Sunday, October 07, 2012

Legislators Want To Take Second Look At Corrupt Leucadia Deal They Can't Undo

Now that the deal is done, some Indiana lawmakers who ignored the obvious when the legislature was considering a coal gasification deal that was simply put forward by Gov. Mitch Daniels to enrich his political cronies want to take a closer look at an agreement they signed off which could force Indiana natural gas utility consumers to pay more than a billion dollars in higher utility prices. The Star's Tony Cook explains how lawmakers can talk about the corrupt deal, but that's pretty much all they can do at this point.

With critics saying Indiana ratepayers would have to shoulder more than $1 billion in losses over eight years, a proposed coal-gas plant in Rockport is likely to undergo significant scrutiny during the upcoming legislative session.
Not everyone believes such dire financial projections will come to fruition. But for those who do, a troubling question remains: Can anything even be done to alter the Rockport deal? . . .
Even a state senator who helped author the enabling legislation in 2009 concedes it might be time to re-examine the deal.
"I think the numbers are speculative but worthy of discussion," said Sen. Brandt Hershman, R-Buck Creek. "If there is a need for enhanced or renewed review, there is nothing wrong with that."
Getting out of the deal could be difficult. Under the contract with Indiana Gasification, the state is permitted to walk away from the deal only under very specific conditions, such as default, bankruptcy, or missed deadlines. Indiana Gasification, on the other hand, is permitted to cancel the deal if it determines that construction of the plant is economically unfeasible for any reason, though the company would be banned from selling gas from the plant to anyone else . . .
Mark Lubbers, Indiana project director for Indiana Gasification and a former chief adviser to Daniels, said if the state pulled out of the contract, there would probably be damages involved, though he wasn't sure about the extent.
"I don't know, and if I did, I probably wouldn't advertise it," he said . . .
What is really disgusting about this discussion is the fact that lawmakers were fully aware that Indiana's natural gas consumers could very well wind up paying higher utility rates if the state entered into a long-term purchase agreement with Leucadia; they simply chose to ignore the inevitable when they signed off on this deal. The fact is that Leucadia officials were begging the state to force Indiana consumers to subsidize the construction of the plant because nobody in their right mind would loan the company the large amount of money it would take to construct a new plant, let alone the high production costs once the plant was constructed. There was always going to be a cheaper natural gas available on the open market. Hershman's notion that the IURC could re-examine the deal is laughable. This is the same corrupt utility commission that has screwed ratepayers time and time again. You don't get appointed to the IURC unless you're in the pocket of utility interests. Consumers have never had a voice on the IURC board. This deal boiled downed to Daniels' long-time political crony, Mark Lubbers, coming to him and saying that he deserved to be allowed to trade his insider government influence to become a multi-millionaire the same way Daniels did it. Mitch agreed, and now  Indiana's natural gas customers will pay dearly. These people could give a damn less how badly they screw over the people; it's all about feathering their own nests.


I know said...

Another mess in a long list of political cronyism.

The Indianapolis Star reports today the I 69 extension from Indy to Evansville is low on money. The Toll Road lease was supposed to give a gold mine of funds to build the last mile of the extension. Daniel's told everyone the money was banked for the extension so where did it all go?

Contracts to friends and family that may have been far bigger than advertised?

Leucadia, Elkhart state contracts with Mr. Bales, Toll Road lease and not enough promised funds for the I 69 extension and a corrupt 40 year casino operating contract in French Lick.

What does the legal system need in Indiana?


A blind and deaf man could figure all this out!

Flogger said...

Just one more case of Corporate Welfare.

Our Legislators must receive a Corporate Welfare Inoculation while in Office. Colts, Pacers, and now this. There seems to be no end in sight to these deals. They just bigger and more Blatant.

So much for the Hoosier Values we hear all about around election time.

Jon said...

When the Indianapolis to Evansville routes were first being discussed updating US41 was an option. The present route was chosen becuase it was about 15 minutes faster. The difference in cost between US41 updates and the new route 1+ billion dollars.

Funny how that number keeps coming up.