband to a Republican state fundraising dinner in Indianapolis featuring First Lady Cheri Daniels as the speaker is now admitting she made a mistake and will reimburse the politically-connected engineering/consulting firm for the cost of the trip. From the Northwest Indiana Times:

Porter County Commissioner Nancy Adams said she intends to reimburse the DLZ engineering firm for a flight she accepted last week to a Republican dinner in Indianapolis.


"I goofed, and I'm sorry," Adams said.

Adams confirmed for The Times earlier this week that she and her husband accepted the free flight May 12 with the intention it would save her time over driving and not interfere with several county-related meetings she had that day and Friday.

She said she thought she was avoiding any problems by paying for her own tickets to the dinner. She said Wednesday that DLZ had yet to provide her with a dollar amount for her share of the flight.

Adams said she was unaware the county personnel policy manual prohibits elected officials from accepting and donors from offering any gift, favor, service or entertainment under circumstances in which it can be reasonably inferred the gift would influence special consideration by the official.

She said it would be helpful if newly elected officials like herself were provided early on with these types of guidelines.

Adams is complaining that she wasn't provided guidance "early on" about accepting gifts from county countractors? It would be nice if elected officials had the common sense not to accept freebies from government contractors without having to be told. The Northwest Indiana Times pointed out that DLZ received the largest individual share of consulting fees from Porter County last year.

DLZ And Its Pay To Play Ways Strike Again

In my various reports on "Pay To Play Is The Ballard Way", I've noted one of the largest Ballard contributors has been a minority-owned engineering/consulting firm, DLZ. This is the same firm that federal investigators in Illinois subpoenaed in its ongoing investigation of Pay To Play corruption in Illinois. The firm lavishes campaign contributions to politicians all over the state of Indiana. Last week, the firm flew Porter Co. Commissioner Nancy Adams (R) and her husband to the state GOP dinner to hear First Lady Cheri Daniels speak. The Northwest Indiana Times Bob Kasarda reports on the free plane ride for the county commissioner:

The engineering firm of DLZ flew newly elected Porter County Commissioner Nancy Adams and her husband to a Republican dinner last week in Indianapolis.


Adams said she and her husband paid for their own tickets to the dinner, but did not reimburse the company for the flight, which also included a mayoral candidate from Mishawaka.

Adams said the flight, gifted by the top paid consultant of Porter County government last year, will in no way influence her decision making.

She said she opted to take the company up on the offer because the Thursday flight was much quicker than driving, which allowed her to attend county-related meetings both that day and Friday. She also felt it was important to attend the event to get to know others downstate, who she will need to rely on to get things done on behalf of the county.

DLZ Indiana President Brian Glaze did not return calls for comment.

The county personnel policy manual prohibits elected officials from accepting and donors from offering any gift, favor, service or entertainment under circumstances in which it can be reasonably inferred the gift would influence special consideration by the official.

Adams took office at the start of this year and thus was not part of the decision making that resulted in DLZ receiving the largest individual share of consulting funds last year from the county at $616,499.

Adams said she and the other two commissioners have made a point to share county work with many consulting firms.

She referred to the $20 million drainage project, where $680,000 in planning and engineering work was recently awarded to four area firms. DLZ was selected as the program manager and to take on a large amount of the work.

Cheri Daniels, wife of Indiana Gov. Mitch Daniels, was the featured speaker at last week's GOP fundraising dinner in question.

Professional Fees For Parking Meter Lease Deal Cost Taxpayers Nearly $3 Million

It's always the driving force behind these deals. The only way the pay-to-play insiders can make big money off representing government is to convince corrupt elected officials to undertake one-sided deals that screw over taxpayers as an excuse to bill hefty fees they earn for carrying them out. The one-sided parking meter lease deal the Ballard administration entered into with ACS was no exception. Fees for that deal reached nearly $3 million, or about 15% of what the city received in the form of an upfront payment for the deal. The Star's Jon Murray breaks the fees down as follows:

• $1.9 million to Morgan Stanley for financial services;
• $950,000 to Ice Miller for legal services; and
• $109,000 to Hirons & Co. for public relations.

A public interest group in Washington was critical of the Ballard administration's decision to use Morgan Stanley because of its role in other parking meter deals around the country. "The company is one of the primary investors in the Chicago deal and stands to gain from the deals they advise on," PIRG's Phineas Baxandall noted in a report it released on the deal. "That is a clear conflict of interest." On the lease agreement drawn up by Ice Miller, the Urbanophile's Aaron Renn noted it was essentially a "cut and paste" job lifting heavily from the lease agreement the City of Chicago used for it long-term parking meter lease. Murray's story omits the real reason Hirons & Co. was paid $109,000 a year to work on public relations for the deal--the firm's owner hired Mayor Ballard's son a short time before he awarded the no-bid contract to the firm. Ballard similarly awarded an even larger no-bid contract to Hirons for work on the Citizens Energy deal for the water and sewer utilities. The Star, like the rest of the news media in town, continues to ignore the fact that ACS installed used electronic parking meters combining old city assets with used assets owned by the company in only the high volume areas to allow the private vendor to start raking in its fees as opposed to new, state-of-the-art technology promised when the deal was approved. Nobody in the media has yet to report on the role Pay To Play has in deals undertaken by this administration on so many fronts to the detriment of city taxpayers.

North Of South Deal: The Fleecing Of Indianapolis Taxpayers

The IBJ's Cory Schouten has a must read story in this week's edition on the North of South deal the Ballard administration recently negotiated that is being entirely financed by taxpayers with zero risks to the private developer and a side windfall for Eli Lilly. It's an analysis that should have been undertaken by the City-County Council and laid out in plain and simple terms for all to understand and absorb before taxpayers were asked to be put on the hook for $116 million in investments--more than the $98 million bond deal that taxpayers were told about. There is no other city in America where such a deal could have been brokered that so royally screws taxpayers to enrich pay to play political insiders.

As Schouten explains, Indianapolis taxpayers are acting as a private lender by issuing bonds totalling $98 million to help finance the project. In addition, city taxpayers are providing an additional $9 million in infrastructure improvements for the project, while state taxpayers are kicking in another $6 million. The politically-connected developer, Buckingham Properties, which is owned by Brad Chambers, is contributing nothing to the deal even though he will wind up owning 100% of the project at the end of the day if the deal is succcessful.

Of the $98 million in bonds being issued for the deal, only $86 million is going directly into the project. The other $12 million is needed to pay the fees to the pay to play attorneys and investment bankers for their cut of the deal and the cost of pre-paid interest on the borrowed money while the project is under construction. Buckingham is credited with an initial $7 million equity interest in the deal for being so kind as to waive to "waive development fees" for a project totally financed with your money. Oh, and Chambers will be able to sell off components of a deal in which he invested no money to other investors as the project proceeds with all of the profits going to him, even if other components of the deal fail.

And guess who the city hired to watch over Buckingham? Keystone Construction. That would be the politically-connected minority-owned contracting firm that has pumped tens of thousands of dollars into Mayor Ballard's campaign committee and hired Ballard's former Chief of Staff Paul Okeson in a high-paid position to make this deal and others happen. Gee, I wonder what Paul's cut of the deal is? Former Marion Co. GOP Chairman Tom John, an Ice Miller lobbyist, was paid to lobby the deal on behalf of Buckingham.

Eli Lilly is credited with being the driving force behind the deal because of its desire to have the new amenities offered by the mixed use development project near its downtown corporate campus. Taxpayers were told $15 million was being pumped into the deal by Lilly, but as Schouten discovered, that's a pretty illusory investment when you cut through the complicated paperwork behind the agreement. The $15 million supposedly represents the shortfall Lilly has paid over the years after city and state officials granted the company hundreds of millions of dollars in tax incentives to make approximately $1 billion in new investments at its Indianapolis facilities. Part of that agreement, as Schouten explains, required the City to give Lilly part of Kentucky Avenue and make another $36 million in road improvements. In consideration for the City's gift to Lilly, the company promised to invest at least $189 million in its Harding Street facility, an investment Schouten says Lilly assured the city it had exceeded.

So why was there a shortfall? Despite the claim Lilly made $357 million in investments, property taxes generated from the new improvements were insufficient to cover payment on the bonds issued to cover the improvements made by the City. “Assessed values used in the forecast and the ultimate values were different,” Lilly's vice president of taxes David Lewis told Schouten. As part of the deal, Lilly has graciously agreed to let the City off the hook for the money it kicked in to pay for improvements that exclusively benefited the company. Yet the City still owes $44 million on those $36 million in road improvements it made more than a decade ago and is scheduled to make bond payments through at least 2024 according to Schouten. No longer will the City have Lilly as a backstop to make up the shortfall in bond payments as it has in the past. Do these deals leave yourself asking who in the hell is at the table representing taxpayers' interests?

The deal was so bad from the standpoint of taxpayers that even Democratic mayoral candidate Melina Kennedy, whose former boss Mayor Bart Peterson helped broker the deal and who had her hand in his administration making her fair share of one-sided deals to benefit Peterson's buddies, including Kite's Conrad Hilton and the Simons corporate headquarters, winced upon being apprised of the details. “Certainly, the actual development itself will be positive for downtown, but I believe some of the negotiating on the city’s behalf wasn’t as aggressive as it should have been to protect the taxpayers,” she said. Lest I forget to mention the 2,000 free parking spaces that are still owed to Wellpoint for graciously agreeing to build its corporate headquarters downtown. The displacement of parking spaces for the North of South development will have to be made up elsewhere--on your dime, of course.

Taxpayers are being fleeced, plain and simple, for a project that offers no clear benefit to the public, said Julia Vaughn, policy director for the government watchdog Common Cause Indiana.

If North of South really were such a certain success, the developers should have been willing to part with some of their own money to help finance it, she said.

“It really shows what the city’s priorities are,” Vaughn said. “We’re going to help out a private developer and one of the largest pharmaceutical companies in the world, yet we’ve got a second-rate public transport system, infrastructure is falling apart, neighborhoods have so many needs. But apparently the checkbook is open if you’re the right corporate citizen.”

The arrangement sounds like the deal between the city and the Indianapolis Colts that paved the way for Lucas Oil Stadium, said Gary Welsh, author of the cantankerous political blog Advance Indiana.


The city under former Mayor Bart Peterson credited the Colts with contributing about $100 million toward the stadium, but the claim was disingenuous at best: The team had simply agreed to waive the lease-termination fee on the RCA Dome in exchange for a state-of-the-art new stadium.

Welsh’s problem with deals like North of South is that they prevent property taxes collected downtown from going to anything other than new downtown projects, to the detriment of neighborhoods and schools.

“They always make those deals so complicated, deliberately so, to confuse people and make it seem like money is coming out of someone’s pocket that it really isn’t,” Welsh said.

But for Buckingham and Lilly, North of South makes perfect sense.

The public owes a debt of gratitude to Schouten for taking the time very few reporters in this town will take to get to the bottom of these matters. My only disappointment is that we did not have the benefit of this kind of analysis prior to the approval of the deal. As with all of these deals, the City plays hide the ball with all the facts and figures until the ink has dried and it's too late to undo a deal that once again screws the taxpayers in order to enrich a handful of political insiders. These insiders laugh behind our backs. They can't believe how stupid our elected officials are in this town, and how easy it is to slip money in their pockets and pull off these deals that make them tens of millions of dollars at the expense of taxpayers. Let the word go out to all of America. Indianapolis is the place to do business if you're corrupt. The politicians can be bought cheap, and the haul at the end of the day is well worth the investment. As an added benefit, there are no prosecutors looking over your shoulder because they are always in bed with the people doing the deals. Immunity from prosecution. You can't beat it.