Monday, May 17, 2010

The Cost of Paying Professional Fees For Transfer of Utilities

When the City of Indianapolis acquired the water company less than ten years ago, it was estimated that the City incurred at least $13 million in professional fees to make the transaction happen. That doesn't include the tens of millions it incurred subsequent to the purchase to manage, make amendments to current agreements, refinancing (which cost us a $60 million penalty) etc. Democratic mayoral candidate Brian Williams does a favor for the public by releasing today some of the costs associated with the proposed transfer of the utilities to Citizens Energy. As it stands, the cost will be at least $10 million. I suspect there is at least another $5 million hidden elsewhere in various city budgets, including DPW, the corporation counsel's office and the mayor's office. Here's a look at who is getting rich off this transaction. Note that Baker & Daniels is being compensated at the highest rates in the City of Indianapolis for legal work--$540 an hour. Williams' numbers don't have an estimate on the total cost of their bill by the conclusion of this transaction, which I can assure you will run into the millions given the number of lawyers they are sending to meetings to just sit and watch. Did the City consider a fixed fee or a capped fee? Of course not. Baker & Daniels is the firm that employs Democratic mayoral candidate Melina Kennedy, who is considered the front-runner in 2011. Mayor Ballard issued another no-bid contract to the public relations firm that hired his son last year. If you look at the $1.8 million we're paying to Capital Source for financial advice and the $6.75 million we're paying to Citigroup for financial advice for this smoke and mirrors financing plan they've presented to us that ensures once again the piling up of more debt the City of Indianapolis does not have the money to repay and higher rates and taxes for its citizens. I've said it before and I'll say it again, if the City of Indianapolis was a private corporation, it would have long ago filed for bankruptcy or been forced to do so by its creditors. All Republican councilors voted for the transfer tonight, basically ensuring the corrupt deal put together by Barnes & Thornburg behind the scenes on behalf of its client, Veolia, goes through intact. Despite his obvious conflict of interest, no Republican councilor objected to putting Vaughn in charge of negotiations post-council approval as their representative. And these are the same people who bitched and moaned about Monroe Gray's inconsequential contracts for his failed concrete company four years ago and how they were going to change all that. Thanks to the contributors who often share tips with me about corruption by our city-county officials. Keep them coming, and I will keep exposing them. We're going to bring these people to justice for the crimes they are committing against this community. If you are a city employee and need whistleblower protection but fear retaliation from your corrupt boss, please contact me or another attorney to discuss your rights.

-$10,000 per month to Hirons and Company for public relations

-$150,000 to RW Beck for appraisal of the water and wastewater systems

-An undisclosed amount billed at rates up to $540 per hour to Baker and Daniels for legal services

-$1.8 million to Capital Source for financial advice

-$6.75 million to Citigroup for financial advice


Downtown Indy said...

What sort of financial advice costs 1.8M to 6.75M?

I could have given them some advice for free - send that money to the library instead.

Gary R. Welsh said...

My biggest laugh came when Republicans insisted they weren't rushing this deal and they were taking it in stages just like they did the water company purchase a decade ago. They paid more than double what the water company was worth, which cost taxpayers an extra $250 million. They then incurred another $800 million in debt subsequent to the purchase to cover the cost of operating it. Yeah, I trust these clowns to make wise decisions.

Marycatherine Barton said...

Tremendous thanks for your promise in this post, that is to bring these corrupt scumbags who operate out of the city-county building environs to justice, Gary, and your willingness to be the lawyer to whom government whistleblowers can turn. Alleluia! Brizzi, be ashamed.

varangianguard said...

You know, I don't mind paying for the City to acquire professional advice and services, but any "financial" advice has to be considered suspect these days. And, I don't know of any lawyer in town who is worth $540/hr, except in their own delusional mind.

More, what ever happened to competitive bidding for government work around here? That alone would bring costs WAY down, IMO.

M Theory said...

Why aren't we hiring $100 an hour attorneys? I have no doubt excellent legal advice and help can be hired in this town for that rate.

This is an outrage.