Why Todd Young Will Stay On The Ballot: Election Laws In Indiana Always Applied Arbitrarily

Here's why Todd Young won't be tossed from the Indiana Republican primary ballot for U.S. Senate. Indiana election laws have never been applied uniformly. Indiana has an onerous requirement that candidates for statewide office like U.S. Senator or Governor obtain a large number of signatures from registered voters in each of the state's nine congressional districts--500 in each--as a way of limiting access to the ballot to eliminate competition.

In 2008, a Democratic political blogger counted the valid signatures filed by Sen. John McCain to run in the Indiana primary. Thomas Cook, who is now chief of staff to Mayor Joe Hogsett, discovered McCain had collected only 498 signatures in the 4th congressional districts. When the four-member Indiana Election Commission met to hear his arguments, the commission's staff said it had two separate tallies for that district, both of which were more than 500. One count found 511 signatures while the other found 514. The media fawned all over Cook, who was a law student at the time, for a job well done as the election commission nonetheless decided on a 4-0 vote that McCain would stay on the ballot.

What political insiders knew at the time but didn't tell anyone was that Democratic operatives had forged dozens of signatures on Barack Obama's petitions in the 2nd District. If those forgeries had been revealed to the Commission as members of both parties knew about at the time, Barack Obama would not have been on the Indiana ballot, all of the attention Indiana got during the 2008 Democratic primary contest between Hillary Clinton and Obama would not have occurred and Clinton, not Obama, would have been the 2008 Democratic presidential nominee. Also, recall that Republican leaders in this state trashed this blogger and anyone else who questioned Obama's eligibility to run for U.S. president because he had not demonstrated that he was a natural born citizen as our constitution requires.

A couple of years later when the dust had settled, someone hands off the story of the forged signatures to an up-and-coming cake boy named Ryan Nees, who became an overnight media sensation when his supposed independent investigation revealed the forgery scandal that would take down the long-time St. Joseph Co. Democratic Chairman and Second District Chairman Butch Morgan and four other political operates in South Bend on forgery charges, all five of whom were found guilty. Nees went on to intern for Sen. Richard Lugar's Foreign Relations Committee and the Obama White House before earning a degree from Yale University in political science and landing a big job as a New York investment banker. Nees, incidentally, came out of the closet the same week South Bend Mayor Pete Buttigieg, also a former investment banker and CIA intelligence asset, revealed he was gay. The countdown has already started for when Nees receives instructions to return to Indiana to run for political office. And Butch Morgan still hasn't figured out that his own fellow Democrats sold him down the river.

Let's move forward to the 2012 Republican primary contest for governor. Mike Pence, the candidate anointed by the Republican Party establishment, was facing a challenge by a wealthy Fishers businessman, Jim Wallace. Mitch Roob, a political crony of Mitch Daniels challenged the petition signatures obtained by Wallace in Marion County's 7th District. Wallace submitted 1,282 signatures, but the Marion County Clerk's office claimed they were only able to match 486 signatures to the registered voter database, leaving Wallace fourteen signatures shy of what he needed to make the Indiana ballot. The commission voted 3-1 to toss Wallace off the ballot. Wallace is seeking to run against Pence again this year as a Libertarian candidate.

Bear in mind who Todd Young is as we take up the challenge to his petition signatures. He is married to the niece of former Vice President Dan Quayle. He's a military intelligence asset, having graduated from the U.S. Naval Academy (like Jim Wallace), attended naval intelligence school and obtained a top security level clearance. He worked in counter-narco intelligence in the Caribbean and was trained in anti-terrorism before earning an MBA at the University of Chicago. After leaving the military, he was sent to London where he says he advised former British Prime Minister Margaret Thatcher at the University of London's Institute of U.S. Studies. He's then sent on some duties, presumably for the CIA, to former communist countries in Eastern Europe to advise on transitioning to free market economies. He comes back to Indiana, worked for South Bend-based Crowe Chizek as a management consultant before earning a law degree from IU School of Law in Indianapolis. He briefly works for Tucker & Tucker in Paoli, the law firm of Marilyn Quayle's brother, before running for Congress in Indiana's 9th District as a virtual political unknown and winning handily.

Todd Young has never had trouble raising big bucks. If you check out his campaign finance reports, all of the folks tied to the military/industrial complex and the rigged financial system drop large amounts of money in his campaign committee. They've already invested more than $3 million in his campaign to become Indiana's next senator. He is their choice to represent you in Washington. The Indianapolis Star, a Gannett newspaper run out of Langley, Virginia, has already been downplaying this ballot access story. The newspapers's political columnist, Matthew Tully, already lashed out at Indiana Democrats for filing the challenge, calling it "petty" and saying it makes them look "scared." It's funny that I don't recall him reacting the same way to Mitch Roob challenging Jim Wallace's petitions in 2012 and getting him tossed from the primary ballot. So you see they're already circling the wagons for their preferred candidate.

Here's what will happen in Todd Young's case. The election commission staff certified 501 signatures. The Democrat hand count found only 498 valid signatures. Four news services counted the signatures and came up with 497. The election commission will meet later this month and hear the complaint. Republicans will say the election staff's count should prevail, one or two of the Democrats will argue the other way, and at best what you'll get is a tie vote, allowing Young to remain on the ballot. Indiana election laws are always applied arbitrarily. If they decide you're an outcast or must go, like they did with Charlie White, laws will be interpreted in ways they've never been interpreted to destroy your career. If you're approved by the establishment, anything goes when it comes to advancing your political career. The political system, just like the financial system, is rigged in this country if you hadn't forget that out by now.

Rules are rules, so we will see what happens. But I think the Democrats look petty and scared by doing this. https://t.co/7f9gU1PvC7

— Matthew Tully (@matthewltully) February 10, 2016

UPDATE: Some lawmakers, including Young's representative from Bloomington, State Rep. Jeff Ellington, and Senate President Pro Tem David Long, who supports Stutzman, now favor changing the law to make ballot access easier in Indiana according to the Indianapolis Star. House Speaker Brian Bosma opposes the idea, blaming Young's campaign for cutting it too close.

Jim Wallace Exploring Primary Fight Against Pence

Ed Feigenbaum is reporting in his subscription-based Indiana Legislative Insight that Fishers businessman Jim Wallace is exploring another primary bid against Mike Pence in next year's gubernatorial race. According to Feigenbaum, Wallace has been in the field polling to gauge support in the event he decides to take the plunge and go forward with a campaign to defeat Pence in next year's primary.

Wallace filed paperwork to run for office in 2012 and began running a series of TV ads promoting his candidacy, but his campaign was derailed when a Mitch Daniels crony, Mitch Roob, contested the signatures he filed for his candidacy. The Marion Co. Election Board invalidated all but 486 of the 1,282 signatures Wallace's campaign had submitted for the 7th congressional district, leaving him 14 signatures short of the required number. The Indiana Election Commission voted 4-1 to remove his name from the 2012 Republican primary ballot.

Wallace, a West Point grad with an MBA from Harvard, has not hidden the disdain he has towards Pence, particularly after the RFRA battle earlier this year. Wallace formerly worked for two Fortune 500 companies in Central Indiana and various consulting companies, including Mitt Romney's Bain & Company. Wallace's TWG Capital, which was in the business of buying future commission payments that flow to insurance agents, filed for bankruptcy protection in September, 2012. He also had a domestic disturbance arrest involving his ex-wife in 2012, which was dismissed after satisfying the terms of probation through diversionary sentencing. "[Wallace] has publicly owned up to some personal negatives in his background and has no problem discussing them with potentially skeptical leaders, who may be warming to the prospect of finding someone with business and government background who speaks their language and is more into pragmatism than social issues," Feigenbaum writes.

Pence Delegates Control Of Regional Cities Windfall To Political Cronies

Gov. Mike Pence signed into law another government boondoggle this year known as the Regional Cities Initiative. Our esteemed lawmakers thought it was a good idea to package up $84 million in the new program that's supposed to help lure younger workers to Indiana by tackling quality-of-life issues on a regional basis. Gov. Mike Pence decided it would be a good idea to outsource the doling out of those dollars to a group of ten "business executives," most of whom would be more aptly described as political cronies. The list includes:

• Keira Amstutz – President and Chief Executive Officer, Indiana Humanities 
• Kathy Davis – President and Owner, Davis Design Group 
• Larry Gigerich – Managing Director, Ginovus 
• Stephen Goldsmith – Daniel Paul Professor of the Practice of Government, John F. Kennedy School of Government, Harvard University 
• Gary Hobbs – Chief Executive Officer, BWi 
• Ryan Kitchell – Executive Vice President and Chief Financial Officer, Indiana University Health 
• Chris LaMothe – Chief Executive Officer, Elevate Ventures 
• Mark Maassel – President, Indiana Energy Association 
• Mitch Roob – Executive Vice President, KERAMIDA 
• John Thompson – Chief Executive Officer, Thompson Distribution

John Mutz, Indiana's former Lt. Governor and member of the Indiana Economic Development Corporation joked to the Journal-Gazette's Niki Kelly, "Steve Goldsmith doesn't even live in the state." He added, "I'm not against Steve Goldsmith," noting he was his 1988 running mate. Actually, he probably wasn't joking because most of the folks who worked on Mutz' campaign felt that Goldsmith dragged the ticket down in that 1988 gubernatorial race when Mutz lost that race to Evan Bayh and totally despise him. 

Regardless, it is very troubling that a triumvirate consisting of Goldsmith and two political hacks from his city administration, Mitch Roob and Larry Gigerich, will be making the decisions on how this money is spent. All three are in the business of making a lot of money off local government spending decisions by getting them to do business with their clients. Pence has effectively given them a platform to use this decision-making process to make even more money for themselves. I've long since given up on deciding how Gov. Pence makes decisions. The only people who seem to financially benefit from his administration are people who absolutely hate him and are doing everything they can to destroy him politically. The guy is either totally clueless or has a fetish for self-punishment. 

WMB Hoosier Heartland Justice Partners Was Only Eligible Bid For Marion County Criminal Justice Center Project

If you wanted yet more proof the bidding process for the Marion County criminal justice center was a rigged bidding process, check out the IBJ's story in the latest edition where Kathleen McLaughlin reports in a matter-of-fact manner WMB Hoosier Hearland Justice Patners' winning bid was the only eligible bid the Ballard administration received. That's because the RFP contained an upset limit of $50 million for annual service payments the City could afford to pay to the winning bidder. The other two bidders, Indy Justice Partners and Plenary Edgemoor Justice Partners, submitted bids above the upset limit. Plenary's bid of $67.1 million exceeded the upset limit by more than 34%, while Indy Justice Partner's $53.7 million exceeded it by 7.4%. Still, the two losing bidders get $1.5 million from the City for participating in the faux bidding process.

McLaughlin's story notes the Ballard administration omitted the fact that the two losing bidders submitted bids exceeding the upset limit set out in the RFP when it announced the winning bid last November. Deputy Mayor for Economic Development Adam Collins assured McLaughlin that Indy Justice Partners was close enough to the upset limit that it could have theoretically still won the bid if WMB had come up short in other areas, which was never going to happen since everyone knew going into the bid WMB was going to be the winning bidder. Collins sought to attribute WMB's initial annual service payment bid of $46.8 to the valuable assistance their team received by including locally-based Keramida as its environmental consultant since each bidder had to assess the risk associated with building on a brownfield site.

Keramida, of course, hired Mitch Roob, a crony of Mitch Daniels and Steve Goldsmith, just last year while the bidding teams were still competing against one another for the right to build, operate and maintain the criminal justice center under a public-private partnership agreement. Goldsmith introduced P3 agreements to Indianapolis in a big way during his two terms as mayor under the guise of cost savings that never lived up to their billing, although Goldsmith has enjoyed a lucrative, post-mayoral career consulting on P3 agreements for companies like ACS/Xerox, to which the corrupt Ballard administration handed control of the City's parking meter assets for the next 50 years. Goldsmith has been a frequent visitor to the mayor's office since Ballard became mayor, although he's never registered as a lobbyist.

What McLaughlin's story fails to mention is that the GM Stamping Plant site where the City is proposing to build the new criminal justice center was acquired last year from RACER Trust by REI Investments, which is controlled by Mike Wells, another political crony of former Mayor Steve Goldsmith, who made off like a bandit on insider deals during Goldsmith's tenure. Ballard appointed Wells as president of the Indianapolis International Airport Authority, another plum mayoral appointment always reserved for political insiders who get rich off their crony relationships with Indianapolis mayors, REI's purchase of the GM Stamping Plant site is conditioned upon the sale of at least half of the property to the City for the proposed criminal justice center. REI is brokering a deal with the Pence administration to sell 35 acres of land on the same site adjacent to the river to White River State Park so another Goldsmith crony, Dave Lucas, can build an outdoor concert venue on the site. Lucas' Sunshine Promotions developed what is now known as Klipsch Music Center in Noblesville.

The Ballard administration continues to lie to the public by making the absurd claim the City will achieve cost savings and actually pay less in annual service payments to the private vendor for a brand new criminal justice center than it pays to operate and maintain existing criminal court and county jail facilities. One of the ways it plans to save money is to get out from under Goldsmith's privatized Jail II contract, which costs the City about $18 million a year in service payments to private jail operator CCA. The City paid KPMG $3 million to perform the financial analysis upon which the City relied to recommend the P3 approach for procuring a new criminal justice center. Under the terms of its contract with the City, its fees triple if the City goes forward with the deal. A council study revealed the KPMG financial analysis was intentionally skewed to make the P3 approach look more favorable. In reality, the City will fall tens of millions of dollars short in the first nine years, forcing the City to either raise taxes, most likely property taxes, or impose steep budget cuts. The administration continues to press the council to approve the deal, which a rubber stamp review committee recommended be approved earlier this week on a 4-1 vote, by the end of this month. So many bribes, payoffs and kickbacks are on the line, after all, the taxpayers be damned.

Four Charged In Welfare Fraud Scheme, Including Two Private Contract Employees

Four Indianapolis women have been charged by the Marion Co. Prosecutor's Office with welfare fraud, including two employees hired by the private contractor which administers Indiana's welfare programs, ACS/Xerox, through a local minority-owned staffing company, CFA Staffing. Leticia Falconer, an employee of CFA Staffing assigned to the SNAP program, is facing 36 felony charges for falsifying documents to illegally collect nearly $80,000 in benefits for herself and about $20,000 in benefits for two others, Debera Anderson and Asia Malone. Another employee of CFA Staffing, Laquisha Flowers, is charged with nine felony counts, accused of falsifying documents to receive $577 in SNAP benefits she wasn't entitled to receive.

An FSSA spokesman applauded FSSA's employees and the Inspector General's office for alerting authorities of the alleged criminal activity. "We are pleased that the FSSA workers did their job and reported to the proper authorities," FSSA spokeswoman Marni Lemons said. The defendants were arrested nearly a month ago. Falconer remains jailed, while the other three defendants bonded out according to The Indianapolis Star. In a highly-controversial move, the administration of former Gov. Mitch Daniels initiated the privatization of Indiana's welfare services under the leadership of then-FSSA Secretary Mitch Roob, a former executive with ACS/Xerox. IBM was the original lead contractor but was forced out so ACS/Xerox could assume total control, another costly move that has cost taxpayers tens of millions of dollars in litigation expenses. CFA Staffing is owned by Teresa Carter of Indianapolis. Three Texas employees were arrested a year ago in a similar welfare fraud scheme where ACS/Xerox also administers the state's welfare services.

Rauner Picks Another Hoosier To Serve In His Administration

Illinois' incoming Republican governor, Bruce Rauner, has tapped another Hoosier with ties to former Gov Mitch Daniels' administration to serve on his staff. Over the weekend, a list of staff appointments made by Rauner included David Wu as Director of Government Transformation. Wu worked as a policy director for Gov. Daniels and later Mayor Greg Ballard, as well as a short stint at Angie's List. A press announcement touted Wu's work not only in public policy but also in international finance and traditional and digital media in diverse places, including Hong Kong, Singapore and Florida. Wu joins Barnes & Thornburg attorney Jason Barclay, who Rauner earlier named as his general counsel. Barclay served in a similar role for Gov. Daniels. We're still awaiting word on whether Mitch Roob, a native of Illinois, will join Rauner's administration.

Ballard Picks Same P3 Vendor Which Built Long Beach Courthouse

It could not have been more obvious. From the outset, the Ballard administration began picking the same cast of attorneys and financial consultants who brought about the highly-criticized Long Beach, California courthouse project built using a costly public-private partnership agreement. So to nobody's surprise it picked the same foreign-led consortium to build a costly new criminal justice center for Marion County. According to WTHR's Mary Milz, Mayor Greg Ballard will announce that the team led by a French-based firm will get the nod.

Mayoral Spokesman Marc Lotter said Paris-based WMB Heartland Justice Partners was chosen to build, manage and operate the $408 million facility which is planned for the old GM Stamping plant just southwest of downtown. WMB is an international conglomerate with numerous partners. 

Lotter said WMB "met the financial and technical specifications we sought in the RFP." .  .

The city told the three finalists it would pay no more than $50 million a year to lease the facility over 35 years. Lotter said WMB's bid came in $3.2 million below that. 

 "So, as soon as we open in 2018, taxpayers will save an estimated $3.2 million a year over what we currently estimate we pay for the various facilities we have now," Lotter said. 

"The biggest part of the savings will come from consolidation....We would have one facility to handle food preparations, laundry, medical and mental health facilities - all those things currently spread out among four-five difference locations."

So you can trade your $100,000 home in Irvington for a $1 million lake-front home on Geist and not pay a dime more a year in mortgage and expenses. It's amazing how easy it is for these people to tell bald-face lies with a straight face and get the media to report their lies without any discernment. Here are the partners identified as being part of WMB Heartland Justice Partners when the three finalists were announced last spring:

WMB Heartland Justice Partners, led by equity members Meridiam Infrastructure Indy Justice LLC, Balfour Beatty Investments Inc. and Walsh Investors LLC with major non-equity contributions by Walsh Construction Co. II LLC, Heery International Inc., Cofely Services Inc., Skidmore Owings & Merrill LLP; and Dewberry Architects.

And Meridiam built what P3 courthouse project? Why yes, that would be the Long Beach, California courthouse project.  Meridiam has also partnered with Walsh in hopes of building that controversial Illiana Expressway in Northwestern Indiana, a bi-state toll roach project with the state of Illinois, which got approval from federal highway authorities yesterday. I told you this was a rigged process from the outset, and Mayor Ballard didn't disappoint us. What else would you expect from the most corrupt mayor in the city's history?

UPDATE: The Indianapolis Bar Association, which did not bother to consult its membership on this issue, continues to be a cheerleader for it. Here's their comments on today's announcement:

The Indianapolis Bar Association expressed its continued optimism about the prospects of a new criminal justice center complex in light of today's important announcement by City officials that a preferred bidder has been selected. The association noted its support of the need for ongoing collaboration by the city administration, city-county council, judiciary and other key stakeholders to continue to prioritize the creation of safe, dignified and adequate justice facilities. The IndyBar has been working for more than a decade to focus attention on the need to overhaul existing judicial resources, citing safety concerns and several other current inadequacies. For years, the organization has spearheaded efforts to make a new justice center a reality, touting the long term benefits that would be realized by not only the people directly involved in the legal system but also the community as a whole. The IndyBar also established a website specifically devoted to the topic at www.indyjusticecenter.org.

The Indianapolis Bar Association appreciates being included as a valued and recognized stakeholder on behalf of its member professionals and the clients they represent. The IndyBar has and will continue to take an active role in the justice center planning and development process through its Justice Center Task Force, which was created in 2002. Attorney John F. Kautzman of Ruckelshaus Kautzman Blackwell Bemis & Hasbrook chairs this task force on behalf of the association, under the leadership of IndyBar President Jeff Abrams and the IndyBar Board of Directors. The IndyBar is committed to its diligent advocacy for new judicial facilities and related infrastructure and urges all stakeholders to work together to iron out the substantial details that still remain, including the final facility design, functionality and responsible financing. The local bar looks forward to the City of Indianapolis benefiting from 21st century justice facilities.

I found it quite enlightening when The Indiana Lawyer recently featured a discussion on P3 deals and who would be at the center of that conversation but the Indianapolis Bar Association's President Jeff Abrams, who specializes in P3 agreements. Does he represent any of the parties to this P3 agreement. Inquiring minds want to know?  John Kautzman, of course, represents the FOP, which likely shades his thinking on this matter considerably.

The updated listing of partners in the Meridiam bid group includes the following:

"WMB Heartland Justice Partners is a partnership comprised of Meridiam, Walsh Investors, and Balfour Beatty Investments formed to design, build, finance and maintain the Marion County Justice Complex. The team features a design/build contractor joint venture between the Walsh Construction Company and Heery International, Inc. Walsh and Heery will be supported by Dewberry Architects, Skidmore, Owings, & Merrill, L.L.P, Parsons Brinckerhoff, and four local firms: The Hagerman Group, Cripe Architects + Engineers, SchenkelShultz Architecture and KERAMIDA. The operations and maintenance of the facility will be provided by Cofely Services, Inc. and its subcontractor ABM Industries, Inc."

Now we know why Mitch Roob went to work for Keramida earlier this year.

Rauner Taps Hoosier Jason Barclay To Serve As His General Counsel

Illinois' Governor-elect Bruce Rauner (R) must be anticipating tussles with federal prosecutors in his new administration. He's tapped one of Mitch Daniels' go-to guys when you have a public corruption problem that needs fixed to serve as general counsel in his administration. Grab your barf bag before reading what Rauner has to say about Barclay.

“Jason has a top flight legal and strategic mind and brings a deep understanding of how one the country’s most successful governor’s offices operated . . . Most importantly, both are committed to transforming Illinois and making it the most compassionate and competitive state in the nation.” 

Prior to joining the firm, Jason served as legal counsel in the office of Indiana Governor Mitch Daniels. In state government, Jason had a particularly sharp focus on public ethics, helping guide one of the nation’s most comprehensive and highly regarded integrity and compliance programs. He also played a key role in executing the legal strategies necessary to implement Governor Daniels’ agenda.

If you had to identify the top ten attorneys in the state of Indiana who inflicted more harm on the state's already bad track record on ethics in state government over the past decade, you would have to put Barclay near the top of the list. He was very adept at writing ethics rules with holes big enough through which you could drive an 18-wheeler. Rauner must have been impressed with Barclay's ability to convince our useless federal prosecutors in this state not to bring our most corrupt public officials to justice. He'll need that extra help in Illinois since the federal prosecutors in Chicago actually have a proven track record for prosecuting public corruption cases, unlike our sorry U.S. Attorney's Office in Indianapolis. So when does Rauner announce a job for Mitch Roob? We hear he's pushing real hard for a job in Rauner's administration.

Supreme Court Has Given Its Cue To IBM To Pick Up Its Marbles And Go Home

The Indiana Supreme Court issued an order on Thursday in the welfare privatization contract cancellation case by the Daniels administration against the lead contractor, IBM. The Court's order signed by Chief Justice Loretta Rush requested the parties use the next 30 days to attempt to resolve the matter through mediation; otherwise, the Court will decide the case. I went back and watched the oral argument. Justice Rush's order was shorthand for telling IBM that we're going to shove it up your butt real hard if you don't pick up your marbles and go home if I'm reading the tea leaves correctly.

I've followed this case very closely from the outset. You may recall that I had the firsthand account of the late Carl Moldthan about the real driving force behind welfare privatization. Essentially, the Family & Social Services Administration had never given welfare workers the modern technological tools they needed to perform welfare services efficiently and effectively. Former FSSA Secretary Mitch Roob wasn't interested in what could be done to improve their work because he had already decided he was going to privatize their jobs and his former employer, ACS, was going to play a key role in that billion dollar plus undertaking. Anyone who read this blog at the time wasn't surprised at the outcome of that supposed competitive bidding process to privatize welfare services. There was a reason other players walked away and refused to participate in the Daniels' administration charade.

There were lots of hiccups along the way, some of them IBM's fault, some of them the fault of subcontractors like ACS, some of them the fault of FSSA and some due to circumstances beyond both parties' control attributed to the explosion in claims caused by the Great Recession. The undisputed facts show the state devised metrics for measuring IBM's performance and an overwhelming number of those metrics were on target. What few were under-performing were moving in the right direction when Gov. Daniels abruptly terminated IBM's contract and handed its work over to ACS entirely to fulfill, which I believe was the objective all along. Roob just needed IBM as a placeholder not to make it so obvious he had steered one of the most lucrative contracts in the state's history to his previous employer, although everyone knew that was his objective all along beyond a shadow of a doubt.

Judge David Dreyer presided over a lengthy trial that went on for many weeks and issued a very lengthy, thoughtful and well-reasoned decision in which he concluded IBM had not materially breached the contract and ordered the state to pay IBM $52 million. In a convoluted opinion I couldn't grasp, perhaps because I'm too familiar with the key characters and their motivations, the Court of Appeals reversed Judge Dreyer's opinion, seeming to ignore the overwhelming evidence of the state's bad faith in its dealings with IBM, and found in FSSA's favor, which would send the case back to the trial court to determine how much of the state's claimed $170 million in damages it should recover for IBM's supposed breach. The only saving for IBM was the Court of Appeals' agreement IBM was entitled to payment of the more than $9.5 million in computer equipment FSSA stole from IBM without compensation, along with $40 million in assignment fees the contract clearly provided it was entitled to receive in the event of termination.

Justice Mark Massa, who served as counsel to Gov. Mitch Daniels during the relevant period in question, recused himself from the case. After watching the oral argument, my takeaway leads me to conclude that at least three of the remaining justices (David, Rush and Rucker) have no sympathies for IBM's arguments. The State has been represented by Barnes & Thornburg throughout this entire ordeal, a fact which turned the rules of professional conduct that are supposed to govern the attorney-client relationship on its head. Their attorneys were the driving force behind ACS getting its seat at that table under IBM and later at the head of the table when IBM got bounced. Nonetheless, the State in some convoluted, lengthy Chinese wall arrangement waived the firm's clear conflict of interest in representing the State's interests.

Sometimes justice works, and sometimes justice works in mysterious ways. This is one of the most corrupt and sad chapters in recent Indiana government history. There should have been criminal prosecutions for what took place involving this contract in the Daniels administration and what continues to take place to this day. Unfortunately, I don't see much upside for IBM finding justice in this state, and its attorneys would probably be well-advised to pick up its marbles and go home without being stripped too bare of its clothing before leaving the state by the wheels of justice in Indiana, which can work in very mysterious ways. IBM should have realized it was lying down with dogs when it got involved in this taxpayer feeding frenzy years ago and the inevitable result of waking up with fleas.

Ballard Administration Claims It Can't Release RFP For Criminal Justice Center Because It Doesn't Exist

Indiana state law could not be more clear on this point. Indiana's Public-Private Agreements Act, the statutory authority on which the Ballard administration is relying to enter into an agreement to build, operate and maintain a more than half billion dollar criminal justice center, requires a Request for Proposal subject to the state's public notice requirement. Incredibly, the naïve pretty boy tasked by the Ballard administration with this daunting task told members of the City-County Council's Rules & Public Policy Committee this evening that it had no "final" Request for Proposal the administration supposedly issued to three bidders on April 25 it chose during earlier secret discussions conducted during a Request for Information process last year.

According to mayoral assistant David Rosenberg, there is no final iteration of the RFP that the administration has been discussing with the three bid groups for the last five months despite the fact that it plans to choose a winning offer in November and present a final 35-year agreement to the council for approval by February of next year. We're to believe that the RFP is being drafted on the fly in a collaborative process with the bidders as the secret discussions with the bidders take place. Rosenberg assured council members this process, while lacking in transparency, protected the public because of the alleged "competitive tension" created by this unique, if illegal public bidding process.

The council's counsel, Fred Biesecker, saw the legal explanation offered by Rosenberg and Ballard's new Deputy Mayor for Economic Development, Adam Collins, as the hogwash it was. Even more interesting was Biesecker's discussion of a memorandum prepared by an attorney at Bingham Greenebaum Doll, one of the law firms awarded a multi-million legal contract to work on the deal in violation of state law because the council never appropriated money in this year's budget for the criminal justice center project. In the August memorandum, Biesecker said the attorney at Bingham had claimed that state law allowed the administration to withhold the RFP from the public until the discussions with the bidders was concluded. In fact, the law provides the exact opposite.

By way of disclosure, I worked at Bingham many years ago and specifically worked on the drafting of the Public-Private Agreements Act for the City of Indianapolis so I know a little about what this law requires. The day of the first hearing on the legislation, a young reporter for the Indianapolis Star-News, Cam Simpson, walked into the committee room and held up a copy of the latest edition with a front-page headline for a story he authored blaring words to the effect, "Bill Would Let Mayor Negotiate Privatization Deals in Secret." Suffice it to say that the Hoosier State Press Association's attorney, Stephen Key, became very involved in drafting changes to the law, one of which specifically required a public RFP process. How an attorney at Bingham could now argue the law means something entirely different now is probably something only an attorney billing at an exorbitantly high billable rate at taxpayers' expense could explain.

Allow me to explain the provisions written into the law to specifically address the Hoosier State Press Association's concerns.

• Any governmental body entering into a Public-Private Agreement MUST request proposals. I.C. 5-23-5-1.
• Proposals SHALL be solicited through a request for proposal process, which must include: the factors or criteria used in evaluation proposals; a statement concerning the relative importance of price and the other evaluation factors; a statement stating whether the proposal MUST be accompanied by evidence of financial responsibility; and a statement concerning whether discussions may be conducted with the offerors for the purpose of clarification to assure full understanding of and responsiveness to the solicitation requirements. I.C. 5-23-5-2
• Notice of the request for proposals SHALL be given by publication in accordance with I.C. 5-3-1. I.C. 5-23-5-3.
• Discussion with the offerors are permitted during the RFP process for the purpose of clarification to assure full understanding of and responsiveness to the solicitation requirements. I.C. 5-23-5-4.
• Eligible offerors MUST be accorded fair and equal treatment with respect to any opportunity for discussion and revisions of proposals. I.C. 5-23-5-5.
• A governmental body MAY refuse to disclose the content of PROPOSALS while the RFP process is underway. There's nothing in the law allowing the withholding of the RFP document itself. I.C. 5-23-5-6.
• A governmental body SHALL negotiate the best and final offers of responsible offerors who submit proposals that are determined to be reasonably susceptible of being selected for a public-private agreement. I.C. 5-23-5-7.
• After best and final offers are negotiated with the offerors, then the governmental body either makes a recommendation to whom a public-private agreement will be awarded or terminate the RFP process. I.C. 23-5-8.
• If a recommendation to award a public-private agreement is being made, notice of a public hearing on the recommendation SHALL be provided. I.C. 23-5-9.
• Finally, a copy of the proposals and a written statement describing the basis upon which the recommendation to make an award is being made SHALL be made available for public inspection and copying. I.C. 23-5-10.

The law is clear as day. The RFP MUST be made available to the public when the RFP process commenced, not at the tail end of the process when the administration is ready to choose a winning offer. It is absolutely beyond me why the media in this city remains silent and takes no legal action to compel the administration to comply with the law its trade organization demanded be written into the law when the Public-Private Agreements Act was enacted. The only reason the Ballard administration would not publish a final RFP at the outset of the process is if it is resorting to subterfuge to hand the winning proposal to one of the three finalists under consideration, which means it knew when it secretly chose the three eligible offerors to compete in the RFP process which one would be awarded a final offer. That's precisely the tactic employed by Mitch Roob when he was Secretary of FSSA to ensure that his former employer, ACS, was awarded the welfare privatization contract. Roob made his intentions so clear in advance that nobody bothered to compete in the end against the offer made by the IBM-ACS team. And we all know how well that turned out. If the RFP is not made public at the outset, there is no way of ensuring that the competing offerors are being accorded "fair and equal treatment" as mandated by the law.

As I previously discussed, the management of the Indianapolis Star, the IBJ and each of the television news stations all sit on the board of the Greater Indianapolis Progress Committee, the shadow government that meets in secret and decides public policies to be pursued. Last December, GIPC unveiled the plan to build a new criminal justice center through a P3 arrangement. Only GIPC's board members know why they deemed it preferable to pursue a P3 arrangement rather than refurbish existing buildings or at least build, own and operate our own criminal justice system instead of an irrefutably costlier method of relying upon private profiteers. Incidentally, the existing City-County Building site was designed to accommodate future expansions, a fact that seems to have gone missing by those running this process. Since the unveiling last December, the local media has had nothing but glowing comments for the concept, which initially recommended a site on the far western edge of the county next to the Indianapolis International Airport, an idea since abandoned in favor of a new site at the former GM Stamping Plant due to outrage expressed by the very stakeholders the Ballard administration claims it's been consulting all along.

The most outlandish claim made to date by the Ballard administration was repeated this evening by Rosenberg--that essentially a private developer can deliver a brand new, state-of-the-art criminal justice center for not a penny more than the $122 million the administration claims we are currently spending annually to support existing facilities. Yes, you can trade your modest $100,000 home in Irvington for a $1 million home up on Geist and not pay a penny more for it. Call up your realtor and make that deal today before it's too late. As Rosenberg told the committee this evening, there is grave concern that interest rates will rise and costs increase unless the council acts the first thing next year to approve whatever it is they are currently negotiating in secret.

We're also learning more details that suggest the plan is being scaled back considerably to make that bold pronouncement about not costing a penny more. The juvenile detention center won't be included in the new site. While office space will be made available for the prosecutor's office and the public defender's office at the new center, other criminal justice-related agencies, such as forensic lab services and property control room, will continue to be maintained off-site. Discussions about the inclusion of other criminal justice agencies are still being debated. Supposedly, we're going to save a bunch of money by having a larger jail built than we really need at the new site so we can rent space to the feds for their detainees. The sheriff's department, incidentally, doesn't utilize all of the existing space in Jail II operated by CCA, which rents out the balance of the space to the feds for immigrant detainees. We're also supposed to see great savings from transportation-related costs. I'm still trying to understand why the Marion County criminal courts refuse to utilize video conferencing for inmates' initial hearings like every other modern court system does. But, hey, that would negate the argument for having the jail housed at the same complex as the criminal courts, wouldn't it?

Oh, and we got an idea of what kind of work Bose Public Affairs Group is performing for its $750,000 contract to promote the project. Lobbyist Greg Hahn appeared at this evening's hearing, well-tanned from many hours on the golf course, to introduce Rosenberg to the committee. Hahn's a Democrat. Rosenberg works for the Republican mayor who awarded the $750,000 to his former mayoral assistant, John Cochran, also a Republican who now works for Hahn at Bose. Get it? Nice job, Greg.

UPDATE: Fellow blogger Pat Andrews had disappointing news of action later taken by the Rules & Public Policy Committee to table a proposal that would have cancelled the more than $12 million in no-bid contracts the Ballard administration entered into for the criminal justice center project in clear violation of state law. Councilor Angela Mansfield, the sponsor of the proposal, voted against tabling it. Other council members were reached. When the council lacks any backbone to stand up to this unethical administration, there is nobody left to protect the public. The federal and state prosecutors in this town sure as hell aren't worth a damn when it comes to holding corrupt city officials accountable for their criminal conduct. Perhaps that was the real reason for Hahn being at the meeting--to lobby against the cancellation of his firm's $750,000 contract on our dime. Only in Indianapolis.
Video showing legal discussion of RFP process

More Proof That Wall Street Is Stacked In Favor Of An Elite Few

In case you haven't figured it out yet, I don't have much respect for people who make their living running corporate America today because of their single-minded determination to make income inequality as extreme as possible. There are a  couple of recent examples in the news which illustrate how the system is stacked against the vast majority of us.

Let's start with that evil company known as Affiliated Computer Services ("ACS"), an information technology company founded and run by government insiders who aren't very good at providing IT services but are very successful at wielding influence over decision-makers in government who make the decision to award government contracts. Yes, that's the same ACS which employed a bunch of government insiders like Steve Goldsmith, Mitch Roob, Ann Lathrop, et al. before the company won lucrative contracts to run Indiana's welfare privatization initiative and Indianapolis' parking meter assets.

Shortly before ACS was acquired by Xerox, the company's CEO and CFO were looking for a way to artificially boost the company's sagging revenues to make an acquisition as lucrative for them as possible. ACS CEO Lynn Blodgett and CFO Kevin Kyser arranged for a computer equipment manufacturer to run pre-existing orders in 2009 through the company to give the appearance the company was involved in the sales of the equipment, thereby padding the company's bottom line by $124.5 million. The customers who were purchasing the equipment had no idea that ACS was even involved in their transaction. This gave investors the impression the company was meeting its revenue targets, not to mention boosting the multi-million dollar bonuses paid out to Blodgett and Kyser.

A subsequent SEC investigation uncovered the accounting fraud. Yet the punishment meted out to Blodgett and Kyser hardly fits the crime. Together, the two received fines and disgorgement penalties totaling $675,000. Together, the two owned over $40 million worth of ACS shares when Xerox acquired the company according to Fortune's Jack Ciesielski. One of the SEC commissioners, Mary Jo White, had to recuse herself because her husband's law firm performed work for ACS. One commissioner, Luis Aguilar, broke ranks with the other three commissioners, complaining that the penalty was a wrist slap at worst. In the words of Aguilar, the SEC is defining down deviancy. He believed both men should have faced fraud charges and been banned from serving in executive capacities for publicly-traded companies. Blodgett still works as a Senior Vice President for Xerox and is set to retire at the end of the year. Kyser retired from a high-level executive position at Xerox last year.

The other story in the news that caught my eye was the announcement that former House Majority Leader Eric Cantor, who got the boot by Republican voters in a primary election earlier this year, is joining a Wall Street investment banking firm after resigning his seat in Congress before the end of his term. Cantor, a career politician with no prior experience working in investment banking, is becoming Vice President and Managing Director of Moelis & Co. If the figures provided by Fortune are accurate, Cantor could earn up to $3.4 million his first year at Moeils, a bit more than the $193,000 a year he earned as House Majority Leader. As New York magazine points out, Cantor couldn't have gotten a job at a fifth-tier firm in the financial services industry based on his experience and skills. His sole purpose will be to buy access in Washington for the firm and its clients. Who would have thought?

High-Paid FSSA Consultant Has Two Masters: Who Would Have Thought?

Seema Verma leading a state health care policy panel discussion 

Those of you familiar with my reporting on this blog know that I've discussed the Family & Social Services Administration and the tangled web of conflicts of those entrusted at the highest levels of the agency. I devoted considerable time discussing former FSSA Secretary Mitch Roob, who left a high-paying executive job at ACS to run the agency at the beginning of the Daniels administration. Roob knew that he planned to privatize the agency's welfare services when he took the job, and by no accident his former employer wound up in the driver's seat on that lucrative contract worth hundreds of millions of dollars. Similarly, one of Roob's successors, Mike Gargano, had a history of performing work both as a consultant to FSSA and to others like ACS who did business with the agency before he joined the agency the first time, and during the short period of time he left the agency during Debra Minott's brief tenure at the beginning of Pence's administration.

It turns out that there is another high-paid consultant who has been with the agency since the days of the O'Bannon administration who has an equally troubling conflict of interest. The Star's Tony Cook has an excellent investigative story describing the two masters FSSA consultant Seema Verma has been serving for some time. Verma is the owner of SVC, Inc., a business which lists its business address at her upscale home in The Woods at Williams Creek subdivision in Carmel where I'm pretty sure the covenants don't permit you to operate a business. As Cook's story points out, she and her company's employees share offices within FSSA's state office building offices downtown to perform their high-level health care consulting role for the agency. Prior to becoming an FSSA consultant, Verma served as Vice-President of Policy & Planning for the Marion Co. Health & Hospital Corporation where Mitch Roob once served as CEO. According to Cook, Verma has assumed the state's lead role in developing the Healthy Indiana Plan, Indiana's alternative health insurance plan to Obamacare.

So what's the problem? Well, according to Cook's story, Verma has been consulting another IT company doing business with FSSA at the same time she and her employees occupy offices in the state office building as a captive agency contractor. Under a contract with HP, Verma can earn up to $1 million, which is a drop in the bucket for the nearly $500 million HP has won in state contracts during her tenure as FSSA's chief health policy consultant. Verma's state contracts for health care consulting have totaled more than $3.5 million to date, over $1 million of which she earned in the last year alone. What is disturbing is that Verma's role as a consultant to HP was fully disclosed and signed off on by state officials as totally kosher. A spokesperson for Gov. Pence defended Verma, noting that she has "played a valuable role in the state's health care policy since the O'Bannon administration." Verma's paid spokesman, Lou Gerig, tells Cook that her role as a subcontractor to HP was spelled out in HP's contracts with the state.

According to Cook's story, her power and influence within FSSA cannot be understated. It sounds like her obvious conflict of interest might not have even come to light had she not butted heads with former FSSA Secretary Debra Minott. It was Minott who lost her job, not Verma. Cook says that Verma's contractual role with HP came as a big surprise to Minott when she discovered it in 2013 after a dispute over one of its invoices. According to Minott, HP dispatched Seema to visit the agency's CFO about resolving the disputed invoice. "I was troubled because I thought Seema was our consultant," Minott told Cook.

Ethics experts agree there is a problem with Verma serving two masters. State lawmakers to whom Cook spoke were also surprised to learn of the arrangement, both as to the size of her contract and the dual, conflicting consulting role. Cook's story doesn't touch on this point, but I noticed that several of the employees listed on SVC's website are former employees of FSSA. Stephanie Baume worked in the Office of Medicaid Policy & Planning where she administered the Hoosier Heathwise plan before joining SVC. Nicole Spears worked as an integration manager within OMPP before joining Verma's company. Kelly Greene served as FSSA's general counsel before she joined SVC. It's no wonder she wields so much power within the agency. People can leave the state payroll and join her firm as consultants to their former employer earning more than they earned in their prior roles as state employees.

Former Family & Social Services Administration Head's New Job Raises More Revolving Door Questions

When Michael Gargano first joined the Family & Social Services Administration as a senior-level political appointee in the Secretary's office, he left behind a consulting firm he founded, Watertown Group, which had not only provided consulting work for FSSA but also ACS, the politically-connected IT company which would later become embroiled in a legal tug-of-war between ACS' former partner in the privatization of the agency's welfare services, IBM, after FSSA fired IBM and retained ACS alone to fulfill the contractual duties FSSA previously hired IBM to perform. The welfare privatization deal FSSA entered into with ACS was worth hundreds of millions of dollars to the firm.

Gargano left FSSA at the end of Mitch Daniels' term in office in January 2013 after Pence opted to name a new secretary to run the agency and just three months later joined another technology company that is under contract to perform services for the very agency he had administered. This blog raised concerns then about Gargano's prior consulting work before joining the agency, concerns that are renewed by his post-employment after leaving FSSA last year.

Gargano joined Indianapolis-based CSpring on April 15, 2013 according to an announcement released to the media as the company's managing director. According to the firm's website, Gargano has "overall responsibility for CSpring's business development and service delivery efforts . . . to ensure each aligns with CSpring's vision and growth strategy, while expanding the firm's client and project portfolio." The firm's website identifies two specific projects that it provides to Gargano's former employer. One project is described as providing enterprise architecture and engineering (EAe20X) for the agency. A second project is described as providing senior advisory and policy analysis services regarding the FSSA's Medicaid reporting to the agency's data manager and director of health informatics. The contract amount for the original multi-year contract from 2011through 2013 was $568,400 with an amendment valued at $128,470.

Indiana law imposes a one-year cooling off period that applies to former state employees under particular circumstances. As the former head of FSSA, Gargano was prohibited from accepting employment for a one-year period from the last day of his state employment from an employer with whom 1) he engaged in the negotiation or administration of a contract on behalf of a state agency and 2) was in a position to make a discretionary decision affecting the outcome of the negotiation or nature of the administration of the contract.

The state's cooling off law prohibited Gargano from accepting employment from an employer if the circumstances surrounding the hire suggest the employer’s purpose is to influence him in his official capacity as a state employee. Gargano would also be prohibited from lobbying the executive branch for his new employer during the one-year cooling off period.

As FSSA's former Secretary, Gargano may also be subject to the post-employment rule’s “particular matter” prohibition in his potential employment. This restriction prevents him from working on certain particular matters indefinitely if he personally and substantially participated in such things as a business transaction or a contract with his new employer. This latter prohibition extends to the life of the matter at issue.

The database of formal opinions issued by the Indiana State Ethics Commission does not include any opinions sought by Gargano after he left his state employment. A written advisory opinion issued by the Commission that a former appointee's new employment does not violate the cooling off and particular matters prohibitions is conclusive proof that the former employee is not in violation of the law.

By comparison, Gargano's successor, Anne Murphy, sought and obtained a formal advisory opinion from the Commission when she obtained employment as Vice President of Government Affairs for Community Health Network upon her departure from the agency. Gargano worked as chief of staff for Murphy prior to succeeding her as the agency head on November 5, 2010. Mitch Roob served as Gov. Daniels' first Secretary of FSSA before he stepped down in 2008. Roob had been heavily criticized for his big push to privatize the agency's welfare services, particularly since his former employer, ACS, became a major benefactor of those efforts. The fact that Gargano had also previously provided consulting services to ACS before joining the agency further heightened conflict of interest concerns.

More recently, the former head of FSSA's Division of Disability and Rehabilitative Services under Gargano obtained an advisory opinion from the Commission in December, 2012 seeking permission to leave his state employment and form a new consulting firm that would be employed as a subcontractor for Health Management Associates working on its contract with FSSA's Office of Medicaid Policy & Planning. The Commission approved the Director's post-employment work as a subcontractor of HMA based on his representations that he had not previously performed any work at the agency for OMPP and would screen himself off from performing any work for DDRS, the division in which he was formerly employed.

In June, 2012, another former FSSA employee received an advisory opinion that allowed her to perform work for a software consulting firm during the cooling off period. The former employee served in various capacities at the agency, including Deputy Director of the Division of Family Resources (“DFR”), Director of Aging, CFO, Appointing Authority for the DFR, and Chief of Staff. The Commission ruled that she could help her new employer respond to an RFP released by the agency during the cooling off period despite the fact that she had signed off on the prior contract issued to the current vendor for those same services.

A refresher on Gargano's incestuous ties: He's married to Ann Lathrop, the president of the Capital Improvement Board who works as a consultant for Crowe Horwath, which has a bunch of state and local government contracts. Lathrop and Mitch Roob cut their teeth in Indianapolis politics working for former Mayor Steve Goldsmith. Roob told people long before Daniels' election as governor that he would be named FSSA Secretary, and that he would privatize the agency's welfare services. ACS was awarded a similar contract in the state of Texas while Roob was still employed there. Roob kept his word and, to no one's surprise, his former employer was part of the team led by IBM that was awarded the contract to privatize the agency's welfare services. All three worked at one point or another for ACS. Goldsmith, working in concert with ACS's attorneys/lobbyists at Barnes & Thornburg, including Bob Grand, Joe Loftus and then-City-County Council President Ryan Vaughn, who doubled as a lobbyist for Barnes & Thornburg before becoming Mayor Ballard's chief of staff, engineered the 50-year privatization agreement for Indy's parking meter assets for ACS. Bob Grand, who previously served as President of the Capital Improvement Board, arranged for Lathrop's appointment to the CIB to ensure that the CIB would approve the more than $200 million in subsidies awarded to his law firm's client, the Indiana Pacers. It is rumored that Goldsmith, who has never been registered as a lobbyist with the City of Indianapolis despite all the time he spent on the 25th floor advising Ballard, received a $600,000 consulting fee for his role in getting the parking meter privatization deal awarded to ACS. Another former Goldsmith staffer, Skip Stitt, worked for ACS in Washington when Indy decided to privatize its parking meters. Stitt once employed Mike Huber, Ballard's former economic development deputy who ran the efforts inside the Ballard administration to privatize the parking meters, and who now runs the Indy Chamber. And of course, Gargano worked as a consultant for ACS before he went to work for FSSA. Can it get any more incestuous?

Former Indiana GOP Chairman James Kittle Fingered In Bribe Offered To House Speaker To Block HJR-3

Wealthy businessman and former Indiana State Republican Chairman James Kittle has been identified as the businessman who offered House Speaker Brian Bosma unlimited campaign cash earlier this session if he would kill HJR-3, the proposed marriage discrimination amendment according to the AP's Tom Lobianco. Citing multiple sources familiar with the offer, Lobianco said Kittle withdrew the offer of "unlimited" campaign help after Bosma questioned the legality of his offer.

Jim Kittle offered "unlimited" campaign help to House Speaker Brian Bosma as part of a push to defeat the proposed amendment, according to multiple people with direct knowledge of the discussion. They spoke on condition of anonymity because they weren't authorized to disclose the private discussions.

Kittle withdrew his offer after Bosma questioned its legality, and it turns out the money wasn't needed after all. Only four House Republicans targeted by ban supporters face primary challenges, and changes to the proposed amendment's language will keep the issue off the ballot until at least 2016. But the back-room intrigue illustrates how election-year politics and campaign dollars shape some of the state's most important decisions . . .

Bosma also has said a potential candidate notified him that he had been offered $500,000 from an out-of-state source to challenge the speaker in the May primary.

But Kittle's offer is the one that raised some eyebrows. Bosma first announced an offer of campaign dollars in a January news conference but did not identify the potential contributor.

"I received a pledge of unlimited campaign funding if I were to make this issue go away," Bosma announced.

Bosma said he rejected the offer and expressed concern that it might have violated state or federal law. He has worn his decision as a badge of pride throughout the session, telling reporters he does not bow to threats or intimidation.

Bosma told The Associated Press last week that he didn't think the offer constituted a crime. But the speaker, who has never said Kittle made the offer, acknowledged voicing some concerns.

"I did bring to that individual's attention what it sounded like he was saying and I think he was pretty concerned about it after he said it," Bosma said.

Kittle did not return calls seeking comment . . .

This isn't the first time Kittle's name has surfaced in connection with nefarious activities. Kittle, who stepped down as the GOP's state party chairman and Gov. Daniels' finance chairman after before his arrest for drunk driving in Hamilton County in December, 2010, was identified as one of several investors a controversial Chinese immigrant had supposedly lined up to start up a new company that would assist Chinese investors with investment opportunities in the United States. Monica Liang, then a newly-hired consultant to Mitch Roob, the former head of the Indiana Economic Development Corporation (IEDC), became the subject of a complaint lodged by Chinese businessmen after Liang lured a Chinese billionaire, Ao Yuqi, to wire $50,000 into her bank account. According to a written complaint several Chinese businessmen had delivered to Gov. Mitch Daniels accusing Liang of criminal wrongdoing, Liang had identified Kittle as someone with whom she was very close who had tremendous political clout in Indiana.

She advised us that the State of Indiana would set up an office in China and she would be appointed as the manager of that office. She also repeatedly hinted to us that she was connected politically because she was in an intimate relationship with Chairman of Republican Party of Indiana. She advised us that the Chairman was "super rich," owned two large biotechnology companies and was the largest campaign contributor of Governor Daniels' election. As she put it that meant it was no problem for us to meet Governor Daniels when we next visit Indiana.

Sources familiar with an FBI investigation of Liang's business dealings tell Advance Indiana that she had formed a new company, China North American Investment Group, LLC, whose members according to Liang were to include herself, Ao, Kittle, Mitch Roob and Bingham McHale managing partner, Toby McClamroch, a former Indianapolis City-County Council member. Liang used a letter dated February 18, 2011 signed by Roob appointing her as his special assistant for Chinese relations to impress potential investors in China. Liang had also supposedly represented to the Chinese investors an opportunity to invest in a $12 million nursing home project she was trying to develop in a building she had purchased in Marion, Indiana, which she claimed included Gov. Daniels, Marion Mayor Wayne Seybold and Roob as investors according to an expose' on the entire sordid affair by the Indianapolis Star, titled, "The China Letter." Among the supporting documents Liang provided to the Chinese investors was a letter on the City of Marion's letterhead signed by the city's economic development director, Darren Reese, pledging support for TIF incentives for the project.

The FBI dropped its investigation of Liang's business dealings after she died unexpectedly from an aneurysm during a visit to her apartment in Carmel in late October, 2011 from a Chicago attorney, Thomas Gehl, who was advising her on EB-5 immigrant visas, a visa program that allows large foreign investors to obtain permanent resident status in the U.S. in consideration for investing in qualified American investments.  As a result of an internal investigation of the complaint sent to Gov. Daniels, Liang was immediately terminated and Roob stepped down as IEDC's CEO a short time later, although he insisted that the sordid affair was not the cause for his resignation. IEDC also ended its long-term relationship with Pacific World Trade, which had an exclusive contract to assist the IEDC in developing business relationships in China, in retaliation for its perceived role in helping bring the serious allegations of wrongdoing on Liang's part to light. The company's owner, Dennis Kelley, delivered the complaint on behalf of the Chinese businessmen, a fact that irked state officials, even though essentially all of the allegations contained in their complaint had been determined to be accurate based on the state agency's internal investigation of the complaint. Roob had demanded that Kelley retract the allegations set forth in the complaint prior to his abrupt departure from the state agency.

Last December, the Indianapolis Star featured a $2.5 million log cabin home in Carmel owned by Kittle that was being offered for sale. "Detailed craftsmanship is the hallmark of this spacious Carmel home being offered for $2.5 million," the article read. "Jim Kittle's custom log home is filled with signature lines from the family furniture business." "Set in a private, wooded area, the home resembles a mountain retreat, complete with natural interior features such as slate flooring and exposed board and batten ceilings." Watch the Indianapolis Star and other media outlets to bury this AP story since it doesn't fit their meme on HJR-3, not to mention the advertising Kittle's furniture store purchases from them.

Marion City Officials Unable To Account For $2 Million In TIF Bond Proceeds For Failed Redevelopment Deal With Korean Businessman

The Marion Chronicle-Tribune continues to perform investigative journalism virtually every other major newspaper in Indiana has ceased doing. "Where did the money go?" seems to be a common theme of their reporting of late and for good reason. In 2009, the administration of Mayor Wayne Seybold obtained approval from the town's council to issue up to $2.5 million in tax increment financing ("TIF") bonds to a little-known Korean businessman from Ontario, California, to purchase and redevelop the city's recently-closed YMCA building on Third Street. Five years later, the building sits undeveloped and has been put on the selling block for unpaid taxes. No visible work has been done on the building, and the property generated no bids when it was offered at a tax sale last year. When the Chronicle-Tribune set out to learn what happened with the money through a public records request, it learned that city officials couldn't account for how at least $2 million of the bond proceeds had been spent.

This saga began when Korean businessman Michael An's Global Investment Consulting, a Nevada corporation, approached city officials in 2009 about redeveloping the vacant YMCA building. An's local business representative was Chad Seybold, brother of Mayor Seybold. An's $6 million redevelopment plan included adding a dry-cleaning business, men's clothing store, women's clothing store, spa, hotel and restaurant to the vacant building after renovations. An told city officials that the project would add between 80 to 90 new jobs with an annual payroll of between $1 to $2 million. Anyone who drove by this location, knew a little about Marion's economic situation and turned on his or her brain for a few minutes would quickly conclude it was a half-baked deal that had no realistic chance of success. Unfortunately, no due diligence was performed before proceeding with the investment of public tax dollars in the project.

An was described to local officials as "a Korean-born investor and retired businessman in California." According to Nevada Secretary of State corporation records, An appears to be the sole shareholder of Global Investment Consulting. An individual by the name of Claude Brock, who serves as a registered agent for multiple businesses, is identified as the company's registered agent. A Google Earth view of the business address for Brock shows a high-rise residential building a few blocks off the Las Vegas strip. A business address in Santa Ana, California is also listed, which appears as a small residential house on Google Earth. The Indiana registered address for Global Investment Consulting according to the Secretary of State records is the vacant YMCA building with An listed as the registered agent at that address. That foreign registration occurred the same month that Marion's common council approved the issuance of $2.5 million in TIF bonds for the project. Global Investment Consulting's business address is listed in its Indiana filing as a post office box in Cucamonga, California.

Further research reveals that Global Investment Consulting is listed as one of the few regional centers in Indiana certified for the controversial foreign immigrant immigrant visa program known as EB-5, although it doesn't appear to have operated as a regional center. Under this immigrant visa program, foreign investors can get a green card for investing at least $1 million in a qualified American investment, or $500,000 if the business investment is made in an area that qualifies as a depressed economic area.

The EB-5 program's controversy was raised in a December 15, 2012 investigative series by the Indianapolis Star titled, "The China Letter." The investigative series focused on Monica Liang and her controversial role as a former consultant to Mayor Seybold and the Indiana Economic Development Corporation's former executive director, Mitch Roob. Liang, a Chinese immigrant, had defrauded a Chinese billionaire out of $50,000, which she represented to the billionaire was part of a plan to invest in a building that she owned in downtown Marion that was to be redeveloped as a nursing home for veterans.

According to the Star, Liang had misrepresented to Ao Yuqi, the Chinese billionaire, that Gov. Mitch Daniels, Mayor Seybold and Mitch Roob were shareholders in the company that planned to redevelop her building. Ao had expected to obtain a green card as part of his investment in the project as an EB-5 investor. Liang, who was in her early 40s, later died under bizarre circumstances after going into cardiac arrest while a Chicago attorney, Thomas Gehl, who was advising her on the EB-5 program, was visiting her at her apartment in Carmel a short time after Roob had fired her as a consultant to the IEDC after learning of her misrepresentations and fraud and had stepped down as head of the state agency. Roob denied to the Star that he had a sexual relationship with Liang, who had traveled on trips to China with Gov. Daniels and Mayor Seybold as part of larger trade delegation to Asia. It is unclear what, if any, role Liang may have had in introducing Michael An's investment to Marion city officials, although it would have been consistent with her economic development activities with the city during that time period.

An's Global Investment Consulting entered into a loan agreement with Marion for $2.5 million as part of the redevelopment plan for the YMCA building he acquired in February, 2009 in which the city agreed to take out the $2.5 million bond "for financing the construction of the project to create additional employment opportunities in Marion, Indiana, and to benefit the health, safety, morals and general welfare of the citizens of Marion and the state of Indiana." The bond indenture and related loan agreements were prepared by Barnes & Thornburg's Bruce Donaldson, while London Whitte's Bob Swintz acted as the city's financial adviser on the transaction. First Farmers Bank & Trust, which held a $5 million mortgage on the YMCA building, acted as trustee. Repayment of the bonds were to be paid out of TIF revenues generated by Global Investment Consulting's redevelopment project. Obviously, no revenues have been generated by the now-defunct project to pay debt service on the bond issue. According to the Chronicle-Tribune, the city refinanced the outstanding bond obligation less than two years later  in February, 2011 as part of a new $5.8 million bond issue. Swintz told the Chronicle-Tribune that the refinancing was undertaken to get a lower interest rate. The bonds are not scheduled to be paid off until 2021.

Shockingly, Marion city officials were unable to produce bank statements, receipts, vendor invoices, or check or wire transfer records to account for how more than $2 million in bond proceeds were spent for An's project. Mayor Seybold, who is a Republican candidate for State Treasurer this year, refused to comment on the missing documentation according to the Chronicle-Tribune. Naturally, An was nowhere to be found. The city's development director, Lisa Dominisse, produced just 16 pages of records in response to the newspaper's request. The documents were primarily invoices from business entities tied to the redevelopment project. Half of the 16 pages, according to the newspaper, pertained to expenses related to renovation and construction of the former YMCA building. "Three Global Investment Consulting invoices from 2009 and 2010 list purchases or services like 'roofing' and 'brick work,' but none was accompanied by supporting documents like receipts for the purchases or vendor invoices for the services," the Chronicle-Tribune reported.

Together, the invoices contain 27 line items. Five line items, totaling $98,033, are listed under “Michael An,” the CEO of Global Investment Consulting: “building purchase” ($54,754), “architectural drawings” ($15,000), “attorney fee” ($20,120), “accountant fee” ($6,000) and “water removal cost — basement — new sump pump” ($2,159).

The other 22 line items, totaling more than $1.9 million, are listed under “World Enterprise Group Inc.” with a federal tax identification number next to the company name. These line items include the “roofing” and “brick work” as well as “elevator,” “HVAC” and “plumbing,” for example.

World Enterprise Group was created by An, who is also listed as the company’s president, on May 6, 2010, according to state corporation records.

The city’s record-keeping has repeatedly been cited in annual state audits. Concerns noted in multiple years’ audits include omission of entire city hall departments from annual financial reports, transfer of funds without city council approval and inconsistent bank balance reconciliations.

After Gallaway deferred questions about bond financial records to the bond trustee at the bank, First Farmers Bank & Trust Vice President Tade Powell referred questions to the bank’s general counsel, Stephen Wilson.

Wilson confirmed the bank’s role as trustee, essentially meaning the bank was hired by Marion to hold and disburse the bond proceeds.

“The bond proceeds were deposited into an account held and maintained by the Trust Department of First Farmers Bank & Trust, and these bond proceeds subsequently were disbursed by the Trust Department in payment of (i) the costs of the issuance of these bonds, and (ii) costs of the of renovating the former YMCA building in the City of Marion, including site development,” Wilson said by email.

Wilson did not respond to follow-up questions about the lack of records like bank statements for the account that held the loan proceeds.

The Chronicle-Tribune also detailed bond proceeds paid out to the bond lawyers and financial advisers for the transaction:

• $35,000 went to national law and lobbying firm Barnes & Thornburg, which served as bond counsel;

• $25,000 went to Indianapolis-based financial firm London Witte Group, which served as financial adviser;

• $10,000 Marion-based law firm Kiley Harker Certain, whose partner Thomas R. Hunt served as counsel for Marion’s Economic Development Commission;

• $10,000 went to Marion-based law firm Spitzer Herriman Stephenson Holderead Musser and Conner, whose lawyer Herb Spitzer served as counsel for Marion;

• $2,500 went to First Farmers Bank & Trust Wealth Management, which served as trustee; and

• $25,000 was kept by First Farmers Bank & Trust, which bought the bond.

Advance Indiana uncovered another 200 pages of documents online related to the original bond issue, which can be accessed by clicking here.

The Chronicle-Tribune has blasted Seybold's management of the city's finances at length in recent editorials. A recent editorial accused Seybold of "aggressively spreading untruths about public matters that will affect the city for decades," including a claimed $2 million surplus in the city's budget. According to the editors, the surplus was only made possible because Seybold chose not to pay back the amount due on a $1.7 million loan to the water utility, which was originally scheduled to be repaid  in 2012, and delayed payment of other bills "until next year and beyond." The editors insist that Marion's financial situation has been propped up by piling up more debt to be paid off by future generations. The newspaper attacked Seybold for spending $7,000 in public funds to tout a surplus it claims truly doesn't exist.

One of the running feuds Seybold has with the editors of the Chronicle-Tribune is over the categorization of TIF-related debt. Seybold insists that it's not really city debt because repayment of the debt relies on property tax revenues generated by TIF economic development projects. The developers are the one's repaying the debt he argues; however, when the projects fail as has happened frequently in Marion and elsewhere around the state, the taxpayers are left holding the bag. As the Chronicle-Tribune's editors say, "That is a distinction without a difference." The editors point out that the city has been forced to redirect money generated by other projects within TIF districts to repay all of the projects like An's that failed to pan out.

The Chronicle-Tribune's Karla Bowsher has taken Seybold to task for doling out city contracts to the same people who are backing his campaign for State Treasurer, including Barnes & Thornburg's Bob Grand, who co-chairs his committee with Lake County attorney Dan Dumezich, and Jim Higgins, a partner at London Witte.

London Witte Group has served as financial adviser to the Seybold administration on general matters and particularly on bond transactions since at least 2005, making in the neighborhood of at least $25,000 to $30,000 per transaction, records shows. Barnes & Thornburg has served as bond counsel since at least 2005, making in the neighborhood of $35,000 to $50,000 per transaction.

Seybold pointed out that he has also worked with other firms on such matters during his three terms as mayor, although he has for years regularly used London Witte Group and Barnes & Thornburg for bond transactions.

"You're barking up the wrong tree. I don't make decisions of that kind," Seybold said. I try to hire really good people.

Grand agreed with Seybold ’s hiring of Barnes & Thornburg. "He did the best thing for the city because be got the best firm for the city, he said. "Our qualifications we could put up against anybody."

Barnes & Thornburg partner Brian Burdick, named on Seybold's campaign letterhead, is general counsel for the Indiana Bond Bank, according to the firm's website.

The Indiana Bond Bank is one of the boards that the state treasurer chairs in addition to his duties as the state's chief investment officer. Of the 13 boards the treasurer sits on, the Indiana Bond Bank may be the busiest, said Ball State University political science professor Ray Scheele, because so many local governments are authorized to raise money via bonds.

The Indiana Bond Bank helps local governments secure various types low-cost financing. According to the 2013 annual report of the current state treasurer, Richard Mourdock, the bond bank issued about $517 million in debt on half of local governments during the 2013 fiscal year . . .

It's unfortunate that you won't see this kind of reporting in the Indianapolis Star. Previously, this blog built on original reporting by the Chronicle-Tribune on how state and Marion city officials invested tens of millions of our tax dollars in a company founded and controlled by a California businessman who defrauded more than 500 investors out of $160 million through a Ponzi scheme remarkably similar to the one perpetrated by Indianapolis businessman Tim Durham. The public in Indianapolis doesn't have a clue about what's happening with the hundreds of millions of dollars that have been borrowed and invested in TIF projects, virtually all of which benefit developers that have contributed heavily to Mayor Greg Ballard's and other local politicians' campaign committees. The City of Indianapolis is paying huge fees to the same bond lawyers and financial advisers upon which the City of Marion is relying. We've demonstrated time and time again that city finances are being dictated by those same players. The Indiana State Treasurer's Office is similarly controlled by these same people and apparently will continue to be if these self-serving people get their way. Meanwhile, the taxpayers always wind up getting stuck with the bill for the bad deals this corrupt bunch of actors concoct on behalf of public officials whose decision-making is obviously blinded by the campaign support they receive from them.

Indiana House Democratic Leader Reacts To Monica Liang Affair

Indiana House Democratic Leader Scott Pelath is urging renewed legislative efforts to increase oversight and public accountability of the Indiana Economic Development Corporation in response to an Indianapolis Star investigative series, "The China Letter," which revealed how a highly-paid consultant of the agency had allegedly engaged in blatant self-dealing and solicited bribes while working for the IEDC and how the agency simply swept the whole matter under the rug. From Pelath's statement:

“With the recent news in the Indianapolis Star about more troubles swirling around the IEDC, it is becoming apparent that the agency that is supposed to help us create jobs is broken. It needs to be fixed.

“The investigation surrounding ‘The China Letter’ leaves many questions unanswered, in particular about the way that the IEDC handles its affairs as a part of state government.

“These concerns are not new. For years, there have been doubts raised about the accuracy of the job creation claims made by the governor and this agency.

“Their method of operation has become all too familiar: Make a big public announcement about large numbers of jobs that are coming, then disappear when the claims turn out to be inaccurate.

“Even before the recent controversies about Litebox in Indianapolis, Carbon Motors in Connersville, and Global Energy Solutions in Madison, there have been investigations – particularly by WTHR-TV in Indianapolis – questioning whether many of the numbers touted by the administration were even close to being correct.

“The current administration that helped create these problems is on its way out of office. It is content to sit back in its final days and make grand claims about job creation. The governor and his staff will be long gone before we see if those claims become reality.

“But with a new governor taking office in a few short weeks, there is plenty of time to see what has gone wrong, and work to improve our job creation efforts.

“To start, we can ask that the IEDC follow the same types of public oversight and accountability that we demand of all state government agencies. After all, we are talking about an agency that has the power to provide hundreds of millions of dollars in taxpayer-funded incentives.

“In addition, we have gone far too long in sitting by and letting this particular department make big claims about the numbers of jobs it creates, without any way to determine whether they are telling the truth or simply a story that makes good headlines initially. Upon taking office, Gov.-elect Mike Pence should examine all recent jobs announcements to determine their validity, then report back to the people of Indiana about his findings.

“Despite all the claims made by the current administration, Indiana lags behind when it comes to creating and keeping good-paying jobs.

“The time has come to demand that the IEDC live up to its charge, and stop hiding behind a shroud of secrecy.”

According to the Star investigation, Monica Liang, a Chinese immigrant, had been contractually hired by the agency as a $100,000 per year special assistant to former Commerce Secretary Mitch Roob. Liang allegedly accepted a $50,000 wire transfer from a Chinese billionaire with whom the agency was in discussions about economic development efforts and had solicited an $8,000 bribe from another Chinese businessman while working for the agency. A complaint filed with the agency by another vendor of the agency claimed Liang had told Chinese officials several state officials were shareholders in a nursing home project she was pursuing in Marion, Indiana, including Roob and Gov. Daniels. The agency dismissed the complaint as unsubstantiated but terminated Liang after it discovered she had lied on her resume' about her education credentials. Despite the seriousness of the allegations contained in the complaint, the matter was not referred to a prosecutor or law enforcement agency for further investigation.

UPDATE: The administration of Mike Pence will give added scrutiny to the IEDC, even if the Daniels administrations chooses not to do so. The Star has this statement from Pence:

“The governor-elect is aware of the issues that have been raised in the media regarding IEDC,” Pence’s spokeswoman Christy Denault said in a statement Monday. “He will give due consideration to the policies and practices of IEDC at the outset of his administration to ensure integrity and transparency.”

The Monica Liang Affair

Monica Liang with Gov. Mitch Daniels
 

I've often wondered why Gov. Mitch Daniels entrusted Mitch Roob with such important positions in his administration. As FSSA Secretary, he forced through the ill-fated privatization of the state's welfare services, which was nothing more than a ruse to direct hundreds of millions of dollars to the hands of his former employer, ACS. As head of the Indiana Economic Development Corporation, he was caught inflating job creation numbers credited to the efforts of the economic development agency. According to a lengthy report in today's Star titled The China Letter, he also covered up the actions of a Chinese immigrant with a checkered past who he had hired on contract in a $100,000 a year position to help with the agency's efforts to forge business deals with China. Before Monica Liang died suddenly in October, 2011, reportedly from a brain aneurysm, she had been quietly removed from her state position after she was later accused of soliciting a bribe and engaging in other self-dealing activities which potentially implicated other state officials. The Monica Liang affair, according to the Star's investigation, was simply swept under the rug and not referred to law enforcement officials for further investigation.

Here's the quick and dirty about the Monica Liang Affair according to the Star:

Liang immigrated to the U.S. from China after getting married in 1997 to an American businessman, Amadio Morais, who was working in China when the two met. She arrived in Indiana in 2001 and becomes a naturalized citizen in 2003. The following year she divorced her husband and walked away with a pretty decent sum of money as part of the couple's property settlement agreement. While living off her divorce money, she takes classes at IUPUI, invests in the stock market and meets a contractor from Marion, Bryan Harris, and winds up buying a building there for $32,000 and becoming a business administrator for a family medicine clinic. Liang gets introduced to Mayor Wayne Seybold, who hires her as a part-time international affairs coordinator, which provides her an opportunity to meet some of Indiana's top officials, including Gov. Mitch Daniels, and she travels with them to China on trade missions to serve as a translator. Liang meets Roob in 2009, moves from Marion to Carmel and later becomes a $100,000 a year contractual employee working for Roob as a Special Assistant to the Secretary of Commerce for Chinese Relations. Apparently while traveling with Mayor Seybold's wife to China after starting her new job, she was soliticiting business deals for herself, including a nursing home project for her Marion building that she claimed involved several government officials, including Daniels, Seybold and Roob. Liang manages to convince a Chinese billionaire, Ao Yuqi, to deposit $50,000 into her bank account. Liang also solicited an $8,000 bribe from another Chinese businessman to secure talks with Indiana officials. Roob later travels to China with Liang and inks a memorandum of understanding with a Chinese company, SME. A month later in July, 2011 a formal complaint is filed by Pacific World Trade with IEDC alleging misconduct by Liang. In September, IEDC terminates Liang and Roob steps down from his position. IEDC months later terminates its contractual relationship with Pacific World Trade after a 25-year relationship. 

Based on the Star's reporting, it sounds like IEDC is being less than forthcoming about the entire Monica Liang matter. IEDC tells the Star that Roob confronted Liang about the allegations, which she denied; however, she continued to take trips on the agency's dime and conduct business more than a month after the agency learned of the complaint against her. Her contract with the agency was terminated at the beginning of September, 2011 based on misrepresentations she had made about her education credentials, not because of the allegations in the complaint, which the IEDC says it was unable to substantiate. "She had claimed a bachelor's degree from Indiana University-Purdue University Indianapolis, but had only attended classes," the Star reports. "The state has a zero-tolerance policy for not accurately documenting your academic credentials," Roob said. Roob became quite defensive when questioned by the Star about the timing of his departure and his relationship with Liang:

On the same day Liang was let go, Daniels announced the resignation of Roob, who had hired Liang.

Officials say it was not related to the Liang incident. "Don't be preposterous," Roob said when asked by The Star about the timing of his departure. He said the two events happening on the same day was either a coincidence, or he wanted to take care of the matter before Dan Hasler took over as the new Secretary of Commerce. "I brought Monica into the agency, right?"

Asked if he had a personal relationship with Liang, Roob answered, "No."

With high praise from Daniels, Roob returned to the private sector as chief executive of the health-care technology company WoundVision. 

The money the Chinese billionaire wired into Liang's account was no longer in her account by the time her personal representative took over her estate following her death in October. Her estate is estimated to be worth about $120,000. The Star obtained records which confirmed the wire transfer of $50,000 into Liang's account had taken place. Roob and Liang had met with Ao in China a month prior to the wire transfer. Asked how that could have happened, Roob told the Star, "I have no idea." The Star also learned that Roob had actually conferred the title of  "Special Assistant to the Commerce Secretary" by letter before she even started work for the agency. "Roob acknowledged the appointment letter came from him but offered few details." "I don't even recall signing the letter, candidly," he told The Star. At the time, she was still working for Mayor Wayne Seybold, who was bothered that Roob had provided her the letter. He told the Star he would have objected to the appointment had he known about it. "At some point," Seybold said, "you gotta work for either one or the other."

Not surprisingly, ethics experts the Star reached found the agency's handling of the matter "woefully inadequate" and created the impression the agency was simply "sweeping it under the rug." "You look at it in hindsight," said white-collar crime expert and former federal prosecutor Peter Henning, "and you go, 'What were you thinking?'" As for what Gov. Daniels knew about the Monica Liang affair: “The governor knew the IEDC dealt with a personnel issue by terminating a contractor after receiving a complaint. He was not otherwise involved in an agency personnel matter.”

None of this surprises me. I used to work for a company that was trying to expand into China. I made one business trip over there and learned all I needed to learn about the business mores there. Remember, this is a country where religion is virtually non-existent, there is a one-child per couple limit imposed by the government, the government forces millions of abortions every year to enforce that limit and the vast majority of the people live in abject poverty and are forced to work at slave labor wages with few rights. People don't value human life there as much as they do in the U.S. The average Chinese citizen wants to get the hell out of the country because of how horrible life is there for the vast majority of people. There is a growing class of super wealthy in China thanks to an extremely corrupt mixed form of crony capitalism and communism that exists there, a system that apparently is very attractive to many of America's elites given the direction we're headed. If you're an American company looking to establish a business relationship in China, you must first set up a Chinese company under which you will conduct business. The China business entity will not meet with government approval until you include individuals blessed by the government as partners in your endeavor, which typically includes Chinese government officials. When Liang told the Chinese counterparts that government officials were shareholders in her American company, they wouldn't have batted an eye because they're used to that arrangement over there and would assume government officials get kickbacks from businesses in one form or another.