Board of Public Works Rubber Stamps Water-Sewage Utility Sale

This should come as no surprise. Indianapolis' Board of Public Works unanimously signed off on Mayor Greg Ballard's proposed sale of the water and sewage utilities to Citizens Energy. When the board is comprised of nothing but political hacks, we should expect no better of this meaningless decision. The Board's chairman is David Sherman, who runs DPW. He formerly worked in the Goldsmith administration before taking a job with the private operator Goldsmith chose to run the City's sewage treatment facilities. He moved back into city government to engineer deals to benefit his friends in the private sector.

Next up is the approval of the deal by the Water Works Board. It is chaired by college professor and perennial congressional candidate Marvin Scott. A couple of months ago I noticed while watching one of the Board's meetings on WCTY that Scott at the end of the meeting asked the record to reflect that a vote on an earlier resolution be revised to show that he abstained from voting. He said the staff had raised a conflict of interest concern with him that he wanted to address. I asked Scott after the meeting what his conflict of interest was. Scott told me that he could not recall. He said he would get back to me with an answer. I'm still waiting for his answer.

The biggest joke on the board is lobbyist Frank Short. Short actually lobbied for the passage of the original purchase of the water company from NiSource while serving as a City-County Councilor. Short, in addition to serving as Washington Township Trustee, is currently paid to lobby for such entities as the Marion Co. Superior Courts, Marion Co. Recorder's Office, ICVA, Cash America, 21st Amendment liquor stores, Indiana Association of Chiefs of Police and the Indiana Apartment Association. Short is originally from the Chicago area and brings with him all of that baggage. Whoever decided to appoint Short to this board must have real contempt for good government.

The Water Works executive director, Matt Klein, boasted at the last meeting about all the attorneys, consultants and experts the City has hired to make the sale of the utilities possible. Klein, a former attorney for Bose McKinney who was cited in a multi-million dollar sanction handed down by Judge McKinney in the Southern District for his role in withholding critical evidence in an environmental liability case, doesn't mention that a lot of those same attorneys and consultants reviewing this deal were the same firms that made millions off the original purchase of the water company by the City. That's the deal that had the City paying about double what the utility was actually worth.

Extortion Pays For Herb Simon

Herb Simon's Simon Property Group didn't become the king of shopping malls without learning the art of extortion. It looks like the extortion card is about to pay off big time for the Simons in their quest to get taxpayers to pick up all of the costs of operating Conseco Fieldhouse. Herb has given the CIB until June 30 to agree to his demands; otherwise, he will explore moving the Indiana Pacers to another City. The CIB would have us believe the loss of the team would have dire economic impact on the City's economy. Nothing could be further from the truth. Simon would have to pay a break up fee well in excess of $100 million if the team decides to move. That's money the CIB could use to pay off the debt on the existing arena, thereby dramatically reducing its annual costs.

Instead of doing what makes sense economically for the City, the CIB's leadership is talking about a deal with the Simons whereby the CIB would take over the management of Conseco but still allow the Simons to pocket all of the revenues from the facility. In other words, we're going to give the Simons the same deal we gave Jim Irsay with Lucas Oil Stadium. You may recall that the state bailout of the CIB was prompted because the CIB failed to budget the additional cost of running Lucas Oil Stadium, along with the loss of revenues it had previously earned from operating the RCA Dome. Ann Lathrop, the CIB's president, claims the CIB will achieve operational efficiencies if it assumes control of Conseco, in addition to the convention center and LOS. This would be the same CIB leadership which just months ago said it was considering privatizing the operation of those facilities in an effort to save money. Sen. Luke Kenley isn't worried. He says the CIB can simply raise visitor taxes again to pay for the added cost.

All of these discussions are based on a dubious claim by the Simons that they are losing tens of millions annually under the current lease agreement. Not once during the history of this lease have the Simons been required to publicly disclose the audited financial statements for the Indiana Pacers and its entertainment affiliate. How do we know these claims of losses really exist? Further, it's time for Ann Lathrop to fully disclose all of the clients of her accounting firm, Crowe-Horwath. I have strong reason to suspect that she has major conflicts of interest that she has never disclosed to the public. Show us the list, Ann.

Meanwhile, the widow of Mel Simon has listed her Bel Air mansion for sale at $50 million. She'll need that money to pay all of the attorney fees she will face as she defends herself against the accusation of Simon's children that she manipulated her late husband while he was suffering from dementia to rewrite his will to leave her everything. The loss of the Bel Air mansion will be no big deal. Bren Simon still owns a $50 million home in Carmel and condominiums at a Colorado ski resort and Manhattan.

Clark Continues High-Flying Ways At Indianapolis Airport Authority

The CEO of the Indianapolis Airport Authority is under investigation by Florida prosecutors for his lavish travels while serving as head of an airport in Jacksonville, Florida. The IBJ's Chris O'Malley finds that John Clark spent $37,000 on travel during his first year alone at the Indianapolis Airport Authority. That amount covered the cost of 23 trips, including a conference in Kuala Lampur, Malaysia. Clark attended another conference in Manchester, England. And he attended another gathering at Augusta National Golf Club in Georgia, home to the Masters PGA Golf Tournament. Clark even billed the airport authority for his lodging at the Super Bowl in Miami. If you average four days for each trip, it means Clark spent at least three months of his first year on the job out of town. Clark is paid $270,000 a year.

This guy should be fired right now. It's obvious he is all about the glitz and glamour of the job and doesn't have a clue how to run an airport. When you're spending all your time after taking a new job travelling around the world at taxpayers' expense, you can't be devoting your energies to figuring out how we're going to pay for this $1 billion-dollar airport. Revenues are plummeting as costs skyrocket. The only reason Clark was hired was because Lacy Johnson, the former President of the Indianapolis Airport Authority, demanded that an African-American be hired to run the airport. Johnson's objective is to make sure he has someone in charge who will dole out MBE contracts to firms that he and his friends control. After all, shouldn't Lacy be able to afford another Bentley?

WTHR's Milz Makes Case For Pacers Subsidy

Whenever the Capital Improvement Board wants a puff piece promoting its latest effort to give more subsidies to the billionaire sports team owners, it calls up WTHR's Mary Milz, who can always be counted on to produce a favorable story for the team. Milz does just that in her latest story explaining the importance of giving a $15 million a year subsidy to the Pacers. Jim Morris tells her the Pacers are $150 million in the hole. The scoreboard needs replaced, furniture needs replaced and the entire arena needs to be wired for Wi-Fi. Morris says the Simons can't afford to put any more money into the building, even though it is required to maintain the building as part of its lease agreement with the CIB. After all, the Simons get every dollar of revenue Conseco Fieldhouse generates under its lease agreement. Morris tells Milz the Pacers aren't interested in moving to another city; however, if the money isn't forthcoming, he tells her there are plenty of other cities in North America which would like to have an NBA team.

Milz then interviews Paul Okeson, Mayor Ballard's former chief of staff who traded his city job for a high-paying job with a major city contractor, Keystone Construction. Ballard promptly appointed Okeson to the CIB. He tells Milz the City can't afford to lose the Pacers. Ergo, we must find the money to subsidize them. He tells her the City is already losing hotel revenues because of the Pacers' slump. Is that our fault? Is it our fault the team hired a bunch of thugs to play for it a few years ago who ran around town shooting off guns and generally engaging in gang-banging activities? Can they blame area residents for not purchasing expensive tickets to see their team play? I've already said it, and I will stand by it. Mayor Ballard fully intends to divert some of the money he expects the City to receive from Citizens Energy if the sale of the water and sewer utilities is carried out to pay for this new subsidy for the Simons. That's what he calls economic development. Mayor Ballard scoffed at that notion during one of his puff ball interviews with radio talk show host Abdul Hakim Shabazz this morning. We've got your number, Greg. You have lied to us so many times you don't deserve the benefit of the doubt on this one. You're only interested in getting your free courtside tickets to the Pacers games. You could give a damn less about the taxpayers who foot the bill for your excesses.

Fair Finance Trustee Sues Laikin For $20 Million

DCI Investments is a Tim Durham-controlled company which received more than $20 million from Fair Finance, which in turn loaned the money to purchase real estate in Los Angeles for Dan Laikin, an investor in DCI Investments. No security interest was ever perfected in the loans made to Laikin, who is now facing sentencing for insider trading in connection with his role running National Lampoon, another Durham-controlled company. The bankruptcy trustee for Fair Finance has initiated a lawsuit against Laikin to recover the $20 million DCI Investments loaned him. The trustee seeks to impose a constructive trust on the real estate acquired with the funds in favor of Fair Finance. It is interesting to note that federal prosecutors in Pennsylvania have repeatedly delayed the sentencing of Laikin, which suggests they may be seeking his assistance in their case of insider trading against Durham and others. Laikin is the brother of Robert Laikin, CEO of Indianapolis-based Brightpoint.

Law Firm Enmeshed In Lake County Sleaze

The Northwest Indiana Times' Marc Chase has a revealing story about how Indianapolis' Barnes & Thornburg managed to work on both sides of a trash-to-ethanol facility in Lake County. The firm represented both the county's waste management district and the winning bidder for the project, World Net Capital 1, LLC. The story gets more interesting when you learn that controversial Lake County attorney Michael Pannos had a role in helping Wold Net Capital land the contract, which has led to speculation that he owns an interest in the company. Indiana Attorney General Greg Zoeller has been pursuing litigation against Pannos and others he claims have reaped millions of dollars in casino revenues from a non-profit established by East Chicago in connection with its riverboat gaming facility. Here's a few of Chase's observations on Barnes & Thornburg:

Through months of committee meetings, presentations and debates on the trash proposals, the waste management district used the Indianapolis office of Barnes & Thornburg to help analyze the companies proposing to consolidate county trash processing.

Powers, the winning bidder, acknowledges that same law firm represented his business interests for about 18 years prior to making his Lake County trash processing bid, including work to incorporate his financial firm, World Net Capital 1 LLC.

Langbehn said the county used Barnes & Thornburg as an additional set of legal eyes to complement the waste district's own attorney, Clifford Duggan. The county also hired a Wisconsin-based engineering firm and a separate consultant to analyze the financial plans and proposals of the three bidding companies.

"We stayed away from any conflict that anybody might have by not hiring anybody locally who might lean towards different people," Langbehn said. "We told Earl (Powers) this had to be the most honest thing he has ever done because this is Lake County, Ind. We set the standards right away."

During his second presentation to the full Lake County Solid Waste Management District board, Powers divulged that Barnes & Thornburg had served as his attorney.

Because the relationship was disclosed, no state ethics rules were violated, said Seth Pruden, interim executive secretary for the Indiana Supreme Court Disciplinary Commission.

Representatives from Barnes & Thornburg did not return calls from The Times seeking comment on the matter.

In a recent interview with The Times, Powers said he severed ties with the law firm six or seven months prior to signing a contract with the county. That contract was approved by the waste management district board in November 2008, more than a year after Powers disclosed his connection to Barnes & Thornburg to the board.

Both Powers and Langbehn deny that Powers Energy received any preferential treatment in the bidding process because of the connection between the district and Powers' company to Barnes & Thornburg.

Langbehn noted that Powers' specific attorney -- though within the same firm -- did not perform any of the legal work for the county.

Though very little was made of the Barnes & Thornburg connection throughout the bidding process, county officials concede that ties between the trash-to-ethanol plans and a well-known region political and business figure raised some eyebrows.

Here's what Chase had to say about Pannos' role in the deal (check out the photo in Chase's story of the the lake-front mansion owned by Pannos):

In a November 2009 interview with The Times, Powers said Northwest Indiana lawyer Michael Pannos did legal work to help secure the site in Schneider -- a small southern Lake County town -- where the trash-to-ethanol plant is to be built.

It was a revelation that sparked speculation throughout Lake County political circles that Pannos, a former Indiana Democratic Party chairman, had a financial stake in the trash-to-ethanol plan -- a contention Langbehn, Scheub and Powers all deny.

Repeated attempts by The Times to reach Pannos at his Merrillville home and by phone were unsuccessful.

In an unrelated matter, the Indiana attorney general and city of East Chicago have been locked in a legal battle with Pannos and fellow political insider Thomas Cappas, alleging they have reaped "enormous" salaries while at the helm of East Chicago Second Century Inc. The for-profit firm is accused of squandering millions in local casino revenue it received under an agreement brokered by the administration of former Mayor Robert Pastrick.

In a more recent interview with The Times, Powers acknowledged Pannos worked as a lawyer for a Merrillville financial firm that Powers was trying to use to aid in the financing of the Schneider trash-to-ethanol plant. However, he said the firm failed to deliver, and he severed ties with the company.

The questions came after The Times learned that Pannos had entertained Powers at Pannos' Culver, Ind., lake home sometime in mid-2009. Powers and Scheub both acknowledge that, during that visit, Pannos and Powers also visited Scheub at the commissioner's nearby Culver farm property.

"That was the first time I knew Mike Pannos had anything to do with this -- when Earl stopped by my house with him," Scheub said.

Following Pannos' name association with Powers' efforts, Langbehn said county officials told Powers he could not involve Pannos in any way with the project.

"Earl (Powers) was told on no uncertain terms Mike Pannos will have nothing to do with it," Langbehn said. "I don't care how far removed it is."

Langbehn, who in addition to Scheub remains one of the most staunch government supporters for the trash-to-ethanol plant, acknowledges his own ties with Pannos.

Langbehn described Pannos as among his "best of friends." Langbehn is godfather to Pannos' daughter, and the men's wives also are close friends, Langbehn said.

In an Aug. 21, 2008, district board meeting, Langbehn also revealed to the board that he had become aware of connections between Pannos' cousin and the second trash-to-ethanol bidder, Indiana Ethanol, the company Powers was affiliated with when he first spoke to Scheub about bringing such a plant to Lake County. Langbehn disclosed he had learned that the Pannos' cousin was an investor with Indiana Ethanol.

But Langbehn said none of those affiliations matters, and he dubbed those who attempt to link Pannos with the trash-to-ethanol project as sabotaging naysayers.

"You can spin anything negative on anything you want," Langbehn said. "If anyone had a problem with this plan, they had board meetings over a 3 1/2-year period in which they could have stepped forward and addressed these concerns."

Who Is Peddling Influence To City Councilors?

The Indianapolis City-County Council finally posted on its website the financial disclosure statements city-county councilors filed last July. The financial disclosures give us a clear indication of what businesses and interest groups are seeking to influence the council the most. It also tells us which councilors are on a government payroll or are doing business with the government. The disclosures revealed that at least 10 of the 29 councilors work for a governmental entity. Those include the following:

Brown: Indianapolis Fire Department

Day: State of Indiana

Lewis: Indiana Criminal Justice Institute

Mahern, B.: State of Indiana

Mahern, D.: City of Indianapolis

Malone: State of Indiana

Minton-McNeill: Indianapolis Public Schools

Moriarity-Adams: Marion County Assessor

Nytes: Mapleton-Fall Creek CDC

Plowman: IMPD

Councilors are required to dislose the source of any gift of $100 or more or aggregate gifts during the year of $250 or more. Note that most councilors did not disclose the value of the gifts. The only thing we can conclude from their filings is that the gift was for more than $100 or there were combined gifts during the year of $250 or more. Most of the gifts involved sporting event tickets or dinners. Here's a look at some of the gift givers and who they were gifting:

Indianapolis Motor Speedway: Caine, Cardwell, Coleman, Day, Hunter, Lewis, Lutz, Mahern, B., Mahern D., McHenry, McQuillen, Moriarty-Adams, Nytes, Pfisterer and Speedy.

Pacers: Cardwell, Cochrum, Day, Hunter, McHenry, McQuillen and Vaughn.

Colts: Cochrum, Hunter, Lutz, McQuillen and Nytes.

IPL: Caine, Cardwell, Coleman, Hunter, Lutz, Scales and Vaughn.

Indianapolis Airport Authority: Cardwell, Cochrum, Day, Hunter and Sanders.

Hunt Construction: Bateman, Lewis, Mahern, B. and Mahern, Dane.

Capital Improvement Board: Cochrum and McHenry

Citizens Energy: Hunter, Lutz and Moriarity-Adams.

AT&T: Cain, McHenry and Moriarity-Adams.

ICVA: Cardwell & Vaughn

Short Strategies: Lutz and Vaughn

United Consulting: Hunter

United Water: McHenry, Moriarity-Adams and Pfisterer.

Mayor Greg Ballard: McHenry, Scales and Vaughn.

Keystone Construction: McQuillen

Milestone Construction: Hunter

R.W. Armstrong: Cochrum

Oppenheimer: Cochrum

Mays Chemical: Lewis

French Lick Resort: Cochrum

A number of councilors also have an interest in businesses that solicit or do business with the City of Indianapolis. Those include:

Cardwell: Cardwell Do It Best Home Center

Lutz: Legal services for the City of Indianapolis

Nytes: Printing Partners, Inc.

Oliver: Oliver Janitorial Services

Smith: RBS Consulting (contract with the Department of Workforce Development)

Vaughn: Barnes & Thornburg legal services for City of Indianapolis

Ballard Plans To Use Utility Money For CIB Bailout

It was just a matter of time before Mayor Greg Ballard came clean on the real reason he is pushing a sale of the water and sewer utilities to Citizens Energy. He now concedes that a major priority in his plan to spend money derived from the sale of the utilities will include economic development, which of course means the Capital Improvement Board. Yes, Ballard will use that money to give a $15 million a year subsidy to the billionaire Simons so they won't take their team to another city. Ballard is already likening his sale of the utilities to Gov. Mitch Daniels' Major Moves deal. The comparison pretty much ends right there. Daniels' Indiana Toll Road deal involved a lease, not a sale of a government asset. If the deal goes south, the taxpayers still own the toll road. The toll road deal netted the state $3.8 billion. If Ballard had bothered to read his MOU he signed with Citizens Energy, he would have figured out that the City of Indianapolis will net no money in the long run from the sale of the water and sewer utilities.

Brizzi Sold Out Rape Victim For Business Partner's Employee

Fox 59 News' Russ McQuaid has another shocking story from the Marion Co. Prosecutor's Office. His latest story tells how Carl Brizzi cut a deal with an accused rapist that allowed him to get off with a mere misdemeanor charge. The accused rapist is an employee of Paul Page, a business partner of Brizzi's. Amy Lindsey, the victim in this case, believes Brizzi sold her out.