Phyllis And Marla Stevens Plead Guilty

GLBT activists and former Indianapolis residents Phyllis and Marla Stevens pleaded guilty to multiple felony charges brought against them in a Des Moines federal district court stemming from Phyllis' embezzlement of $6 million from her former employer, Aviva, a successor company of the Indianapolis Life Insurance Company. The Des Moines Register reports on their voluntary pleas of guilty in court this week:

Phyllis Stevens, 59, pleaded guilty to two counts of wire fraud, one count of computer fraud, one count of conspiracy to commit money laundering, one count of conspiracy to file false documents and income tax returns and one count of filing a false tax return in 2003.

As part of the agreement, prosecutors dropped 14 counts against Phyllis Stevens including two counts of aggravated identity theft that carried mandatory two-year prison terms that would have to be imposed consecutively on any prison term she served.

In pleading guilty together on the count of filing false documents and income tax returns, the two women admitted that Phyllis Stevens embezzled about $6 million from 2003 through 2009 and conspired with Marla Stevens to attempt avoiding detection by the U.S. Internal Revenue Service by providing a number of false explanations for the money including a claim that Marla Stevens obtained income from running an insurance business.

Phyllis Stevens faces a maximum prison term of up to 48 years and fines amounting to $1.75 million at sentencing. Under the original 20 count indictment, Phyllis Stevens faced up to 319 years in prison and $5.5 million in fines.

Marla Stevens, 58, pleaded guilty to a count of conspiring to commit money laundering and a count of conspiracy to file false documents and income tax returns.

Marla Stevens now faces a maximum prison term of up to 25 years and fines amounting to $750,000 at sentencing. Under her original five-count indictment, Marla Stevens faced a maximum a maximum penalty of 50 years in prison and $1.2 million in fines, if convicted.

Phyllis Stevens' attorney earlier unsuccessfully argued to the court that his client was incompetent to stand trial because she was mentally ill with dissociative identity disorder as a result of severe sexual, physical and emotional abuse by her adopted parents as a child. The two could likely spend the rest of their lives in prison unless the judge metes out lenient sentences to them, in addition to $2.5 million in fines. The two are scheduled to be sentenced in January.

Phyllis and Marla used the money to make hundreds of thousands of dollars in campaign contributions to Democratic candidates, in addition to purchasing a number of homes in Iowa, Indiana and Florida. At the time of the couple's arrests, Marla had been living at the Bellagio Hotel & Casino in Las Vegas for months, spending close to $2 million of the embezzled funds there. Locally, the two were one of U.S. Rep. Andre Carson's largest campaign contributors, making more than $25,000 in contributions to his campaign committee. The couple also donated thousands of dollars to his grandmother, the late U.S. Rep. Julia Carson. Marla had been a frequent blogger on the Bilerico.com blog prior to her arrest. Phyllis had chaired Iowa's Marriage Equality USA organization in addition to working as a financial analyst for Aviva.

Fair Finance Claims Top $180 Million

The bankruptcy trustee for Fair Finance, the Ohio-based company Indianapolis businessman Tim Durham allegedly operated like a Ponzi scheme, reported receiving more than 4,000 claims totalling $181.3 million to date at the latest case status hearing. The trustee says as many as 5,300 Ohio residents purchased more than $200 million worth of uninsured certificates of investment in the company. The trustee obtained an extension until October 29 for creditors to file their claims in the bankruptcy case. The trustee has sold two collectible cars turned over by Durham for more than $250,000 and has plans to sell many more expensive cars collected by Durham, along with a 100-piece art collection at auction on October 16 in Cleveland. The art collection can be viewed by clicking here. Federal prosecutors have yet to bring any charges against Durham in the matter.

A Salute To Chris Kennedy

It isn't often that I've been in a position to complement a member of the Kennedy family, but this is a huge exception. Chris Kennedy, the son of Robert Kennedy, gave an impassioned speech to the Board of Trustees of the University of Illinois of which he chairs against granting professor emeritus status to best pal of, and ghost book writer for, President Barack Hussein Obama. The Board of Trustees unanimously voted down emeritus status for Bill Ayers after Kennedy's persuasive speech. The Chicago Tribune's Jodi Cohen describes the highly emotional scene:

The vote, at a U. of I. board meeting in Urbana, was unanimous and came after a passionate speech by board chair Christopher Kennedy, who invoked the 1968 assassination of his father, Sen. Robert F. Kennedy, in saying that he was voting his conscience.

The other trustees, without comment, also voted against the appointment.

Ayers, the Vietnam War-era radical, had been an education faculty member at UIC since 1987. He retired effective Aug. 31 and then sought the emeritus faculty status, a largely honorific title that includes some benefits such as library privileges.

A co-founder of the Weather Underground anti-war group, Ayers was frequently in the media spotlight and, as such, was one of the university's best-known faculty members.

While trustees regularly vote on emeritus appointments, they rarely comment about them.

But in an emotional statement, Kennedy discussed his reasons for voting against Ayers' request.

"I am guided by my conscience and one which has been formed by a series of experiences, many of which have been shared with the people of our country and mark each of us in a profound way," Kennedy said.

He said he could not confer the title "to a man whose body of work includes a book dedicated in part to the man who murdered my father."

Kennedy was referring to a 1974 book co-authored by Ayers, "Prairie Fire," which was dedicated to a long list of people including Robert Kennedy assassin Sirhan Sirhan and "all political prisoners in the U.S."

Ayers became a controversial figure in Barack Obama's presidential campaign because they worked on a school-reform initiative together, leading opponents to say Obama was linked to a "terrorist." UIC was forced to release more than 1,000 files detailing the activities of that group. The university also faced questions in 2001 after Ayers wrote in his memoir about helping with the non-fatal bombings of government buildings.

According to the UIC faculty handbook, the granting of emeritus status is "based on merit" and is "an extraordinary title that is given for extraordinary service."

Kennedy said he hoped faculty, staff and Illinois residents "understand my motives and my reasoning" and concluded: "How could I do anything else?"

Ayers could not be reached for comment, and UIC School of Education Dean Vicki Chou did not return a call from the Tribune. She told the Tribune last month that Ayers has "been really a very good colleague here" and "the good far outweighs any negative press."

It absolutely sickens me that the President of the United States and Commander In Chief of our armed services has chosen to so closely align himself with a man like Ayers who considers the assassin of Robert Kennedy a political prisoner. When I used to work for the Illinois legislature, we had a Republican legislator who relentlessly offered up resolutions to denounce the University of Illinois for giving a professorship to such a despicable terrorist like Ayers. His presence at the University of Illinois permanently maligned my view of the school as an institution of higher learning. Thank God the Board of Trustees was more sensible than the university's administration has been these past 25 years in allowing the terrorist Ayers to teach at the school.

Zionsville School Property Tax Increase Referendum Misleads Voters

We saw this last year in the referendum proposing a new $700 million county hospital to replace the existing Wishard Hospital. Now we're seeing it in a suburban school district seeking support for a major property tax rate increase. Clever referendum writers use vague and misleading language to give voters the impression they are voting on something other than the actual question they are deciding through the referendum process. WRTV's Kara Kenney picks up on this latest deceptive tactic in Zionsville where a property tax increase is written to appear as a tax-limiting question instead. Here's the language used to describe that property tax increase question:

For the seven calendar years immediately following the holding of the referendum, shall the school corporation impose a property tax rate that does not exceed twenty nine and one half cents on each $100 of assessed valuation and that is in addition to all other property tax levies imposed by the school corporation.

As Kenney explains, "The intent of the referendum is to add up to 29.5 cents to the current tax rate of $1.29 per $100 of assessed value." There is nothing in the referendum question, however, that puts the voter on notice he is voting for what amounts to a 23% increase in the school tax levy. That would equate to a $480 a year property tax increase for a person owning a home worth $300,000 Kenney notes. Keep in mind also that property tax levy increases approved by referendum allow property taxes collected by that unit of government to override the 1% property tax cap law on homes. The statute governing referendums doesn't require voters to be put on notice if a tax increase allows the property tax cap limit to be exceeded.

Illinois has a similar property tax limitation law. Here is the language used in a sample school referendum question that would allow the school district to exceed the state's property tax limitation law:

Shall the limiting rate under the Property Tax Extension Limitation Law for Oak Park School District Number 97, Cook County, Illinois, be increased by an additional amount equal to ____% above the limiting rate for levy year 2010 and be equal to ____% of the equalized assessed value of the taxable property therein for levy year 2010?

(1) The approximate amount of taxes extendable at the most recently extended limiting rate is $___________, and the approximate amount of taxes extendable if the proposition is approved is $_______________.

(2) For the 2010 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $______.

(3)If the proposition is approved, the aggregate extension for 2010 will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law).

As you can see, the wording of the Illinois referendum question clearly puts a voter on notice as to the question the public is being asked to decide. What is disappointing is Gov. Mitch Daniels, a big proponent of the property tax cap law, has appointed people to run the Department of Local Government Finance who are interpreting the referendum law to allow units of government to deliberately mislead voters, and who have failed to draft regulations that protect the spirit of the property tax cap law and the purpose of subjecting property tax increases to referendum.

Mary Jane Michalak told Kenney the referendum language in question "follows the law." "Any changes to the statute would need to come through the General Assembly," Michalak said. It's interesting how our government imposes liability on the issuers of securities who mislead investors in this fashion in their offering statements, but if it's the government making the representations, it is free to mislead taxpayers at will. If the legislature doesn't act quickly to correct this abuse of the referendum law, then Mitch Daniels' property tax caps he has taken to the airwaves to promote are simply going to become a figment of our imaginations. Voters need to demand a commitment from their legislative candidate to clean up the law so it is not completely undermined by deceptive local government officials.

State's Revolving Door Law Has No Teeth

The hiring of the top lawyer for the Indiana Utility Regulatory Commission by Duke Energy is Exhibit A for demonstrating Indiana's revolving door law has no teeth. The Star's John Russell has a story on the state ethics commission giving a green light to Duke Energy to hire Scott Storms, the IURC's general counsel:

Indiana's largest electric supplier, Duke Energy, has hired the top lawyer away from the state commission that approves utility rates, a move that raised ethical howls from several consumer-watchdog groups.


Scott R. Storms will begin his new job Monday as a lawyer in Duke Energy's regulatory division, just days after leaving his job as general counsel of the Indiana Utility Regulatory Commission . . .

While working for the state, Storms helped manage the regulatory process over Duke Energy, including oversight of its controversial Edwardsport power plant in southwestern Indiana.


The plant, which is still under construction, has seen its construction costs climb sharply, which will result in higher electrical rates for customers. Storms also acted as an administrative law judge in the case, taking testimony and evidence and overseeing numerous proceedings about the Edwardsport plant . . .

State ethics law forbids certain state employees from taking a job with a company the state regulates for at least a year. But the panel said the prohibition didn't apply to Storms, because he never made a regulatory or licensing decision on behalf of the state affecting Duke. Nor did he negotiate or administer a contract with Duke, the ethics panel said.


"This provision would not be triggered by Mr. Storms' work at the IURC as he was neither a commissioner nor a voting member of the regulatory body that may have made license or permit decisions regarding Duke," the panel wrote in a decision issued this month.

However, the ethics panel added that Storms would be prohibited from representing or assisting Duke on any matter in which he was "personally or substantially involved as a regulator." Those include several cases involving the Edwardsport plant and Duke's "smart grid." . . .

"An administrative law judge is extremely involved in handling all the legal evidence, procedures and details in a utility case, maybe even more so than a commissioner," said Julia Vaughn, policy director of Common Cause Indiana, a nonpartisan government watchdog group. "He or she is really the person who does the hard, hands-on day-to-day work."


She said that allowing a utility to hire a state regulator without an extended "cooling-off" period could give the impression that the corporate job was a gift offered in exchange for favorable regulatory treatment.

It's bad enough the revolving door law is only applicable to a one-year cooling off period after a person leaves their governmental job. The law becomes completely useless when the state ethics commission issues opinions which grant exceptions that completely consume the rule.

Anti-Gay Pastor Tied To Black Expo Sued For Coercing Young Men To Have Sex With Him

Pastor Eddie Long presides over one of Atlanta's largest black churches. He has led rallies denouncing homosexuality. Now he stands accused of coercing two young men to have sex with him. Pastor Long was a special guest of Indiana Black Expo during the organization's summer festival when 10 young men were shot in downtown Indianapolis. Long spoke out against youth violence following the shootings to WISH-TV.

Is Pittsburgh Getting A Better Deal For Its Parking Meter Business?

LAZ Parking has agreed to pay the City of Pittsburgh $451 million for a 50-year lease agreement for the city's parking meter and garage business. LAZ Parking is the same company that paid the City of Chicago $1.16 billion for a 75-year lease of the nation's third largest city's parking meter business. Indianapolis will receive a relatively paltry sum of $35 million and eventually receive a minority share of the parking revenues over the life of the agreement after ACS recoups the $7 to $10 million it expects to invest initially in new electronic parking meters. The City of Indianapolis anticipates it will receive approximately $400 million in shared revenues over the 50-year life of the lease from ACS. J.P. Morgan is partnering with LAZ Parking on the deal, along with IFF Acquisitions. Morgan Stanley served as financial advisor to the City of Pittsburgh. LAZ beat out competing bids by EQT Partners and The Carlyle Group.

"The winning bid of $451 million, it certainly blew away my wildest expectations," Pittsburgh Mayor Luke Ravenstahl said. Mayor Richard Daley came under heavy fire for leaving too much money on the table when he inked his nearly $1.2 billion lease agreement with LAZ Parking for a longer term. Chicago is a city of 2.8 million people compared to Pittsburgh's 311,000 population. Indianapolis is more than double the size of Pittsburgh with a population of 807,000. Ravenstahl had hoped to raise $100 million to cover debt owed by the city's parking authority and another $200 million to support the city's pension fund debt when he first announced his plan to privatize the city's parking meters and garages earlier this year.

Pittsburgh's deal is much different than Indianapolis' deal with ACS to be sure. Parking meter rates in downtown Pittsburg will jump from $2.00 an hour to $4.50 an hour and be adjusted thereafter for inflation compared to Indianapolis' meter rates, which are scheduled to jump from 75 cents an hour to $1.50 an hour and be adjusted for inflation thereafter. Unlike Indianapolis, however, Pittsburgh has lower parking meter rates in areas outside of the downtown area. Neighborhoods outside downtown Pittsburg will see their rates average about 50 cents an hour higher, ranging from $1.00 per hour to $3.00 per hour. Pittsburgh last raised its parking meter rates 15 years ago, while Indianapolis hasn't raised its rates in 35 years. The Pittsburgh deal includes several city-owned parking garages that will see their fares increase substantially. Daily rates at those garages will vary from $9.75 to $24.00. Indianapolis rates would double by 2012, while Pittsburgh's higher rates are being phased in over a 4-year period. Advertising rights for the parking meters and garages are being awarded entirely to the concessionaire under the Pittsburgh deal, which will also have the opportunity to lease out retail space at the ground level of those city-owned parking garages; ACS is required to share some of its advertising revenues with the City. A key difference in the parking situation in Pittsburgh and Indianapolis, however, cannot be overlooked. Pittsburgh has a subway and light rail system to move pedestrians throughout the city, in addition to a public bus system; Indianapolis has one very lousy bus system that inefficiently transports people around the city who choose to go without automobiles. For most Indianapolis residents, public transportation is no substitute for the automobile so it is nearly impossible to avoid the parking fees if you plan to visit downtown or Broad Ripple.

Like Indianapolis, the lease agreement with LAZ Parking is subject to approval by the city council, where support for the deal is not a given. Some business owners, particularly small business owners, have expressed concern about the impact of the higher rates. Pittsburgh's mayor has warned the city may be forced to lay off up to 400 police officers and cut other city services if the deal is not approved. Pittsburgh must come up with $200 million by January 1 to cover its unfunded pension liability or face a state take-over of its pension fund, a move that would thereafter cost the city at least $30 million annually. Mayor Ballard got lucky during the first year in office when the state legislature approved a measure that required the state to pick up close to a half billion dollars in unfunded public safety pension liability. Mayor Ballard plans to use the $35 million upfront payment from ACS to make street and sidewalk improvements in downtown and Broad Ripple neighborhoods where the parking meters are located. Interestingly, the $451 million the City of Pittsburgh is getting for its parking lease deal is nearly identical to what the City of Indianapolis received from Citizens Energy for permanently giving up ownership of the water and sewer utilities, along with giving up billions of dollars in revenue stream derived from operating the utilities. Indianapolis did, however, manage to offload $1.5 billion in debt in the process of giving up ownership of the utilities.

Critics of the Pittsburgh deal point out the City could expect to capture over $1 billion over the same period if it implemented the anticipated rate increases but kept control of the parking meters and garages. Pittsburgh's mayor insists the large upfront payment is essential to shoring up the City's unfunded pension liability, a requirement alternative proposals cannot satisfy. Clearly, Pittsburgh is facing financial problems more serious than Indianapolis is currently facing; however, it's hard to argue Pittsburgh may not be getting a better deal than Indianapolis over the life of the lease when you consider the city is getting all of that money upfront, while Indianapolis must wait 50 years to recoup an even smaller sum of money.

A thought occurred to me after thinking about all of the players in the Chicago, Indianapolis and Pittsburgh parking meter lease deals. Is there a risk of collusion among the key players in this business? LAZ won out in both Chicago and Pittsburgh. Morgan Stanley is a player in all three transactions. ACS participates in the LAZ Chicago parking lease agreement. LAZ Parking competed against ACS for the Indianapolis parking meter deal. LAZ Partners actually offered Indianapolis a larger upfront payment, $46.8 million compared to $35 million. Indianapolis favored ACS over LAZ Parking because it said ACS offered more flexibility to the city on removal of meters, rate reductions and duration charges. The City also preferred ACS because it allowed approval of any meter technology proposed for use by the concessionaire.

Failed Welfare Privatization Deal Cost Taxpayers $500 Million

The original IBM-led privatization of welfare services agreement FSSA entered into may be dead, but the costs to taxpayers is still being tallied. FSSA Secretary Anne Murphy pegs the cost at $500 million to date and climbing. WRTV reports:

Indiana's human services chief said the costs to modernize the state's welfare eligibility system since 2007 have topped $500 million.


Family and Social Services Administration Secretary Anne Murphy told state lawmakers Tuesday that IBM Corp. has received nearly $442 million of that total through Aug. 31.

Gov. Mitch Daniels fired Armonk, N.Y.-based IBM in October 2009, citing poor performance, including lost documents, lengthy hold times for the call centers and too many errors in processing of food stamps and Medicaid.

Its work ended in December, but it collected more than $4 million more after that for "disengagement services."

FSSA and IBM have sued each other to recover costs each claim to be owed.

Murphy said federal agencies have paid more than $275 million of the total. The state's share comes in at just under $225 million.

Nearly $59 million has gone to IBM subcontractors who now work directly for FSSA.

The largest amount of the $59 million paid to IBM subcontractors went to ACS, the same company with whom Mayor Greg Ballard wants to award a 50-year parking meter lease deal if he can convince the Indianapolis City-County Council to go along.

Marion County Democrats Blast Conflict Of Interest In Ballard Administration Awarding Parking Meter Lease Agreement To ACS

The Marion County Democrats picked up another fumbled ball by the Ballard administration and are running with it. The party's chairman, Ed Treacy released this statement yesterday discussing the ties of the City's paid lobbyist, Joe Loftus, to ACS:

Mayor Greg Ballard's chief counselor and lobbyist is apparently using his contract with the city to enrich other clients, most specifically ACS in the parking meter privatization scheme.


Joe Loftus has been a frequent visitor to the 25th floor of the City-County Building. Loftus is the city's chief statehouse lobbyist and a counselor to Mayor Greg Ballard. The city's lobbyist registration shows Joe Loftus as registered to lobby for ACS, the company Ballard chose to award the potentially billion dollar parking meter privatization to. It is unknown whether Loftus consulted the Mayor on the deal or lobbied for ACS or both.

"It's awful that Mr. Loftus would take the taxpayers' money and put it into his left pocket while taking ACS's money to lobby the city and putting into his right," Marion County Democratic Party Chairman Ed Treacy said.

Treacy indicated that this conflict of interest was serious enough to question the entire parking plan. "Well, I guess we can add it to the list of questions, but did the Mayor try to get a good deal, or was he just trying to further his friend and political counselor's pocketbook?

Joe Loftus told the IBJ the Democratic attack on him is "unacceptable." Scott Olsen reports on Lofus' reaction:

When reached by phone Wednesday morning, Loftus acknowledged he has lobbied for ACS “for years,” but said he was not involved in the negotiations from either side.


“I’ve been doing this for 30 years,” he said. “Nobody’s ever attacked me like this. That’s not acceptable.”

Loftus further said he’s never discussed the parking deal with Mayor Greg Ballard and pointed to an ethics ordinance the mayor led that requires anyone contracted with the city to disclose other contracts.

What people need to understand is Loftus' ties to ACS and its representatives run very deep. His former boss, Mayor Steve Goldsmith, worked for ACS. His fellow colleagues in that administration, Mitch Roob, Skip Stitt and Ann Lathrop, all later worked for ACS. Loftus and his law firm helped ACS obtain a large subcontract on FSSA's badly bungled privatization agreement for the agency's welfare services with IBM after Roob became Secretary of FSSA as an appointee of Gov. Mitch Daniels. Roob's successor later terminated the agreement under heavy fire and filed a lawsuit against IBM; the agency, however, allowed ACS to continue operating a criticized call center in Marion, Indiana that operates in a building owned by State Rep. Eric Turner and his son. Turner's daughter served as chief counsel to FSSA at the time the IBM-ACS privatization agreement was inked. She recently left the agency. It also hasn't gone unnoticed by this blog that Mike Huber, the Deputy Mayor who spear-headed the 50-year lease agreement with ACS on behalf of the Ballard administration, is a former associate of Skip Stitt, who is ACS' chief administrative officer in its Washington, DC office.

During the transition between the Peterson and Ballard administrations, Loftus and Bob Grand, both partners at Barnes & Thornburg, played key roles as representatives of Ballard in helping choose people to serve in Ballard's administration. Loftus helped place Huber in a job with the Ballard administration. The old ACS hands likely played a key role in Huber's earlier hiring by the Daniels administration to work in his budget agency before he joined the Ballard administration. In addition to serving as Ballard's chief lobbyist, Loftus has also served as a mentor to members of Ballard's administration like Huber and meets often with them. Ballard appointed Grand as his first CIB President despite his obvious conflict of interest because his law firm represented the Simons and their Indiana Pacers. Ballard named yet another ACS hand to the CIB, Ann Lathrop. She first served as its treasurer and now as its president. It is hard to separate the ACS-Barnes & Thornburg ties from almost any decision of importance made by this administration. And lest we forget that Loftus hired City-County Councilor Ryan Vaughn as a high-paid lobbyist with the firm after Ballard's election. Vaughn later was elected as the City-County Council President. He has refused to recuse himself from participating in the approval of the 50-year parking meter lease agreement with ACS despite his firm's representation of the company that stands to make a lot of money off the agreement.