Monday, January 13, 2014

ROC Investigative Commitee: Little Progress In Unraveling A Major Scandal

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The special council committee tasked with investigating the controversial lease agreement that we are led to believe that former Public Safety Director Frank Straub unilaterally entered into with a company controlled by businessman Alex Carroll for space within the former Eastgate Consumer Mall for the Regional Operations Center met again last week. As I noted in a previous post about a news story by WTHR's Sandra Chapman, the City has still not turned over the most pertinent documents related to the highly unusual lease agreement. The corporation counsel's office and the Office of Finance & Management didn't review the legal documents before they were signed off on by Straub, the City-County Council and the Board of Public Safety. According to the Office of Corporation Counsel, files related to the deal went missing when Straub departed the City so it has become necessary to obtain those documents from third parties. OCC says it needs another 30 days to track down the documents that have been sought by the committee for months now. Interestingly, the council's counsel, Fred Biesecker, also informed members of the committee that when he sought the archived video of the relative meetings of the Board of Public Safety where Straub discussed the ROC deal with members of that board, he learned that no recorded videos exist for those meetings.

The meeting last week was quite lengthy. I've provided the video above of only Biesecker's presentation of what he's learned about the lease agreement to date given that all of the key financial documents are still missing. As he notes in his presentation, the agreement is more akin to a borrowing agreement than a true real estate lease, which is why the lease agreement reads more like a bond indenture. The City obligated itself to this borrowing agreement before it formally entered into the lease through the execution of a development agreement with Lifeline Construction Services, LLC under which the City began advancing funds to Carroll for the build-out of the tenant space before the lease agreement received final approval that detailed a more than $14.2 million project that mentions a $1.1 million upfront payment to Carroll's business entity. As soon as the lease agreement with 401 Public Safety, LLC was executed, Carroll assigned his interest in the lease to Wells Fargo, which advanced him an unknown sum of money at the closing in consideration for the City signing some long-term financial commitment to repay the funds advanced to Carroll's business entity. The City is on the hook to pay at least $18.2 million in lease payments over the life of what is essentially a 25-year credit lease agreement; however, when you factor into consideration other financial obligations with respect to the leased space, the obligation is closer to $24 million. Particularly troubling are the "hell or high water" one-sided terms of the deal outlined by Biesecker in his presentation that gives one cause to question whether anyone representing the City's interest was present at the table during negotiations.

As a Republican, I'm appalled by the dismissive attitude and seemingly stone-walling attitude of several of the Republican committee members appointed to this investigative committee. In the case of a couple of the council members participating in the investigation, it is the equivalent of permitting E. Howard Hunt and G. Gordon Liddy to investigate Watergate and their actions to date as members of the committee only serve to reinforce that notion. Let there be no mistake. This a major scandal that has not been accorded the attention it deserves by the local news media, particularly the Indianapolis Star, which is asleep at the wheel as usual when it comes to good investigative journalism. It is unimaginable to me that this is not a criminal matter. There are no indications that either the Marion Co. Prosecutor's Office or the U.S. Attorney's Office has opened an investigation of the ROC, which is equally troubling given the amount of money taxpayers are on the hook to pay. It's just sickening how easy it is for some people to defraud the taxpayers in this city on a regular basis without any threat of criminal prosecution. Keep in mind that these are the same people who want you to entrust them with using a private developer to build, own and operate a new criminal justice center for Marion County using a similar mechanism.


Flogger said...

I would not say The Star is asleep at the wheel on this story, I suspect they have in the infamous tradition of Pravda decided it is not a story and therefor will not report on it.

The ROC it seems was another of those Super Bowl necessities. From : “We are very proud of this new facility and hope that it serves as a national model of partnership between local, state and federal authorities,” said Mayor Ballard. “The creation and opening of the ROC is an integral part of our ongoing, proactive plan to ensure the safety of the public.”

The Star will not report on this story for at least three reasons I can think of: 1.) Nothing negative about the Super Bowl in the past or any planned one will be printed. 2. No story on Crony-Capitalism in Marion County will be printed. 3.) Possibility of insider deals that may touch Elected and Appointed Officials.

I agree given the magnitude of money involved and the disappearance of key documents and a video an investigation by State-Local and Federal Officials is warranted.

Anonymous said...

The committee needs to appoint Patrick J. Fitzgerald, former U. S. Attorney, to lead the investigation and give him all necessary subpoena powers as deemed necessary.

All those who had an original interest in the ROC, accepted money from ROC participants, or participated in any of the original ROC activities that led to taxpayers being held out to dry should be removed as possible targets of the investigation.

Will the DOJ's Washington Public Integrity Task Force take this case? -I don't think anyone has confidence in Hogsett to handle this.

Anonymous said...

Who put "Sweat Pea" Monroe Gray, known for his infamous no-bid concrete contract at the airport on this committee?

-That says it all right there. Put those types on the committee and what do you think they'll find? The answer: "Quid pro Quo." (To date Sweat Pea has not been prosecuted)

Gary R. Welsh said...

Anon, you always remind us of Monroe Gray's transgressions. I didn't approve of them, but a Republican county prosecutor and a Republican federal prosecutor saw no crimes to prosecute. Of course, the former Republican county prosecutor was committing far worse self-dealing and criminal acts, in my opinion, than what Monroe Gray was accused of doing, which may explain why he never prosecuted real public corruption.

L Truth said...

The ROC is in Ben Hunter's Council District and he was the Chairman of the Public Safety Criminal Justce Commitee when the city agreed to the terms for the ROC. He also received campaign contributions from the ROC owner. This is incredible that there isn't a corruption investigation!

Anonymous said...

And he was at Butler for how long with investigations...follow the money...

Anonymous said...

why is no one state ,city ,federal and those in city county building not involved in getting to the bottom of ROC..investigate for the taxpayers ,it is our millions going out he we have any honest people in the offices that we all elected these people.if you are not involved get involved ,do the right thing for us the people of indpls.let the chips fall where they may.joe hogsett it is time to move forward on this matter,iINDIANA STATE POLICE white collar division,this is your job and the FBI ,statr looking into this mess,of hide and seek on paperwork