Monday, June 14, 2010

Star Reports Meaninglessly On Professional Fees For Utilities Deal

Big campaign contributors and political insiders profiteer big time off of deals like the City is currently undertaking to transfer the sewer and water utilities to Citizens Energy. Democratic mayoral candidate Brian Williams and blogs like this one have tried to focus scrutiny on those professional fees. After the transaction is pretty much already a done deal, the Star decides to do a story that is so patently biased in favor of defending the nearly $10 million taxpayers will have to pay to make this deal happen that it is not even worthy of passing as credible news reporting. I won't even waste your time discussing the useless dribble Francesca Jarosz wrote about in this biased story, but I will share with you the dollars being paid to each of the firms. In fairness to her, perhaps she tried to do a tougher story and Ryerson nixed it. Because Citizens Energy will pass its costs on to ratepayers in the form of higher rates, you will pay the costs of both sides in the transaction.


» Financial advisers: $5.6 million to Citigroup; $970,000 to Capital Source (which employs former Indianapolis Mayor Stephen Goldsmith).

» Lawyers: $2 million to Baker & Daniels.

» Analysis/due diligence: $250,000 to Crowe Horwath.

» Engineering: $206,500 to R.W. Beck.

» Public relations/communications: $322,500 to Hirons & Co.

» Total: $9.3 million


» Financial advisers: $366,809 to Morgan Stanley & Co.

» Lawyers: $1.2 million to Ice Miller; $47,000 to Hackman Hulett & Cracraft; $14,475 to Krieg DeVault Alexander and Capehart.

» Analysis/due diligence: $604,000 to Booz & Co.; $221,547 to Deloitte & Touche; $61,476 to The Revere Group.

» Engineering: $457,180 to Malcolm Pirnie.

» Public relations/communications: $90,093 to Bose Public Affairs Group.
          » Total: $3.1 million

The story doesn't mention the nearly $1 million haul Capital Source, the firm with which former Mayor Steve Goldsmith is associated, is getting to provide financial advice on the deal; you have to pick up that little snippet from the side bar accompanying the main story. So what other deals was he getting paid for work during all that time he spent on the 25th floor since Ballard became mayor? He now works as a deputy mayor for New York's Mayor Michael Bloomberg. Somebody should be taking a close look at the ethics disclosure form he would have been required to complete as part of  taking that job.

Mayor Ballard's son got a job with Hirons & Co, to which the City is paying $322,500 for public relations advice as this blog noted several weeks ago. The Mayor already has a bunch of people on his payroll supposedly being paid to perform communications work. Is he saying Robert Vane and is staff aren't up to the job? Hirons had anticipated a hard-hitting piece by the Star on the family connection to Ballard so it even prepared talking points it circulated among its staff to defend the relationship as pointed out on the Indianapolis Times blog, but as it turns out, neither the firm nor Ballard needed to fear any fallout. Hey, this isn't the Chicago Sun-Times or the Chicago Tribune after all where such a relationship would have made front page headlines.  A memo said of Greg, Jr. working for the firm:

Right now, we anticipate the story to focus on fees paid to all outside consultants who made this deal happen. It’s apparent we won’t be the largest recipient of dollars.

There are many law firms, and others, in the mix. One question that has surfaced (resulting from Blogger traffic) centers on having Greg Ballard Jr. on our payroll.

If you are approached by a client or colleague, keep these talking points in mind.

We have a diverse client base including federal, state and local government as well as other public and private sector accounts.

We have multiple contracts with the City of Indianapolis and this utility sale is one of several agreements in which we have considerable involvement.

Our efforts have focused on providing public involvement and outreach to a multiplicity of stakeholders, politicians and media sources.

Our fees have totaled around $320,000 to date, as we head into final city/county council action on the measure, for literally dozens of public forums and meetings

Greg Ballard has been a Hirons intern/employee for two years.

He performs exceptional work and we’re proud to have him on our team.

The Star had decided this deal must go through and it will cover up any information that might harm public approval of the deal just like it did with the CIB bailout and the latest handout demand by the billionaire Simons for its Pacers team.

CIB President Ann Lathrop's firm, Crowe Horwath, is getting paid a quarter of a million dollars for useless analysis work, while we're still giving $5.6 million to Citigroup, one of the worst run financial institutions in America. Citigroup got billions in bailout money from the federal government while it paid out bonuses of more than $25 billion to its top executives in 2009. Any advice that firm provides to this City should be viewed quite skeptically. It's also worth observing that Citizens is spending less than a third of what the City is spending on its professional fees. The story continues to ignore the linkage between campaign contributions to Ballard and the awarding of city contracts. What do they teach these people in jounalism school these days who become reporters? God help us.


JudgeNot said...

don't forget the bone to Ed Treacy thru Bose

M Theory said...

Ryan Vaughn and I have the first of our weekly coffee meetings scheduled for this Wednesday morning at 9:30 am at Henry's coffee shop downtown. ----

I'm going to print this. I think it is the perfect thing to discuss at our first meeting.

Gary R. Welsh said...

That's being paid by Citizens Energy and not the City. BTW, Matt Klein, who is running the waterworks department, worked for Bose immediately prior to joining the Ballard administration. His violation of the discovery rules in a case he worked on there cost the firm several million dollars in sanctions ordered by Judge McKinney. He basically withheld evidence that proved the environmental liability of his client which evidence had been generated by the very unit of IDEM which he used to run in the Daniels administration. Like I said, unless you're a person who wants to fleece the taxpayers, you aren't eligible for a job in the Ballard administration. It's the most dishonest administration in the City's modern history. We will be paying for Ballard's and his cronies' corruption for decades to come.

Gary R. Welsh said...

Melyssa, You've been telling that same thing to me for months that you were having a meeting with Vaughn. I'm getting sick of hearing about it.

Paul K. Ogden said...

"In fairness to her, perhaps she tried to do a tougher story and Ryerson nixed it."

I'd bet my meager paycheck on it.

Bill said...

The contract that was given to Hirons was a NO BID contract. NO RFP went out to other firms. Hirons was chosen simply because of Gregg Ballard. End of Story.

$300K for what? I estimate that is 2,113 hours of PR time.Please explain to me how that can happen. That is 40 hours a week for 53 weeks. Hirons is screwing us through his employees father.

M Theory said...


I said Vaughn and I first started emailing about it a couple months ago. Finally we got it scheduled. ANd we plan to make it a regular meeting.

I don't think we're going to get anything accomplished by simply criticizing all the time and not meeting in person so that we can better understand where each other is coming from.

I know you don't want to meet with him and that's fine. But it's only fair to let him state his position on matters and why. Besides, it gives our criticism more credibility. If we don't meet, when he extended the invite, it makes us look flaky.

I will update the blog later today with the info on the meeting and leave it open for others to join us...that includes you if you want to show up and give the man a chance to explain himself.

Afterall, that's only fair.

Covenant60 said...

Hey Gary... check this out....

Gary R. Welsh said...

Michael, I saw the article where the former Hawaii elections official said he would swear in court that no birth record for Obama exists at either of the two hospitals at which Obama has claimed he was born at various times. I also saw the article where Egypt's president said Obama assured him earlier this year he is a Muslim. He is an imposter as I've always maintained. Why else would he spend millions of dollars on attorneys fees to prevent access to his vital records? The American people have no idea that their government was hijacked by foreign powers. It's pathetic.

Gary R. Welsh said...

No, Melyssa, you contacted me several months ago and asked me to attend a meeting with Vaughn with you and others that you had supposedly arranged so he could explain his position on the utilities transfer and why he didn't have a conflict of interest. When I asked you for the specifics of the meeting, you couldn't provide any. You said you were still working on it. I never told you I wouldn't meet with him. There is no point in it now. It's a done deal. Are you that clueless?

guy77money said...

Where is the rest of the 50 million for due diligence going? I have to agree the professional fees are way over inflated. I would really like to see a break down of these fees paid out and to who. A hourly breakdown would be wonderful! Of course I am not naive it will not happen. When the city bought the water company the first time around the council asked for a break down of fees and the law firms involved blacked out all of the dollar amounts stating that there was a law suit against the city buying it that prompted them to do it. They did find one contractor billing the city for 24 hours on the phone for one day. I wonder how much over billing goes on in these cases.

Paul K. Ogden said...


I remember when people criticized Obama, rightly, for his saying we just need to sit down and talk with terrorists - as if every dispute is just a matter of people not understanding each other which can be resolved if two people meet and talk in person.

I haven't seen any indication that Ryan Vaughn is remotely open-minded or willing to change. Do you think he'll stop voting on issues where he has a conflict because we had a talk? You think he's going to stop supportunit reckless spending and tax/fee increases? Vaughn isn't going to change.

The only possible reason to even meet is to take away his phony claim that he wanted to resolve differences but the other side wasn't willing to meet. Of course it's a bogus claim (since he's not open-minded), but the argument works with some people.

Gary R. Welsh said...

guy, The last water company deal cost about $13 million in professional fees from a summary I saw that was given to Bradford when he was still on the council. Giving bad advice has its reward in this town. You get paid millions more to give more bad advice.

M Theory said...

Paul, You are right. I see no chance that Ryan will change his tune and work in our best interests before the best interests of his new employer, B&T.

However, I'm going to talk with the man. I'm not going to let my judgments keep me from having an open ear...especially because he reached out.

At the very least it would rude to not meet when he asked.

Please don't compare my actions with what Obama does. I'm not for sale and I don't compromise my principles.

Marycatherine Barton said...

The deceitful STAR does not deserve to have the name INDIANAPOLIS before it. Which reminds me, you can now watch THE OBAMA DECEPTION on line.

Marycatherine Barton said...

Also, re AI's comment about Americans not knowing about the amount of control foreign countries have on Obama, also now on line, you can watch, "Rothschild's Choice" and "Americans are Not Stupid, with Subtitles" and be chagrined. We all need to wise-up, quick.