Indianapolis Bar Association Announces Opposition To Marriage Discrimination Amendment

The Indianapolis Bar Association last week surveyed its membership for their views on HJR-3, the proposed constitutional amendment that would add to the state's Bill of Rights a provision outlawing legal recognition of same-sex marriages or civil unions despite the fact that the state's Defense of Marriage Act already bars legal recognition of same-sex marriages. The bar membership overwhelmingly expressed opposition to the amendment, with 73.1% against to just 5.4% favoring it. About one-fifth of the 2,196 Indianapolis area attorneys who responded to the survey thought the organization should remain neutral. According to the association, the participation rate in the survey was the highest survey response rate in the organization's history. The organization's board explains its position:

Considering these survey results and the Board's review of the proposed amendment and companion legislation, the Indianapolis Bar Association opposes passage of the proposed amendment and legislation.  First, based on Indiana constitutional history and precedent, the content of this amendment stands out as inappropriate.  In the 163 year history of the State's constitution, it has been amended on subjects such as term limits, taxation, governmental structure, elections, and courts. Prior amendments dealt with what government could and could not do, and how the government is to be formulated and operated, not the regulation of its individual citizens. Second, members of the Indianapolis Bar Association expressed great concerns about the unintended consequences upon potentially hundreds of Indiana laws if HJR-3 is passed and ratified, including those in the areas of family law, criminal law, employment law, health care law, and tax law. This uncertainty would likely lead to an interruption in the administration of justice, years of litigation and significant expense for individual citizens and Indiana businesses.

 

 

"Presidential Puppetry": A Must Read

I don't often promote books to my readers, but this one requires your attention. This past week, I've had the opportunity to read a complimentary copy of Andrew Kreig's, "Presidential Puppetry: Obama, Romney and Their Masters." It dovetails perfectly with the cynical conclusions I've drawn about our two-party system in this country often on this blog and how the top leaders of both parties, as well as the big corporate media, simply do the bidding of their puppet masters, the military industrial complex that has assumed virtual control of every major aspect of this country, particularly following the government coup d'etat accomplished in 1963 by the assassination of President John F. Kennedy. The forces that ended his presidency have prospered and dramatically strengthened the iron fist they exercise to the detriment of most Americans who remain silent as rights we believed our constitution guaranteed to all of us as citizens of a democratic republic are eroded by a Nazi-styled government instituted for the benefit of an elite few.

Andrew Kreig's book draws upon his life-time of experiences with our political system as an investigative reporter, attorney, author, business strategist and non-profit executive working in Washington, D.C. Kreig readily acknowledges his past work for powerful companies, along with his work investigating official misconduct through the non-partisan legal reform group, the Justice Integrity Project. He also has a unique perspective as the son of Margaret Kreig, a best-selling author who confessed her role to him as a covert CIA asset when her work took her to China during the early 1970s.

I know that some of you have been dismissive of my past reporting on this blog about the degree to which the CIA and the national security state apparatus has penetrated this country from top to bottom as a bit too conspiratorial but Kreig's book confirms the worst fears. Ideologically, Kreig comes from the opposite end of the political perspective, but his well-researched work leads him to the same conclusion that I have reached about President Barack Obama's puppet strings being pulled by the very same persons who pulled the strings of both Bush presidents and Bill Clinton.

Kreig closely examines Obama's hidden family history and unequivocally concludes that Obama and his other immediate family members, including his mother and grandparents, all had backgrounds working for the CIA long before his name entered the national discussion just like President George H.W. Bush and his son, President George W. Bush. Kreig doesn't overlook the Bush family ties to the financing of the Nazis prior to and during World War II like the mainstream media does. Similarly, Kreig's research picks up on young Bill Clinton work as an intelligence asset dating back to his early college years. Romney's ties to Bain Capital and the Mormon Church also explain his ties to the same puppet masters.

So why didn't the news media discuss the hidden pasts of all of our recent presidents who were performing work covertly for the CIA prior to launching their political careers? Kreig helps explain those puzzling omissions by the mainstream news media, as well as coverage of other public affairs by connecting the dots too many ignore. Yes, their corporate bosses answer to the same people at the end of the day.

Kreig observes three particular omissions  by the media that peaked his curiosity, including the nearly-absent coverage of the post-911 anthrax attacks on members of the media and U.S. Senators, the unusually aggressive prosecution of Jeane Palfrey, the so-called D.C. Madam, and Karl Rove's engineering of the 2007 purge of a number of U.S. Attorneys around the country, and Rove's role in the political prosecution of Alabama's Democratic Gov. Don Siegelman. In case you were curious, Rove's treacherous spying and covert ways are well-documented in Kreig's book.

Kreig's book also offers the stories behind the stories on a number of recent topics of interest, including the resignation of Gen. David Petraeus as CIA Director, Benghazi, plots to commit massive election fraud in 2012 through electronic voting machines, the CIA connection to the Boston Marathon bombing suspects and the latest and newest mysteries revolving around massive federal surveillance of American in the aftermath of whistle blower Edward Snowden's disclosures.

If you like drinking the Kool-Aid that is served up to you by the leaders of the Democratic and Republican Parties, Kreig's book isn't your drink. If you are looking for an insightful, well-researched and critical analysis of the thoroughly corrupt, unethical, vindictive and self-serving elites who have turned our government and nation into something completely unimaginable in the worst nightmares of our Founding Fathers, then Kreig's book will satisfy your thirst for learning more than the half-baked and grossly misleading political analysis and disinformation of the giant corporate media to create the false reality they want us to believe. As Kreig explains in the book's preface, it's for "those who want to understand the news, not just watch it."

House Elections Committee Chairman's Gay Son Disappointed In Father's Support Of Marriage Discrimination Amendment

Chris Smith is the son of State Rep. Milo Smith (R-Columbus), who is chairman of the House Elections Committee which just this past week passed HJR-3 on a 9-3 vote along party lines to the full house for consideration. He's also gay. Chris Smith posted on Indiana Equality's Facebook site his disappointment of his father's support of a constitutional amendment to enshrine discrimination against Indiana's gay and lesbian citizens in the state's constitution.

Hello everyone. I am the gay son of Representative Milo Smith, chairman of the Elections Committee that just passed HJR-3 onto the full House. I'm not here to badmouth my dad. I'm terribly disappointed in his decision and beliefs, but he's not going to change them now if he hasn't after all these years of knowing I am gay. I am here to support you and my friends who remain in Indiana. They are my extended family.

Chris currently resides in Culver City, California according to his Facebook profile. His father is tax consultant in Columbus who formerly worked for Cummins Engine, which as a company has spoken out forcefully in opposition to HJR-3. Chris added the following comment on his personal Facebook site about the debate over HJR-3:

As I look at the fight over marriage equality in my home state of Indiana, I'm reminded why I have such a disregard for politics and government. Politics is simply a fight for control in order to rule over others. If you want to tell others how they have to live their lives, then it should come as no surprise when others want to tell you how you have to live yours.

Support For Marriage Discrimination Amendment In The House Collapses

Three years ago, the proposed marriage discrimination amendment easily passed the House of Representatives on a bipartisan, 70-26 vote. A survey of House members reported in the Star this evening now shows an equal number of members planning to vote for and against HJR-3 and more than a dozen votes short of the majority required for its passage. The Star poll of lawmakers shows 38 plan to vote for it, while 38 plan to vote against it. Thirteen lawmakers told the Star they are undecided, 11 of which are Republicans, and eleven members refused to comment. More than a third of the House members who voted for the amendment three years ago now plan to vote against it, including several Republicans. Not a single member has switched from opposing to supporting the amendment.

Indiana Lobby Protection Commission Hiding Data From The Public

Once upon a time, the Indiana Lobby Registration Protection Commission provided real-time data on its website about which individuals, organizations and businesses were registered to lobby the legislature at any given time, including all compensated lobbyists hired to represent those interests and the subject matter on which they were lobbying. Of course, once upon a time the ILRC was under the control of the Indiana Secretary of State until corrupt lobbyists and lawmakers became concerned that the office was getting too serious about enforcing Indiana's lobby registration and reporting laws, which were already among the weakest in the country. The law was changed to put it under the control of the legislative leaders so the fox could guard the chickens.

If you want to learn anything about who is lobbying whom on what this session, you will find nothing on the ILRC's website other than data from previous years. The most current data is dated July 3, 2013. Gift reports haven't been updated since 2012. This is done intentionally to keep the general public in the dark about what is happening at the State House. If this data had been provided to the public in real time, we wouldn't have had to wait for a report in the IBJ that pay-to-play contractor Ersal Ozdemir had hired a team of lobbyists months ago to lobby state lawmakers this session to subsidize the construction of an $87 million soccer stadium he plans to build for his new professional soccer team, Indy Eleven. [Note: Ozdemir's number one fan is his next door neighbor in a tony Carmel neighborhood, IBJ publisher Mickey Maurer]

Indiana's lobby registration and reporting laws are a joke. Essentially, lobbyists can put down on the forms anything they want without fear of any consequences for lying on the forms, particularly about gifts they provide lawmakers. Most dishonest lobbyists don't fully disclose the extent of the gifts they give to lawmakers, who have a gentleman's agreement with corrupt lawmakers not to disclose them so the lawmaker can avoid reporting them on their financial disclosure forms as well. A few years ago, I uncovered credible evidence that Advance America's Eric Miller was not properly disclosing his lobbying activities on the organization's reports filed with the ILRC. My evidence was bolstered by admissions Miller had made during a recorded interview with a former Star reporter, Brendan O'Shaughnessy, who interviewed Miller about the findings of my investigation of his organization. Miller, of course, is at the forefront of current legislative efforts to place the marriage discrimination amendment, HJR-3, on the state's ballot this year for consideration by voters.

I later filed a complaint against Miller with the ILRC. After several months passed and I heard nothing, I contacted the then-executive director Sarah Nagy and inquired about the status of my complaint. She told me that it couldn't be acted upon because I had only filed one copy, not the five copies that were required, even though there was no such requirement noted at the time to file a complaint. After I provided the additional copies, Nagy told me that the commission met behind closed doors to discuss it at its next regularly-scheduled meeting and informed me that unless I furnished the tape recording O'Shaughnessy had made of his interview with Miller, the ILRC could not act on my complaint. When I contacted O'Shaughnessy, he told me that he destroyed the tape despite me telling him how valuable the statements made on it were to prove Miller's wrongdoing. Inexplicably, O'Shaughnessy had been ordered off the investigative story by his editor, Dennis Ryerson. When I contacted Ryerson, he confirmed the tape had been destroyed and that the newspaper would not participate in providing any evidence to the ILRC against Miller. When I informed Nagy that the Star had destroyed O'Shaughnessy's recorded interview with Miller, I received the following response from her:

The full Commission has reviewed your complaint, along with your supporting materials. There is insufficient showing on your part to merit further investigation. Should you have additional and verifiable evidence, you may re-submit your complaint. At this time, the matter is closed.

It was bad enough that the Commission refused to act on the credible documentary evidence I provided but absolutely shocking that the state's supposed newspaper of record would actually destroy evidence that could be used to prove Miller's violation of the state's lobbying law. A few years later, the ILRC fired Nagy after she had haggled with lobbyists for months over how to interpret a new ethics law the legislature passed in 2010, which accomplished very little other than window dressing.  The law lowered the threshold at which lobbyists are required to report their spending on lawmakers, from $100 to $50, and banned them from taking legislators on out-of-state junkets, both of which unscrupulous lobbyists and lawmakers have no problem skirting. The Attorney Disciplinary Commission later initiated a complaint against Nagy after some of her clients complained that she took money from them for work she never performed, primarily post-conviction relief petitions for criminal defendants. The Supreme Court agreed to a voluntary suspension of her law license in 2012 after Nagy blamed her inaction on client files due to a medical disability.

If you take a look at the people appointed to serve on the commission overseeing the ILRC, it's not surprising that the agency is so ineffective at regulating and enforcing the lobby registration and reporting laws. Current members include two former lawmakers, Sue Scholer and Joe Micon, both from Lafayette, Jan Abbs, a former attorney for the Indiana Senate now working as a corporate attorney in Muncie, and Evansville attorney Terry White. The current part-time executive director of the ILRC is Charles Harris, a former staff attorney for the legislature who was responsible for drafting tax legislation. He left the legislature to accept a job at Ivy Tech as a Vice President of Development and now has a private law practice, in addition to working as the ILRC's part-time director. The commission has a budget of about $280,000 annually for 2 full-time employees and one part-time employee. So if you're not happy about Eric Miller's current actions regarding the advocacy of HJR-3 at the State House, blame the ILRC and the Indianapolis Star.

Below are links to my original research on the lobbying activities of Advance America and Eric Miller:

Advance America's Lobbying Reports Belie The Extent Of Its Lobbying Activities
Advance America's Tax Returns Misleading And Deceptive
Miller's Self-Dealing At Advance America Escalates
Miller And Advance America Abuse Non-Profit Status
Miller Enriched By Self-Dealing At Advance America
Miller Helping Miller
Miller Gloats Over Defeat Of Lobbying Reform
More Miller Self-Dealing To Report
Legality of Advance America's Payment To Miller's Law Firm Questioned
Miller Turns To Pulliam For Help
Miller Speaks Out On Election And His Future, Avoids Accountability

The Indy Chamber of Anti-Commerce Wants Suburban Taxpayers To Bail Out City Of Indianapolis

No legitimate business owner would pay membership to belong to the organization called the Greater Indianapolis Chamber of Commerce. It exists solely for the benefit of a few corrupt businesses that use government as a tool for self-enrichment at the expense of all the rest of us; it could give a damn about rank-and-file business owners and taxpayers. More importantly, it is now an extension of the municipal city government since it merged with Develop Indy under one umbrella organization that is heavily funded with city taxpayer dollars. Against that backdrop, it comes as no surprise that this anti-business, anti-taxpayer organization is proposing a commuter tax on suburban taxpayers to funnel more money into the most corrupt, mismanaged municipal government in the state of Indiana to further enrich their self-dealing business interests. The group's head, Mike Huber, who lacks any basic understanding of what it takes to run a business because he's been on the government payroll virtually his entire adult life, tells the IBJ what a wonderful concept a commuter tax is, an additional income tax of up to one-quarter percent on suburban workers who commute to Marion County:

This is one of the most significant, if not the most significant, fiscal issues facing Indianapolis' ability to invest in its amenities, and therefore, is a serious nine-county issue," said Huber, a former deputy mayor under Mayor Greg Ballard.  

For this press release masquerading as a news story, the IBJ drags out the usual suspects to concur in Huber's view. The multi-millionaire businessman Jeff Smulyan of Emmis Communications claims it's a "fairness issue" that he feels strongly about. "You can't be a suburb of nothing," he says. The reporter would lead us to believe that Mayor Ballard hasn't decided where he stands on the issue, but it quotes his chief of staff, Ryan Vaughn, as saying, "We absolutely believe there needs to be a discussion about it." Of course, Vaughn answers to Barnes & Thornburg's Bob Grand, not Mayor Ballard, who handed control of city hall to Grand and his law firm the day he was sworn into office. Westfield Mayor Andy Cook, another fake Republican mayor, says he believes that "we need to spread some of the costs Marion County is facing to the suburbs," Cook said. All of these sorry characters are also supporting state legislative efforts to raise everyone's local income taxes to fund a mass transit boondoggle to stretch Indianapolis' IndyGO system into the suburban counties.

Instead of blaming people who flee Marion County to live in the suburban counties for Indianapolis' fiscal woes, why don't they do some introspective thinking about what it is they are doing wrong in the first place that makes people choose to live beyond the borders of Indianapolis?. Clearly, consuming a disproportionate share of the available tax dollars to fund world-class sports facilities and luxury hotels and luxury housing projects for pay-to-play contractors has done little to stem the general trend of people with means gravitating towards the suburban counties.  Notice that Huber's concern is focused on the city's ability to fund "amenities," not basic city services. By all accounts, there has been no shortage of funds when it comes to funding whatever luxury amenities the downtown mafia envisions; it's funding of basic city services and our schools that always comes up short. Every time our taxes are raised under the guise of paying for basic city services, the powers that be play shell games with the additional revenues that prevent the added tax burden from being allocated to the priorities sold to the public in the first place to gain approval of tax increases. Fellow blogger Fred McCarthy has the right idea about this bad notion:

Various over-sold and over-used property tax schemes have put municipal functions in financial need.  Now we have a proposal to exacerbate the problem by increasing income taxes without ever looking over the shoulder to check where current revenues are used - or abused. 

For one who spent a lifetime career with a variety of business associations, it is a tragic reversal to see one of the largest of such organizations support new taxation without a single suggestion that the need for a serious review of current spending policies should come first.

President Reagan was surely correct when he said the closest we’ll ever come to perpetual motion is the initiation (and funding) of another government program

Ozdemir Trying To Force Taxpayers To Pay For Downtown Stadium For His Soccer Team

The IBJ is reporting that Ersal Ozdemir has hired State House lobbyists to lobby Indiana state lawmakers to create a state funding mechanism for an $87 million soccer stadium he wants to build for his new professional soccer team, Indy Eleven, at an undisclosed location in downtown Indianapolis. According to the report, Ozdemir claims without substantiation that his professional soccer team will generate at least $8 million annually in tax revenues, and that he plans to ask state lawmakers to allow his professional sports franchise to capture up to $5 million annually for stadium costs. “We’re just asking for the money we’re going to create,” Ozdemir said.

Ozdemir wants his organization to be allowed to capture admissions take revenues he anticipates that his team will generate from ticket sales, as well as a portion of state sales and income tax revenues from the downtown Professional Sports Development Area, which was created to allow the Capital Improvement Board to capture revenues to pay the operating and maintenance expenses on Lucas Oil Stadium, none of which are paid by Colts' team owner Jim Irsay. The CIB has also been subsidizing Herb Simon's Indiana Pacers to the tune of at least $10 million a year for the past four years, which like the Colts, pay absolutely no rent for using a sports facility built with taxpayer dollars.

According to the IBJ, former Indiana GOP Chairman Murray Clark, is heading up a team of lobbyists hired by Ozdemir this session in an effort to convince lawmakers to enact legislation authorizing the public subsidy for Indy Eleven's proposed stadium. The team plans to play at IUPUI's Carroll Stadium, which holds up to 11,000 until a new stadium is built, which would hold up to 18,500 fans.

Ozdemir, a Turkish immigrant, has experienced a meteoric rise in his profile as a construction and real estate developer over the past decade that has coincided with large campaign contributions he has doled out to the politicians. Mayor Greg Ballard, one of the largest recipients of campaign contributions from Ozdemir, handed one of his businesses $6.5 million in taxpayer cash to build a mixed retail/parking garage in Broad Ripple after Ozdemir hired Ballard's former chief of staff, Paul Okeson, as a high-paid executive. Ballard also initially appointed Okeson to serve on the Capital Improvement Board that overseas the downtown sports facilities, where he briefly served as the CIB's treasurer. Okeson left the CIB after Ozdemir submitted a proposal to manage the CIB's facilities during a period of time that it considered outsourcing that work.

The CIB, which got a big taxpayer bailout a few years ago after the CIB cooked its books to make it appear that it was insolvent, that included new taxes and state subsidies, is now sitting on more than a $70 million cash surplus while the city of Indianapolis pleads poverty in paying for basic city services. Ballard at that time appointed attorney/lobbyist Bob Grand to head up the Capital Improvement Board despite the fact that his law firm represented Simon family interests, including the Indiana Pacers. Grand brokered the state bailout plan that resulted in tens of millions of dollars in new subsidies flowing to his law firm's client.

Did Marion's Mayor Wayne Seybold Gamble The City's And His Future On A Ponzi Schemer?

Larry Polhill (Left) with Gov. Mitch Daniels and Mayor Wayne Seybold

Marion Mayor Wayne Seybold, along with Gov. Mitch Daniels and other state and local economic development leaders, stood shoulder to shoulder with a San Bernardino, California businessman, Larry Polhill, in December, 2012 to announce economic development incentives to lure Cafe' Valley, a Phoenix-based baked goods supplier, to build a $48 million facility at the site of the former Thomson plant in Marion to anchor its eastern U.S. operations. The terms of local economic development incentives were not made known at that time, but Gov. Daniels pledged $5.8 million in conditional tax credits on behalf of the Indiana Economic Development Corporation based on the company's investment plans and more than 100 new jobs the company promised to create when the facility opened in the spring of 2014 and at least 400 jobs by 2018. The new jobs will pay only about $12 an hour. Seybold told the Chronicle Tribune that he was very excited about what he described as a "sweet deal" for the city and a project that Café Valley's Polhill described as being "well underway.":

 “We’re excited that they’re taking one of the most blighted areas in the city and really enhancing it,” he said.

City officials hope the project could be the catalyst for further development at the former television and electronics factory. With one notable exception, it has been largely empty since it was closed in 2004.

Café Valley plans to demolish part of the building’s southwest portion, near the corner of South Adams and 38th streets, ultimately utilizing one-third of the 60-acre property. The exact configuration is still being determined, as is the final cost.

Larry Polhill, Café Valley principal partner and board of directors member, said the company was “well underway” with designs for the new facility and securing food processing equipment.

He said the company hoped to have its financials finalized by early next year in order to break ground by March 2013.

“We’re on a very tight timeline,” he said.

Polhill said the company hoped to receive New Markets Tax Credits from the federal government in order to secure financing for the project. If they do not receive them, it could derail the project.

These credits incentivize investors who build in low-income communities and are allocated once per year.

“Hopefully there will be some new allocation after the first of the year,” Polhill said.

What neither Mayor Seybold nor Gov. Daniels mentioned to the public was that Café Valley's Polhill, an officer and one of the company's three directors, was embroiled in a bankruptcy of his San Bernardino-based private equity real estate firm, American Pacific Financial Corp., in a Las Vegas federal bankruptcy court and an investigation by the Securities & Exchange Commission looking into allegations that he had defrauded nearly 500 investors out of $160 million through a Ponzi-like scheme that closely resembled the one run by Indianapolis' Tim Durham through his Ohio-based Fair Finance Company. Concerns raised by a member of Marion's common council were brushed aside months later when a complex local TIF financing deal that puts Marion taxpayers on the hook for tens of million of dollars raised questions about Polhill's bankrupt private equity firm and an ongoing SEC investigation. As Councilwoman Joselyn Whitticker expressed her concerns according to the council's minutes from a special meeting of the council on February 25, 2013:

There is not a person in this room, nor on this Council, who does not believe in the growth of the City of Marion and they want it to prosper, but, based on some things that have happened in the immediate past and some things that have been put with the Café Valley deal, it puts us in limbo. And based on some information she has regarding one of the principals, she has deep concerns and those deep concerns regard the whole issue of a primary principal who has been repeatedly and is, at this point, in the SEC and it is on the grounds of fraudulent misrepresentation and omitting of facts and that’s Mr. Larry Polhill. This is public knowledge and this came from the SEC. She also has concerns because with somebody and that case is ongoing.

Whitticker was expressing doubts about a plan by the financially-pressed city to provide $4.2 million to Café Valley to acquire the Thomson property and perform demolition work, and to issue two separate bond issues totaling up to $26.5 million for distinct purposes. An initial Series A bond issue in the amount of $14.5 million was described to council members as the "meat" of the deal. The first bond issue included the $4.2 million to allow Marion's Growth Council to purchase the property, $5 million for Café Valley for site preparation, $2 million to refinance old debt and the balance for a built-in reserve fund and fees associated with the bond issue.

In 2012, the city backed a $2 million loan for Earthbound Recreational Vehicles with county economic development income tax (EDIT) revenues. Earthbound Recreational Vehicles closed down a short time later, leaving taxpayers holding the bag to repay the $2 million loan. The city's financial advisers insisted that the old debt needed to be refinanced with the new debt. Council members were told that taxes generated from the new facility would be recycled to pay off the newly-issued bond debt.

City officials agreed to move forward with the issuance of the Series A bonds payable over 25 years without knowing whether Café Valley would succeed in obtaining the additional funding it needed for the project, which it intended to obtain from New Markets Tax Credits made available through the federal government as part of President Obama's economic stimulus plan. A second Series B bond issue of up to $12 million was described as the "carrot" to entice Café Valley to remain and expand in Marion after the City acquired the needed land and expended millions for the new improvements. Polhill attempted to explain to council members how his company would obtain financing using federal tax credits at its February 19, 2013 meeting in a way only a snake oil salesman could do it:

Larry Polhill told the Council he heard a lot of definitions of things today that have been a lot different than reality, he believes. Federal tax credits are, in fact, tax credits, not tax dollars. They are federal dollars which are credits against somebody’s income taxes. Not Café Valley. Somebody in the country will buy those tax credits and that generates cash for them to bring to this community. President Obama signed $7,000,000,000 of additional federal tax credits just in January which is why this project is going forward. They can bring $40,000,000, maybe $50,000,000 of those tax credits to Marion or they could end up somewhere else. Those credits, that $7,000,000,000, there are people standing in line for it. We’re at the head of the line at this point and they want to bring those credits to Marion. And this is not a handout by any stretch. People have asked, well (inaudible), and he’s really getting frustrated answering answering those questions so he apologizes for his tone but, you know, this is a $50,000,000 project. It’s a $25,000,000 bank loan. It’s personally guaranteed by him and the other principals of the company so he thinks they’ve got a lot of skin in this game. They backstopped the city’s tax bonds to the extent that the city is signing on that. He doesn’t know what more they expect them to do, Polhill said. Now they got a $25,000,000 bank loan to start with, they have state tax credits for $5,000,000, they got the TIF contribution for (inaudible) $5,000,000, which is, by the way, limited at $10,000,000. So if the city’s counsel is good and sells those credits for more, that’s a benefit to the city. They don’t get another penny over that amount.

In other words, it's just free money waiting to be claimed by someone, even business owners under investigation by the SEC for defrauding innocent investors. Council members were equally confused about the lease on the property the city was acquiring on Café Valley's behalf as it was the source of the company's personal financing for the project. Polhill told them that city taxpayers aren't paying for the lease; rather, this was just a mechanism "in order to get the bonds." Nobody seemed to understand or be able to explain the lease of the property to Café Valley, let alone who was actually going to wind up owning the property after all was done and said so the council turned to its TIF lawyer on the project, Barnes & Thornburg's Bruce Donaldson, to explain:

Bruce Donaldson with Barnes & Thornburg told the Council essentially the company is going to own the site. It’s going to lease it to the Growth Council and then the Growth Council is going to lease it right back to them. Each side is $1.00 and then the Redevelopment Commission joins the lease for purposes of making the payments on the bonds. And so the lease is a mechanism to get the Redevelopment Commission’s TIF, which is the primary source, the project TIF, the primary source of repaying the bonds into the transaction. So the lease is really just a, like Larry said, a mechanical, it’s an accommodation by the company to allow them to have an asset to lease, to access the Redevelopment Commission TIF money, Donaldson said. Thompson asked, is this a lease to own? Donaldson replied, the company will own the project and it will continue to own it throughout the lease and then when the lease is over, the company will own the project. Thompson stated, okay, not that he really understands but he appreciates what he’s said because it’s helped him a little bit.

So did you get that since the council member who asked the question obviously didn't understand after Donaldson got through explaining it? The use of the term "lease" is all smoke and mirrors to put the taxpayers on the hook for the debt incurred to build Polhill's $50 million facility as a TIF-funded project. Polhill's Café Valley will own the property from the get-go, throughout the term of the 25-year lease and after the bonds are retired, assuming the company is still around at that point.

Seybold still insisted the complicated financing arrangement did not represent any long-term debt for the city. “That doesn’t become debt of the city,” Seybold told the Chronicle-Tribune. “It’s not like we go out and take a bond to build something. This is all based on the property tax and the ability of the company to pay their property taxes. …“If the project were not to happen, then the company would cover those bond payments until someone else came along. As long as the taxes are paid, then the bond gets paid. If they don’t get paid — if there’s a shortfall — then the company covers that.”

Needless to say, the city went forward with the Café Valley project and broke ground on the project on March 31, 2013, even after the Chronicle-Tribune brought to Seybold's attention the fact that the company had previously purchased land in Spartanburg, South Carolina where it had planned to base its eastern U.S. operations until the company scrapped the project in 2011. Polhill told the newspaper that the company had purchased a former pie plant in Spartanburg and discussed economic development incentives with officials there but that it was a lower priority than a new facility it built in Phoenix that year. Marion's development director, Darren Reese, dismissed the concern: "People buy and sell facilities all the time." The company is still projecting an opening date this spring and has hired its first employees to assist in the hiring of full-time workers for the facility. See a timeline of events for the project as detailed quite nicely by Frank Stahl at Indiana Policy Review here.

Meanwhile, the SEC concludes its investigation of Polhill's American Pacific Financial Corp. last September and concludes that "he falsely presented investment opportunities that were safe and reliable based on collateral that didn’t always exist, and his fraudulent misrepresentations left investors with nothing to show for their investments when APFC declared bankruptcy.” The SEC found that Polhill had issued promissory notes to nearly 500 investors under the false premise that they were secured by specific properties or other collateral. The notes offered investors interest payments of between five and seventeen percent per year. According to the SEC, Polhill had used money raised from investors to buy and sell real estate, and to acquire distressed assets, including Café Valley with the company he started back in the last 1970s. Polhill's company consistently paid interest on the investors' notes until it ceased making payments in 2008. By 2010, investors suspicions grew when APFC filed for Chapter 11 bankruptcy protection in the U.S. bankruptcy court in Las Vegas, listing debts of $152 million owed to nearly 500 creditors.

According to the San Bernardino Sun, the court-appointed bankruptcy trustee, Christopher Barclay, described what he found as a "number of failed investments and poor management decisions" made by APFC's president, Larry Polhill. Barclay described Polhill's management of the company as "Byzantine." Based on his recommendation, the bankruptcy was converted to a Chapter 7 liquidation proceeding "in an effort to find the most beneficial resolution for the company's many creditors." Polhill told the newspaper that he had made a settlement offer to the investors, but the investors complained that it was only for a fraction of what they had invested with APFC. "My parents lost their life savings," said Derick, who did not want his last name used for fear of retaliation against his parents. "They're in their 80s now and they can't really recover that money. They lost $100,000." At the urging of defrauded investors, State Rep. Joe Baca (D-San Bernardino) asked the district attorney, Michael Ramos, to investigate the investors' allegations of fraud. The DA's office told them their best recourse was to pursue a remedy in civil court. Ramos' office later told investors it was "looking into the matter and to be patient," but nothing ever became of that investigation.

The SEC's investigation found that, although some of Polhill's businesses were successful, most had failed, a fact never disclosed to APFC's investors. In the complaint announcing a settlement reached with Polhill under which he agreed to be barred from acting as the officer or director of any public company, the SEC laid out the fraud claims against Polhill and the securities law violations that he committed:

The SEC alleges that Polhill made several material misrepresentations to investors. Specifically, he told investors that the notes were secured by collateral when no such security interest existed. He failed to disclose that the collateral securing some investors' notes already had been pledged to other lenders. Polhill represented that he would notify investors if their collateral went into default when that was often not the case. For instance, one investor's note specifically stated it was secured by property located in Hesperia, Calif., that was owned by APFC and pledged as collateral. However, APFC sold the collateral in 2004, and neither Polhill nor APFC informed the investor that his collateral had been sold and there was no longer any asset securing the note.

The SEC's complaint charges Polhill with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 of the Securities Exchange Act. Polhill has consented to the entry of an order that permanently enjoins him from violating these laws and permanently bars him from acting as an officer or director of any public company.

Yeah, Polhill's scheme to defraud investors was remarkably similar to the Ponzi scheme Tim Durham ran with his Fair Finance Company that defrauded small Ohio investors out of more  than $200 million. The SEC's complaint against Polhill specifically references his use of Café Valley notes that he personally signed to defraud investors in the scheme:

As another example, over 80 investors held notes from APFC note offerings from 2004 to 2008. These notes specifically stated that the notes were secured by accounts receivable owed by Cafe Valley, a privately-held bakery, and the notes claimed this account receivable had been pledged as collateral for the notes. However, Polhill and APFC never disclosed that this collateral was already subject to a senior bank loan.

Even worse, the complaint says that Polhill continued issuing promissory notes listing as collateral for businesses that had already failed without notice to the investors. When one of Polhill's cousins who had invested in APFC learned of the fraud, Polhill substituted his collateral for him without notifying the other investors. The complaint alleged that Polhill soliticited investors across the country but never registered any of the securities he offered to investors in violation of federal securities law. Polhill also offered investors the opportunity to invest in limited partnership, which were also not registered, and comingled funds raised from those investments with APFC's funds in the form of loans to APFC that were used to pay interest on the uncollateralized promissory notes. The SEC's complaint stated, in part:

Polhill and APFC did not maintain the collateral pledged as security for the notes throughout their terms, and often sold or lost the original pledged collateral without notifying investors.  APFC and Polhill also did not notify investors when collateral went into default and did not offer investors the options of (i) reducing their loans; (ii) accepting substitute security; or (iii) placing their funds in trust pending their approval of a replacement security as required under the terms of the promissory note. Finally, APFC and Polhill did not hold the pledged collateral in safekeeping and available for inspection by the investors upon request.

In fact, APFC and Polhill had no procedures or safeguards in place to track the status of investor collateral and ensure that appropriate notice was being provided in the event of default.

Furthermore, even when Polhill was fully aware that collateral securing investor notes was impaired, he did not tell investors. For example, in one instance, Polhill's cousin held one of the APFC notes. When his cousin learned that the collateral was no longer available, the cousin asked Polhill for substitute collateral. Polhill agreed, and substituted new collateral to secure the note. However, Polhill did not inform any of the other investors holding that note that the collateral was impaired . . .

A website titled, APFC Ponzi Scheme, was created to expose Polhill as a "criminal" and a pathological liar." It should be noted that no criminal charges have been filed to date against Polhill. Information gleaned from the Internet indicates that Polhill grew up in Illinois where he first went into business in the late 1960s with his former high school business teacher, Bill Guymon, who still works for him, as a partner in buying a gas station in South Beloit, Illinois. Polhill, who describes himself as a "professional opportunist," later moved to California and began raising money for a number of business ventures, including a space launch provider, a health club, several Illinois food manufacturers, an Internet service provider, a trucking company and various real estate investments. Kelly Space & Technology in San Bernardino is one of Polhill's proudest investments. A news article from The Press-Enterprise in San Bernardino from several years ago describes a civil lawsuit that a 39-year old man, Gregory A. Letterly, filed against Polhill, a former family friend that he alleged had sexually molested him repeatedly when he was a pre-teen boy in the early 1970s during trips to the Salton Sea, Big Bear Lake and Lake Havasu. Polhill told The Press-Enterprise that he denied all of the allegations in Letterly's "unfounded" lawsuit at the time.

Earlier this year, Advance Indiana noted that Marion's financial woes were becoming a financial albatross for Seybold's statewide campaign this year for the Republican nomination for State Treasurer, which will be decided by delegates to the Republican State Convention in Fort Wayne in June. Seybold recently asked the city council for authorization to borrow $12.8 million in tax anticipation notes after the city began the calendar year with only $320,000 in its general fund. A recent State Board of Accounts audit criticized the city for having a "lack of financial controls" that led to recurring problems with  "overdrawn cash balances, bank account reconciliation concerns and questions about funds use" according to the Chronicle-Tribune. Seybold was also recently sued in Grant County Superior Court for an unpaid personal credit card bill in the amount of $5,357 owed on an American Express credit card issued by Centurion Bank. When Seybold announced his campaign last June, he said he had the support of more than 50 state lawmakers, municipal officeholders, and national and state and community leaders.

Witness Describes Shooting At Purdue To Exponent

A student tells the Purdue Exponent that he was standing in his lab classroom in the Electrical Engineering Building on Purdue's West Lafayette campus when 23-year old Cody Cousins, a teaching assistant in the engineering department, shot another teaching assistant, 21-year old Andrew Boldt, at point blank range multiple times with a gun only feet away from him. Here's how Andrew Pawling described the shooting:

Andrew Pawling was simply attending his second lab class of the semester on Tuesday when he heard “pop” sounds in his classroom just a few feet behind where he was standing.

“As I was turning around I heard another pop, then I saw my (teaching assistant) fall to the floor. The guy got on top of him and then shot him in the face, once or twice and maybe two more times,” Pawling, a junior in the College of Engineering, said.

He witnessed Andrew Boldt, his teaching assistant for ECE 362, being killed “point blank” on Tuesday afternoon by an unrecognizable male who had entered the classroom through the one and only door. The suspect was not a student in the class that had about 10 to 15 students in it at the time, according to Pawling, and the shooter stood between many of the students and their only escape out.

“(Andrew) was obviously trying to stop him. I don’t think he really had any chance to really fight back much,” Pawling said. “I wish I could have helped him, but by the time I realized what was happening he already got shot in the face two times and there wasn’t really anything I could do.”

Pawling told the Exponent that he was close to the door and turned and ran away, warning others as he fled the building that there had been a shooting. Pawling relayed to a police officer outside the building what he witnessed. Another female witness told the Exponent that she came upon Cousins shortly after the shooting kneeling outside the building with his hands on his head near the bus stop without a coat in the extreme cold weather conditions. She proceeded to ask him if he was okay. “He said something like, ‘Stay away,’ ” Liu said. “I stood aside and waited for awhile and I noticed that there was blood on his hands (and) on the shoes. So I thought he was injured and waiting for some professional help ... Then I saw the police cars coming and I heard the sirens and the police came and arrested him.”   “He looked so calm ... He kind of looked sad,” Liu said.

It remains a mystery what, if any relationship, there was between Boldt and Cousins. Both worked as teaching assistants for Professor Stephen Meyer, who has declined media requests to discuss the shooting. Meyer sent out an e-mail shortly after the shooting requesting that any witnesses to the shooting contact police immediately, a message heeded by Pawling, who had returned to his apartment after telling police about the shooting. He later contacted police and went in for questioning according to the Exponent.

UPDATE: Now the story is that Cousins not only shot Boldt, including two shots at point blank range to the face after he fell to the ground, but he also stabbed him before leaving the gun and knife laying on the floor in the lab classroom as multiple witnesses looked on. The picture of a calm, well-lied student is changing as well. A teaching assistant, Ashley Eidsmore, describes Cousins as an "all-around rude individual." Professor Thomas Talavage said he was "intense and aggressive" about his projects and "didn't like to be told he was wrong." From the Journal & Courier's report on Cousins' arraignment today:

Court documents allege that officers who entered the building saw bloody footprints in the area of Room 067. Inside the classroom, police discovered the body of 21-year-old Andrew Boldt.

Boldt had been shot and stabbed, police said. Officers recovered a handgun, a knife and several spent shell casings near his body.

Witnesses in the room reportedly said they saw Cousins stab and shoot Boldt. Surveillance footage also showed Cousins in the building.

Information about the type of handgun used and the number of shots fired was not included in the affidavit.