About That CIB Bailout Meeting Tonight

Yes, it is is true. I had a bit of a dust up with CIB President Bob Grand at tonight's Municipal Corporations Committee meeting on the CIB's proposed $48 million bailout deal. Let's set the record clear. At the beginning of the committee meeting, Chairman Michael McQuillen announced that the Indiana Pacers and the Indianapolis Colts turned down an invitation to send representatives to attend tonight's meeting and explain why taxpayers should dig deeper into their pockets to subsidize their professional sports enterprises, but CIB President Bob Grand and CIB Vice President Pat Early appeared in their place on behalf of the CIB. I explained during my testimony at tonight's hearing that the Indiana Pacers were well-represented at the meeting by CIB President Bob Grand, who represents the Simons and Indiana Pacers. After a well-received applause from the audience, Grand said he was happy to see that I finally appeared in public to cast my aspersions against him, which he claimed were false. Grand added that nobody reads my blog anyway, which I assume included him since he knew what I had to say about his role as CIB President. Grand told the committee that he did not represent the Indiana Pacers; his law firm represented the Pacers. Laying aside the fact that he's the managing partner of the firm, let's chuckle and just move along. [If you want to see the video of last night's meeting, click here and highlight the video for the April 16 meeting of Municipal Corporations Committee. My statements begin at 1:09 on the video.]

I want to thank Councilor McQuillen for conducting the first public hearing at which someone other than the interests of the professional sports team owners were represented. I encouraged him to hold at least one public hearing at which the public could speak without all of the interference from the CIB mouthpieces. Members of the public were allowed just 2 minutes each to speak after the CIB representatives spoke for more than an hour to the committee. If committee members were listening closely tonight, they learned the following:

• The CIB does not own Lucas Oil Stadium. If it cannot afford the $20 million in added costs to operate it, it is within its rights to return the leased facility to the state-run authority that built it. CIB President Grand backed off his ridiculous claim he made a couple of weeks back that LOS would be shuttered if this bailout plan before the legislature is not approved.
• The CIB is not contractually obligated to hand over the $15 million a year the Pacers are demanding to cover operating and maintenance expenses on Conseco Fieldhouse.
• Bob Grand told the Committee the CIB has been operating at a deficit every year since 1999.
• Increasing the alcohol tax to fund a bailout could lead to the exodus of certain businesses within the alcohol industry to neighboring counties and Marion County-based businesses could see a loss of business to neighboring counties.
• John Dora of Dora Brothers hotels explained that the increase in the innkeeper's tax could be detrimental to his hotel and other hotels in Indianapolis like his which did not receive public subsidies like the Conrad Hilton and the J.W. Marriott convention hotel complex being built by billionaire Dean White of White Lodging. His message contradicted published reports in local media suggesting that the hotel industry in the City is on board in making Indianapolis' innkeeper's tax the highest in the country. Adding sales tax to the mix, the tax would reach 17%.
• Representatives of the car rental business explained to the Committee that the tax is paid largely by members of the local community and not by out-of-towners as suggested by the proponents of the CIB bailout plan. Increasing this tax in Marion County yet again to fund the CIB could lead to an exodus of business in this sector across the county lines.
• Representatives of the CIB could not respond to questions about the fuzzy math of the proposed tax increases as indicated by the Legislative Services Agency's analysis of the Ballard CIB bailout plan. CCC advisor Jim Steele says he needs more time to study the numbers.
• Representatives of the CIB could not explain why debt of the CIB had been converted from long-term fixed rate bonds to risky interest rate swap notes, which resulted in a $17 million penalty payment to the CIB, and which was covered by an emergency loan from the State of Indiana due in June of this year.
• The CIB is distributing more than $2 million in grant money to various groups, including the arts.
• The CIB is distributing $10-$12 million annually to the ICVA, which it defended as its marketing arm for the convention business.

Kudos to Councilor Ed Coleman, who had the courage to ask CIB President Bob Grand publicly if he should consider resigning from the CIB because of his conflict of interest. Grand became red-faced at Coleman's suggestion and insisted that he had fully disclosed his conflicts when he accepted the appointment to the Board by Mayor Greg Ballard. Councilor Lutz rushed to his defense, criticizing Coleman for casting aspersions at Grand for volunteering his service to the CIB. Democratic Minority Leader Joanne Sanders offered the Democrats' plan for expanding the professional sports development area to capture the sales tax revenues from Circle Centre Mall and the establishment of a downtown casino as a way of funding the CIB bailout without a tax increase. My problem with the Democratic plan is that it assumes the need for a bailout, which has not been proven to date, and it simply feeds the CIB monster and allows for even greater unwarranted subsidies for the billionaire sports team owners.

On those parking fee increases the state bailout legislation includes, Councilor McQuillen said Mayor Ballard's administration insists that was a mere "typo" in Sen. Kenley's drafting. The CIB seems to be singing a different tune on that one. The CIB is looking at raising rates as much as 20% on more than 7,000 parking spaces it controls downtown according to WTHR's Mary Milz. "CIB Executive Director Barney Levengood recently told the CIB Finance committee, 'You could raise them a buck or two. Where there's demand, we can raise rates and get more money for the CIB.'" Here's the kicker to Levengood's statement: "But Levengood said they'd have to consult with the Pacers before making any changes." Hey, you got to hand it to Levengood for his candor in telling us who's really calling the shots at the CIB, unlike its president, Bob Grand.

UPDATE: WIBC is the only local news source that has directed any attention to the issue of Bob Grand's conflict of interest discussed at last night's meeting. Brendan O'Shaughnessy's story in the Star completely omits any mention of it. WIBC's Stan Lehr writes:

It's not just the bloggers pushing it now.

A member of the City County Council is suggesting resignation to the head of the embattled Capital Improvement Board. It had gone unsaid in polite company until Libertarian Ed Coleman brought it up at a meeting of a Council Committee. The bloggers have repeatedly attacked CIB President Bob Grand, who is also managing partner of the Indianapolis office of the law firm Barnes and Thornburgh. The firm represents the Indiana Pacers, one of the key players in the CIB budget crisis.

Coleman told Grand he was stating a suggestion as much as a question when he asked, "Have you recognized there is a possible conflict of interest and considered resigning so we can get someone on this board who represents the citizens and not the Simons?" That's a reference to the Simon brothers, owners of the Pacers.

Grand says he has acknowleged his position and has sometimes abstained from votes to avoid any conflict. And to the suggestion that he step aside, he said, "I strongly disagree." He referred to "aspersions" cast on blogs that "not many people read." That brought jeers from some in the meeting room. Grand was there, at least. The Pacers and the Colts declined the committee's invitation to attend the meeting.

More On CIB Bailout Numbers Don't Add Up

You've seen my reporting on how the $48 million legislative bailout plan for Marion County's Capital Improvement Board doesn't add up. The IBJ has concluded the same. And now the Star's Brendan O'Shaughnessy reports the same. He writes:

Tax increases called for under Mayor Greg Ballard's rescue plan will go far in helping the city's ailing sports board, but millions of dollars more will still be needed to fully close its projected 2010 budget deficit.

It may be several years, if not longer, before Ballard's approach generates enough revenue to cover the Capital Improvement Board's higher expenses, including operating costs at Lucas Oil Stadium that are twice as high as those at the Colts' old home in the RCA Dome.

The Republican mayor's plan would give the City-County Council the power to raise taxes in Marion County on alcohol, hotel rooms, car rentals and stadium tickets. It also expands a special tax district Downtown to include the JW Marriott hotel complex being built next to the Indiana Convention Center.

Late last week, Ballard administration officials estimated that the most the mayor's plan can raise in its first year is $27.4 million. The CIB's deficit next year is expected to be $47.5 million.

Why should members of the City-County Council be asked to risk political suicide by voting for all of these tax increases in times of double-digit unemployment to adopt a plan that doesn't even come close to adding up? Members of the Municipal Corporations Committee pressed CIB President Bob Grand on the analysis Thursday night. Grand's response made it clear that neither he nor anyone else associated with the CIB had conducted a competent fiscal analysis. Instead, Grand deferred to the Indiana General Assembly to get it right. The public could only conclude that they don't know what they're doing, particularly when they tell us a plan raising parking fees that was included in the state bailout plan was simply a typo.

There are also a couple of items of note in the Star's "Behind Closed Doors" column today. Grand announced at Thursday's Municipal Corporations Committee meeting that the Capital Improvement Board had finally gotten its own website at which the public could access information on it for the first time. I thought he was just pulling our leg. I searched the City's website up and down and couldn't find it. That's because it's not on the City's indy.gov website. A link on indy.gov for boards and commissions draws a blank when you enter it. If you enter http://www.capitalimprovementboard.org/, you will be directed to a website for the CIB. It has the CIB's meeting schedule, board minutes, budget and financial reports on it, as well as its agreements with the Colts and Pacers. The most recent financial statement, 2007, shows the CIB's staggering debt: over $348 million in capital lease debt obligations; $34 million is owed to Circle Centre investors; $28 million owed on two separate revenue bonds of $3.1 million and $24.8 million. Close to $500 million more is owed to the State of Indiana. Who knew the CIB shares the operating costs for Capital Commons garage? Isn't that the garage Simon's employees use for free at their corporate headquarters? The audited financial statement prepared by BKD made no warning about the risks associated with the interest rate swap notes the CIB held. To say the report downplayed the CIB's future financial plight would be an understatement. One would expect a different read for an organization that has run a deficit 10 years in a row.

The "Behind Closed Doors" column also has an item on the discussion about Bob Grand's conflict of interest that I raised at Thursday's Municipal Corporations Committee meeting:

A hearing on the CIB's deficit in the City-County Council turned personal last week when a council member and blogger criticized Grand.

Ed Coleman, a Republican-turned-Libertarian councilman, asked Grand to resign.

Grand, managing partner of Barnes & Thornburg's Indianapolis office, has faced questions about conflict of interest since he took the CIB job last year. He said he had to go to great lengths to distance himself from his firm's representation of the Indiana Pacers and his own work for the Simon family, which owns the Pacers.

Critics say the measures he took weren't enough. They pounced again at the meeting, saying Grand is too conflicted to lead a board negotiating a new lease with the Pacers. The board has from the start assumed it would take over the cost of operating Conseco Fieldhouse -- $15 million per year -- from the team.

Coleman asked how Grand could lead the board if he has to abstain from votes on the major issue of the day. Grand said he would not step down.

"If you want someone of my qualifications, with my experience, and with my reputation, that's what you'll get," Grand told council members.

Local blogger Gary Welsh, a critic of Grand and the CIB, took a shot, too.

"I think the Pacers are very well represented here by the president of the CIB, Bob Grand, their attorney," Welsh said.

Grand responded that he was glad to see Welsh criticize him in person rather than online. He said he is aware of criticism "in blogs that most people don't read."

I might add that Grand said I had it wrong. It is his law firm and not he which represents the Simons. It still galls me that people like Bob Grand think that there aren't people in our community who are qualified to lead the CIB unless they have conflicts of interest like him. And contrary to Grand's assertion, the blogs were not alone in questioning his conflict. The Star's editorial board raised similar concerns.

CIB Bankrupt: Grand Won't Ask Colts To Shoulder Burden And Early Wants To Give More To Pacers

Despite facing a complete financial meltdown, the leaders of our Capital Improvement Board refuse to ask Colts owner Jim Irsay to shoulder some of the costs of maintaining the costly Lucas Oil Stadium which made him a billionaire, and those same leaders plan to reward the billionaire Simon family with more subsidies for their Pacer team to keep them in Conseco. That's the untenable view the CIB delivered at its monthly meeting this afternoon. The Star's Brendan O'Shaughnessy reports that the CIB now concedes that its financial woes go way beyond the $20 million annual operating deficit it deliberately incurred in building Lucas Oil Stadium and giving away virtually all income-producing opportunities to the Colts franchise. Other facilities, including Conseco, are running a $5 million deficit. Even worse, the financial meltdown has led creditors of the CIB to call in $43 million in loan and insurance obligations. By next year, the annual operating deficit of the CIB is expected to top $40 million.

Here's the rub that will really make you raw. The CIB plans to renegotiate the lease with the Pacers , giving the Simon family an additional $15 million a year subsidy for its Pacer franchise. CIB Vice President Pat Early discussed the Pacers lease since CIB President Bob Grand is conflicted out because he personally represents the Simon family. O'Shaughnessy explains Early's explanation for why we must give more subsidies to the billionaire Simons:

Pat Early, the board's vice president, said the Pacers are expected to use their option to renegotiate their lease this year. He said the CIB will have to take on more of the expenses of running Conseco if it wants to keep the team in Indianapolis."All we've established is that the business model we're working with now can't work in the long term," Early said. "We havent' figured out a solution, but I believe it's in the best interest of the city to have the Pacers stay in that building."

Bull! This team can't make money because the fans won't attend their games. They got sick and tired of a team full of players with nothing better to do than shoot up the town, get into brawls, hang out with drug dealers and frequent strip clubs. It is absolutely unconscionable to think that the taxpayers should have to dig deeper into their wallets to pay for the bad business decisions of this franchise. How greedy and self-serving can the Simons be to the people of this community. Thousands are being laid off every day because of this deep recession and these people think the taxpayers should shell out more to subsidize their playground.

Despite the CIB facing bankruptcy, President Bob Grand refuses to ask Irsay to make some concessions in the one-sided agreement Mayor Bart Peterson and his predecessor, Fred Glass, negotiated with the Colts. "Grand said he was not ready to ask the Colts to renegotiate a deal that many have criticized as too generous," O'Shaughnessy reports. "He said the board will review grants for the arts and other groups, work with others and find a way to manage the facilities."

O'Shaughnessy notes that the CIB's Treasurer Ann Lathrop expressed the dire financial condition of the CIB. "The situation is so dire that board treasurer Ann Lathrop said auditors are reviewing the CIB's finances as a "going concern," a term used to suggest that its near-term viability is in question," O'Shaughnessy said.

It's obvious that neither Grand nor Early are on the taxpayers' side. They are in the pockets of the sports team owners and the people who financially benefit from their presence in this town. Mayor Ballard needs to find a new team to run the CIB. If these guys can't tell the Simons and Irsay that enough is enough, then he needs to find someone who can. That is, if all of those free, front-row tickets he and his family have accepted over the past year hasn't completely corrupted his thinking.

UPDATE: Is Bob Grand violating his pledge to Mayor Ballard to wall himself off from any discussions concerning the Pacers' lease at Conseco Fieldhouse? Check out this quote from the IBJ: “The challenge is to renegotiate,” CIB President Bob Grand said of the lease. “[The Pacers] have an option to have these discussions.” I guess only a fool would have ever believed that Grand would abide by the agreement, effectively removing nearly one-half of the CIB's business from his plate. Note that Grand had to move for a reconsideration of a vote taken at an earlier board meeting at the CIB's December meeting approving a long-term parking lease agreement with Wellpoint. It slipped Grand's mind that the nation's largest health insurer was one of his firm's client when he voted on the parking lease agreement. His law firm is registered to lobby for Wellpoint. Grand is one of many lobbyists employed by the firm. He is also the firm's managing partner.

Ballard Mired In Ethics Dilemma Of His Own Making

Mayor Greg Ballard is facing the first ethics test in his 30-day-old administration and is failing it badly. As Advance Indiana was the first to report, Ballard's choice to lead the Capital Improvement Board is a lobbyist for Simon family interests, and his law firm lobbies for the Indiana Pacers. The Star's Brendan O'Shaughnessy, borrowing heavily on my original reporting (without attribution, of course), lands a front-page story questioning the ethical propriety of one of the biggest appointments Ballard will make as mayor. O'Shaughnessy opens his story:

Mayor Greg Ballard's choice to lead the Capital Improvement Board heads a law firm that has lobbied for the Indiana Pacers, one of the agency's biggest tenants.

The CIB owns Conseco Fieldhouse, home of the Pacers.
To avoid a conflict of interest in his new role, Barnes & Thornburg managing partner Robert T. Grand has set up an "ethical screen" that includes removing himself from any discussions about the Pacers.

He also has promised to bar the firm -- one of the city's biggest, representing various clients with interests in city business -- from working for anyone involved in matters harmful to the CIB and said he would forgo any potential compensation from his firm's involvement with the Pacers.

A political watchdog questioned whether those steps would be enough to outweigh the perception of a conflict, while an ethics expert questioned whether it would limit Grand's effectiveness on the board.

As I pointed out in my report, the appointment of Grand to the CIB directly clashes with a key element of Ballard's campaign pledge to enact ethics reform if he was elected mayor. That campaign pledge promised to prohibit registered lobbyists or people with a financial interest from serving on any board or commission that directly affects or deals with their lobbying or financial interests. With an "ethics schmethics" style reply, Ballard said of the Grand ethics problem, "Bob said he wouldn't do it if it embarrassed us," Ballard said. "But we want top talent." O'Shaughnessy added, "Ballard also said Grand 'has a reputation for being a clean and ethical guy.'" I would add an editorial comment here that Ballard didn't even know who the hell Grand was until a few months ago when he showed offering to raise a few bucks for his strugging campaign. Grand's response was equally as repulsive as Ballard's. "Why would I turn away this opportunity to serve this mayor and my city because I happen to be registered as a lobbyist?" he asked.

To cover up the error in this horrific decision, Ballard and Grand have created what they call an "ethical screen" to give the appearance they are trying to deal with the problem. Because the Indiana Pacers are one of the biggest agenda items coming before the CIB, essentially Grand, as its leaders, will supposedly step back from participating in any decisions involving the Pacers. Under this plan, which I assure will have attorneys all over town laughing as they stand around the water coolers Monday morning discussing it, Grand will do the following to avoid conflicts of interest:

• Notify the CIB any time a client of the firm is involved in "matters with or become adverse to the CIB."
• Abstain from taking part in deliberations or votes on such matters.
• Establish an "ethical screen" that precludes Grand's involvement in matters in which the firm represents the Pacers.
• Bar Grand's access to the firm's files on the Pacers.
• Bar access by firm attorneys to any materials Grand receives in his role as a member of the CIB.
• Deduct from Grand's compensation any share of firm income derived from representing the Pacers.

"I have not ever been involved with anything with respect to the Pacers," Grand said to O'Shaughnessy. "To the degree that there is any involvement of the firm with the Pacers, I won't be involved," he added. In the business world, this would be the equivalent of telling the CEO of General Motors he couldn't participate in any decisions involving the company's entire Chevrolet division. "The CIB and the firm have to weigh if the breadth of (ethical) screens is so great that the person would be limited in what they can do," former state ethics commissioner David Hadley said. Nobody with a straight face can say this ethics screen will work. For God's sakes, Bob Grand is the managing partner of Barnes & Thornburg. The ethics problem has already surfaced. Everyone knows, Mayor Ballard, that Grand made sure you were fully briefed on the financial problems facing the Pacers franchise because of lousy attendance, and that Grand or his law firm arranged for your meeting with the Simons at Conseco Fieldhouse on Thursday. It's no secret the Simons think they got a raw deal compared to Irsay and think their lease deal with the City should be renegotiated. As O'Shaughnessy reported:

The thorniest issue Grand might face is the possibility that the Pacers could seek to renegotiate the team's 20-year lease at the 10-year mark, in 2009.

Ballard met with the Simons at Conseco on Thursday. Both sides said the point of the meeting was to get acquainted. Ballard said there was no discussion of a new lease.

Speculation that the Pacers will ask for a new lease has been fueled by reports about the team's financial problems.

What is incredulous about this move by Ballard is the degree to which he has been willing to abandon the higher moral ground that he had coming into office with "no strings attached" as he told the media in order to advance the self-promoting Grand's status as a leading state and city "power broker." Grand's claim that "lobbying" is a small part of what he does is simply not believable to anyone who knows this man. As to ethics, let's examine this part of O'Shaughnessy's story. "[Grand] said his experience in public finance as an adviser to then-Mayor Stephen Goldsmith in building Conseco Fieldhouse and Victory Field qualified him to serve in the position." So he advised Goldsmith on behalf of city taxpayers on the public financing of Conseco Fieldhouse and then he and his firm turned around and became a lobbyist for Simon interests, including the Indiana Pacers. The only thing you can say about the Conseco Fieldhouse lease with the Simons is that it screwed taxpayers a little less than the Lucas Oil Stadium lease with Irsay.

Because Ballard has set out with such reckless abandon to pursue this "business as usual" governance of our city, we must now turn to the City-County Council for help. This appointment of Bob Grand must be rejected by the council. "Council Democrats said they were nonetheless concerned," O'Shaughnessy writes. "After taking considerable heat last year for a series of ethics-related questions about then-council President Monroe Gray's business deals, some said Ballard should be more careful with his appointments." "I go back to perception," said Joanne Sanders, the Democratic minority leader. "I do have some concerns about the appearance of a conflict."

As for Ballard, he tells O'Shaughnessy he plans to submit his own ethics reform package later this month, but if it allows for these kinds of appointments, then it isn't worth the paper on which it's written. This is what really insults the good people of this city. Ballard's Corporation Counsel, taking a page out of his predecessor's lack of respect for ethical considerations, said to O'Shaughnessy that "anyone qualified for a position such as one on the CIB is bound to have extensive business connections that create potentials for conflict." You see, in the world in which these people operate the only people "qualified for a position" come from within a small, elitist group who look down upon all of the rest of us. Strangely, until a few months ago, Ballard was one of those people they looked down upon. Now, Greg Ballard has become one of those people looking down at us in the same way.

UPDATE: There is a key piece of information missing from O'Shaughnessy's report in today's Star which raises even more concern about this so-called "ethical screen." O'Shaughnessy writes, "Ballard said Grand was the one who raised the question of potential conflicts and offered to draft the letter to avoid them." "He said the city's top attorney, Chris Cotterill, reviewed the letter and approved the appointment," he added. Cotterill is a former employee of Grand's law firm! That's right. Cotterill worked as an associate at the same law firm where Grand serves as managing partner. He practiced at the firm for a short period after graduating from law school before Grand helped him land a job in the administration of Gov. Daniels.

Representing The Star Has Its Advantages

If you're the law firm that represents the Indianapolis Star, it apparently comes with the privilege of getting the newspaper to write glowing news stories and columns about your attorneys. After I recently posted a blog post about the firm's power broker, Bob Grand, celebrating over drinks with several Republican council members the ouster of Republican City-County Councilor Christine Scales from the Republican caucus, the Star's Russ Pulliam responded by penning a column titled, "The private, generous side of Bob Grand." Those who follow this blog regularly know that Grand has played a central role in the corrupting of state and local government the past decade. The Star never published a story on the highly unusual ouster of Scales from the caucus, only mentioning it in passing in an unrelated story about the council meeting that took place following the highly-divisive vote inside the Republican caucus. It certainly didn't mention that Grand celebrated Scales' ouster over drinks at a local bar with three male council members behind her ouster following the meeting.

Whether it's been the privatization of FSSA that cost taxpayers hundreds of millions of dollars for the benefit of his client, ACS, for which he also engineered the corrupt parking meter lease deal in Indianapolis, the awarding of the corrupt exclusive real estate leasing agreement by the state to his client, John Bales, or the scheme he devised as Mayor Greg Ballard's CIB President to make it appear that the CIB was insolvent in order to gain passage of several tax increases and new subsidies by the state that have left the organization flush with cash (a surplus in excess of $70 million ) to hand out to his firm's billionaire sports team owner client, Herb Simon, Bob Grand has played a central role.

Today the Star has a story press release glorifying another Barnes & Thornburg attorney, Jason Barclay, who Grand placed as a high-level adviser in the administration of Mitch Daniels to aid the firm's clients. The story is titled, "Rising Star: Government experience helped Jason Barclay become a high-stakes litigator."

As a special counsel and policy director for Daniels, Barclay got to help the firm from the inside land the corrupt privatization deal that has made hundreds of millions of dollars for its client, ACS, and millions of dollars for his law firm defending the corrupt deal. Barclay got the task of defending with lead defense attorney Larry Mackey, the infamous Oklahoma City bombing prosecutor, John Bales in his public corruption trial in South Bend while working across the table from another former Barnes & Thornburg attorney who led the government's badly-failed prosecution of the case. Bales had the good fortune of not only having the law firm which had helped set up the corrupt exclusive state leasing agreement for him defending him, he had one of the senior advisers in Daniels' administration at the time the deal was hatched on his defense team. Several observers said the federal prosecutors could not have done a worse job in prosecuting Bales. The prosecutors didn't even call Paul Page, who pleaded guilty in the conspiracy at the heart of the prosecution, as a witness or the government whistle blowers who talked to the IBJ's Cory Schouten, the investigative reporter who blew the scandal wide open. Gee, I wonder why?

In the Star story, Barclay's boasts include working for David Gergen, a sleazy disinformation agent for the New World Order who worked for several former presidents to deal with scandals, including Nixon's Watergate, Ford's pardon of Nixon, Reagan and Bush's Iran-Contra and Bill Clinton's multiple scandals. Barclay says he was hired to work for Gergen directly out of college to help  him write his self-serving book, "Eyewitness to Power: The Essence of Leadership from Nixon to Clinton." He also boasts of working for former FBI Director Robert Mueller, who had just taken the reins of the FBI when 9/11 happened and Eric Holder in his earlier stint at the Justice Department, perhaps the most corrupt Attorney General in the history of the United States.

A story you will never read about in the Star, which is represented by Barnes & Thornburg, is the fact that Barclay's law firm employed as one of its top partners the man behind the infamous Huston Plan in the Nixon administration. The Huston Plan was authored by Tom Huston, a senior Nixon adviser and former CIA agent assigned to work at the White House by the Interagency Committee on Intelligence headed by FBI Director J. Edgar Hoover. The Huston Plan advocated domestic burglaries, illegal electronic surveillance and U.S. mail tampering to target persons viewed as domestic enemies of the administration. Huston was a man ahead of his times, if you will. What was vilified by the media in Nixon's times is now deemed a necessity by today's useless government propagandists who now control the Operation Mockingbird media. You also won't read anything about the firm's initial, behind-the-scenes efforts at helping convicted Ponzi schemer Tim Durham when the acting U.S. Attorney inexplicably withdrew a civil forfeiture action the government had filed against his assets, forcing the defrauded investors of Fair Finance to seek the appointment of a bankruptcy trustee through an involuntary bankruptcy proceeding to attempt to recover their stolen assets.

Like Gergen, it always helps when you have reporters like Jill Phillips at the Star writing press releases for you under the cover of being a legitimate reporter. Since Barclay learned the corrupt Washington ways from Gergen, who I think epitomizes everything wrong with government in Washington today and the way our news media has become nothing more than a propaganda arm of the ruling elites, I'm sharing with you two contrasting videos. In the first, Vanderbilt trust fund baby and fake CNN News anchor Anderson Cooper as he gives a hand job to Gergen while he's supposed to be conducting a serious discussion. In the second, you see a real investigative reporter, Alex Jones, confront Gergen about his participation in annual events hosted by the exclusive Bohemian Grove, where the corrupt New World Order leaders gather to wander the forest buck naked, hire gay porn actors to serve as their personal valets and worship at the altar of a large, sculpted owl during bizarre sacrificial rituals. It pretty much summarizes the reality of American journalism today where you get nothing but propaganda from the mainstream media and must turn to alternative media to learn the truth about anything happening in this country.

Invest In This Pool

A newly-created state investment pool into which local governments and school districts can deposit their funds has tanked according to the AP:

State officials had high hopes for an investment pool created last year to give Indiana's school districts and local governments a safe, short-term place to deposit taxpayer money and earn interest.

Then the economy tanked.

The account's daily interest rate fell from 3.23 percent last February to just 0.53 percent today. Its balance dwindled from a peak of more than $1 billion in December to $473 million — and that includes $200 million the state government invested to demonstrate that the fund is secure.

There's a story behind this so-called investment pool. Back in the 1990s when I was lobbying for small community banks, State Treasurer Marjorie O'Laughlin was rapping up her last year in office and had this big legislative proposal she wanted enacted before she left office. She wanted to do away with a state law that required local units of government to deposit public funds on a pro-rata basis with area banks and create this state investment pool under the State Treasurer's office whereby a private investment manager would be contracted to invest collective investments of participating local governmental entities. One of her employees at the time, Brian Burdick, helped put this idea together and it promised much greater investment returns for the participating local governments.

The small banks I represented at the time went ballistic. They pointed out that local governments and school districts were their largest depositors. If these funds were pulled out and put in this pooled investment fund at the state level, their loan-to-deposit ratio would be adversely affected, meaning that fewer funds would be available to extend loans to local homeowners and businesses. As I explained to lawmakers at the time, it would result in a shift in investments from main street to Wall Street. Additionally, there had been debacles in Orange County, California and elsewhere with local governments being enticed into these alternative investment schemes such as something called derivatives and the taxpayers wound up holding the bag. The conservative-minded legislators agreed and Marje's big retirement plans were dashed.

A short time after the legislature adjourned that year I was at a friend's party. I find myself in a discussion with this guy who used to work for Sen. Lugar. As soon as he heard my name, he went ballistic. "You're that guy who killed my business plan," he shouted. As he explained it, Bob Grand had it all set up. As soon as the legislation went through, his business would get the contract with the Treasurer's Office to manage the investment pool and he would make all kinds of money. I did such a good job misinforming the legislature about the virtues of his investment pool plan that I caused the idea to be defeated. O'Laughlin didn't go away quietly. Until the final day of the legislature, she could be seen with Grand and Burdick at her side button-holing legislators and trying to find a vehicle bill on to which to sneak her proposal. O'Laughlin later that year was replaced by Joyce Brinkman and Brian Burdick went to work for Bob Grand at Barnes & Thornburg. Brinkman refused to go along with the investment pool plan and wouldn't allow Grand to control all of the bond work for her office as he had intended. Grand vowed to make her a one-termer and, indeed, he succeeded in that, although Joyce played her own part in hanging herself politically.

I had pretty much forgotten all about the investment pool legislation until I read today's AP story. Yeah,Bob Grand and Brian Burdick finally found a State Treasurer and a complicit legislature to go along with this ill-conceived idea. "Nearly 130 schools and local governments are investing in the account, said state Treasurer Richard Mourdock," the AP reports. "He's been pitching the plan to local leaders, but said it's been difficult persuading them to become new investors." "There's a natural pushback," Mourdock said. "At some point — we're not there yet — it will be selling itself based on the word of mouth of its users. We have to keep earning credibility every day." My message to all of you local government officials--keep pushing back. Invest your money in local banks that offer assurances of making loans to help your own communities. A statewide investment pool is nothing but an invitation for all of the Bernie Madoffs of this world to crawl out of the woodwork and screw over not so savvy government officials charged with investing these funds.

CIB Annual Shortfall Now Pegged At $50 Million

BALLARD WANTS TAXPAYERS TO PICK UP THE TAB
At first we thought it was going to be a $10 million shortfall. The number later grew to $20 million. Now, CIB officials say they will need at least another $50 million annually to cover a $20 million shortfall it faces in funding operating costs for the Lucas Oil Stadium, provide $15 million more to the Pacers for operating Conseco Fieldhouse, cover a $ 6 million deficit for the convention center, which is currently undergoing a major expansion, provide $3 million for the ICVA for marketing activities and pick up $4 million in debt refinancing costs. Although Mayor Greg Ballard will not publicly discuss his plan for resolving this colossal financial mess, the IBJ's Peter Schnitzler tells us today that Ballard's administration is quietly lobbying state officials for authority to shift the additional burden to taxpayers. "In private discussions, Republican Mayor Greg Ballard’s administration has proposed hikes to CIB’s existing mix of hospitality taxes, or, alternately, permanently shifting sales or income tax revenue away from other government agencies," Schnitzler writes.

And who is at the center of those private discussions as a paid lobbyist for the City of Indianapolis? That would be CIB Chairman Bob Grand, who faces a direct conflict of interest because he personally represents the Simons, who own the Pacers. “Keep in mind that the Capital Improvement Board cannot do anything on its own to raise revenue. We can’t raise any taxes. We can’t create any taxes. We can’t create any sources of revenue,” said Grand, a partner with the local law firm Barnes & Thornburg LLP. “At the end of the day, it’s outside of our control. We’re going to lobby to go do something. Somebody needs to help us figure out a longterm solution.”

Grand's continued participation in these negotiations represents a clear violation of Indiana's Rules of Professional Conduct for attorneys. Those rules specifically bar an attorney from representing a client "if the representation of one client will be directly adverse to another client", or "there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer." When Grand accepted the appointment to be the CIB's President, he promised to wall himself off from any discussions involving the Pacers. With the long-term Pacers lease in the mix with this funding debate, there is no way Grand can participate in these discussions without affecting the Pacers' lease, and Mayor Ballard should not be allowed to waive the conflict by consenting to this untenable, conflicting representation.

Laying aside Grand's conflict of interest problem, it has now become clear that the taxpayers of Indianapolis will not be able to count on Mayor Greg Ballard to protect them. Instead, we are going to have to rely on the good sense and fairness of the Indiana General Assembly to look out for the public good. We may have a friend in Sen. Luke Kenley (R-Noblesville), the Senate's point guy on these discussions. Kenley tells Schnitzler that the teams and their fans and out-of-town conventioneers should bear these additional costs. “We’ve kind of asked the taxpayer to give their contribution,” Schnitzler quotes Kenley as saying in reference to taxes approved by the legislature used to fund construction of Conseco Fieldhouse and Lucas Oil Stadium. “If [the team owners] had at least some skin in the game, maybe that would help control cost overall,” he said. [Note: During last year's election, I asked all Marion County legislators to pledge to oppose a state bailout of the CIB. Only two incumbent legislators made the pledge, Rep. Phil Hinkle (R) and Rep. Jon Elrod (R). Elrod lost his re-election bid to Democrat Mary Ann Sullivan, whose husband's employer is making millions off construction contracts with the CIB. Sullivan refused to take the pledge, not surprisingly.]

Ballard, now clearly demonstrated to be no friend of the taxpayers, even if he has to rely on others to do the talking for him, wants to expand the Professional Sports Development Area, which currently captures all income taxes generated from the Lucas Oil Stadium to include other downtown businesses. According to Schnitzler, the CIB collects $16 million from that mechanism, of which $5 million is used for the CIB's operating expenses and another $11 million is used to cover construction costs for Lucas Oil Stadium. Ballard also wants to create a sales tax increment finance district, akin to a TIF district for property taxes, to divert sales tax revenues towards the CIB and away from other governmental units. Ballard is also looking at raising the food and beverage tax, the innkeepers tax and a ticket tax on sporting events, which collectively would raise about $28.5 million annually.

Meanwhile, the Pacers billionaire owners, Mel and Herb Simon, continue their public crying game for help. They whine to the IBJ's Anthony Schoettle that the team has lost money in 25 of the last 27 years. "Apparently, not even housing the team in the much-ballyhooed Conseco Fieldhouse or a trip to the National Basketball Association finals could stop the Pacers’ bleeding," Schoettle writes. According to Schoettle, the Pacers aren't alone. Ten of thirty NBA teams are losing money he says. And back to the pledge by Grand not to participate in any discussions involving the Pacers, he's still talking. "CIB President Bob Grand said at this point nothing is off the table, including increasing a variety of taxes and user fees to cover the Fieldhouse operations and other CIB shortfalls," Schoettle writes.

The Pacers pay just $1 a year to lease Conseco Fieldhouse, while pocketing all suite and concession revenues for both game and non-game events. Player salaries are the biggest reason the Pacers are losing money. That figure has reached close to $80 million annually according to Schoettle. The Pacers still owe $15 million on Jamaal Tinsley's contract, who doesn't even sit on the bench with the team anymore because of his numerous brushes with the law.

At least one expert blames the Pacers' woes on poor management. “Running a facility of that magnitude is a challenge, no doubt,” [Randy] Schwoerer said. “But I have a hard time understanding losing money to that level in a town with the sports support and entertainment appreciation that Indianapolis has. If you’re losing money to that level, it’s poor management and poor leadership, not solely the building.” Schwoerer suggests that an extensive audit of the franchise be conducted before the taxpaying public shells out more to help the franchise. Yeah, like that is going to happen.

The Folly We Call The CIB

Our esteemed leaders of the Capital Improvement Board of Managers went before the Municipal Corporations Committee of the City-County Council yesterday and put on their little dog-and-pony show. You can view the entire hearing by clicking here. If you can imagine a first-grade school teacher teaching arithmetic to her students, you could appreciate the level of the conversation. CIB Executive Director Barney Levengood did most of the talking while CIB President Bob Grand and Treasurer Ann Lathrop looked on. Barney explained to his students that we've got a home, and we've got all of these bills, like the electric, water, etc. that we have to pay each month to keep it going and then there's this mortgage we have to pay if we want to continue living in our house. Barney first explained a few pesky problems with the mortgage, which went something like this:

Well, There's this thing called a swap note we took out a few years back for Conseco Fieldhouse for about $16.9 million. Barney didn't go into all of the details, but when the credit markets fell apart last year, the swap note was terminated and there was some $5 million cash penalty that had to be paid. We didn't tell you at the time, but the State bailed us out with an emergency loan and gave us a year to get our house in order. That payment comes due in June and we're not quite sure what we're going to do about that just yet.

Oh, and then there's this $26.3 million variable rate debt we took out in the past as well, which has a maturity date in September. You see, we didn't want to bother with those pesky cash reserve funds you are required to set up with a fixed rate, long-term bond. That credit market meltdown, however, sent interest costs on that debt soaring so we need to do something about that debt.

And, then there's the other matter of that $34 million we got the Circle Centre investors to divert to us from their dividends in the form of a loan for the construction of Conseco Fieldhouse. It was originally due in 2007, but we quietly got the investors to defer that obligation until 2017.

We wanted to be completely transparent and candid with you about all of these funding obligations. That's why we're telling you all of this today.

And by the way, we're doing everything we can to cut our budget. Sure, we increased our budget by $20 million this year, but we're going to show you we mean business and trim our budget increase by $6 million. Of course, we are calling this a budget cut because that's what we need to say to keep the increasingly discontented taxpayers assuaged. We're going to defer purchasing new carpeting, make sure the lights are turned out when a room isn't in use and turn down the thermostat. Barney reminded his students that our mayor didn't want to blame anyone for this mess so let's not discuss how we found ourselves where we are today. I didn't quite understand Barney's analogy, but he said his staff was working as hard as you work when you are running away from the police. I've never been chased by a cop so I don't know what that's like or whether it's at all appropriate in this context. On second thought . . .

Oh, one last point. Barney says there's some issue a CPA firm raised about our status as "a going concern." That's another way of saying that the CIB is insolvent. We have to figure out a way to pay for this mess so our creditors will continue to extend credit to us.

I found it fascinating that throughout this presentation Bob Grand just sat there and deferred to Barney or Ann. Bob Grand is a self-described public finance expert. He makes a living as a bond lawyer. Why would he not be the person to explain the CIB's financial problems, particularly as it related to the bonded indebtedness? Ask which law firms and which attorneys have been providing advice to the Indianapolis Bond Bank the last few years for your answer. Ask why we opted for funding schemes that proved extremely costly and risky to the public. Ask how much those funding schemes cost the public in fees for the professional advice we followed in undertaking those risky funding options as opposed to traditional, more sound forms of public financing. Grand did say near the close of the presentation that he was talking to the Colts and Pat Early was talking to the Pacers about possible concessions from the sports franchises, but he reminded the Committee that the CIB could not unilaterally alter a contract with the team owners. Remember, that right is only reserved to the team owners, both of whom have exercised it in the past to demand more money from the CIB at a huge cost to taxpayers.

The really frightening aspect of this presentation was not the explanation offered by the CIB for this mess, but the complete blank stares of the Committee members and Chairman Mike McQuillen's astonishing compliment for the transparency the CIB had provided to the public. Did you know about the interest rate swaps and variable interest debt before this presentation? Did you know the CIB received a $17 million emergency loan from the State last year after paying a $5 million termination penalty on another debt instrument? Did you know that the CIB had taken out a $34 million short-term loan from Circle Centre's investors to build Conseco Fieldhouse and had defaulted on its repayment in 2007 and had to receive a 10-year extension before the IBJ reported on it a few weeks back?

The questions the council members asked of the CIB leaders were shallow to say the least. Back in my younger days when I analyzed budgets for the Illinois legislature, I used to spend days preparing for the legislators a detailed analysis of a department's proposed budget after reviewing the budget request and spending time interrogating the department's fiscal analyst. Right before the hearing, our staff director would ask me to prepare a list of questions for our members to ask. When I would explain that the questions were already set out in my analysis, he would respond by saying that legislators don't read your analysis. We need the people in the audience to think they really read the budget before the hearing so that's why you need to make a list of intelligent questions for them to ask. In the case of the Municipal Corporations Committee, nobody even bothered to make up a list of questions for them to ask to make it appear they knew what he hell was going on. Truly sad and frightening when you think about it.

CIB Officials Downplay Lucas Oil Stadium Funding Debacle

I've been warning about this problem for a long time. The chickens will soon be coming home to roost on the ongoing funding problem for the new Lucas Oil Stadium. The CIB projects a $20 million operating deficit for the new stadium in its first full year of operation alone according to the IBJ's Jennifer Whitson. Operating expenses for 2009 are expected to be $27.7 million, while operating revenues generated from events are estimated at $7.7 million. The CIB plans to use a reserve fund, which was set aside for the construction of the new stadium and convention center expansion, to cover the shortfall. The CIB plans to tap $25 million in reserve funds to shore up the stadium's funding in 2009. CIB Chairman Bob Grand tells Whitson that some belt tightening is in order to get through the next few years:

“We’re expecting fairly significant increases in revenues,” said CIB President Bob Grand. But in the interim, the board’s bracing for tight budgets and potential cuts to shore them up.

“We’ll have to be very fiscally responsible in the next three years,” Grand said.

He said CIB has dropped a couple of charitable golf outings and also has flatlined a total of $1.4 million in grants to the Arts Council of Indianapolis, the Indiana Black Expo and the Indiana Sports Corp. in its 2009 budget. He said those could be cut if needed.

“If those activities are driving revenues … then I’m going to support them,” Grand said. “If not … they’ll probably be reviewed and cut.”

But spending reductions of that magnitude would be a drop in the budget. Lucas Oil’s $27.7 million in estimated operating costs represent nearly 36 percent of CIB’s operating expenses.

CIB didn’t face the same challenges at the RCA Dome, in part because it controlled more of the revenue. Barney Levengood, executive director of CIB, told IBJ that he did not have revenue and expenses for the RCA Dome, saying his office does not break out the information that way.

CIB may be able to find some relief to financial pressures by using revenue generated by other venues it oversees, said Rob Hunden, a consultant who formerly worked for the Indianapolis Bond Bank.

“They have a lot of ways to move things around,” said Hunden, president of Chicago-based Hunden Strategic Partners.

Bet you didn't know the CIB has been helping to fund the arts and Indiana Black Expo? That is a complete deviation from the CIB's mission. Hunden's comment that the CIB has "a lot of ways to move things around" to shore up the funding problem highlights the fact that the CIB operates as a private slush fund for the City, operating completely without accountability to the taxpayers.

The fact is that there is no money to operate Lucas Oil Stadium because Fred Glass and Bart Peterson gave away the store to the Irsays during the negotiations on the new stadium construction. Notice there is no talk of reopening those negotiations. No other NFL team owner has received a larger subsidy than Irsay's Colts. The deal is the biggest taxpayer ripoff in NFL history. Irsay gets most of the revenues generated from the stadium and pays absolutely none of its operating and maintenance expenses.

This comment from Grand in Whitson's story is infuriating. "Grand said he didn’t think the board would need to tap taxpayers for any additional money to cover operating expenses 'at this point,' adding that the CIB traditionally has operated 'pretty efficiently.'" The CIB has operated "pretty efficiently" my ass. If it were a business, it would have long ago been shut down from bankruptcy. Note how much over budget the stadium is. The stadium's original construction cost was $625 million. The final tab is now expected to be $720 million, consuming a $90 million contingency fund. Thanks to Gov. Daniels, any extra funds raised from new taxes on food and beverages, hotels, car rentals and admissions above what is needed to meet annual debt obligations must be used exclusively to pay down the debt sooner. This was not the case with the RCA Dome, where CIB officials diverted tax revenues intended for debt reduction to other projects. As a consequence, the CIB still owes about $70 million on the RCA Dome, nearly what it cost to build originally, as its demolition begins to make way for the expanded convention center.

Dems Rap Ballard And GOP On Ethics

Turnabout is fair play, right? After taking a beating day after day during last year's municipal election from candidate Greg Ballard and GOP council candidates and party leaders on the ethical lapses of CCC President Monroe Gray and other Democrats, you can hardly blame Democrats for pointing out obvious hypocrisy on display by Mayor Ballard and other Republicans during the early days of their takeover of Indianapolis city government. In a press release today, Terry Burns, Executive Director of the Marion County Democrats took the GOP to task on the issue of ethics. "Marion County Republican Party Chairman Tom John has joined a growing list of GOP officials who are cashing in on their connections to newly elected Mayor Greg Ballard," Burns began his statement. "This comes on the heels of Republican City County Councillor Ryan Vaughn announcing that he was leaving his current law firm to join the politically connected firm of Barnes & Thornburg LLP," he continued. "Not surprisingly, both law firms do extensive and lucrative business with the City of Indianapolis and the additions of John and Vaughn are expected to solidify the political connections each firm has with city government."

As Burns was releasing his statement today, Bob Grand assumed control of the Capital Improvement Board of Managers at his first meeting, notwithstanding the firestorm his appointment has created for Mayor Ballard, a fact which Burns didn't miss. "The mayor recently appointed Bob Grand, one of the city’s most influential Republican dealmakers, to head the Capital Improvement Board (CIB), which manages, among other things, Lucas Oil Stadium and Conseco Fieldhouse," Burns aid. "Not coincidently, Grand’s law firm represents the Indiana Pacers, the major tenant at Conseco Fieldhouse." Burns noted the appointment clashed with one of Ballard's own promised ethics reforms. "Mayor Ballard touted his ethics proposal early and often in his campaign, not by contrasting any accusations of wrong-doing by the prior administration but simply to state that his administration would be free of the kind of outside influence that now seems to be infiltrating it,” Burns said. “As we have seen time and time again, most of what Ballard the candidate told us prior to the November election does not hold up in the actions of Ballard the mayor. "He has violated his own ethics policies in making board appointments, he has backtracked on his promise to fight for the elimination of property taxes and he has increased the size of the mayor’s staff, not cut positions as promised." "What we’ve learned so far from the Ballard administration is that promises ring hollow when compared to the actions taken so far in office,” Burns said.

As Burns was rapping Ballard and the GOP on one side of town, Mayor Ballard took more hits from Democratic members of the House Ways & Means Committee over at the State House where he appeared to testify in support of Gov. Mitch Daniels' plan to cap homeowner's taxes at 1% of a home's assessed value. When I first read the Star's Mary Beth Schneider's account of his testimony, I thought she was being a little hard on him, but after I saw the TV news reports this evening, her reporting appeared dead on. Understandably, Mayor Ballard is swimming upstream as the mayor of the state's largest municipality testifying before a legislative committee to ask the lawmakers to curb the ability of local government to tax. He incited Democratic lawmakers of the committee, however, by asking the state to pick up the cost of the city's pensions at the same time he asked them to cut taxes. "Ballard, who was elected in November in a giant political upset over Democrat incumbent Bart Peterson, told lawmakers that he would like to see the state pick up the cost of police and fire pensions, which will cost Marion County $25 million to $27 million this year," Schneider wrote. When pressed on whether he planned to cut his own budget, the Democrats didn't like the answers Mayor Ballard gave them. Schneider explains:

He told lawmakers that there's "fluff" in the Marion County budget, but he had few answers for them about where he would cut back.

"Everything is on the table," he said, but repeatedly fended off questions by saying he had only been in office five weeks.State Rep. Win Moses, D-Fort Wayne and a former mayor, said that answer wasn't good enough, and pressed for more details.Asked if police would be laid off, Ballard said no.

Asked if firefighters would be cut, Ballard said "I can't say. I just don't know. You're asking me questions that I don't know."Moses fired back: "I'm asking questions that you must know."

And, he added, "I know you don't mean everything you're saying."

Ballard couldn't say everything was on the table, he said, and then say that police wouldn't be cut and that the possibility of raising local income taxes to pay for the property tax relief was not a viable option in Marion County.

Peterson raised income taxes to 1.65 percent, up from 1 percent, to pay for public safety, including for pensions.That income tax increase, though, helped seal Peterson's defeat from an angry electorate that saw their property taxes go up and their income taxes go up.

While he told legislators that he would like to see them pass more cost-saving tools -- such as the ability to consolidate areas of government, including all township fire departments -- one tool he was unlikely to use is an increase in income taxes.

"That would not play well in Marion County after last year," he said. "I would do almost anything not to do that.

"But legislators were skeptical about the state picking up the cost of pensions, especially since the county's income tax increase was supposed to cover that, Rep. Carolene Mays, D-Indianapolis, told Ballard he should be looking at using the money the income tax raised for pensions "before you come in here and ask up to pay for an expense you have."

Based on Schneider's report and what I saw on this evening's TV news, Ballard was ill-prepared for his testimony today. It's ironic that the man Ballard has made as his closest advisor, Bob Grand, was helping himself to the head of the table of the city's most powerful Board today as Mayor Ballard was walking into a lion's den over at the State House to be eaten alive. Folks familiar with Grand's lobbying prowess over at the State House knows that neither he nor his fellow lobbying partner Joe Loftus would ever catch themselves being embarrassed in front of such a powerful legislative committee as Mayor Ballard was today. Ballard's performance today became fodder for his chief critic, the Accidental Mayor blog authored by Jen Wagner. Under a post labeled, "Maybe The Dog Ate His Homework," Wagner writes, "In short, Ballard went to the Statehouse to ask for a handout." "He couldn't answer any questions about proceeds from last year's income tax increase." "He couldn't tell lawmakers his plans for reducing costs." "Hell, if someone had asked him how much money is in the local budget, he probably would have responded with a blank stare."

This really is an unfortunate development today. Those of us who support real property tax reform were counting on Mayor Ballard to help lead the battle at the State House. I suspect that one of the reasons he wasn't prepared is because none of the people with whom he has chosen to surround himself could give a damn about implementing real property tax reform. My fear, however, is that Mayor Ballard simply has not taken his role seriously. Yes, he's only been in office a little more than a month, but I would have at least expected him to have been able to articulate in broad terms what he was doing to rein in city spending, particularly when he is asking lawmakers to approve a new state law which could result in fewer revenues for city government. I hope this isn't a further indication of what lies ahead of us.

Ballard Now Pushing Regional Alcohol Tax To Finance CIB Bailout

In his continuing quest to completely renege on every campaign promise he made as a candidate, Mayor Greg Ballard has settled on a push for a regional tax hike on alcohol to finance his bailout of the Marion County Capital Improvement Board. Carmel Mayor Jim Brainard will love this little gift to help bail him out of the financial mess he has brought to his city with his reckless spend, borrow and build programs. Fox 59's Russ McQuaid reports:

Indianapolis Mayor Greg Ballard tells Fox 59 News he will announce this coming week that his latest plan to erase a $47 million budget deficit at the Marion County Capital Improvement Board includes an alcohol tax through the nine donut counties of central Indiana.

"I think the regional alcohol tax is something that should be in play," said Ballard. "Those taxes haven't been raised since 1981.

"Ballard's original proposal, which included a higher alcohol tax in Marion County, did not pass through the regular session of the Indiana General Assembly. That tax was opposed by alcohol retailers in Indianapolis who feared it would chase customers across county lines. This proposal would raise alcohol taxes through the metro area, allowing those counties to keep the additional revenue raised in their area, while raising money to fund the CIB which operates the city's convention business and sports venues. By proposing a tax that provides funding for the donut counties, Ballard is hoping local officials will lean on lawmakers from their areas to support the plan at the Indiana statehouse when the legislature meets in a special session to write a state budget.

"I think you'll see next week that we've got this thing corralled and there may be some options at the statehouse to do that," said Ballard.

McQuaid's report also indicates that talks are still alive for awarding table games to the racinos in Anderson and Shelbyville, making them full blown casinos. Several CIB members have financial ties to both race tracks and stand to gain financially from any expansion of gaming at the race tracks. Of course those self-serving board members have got a plan to put a few million in their pockets while pretending to be good public servants. The race tracks are generously offering to share $17 million a year with the CIB if it gets its expanded gambling wish.

I would have not thought it possible, but I am convinced now that Ballard has ushered in an even more corrupt city government than the one presided over by Bart Peterson. Just ask city contractors. Ballard's campaign has been hitting them up the past year to join he and his wife, Winnie, at St. Elmo's Steakhouse for private, intimate dinners with the mayoral couple for $5,000 a pop according to a reliable source. The source says Ballard's fundraisers are getting a little too pushy for the comfort level of some contractors. Ballard has nothing to fear. Indianapolis doesn't have a prosecutor who will deal with corrupt politicians. Let's see, who is a business partner with the owner of St. Elmos? And doesn't that same owner serve on the Capital Improvement Board? And isn't he the same guy who has an ownership interest in Centaur, the company that owns the Anderson racino? And doesn't another CIB member's family have a financial stake in the Shelbyville racino, which is represented by yet another CIB member?

UPDATE: Proving just how irresponsible his administration has been since it took over the CIB, Mayor Ballard is actually defending the payraises and new workers the CIB added last year knowing that it was about to run out of money. The Star's Brendan O'Shaughnessy reports that Ballard downplayed concerns about the issue. His CIB President, Bob Grand, had this incredible statement in response to the criticism:

CIB President Bob Grand defended the pay raises as reasonable at the time they were budgeted last year, before the agency had a clear understanding that its finances were crumbling. He also said the board voted for the raises -- the total cost is about $240,000 in a CIB salary budget of $3.7 million -- "knowing full well that they may not stick" because cuts were possible in the future.

"Why would I shut down the place and risk losing all the employees?" Grand said.

Since then, the board has made budget cuts as it attempts to trim costs in the face of a potential $47 million budget deficit next year. The cuts include furloughs -- six days of unpaid time off by June -- for the agency's 81 salaried employees.

"There are no raises now," Grand said. "The furloughs mean a cut in pay."

For many, that's undeniable. But the furloughs will have little effect on some of the bigger raises that a few CIB executives received.

For example, Stadium Director Mike Fox received a 36 percent pay raise. His salary last year was $94,507; now it's $128,242.

Notice that Grand tells O'Shaughnessy that the raises were reasonable at the time they were approved last year "before the agency had a clear understanding that its finances were crumbling." That's a flat out lie. Grand and the administration knew full well last year the CIB had no extra money in its budget for operating and maintaining the Lucas Oil Stadium and would run out of money and the agency had been running deficits for a decade. News reports for the past two years have made the issue of the anticipated shortfall abundantly clear. As I said when I first saw the published numbers for the CIB's budget, it was a padded budget. The CIB upped its budget 20% going into this budget year. The budget cuts it has made since then still translate into an increase over prior year's budgets. The CIB went out of its way to exacerbate its financial woes so it could get as big of a bailout as possible.

The Republican-controlled City-County Council is equally culpable. It has completely abandoned its duty to review these budgets proposed by the Ballard administration. "Michael McQuillen, chairman of the City-County Council committee overseeing the CIB, said the committee found the CIB's overall budget request reasonable but did not review each salary," O'Shaughnessy writes. "Reasonable?" It was a 20% hike at a time when other budgets were being cut or flat-lined. "We knew a problem was coming, but in the last few months, we realized it was a worse mess than imagined," McQuillen said. A City-County Councilor would have had to bury his head in the sand for the past two years not to see this financial crisis coming.

Coleman Cites Abuse Of Power And CIB Excesses For Party Switch

City-County Council President Robert Cockrum expressed surprise at At-Large Councilor Ed Coleman's decision to switch from the Republican to the Libertarian Party according to the Star's Vic Ryckaert, but anyone who has followed council politics this past year knew that Coleman had become increasingly disturbed at how party priniciple had become confused with doing what you are ordered to do by Barnes & Thornburg's Bob Grand and Joe Loftus. Coleman complains to Ryckaert about "abuse of power" and criticism he received from opposing CIB excesses as reasons for bolting the party:

Coleman, who was elected to his first term as an at-large council member in November 2007, said he was disillusioned by what he called the GOP's abuse of power.

"During the council's previous period of Democrat control, the majority's powers were used to silence Republicans," Coleman said. "Now, under Republican control, the council majority abuses their power to weaken Democrat influence."

Coleman said he faced criticism from fellow Republicans when he opposed the "secretive and expensive affairs of the Capital Improvement Board."

"The two old parties want obedient followers, not leaders," he said.

The same party which refused to support Coleman in the general election demanded total allegiance from him as a councilor. Although Grand and Loftus had no part of the grassroots effort that turned out council Democrats and Mayor Bart Peterson, the two immediately seized control of Ballard's administration before he was sworn into office. Ryan Vaughn, who is the political equivalent of a prostitute, then sold his seat to the law firm for a job as a lobbyist working for Grand and Loftus, assuring the two of a direct line into the council. Vaughn has dutifully carried their water over the past year, even when it involved a direct conflict of interest.

Cockrum boasts to Ryckaert that he still has a majority, but it isn't one he can take to the bank. At-Large Councilor Barbara Malone won her seat on the council by beating a slated candidate in the primary and then received no support from the party for her election in the fall. She has strayed from the party on a number of votes this past year. She owes absolutely nothing to the GOP and could become a serious threat to the party's working majority until the next elections in 2011. More importantly, Republicans will need either her vote or Coleman's to pass a redistricting plan for council districts, which could determine control of the council during the next decade.

Majority Leader Lincoln Plowman defended the party's conduct to Coleman's criticisms. "Majority Leader Lincoln Plowman said debate is not curtailed and everybody has a say. GOP caucus meetings get heated at times, Plowman said, but 'we try to go out as a unified party after that,'" Ryckaert reports. Plowman is actually part of the problem. He is a city police officer who was handed a plum job in a reorganized IMPD ala Monroe Gray by Public Safety Director Scott Newman, a former Barnes & Thornburg partner, effectively putting him in the pocket of Grand and Loftus. The firm's control of the council and the Ballard administration is complete, and anyone who has a problem with that reality will be punished and pushed sway.

Personally, I'm very disappointed that Coleman chose to leave the party rather than stay and fight. I believe he could have been a more effective voice on the issues had he remained in the Republican Party. I think people need to understand that it is our own party, however, which has abandoned the principles upon which it was elected in 2007 that has led to Coleman's disillusion. As long as we have an administration and council that can't fart without getting Bob Grand's and Joe Loftus' permission, you are going to see continued and growing dissatisfaction with the party's short-term lease on controlling city government.

Grand: Bankruptcy Should Not Be Used As A Threat By CIB

Last month, CIB President Bob Grand threatened to close Lucas Oil Stadium if the legislature didn't approve a $48 million a year bailout for the CIB. Last week, CIB Treasurer Ann Dillon told a legislative committee considering the bailout that the CIB would have to begin cancelling conventions at the Indiana Convention Center if a bailout deal is not approved. And for the past several months, we have been bombarded with "sky is falling" rhetoric from the entire CIB leadership, including Mayor Greg Ballard, if a bailout plan is not approved. Grand, however, draws the line at a suggestion of bankruptcy. "CIB President Bob Grand said he hasn't spent time considering whether bankruptcy would allow the agency to renegotiate with the Colts because he did not want to use it as a threat," the Star's Brendan O'Shaughnessy reports. "There are too many unanswered questions right now for me to shoot from the hip," Grand said.

Now that Jimmy Irsay has spoken, Mayor Ballard has changed his tune on asking the Colts to contribute money to help bail out the CIB. O'Shaughnessy writes, "Ballard last week said he has the same concerns as Irsay about reopening the Colts' lease. Ballard said the Colts should not be "demonized" for holding to their contract with the city." "I'm worried about the precedent it sets," Ballard said. "It could send chills down the spine of every business that does deals with the city." O'Shaughnessy adds, "Rather than try to reopen its 30-year contract with the Indianapolis Colts, the city might ask the team to donate money to area arts and culture groups now supported by the struggling Capital Improvement Board."

What is really sending a chill down the spines of taxpayers is the fact that not a single politician in this debate is standing up and fighting for the taxpayers' interest, save Libertarian Indianapolis City-County Councilor Ed Coleman, who is no longer a Republican because members of his own party opposed his efforts to get to the bottom of the CIB mess.

Let me repeat, opposing tax increases to bail out the CIB but looking for alternative ways of sending the same amount of money to the mismanaged entity is not an acceptable solution. The politicians who are advocating this route want their cake and eat it too. The CIB can't afford the lease agreement with the State of Indiana for LOS. The answer is pretty simple. Give the stadium back. Local politicians oppose this option because they fear control over the distribution of all of those free tickets to the games, which are controlled by the CIB and the Mayor, will shift to Governor Daniels.

Disappointingly, local news media reports have ignored the free ticket scam that allows politicians to be bought off using your tax dollars. Let's see who is getting free tickets and using suites controlled by the City and the CIB at LOS at Colts games. Let's learn who is footing the bill for that free entertainment. Let's find out whether politicians are reporting all of those free gifts on their statements of economic interest. You would be surprised how some politicians' thinking changes once they are doled out free tickets to Colts games. The CIB learned this early on and bilked it for all its worth.

See Star business columnist John Ketzenberger's latest pitch for the City's downtown elite here. In case you missed it, they're setting up Mayor Ballard to take the fall if their CIB bailout fraud fails.

Indy's New Lobby Law Has Few Takers

A new ordinance that took effect on January 1 of this year requires all persons who engage in certain lobbying activities of city and county officials to file a registration statement and to report annually on their lobbying activities, including expenditures made for this purpose during a calendar year, has produced few registered lobbyists. According to a new online database the City has made available, only 61 persons have registered to lobby city and county officials so far this year, and 15% of those registrants came from a single law firm, Barnes & Thornburg. More than ten times that number of persons are registered with the state's Indiana Lobby Registration Commission.

City-County Councilor Joanne Sanders reacted with skepticism to the number of registrations in a story in today's Star. "I think it sounds low," Joanne Sanders, the Democratic minority leader, told the Star's Evan Shields. "I'm not sure 61 is a valid number." "Sanders' doubts stem from her experience with the potential sale of the city's water and sewer works," Shields continued. "She said she sees plenty of lawyers working on the issue and does not believe they all have registered." On that point, the law firm of Baker & Daniels has been engaged and is being paid $2 million to assist the Ballard administration with its proposed transfer of the water and sewer utilities to Citizens Energy. Although several of its lawyers have appeared at City-County Council meetings and met with councilors on the issue, a search of the database produced no registrations from the law firm. Citizens Energy, according to the database, has hired Ice Miller's Lesa Dietrick and former Center Township Trustee Carl Drummer, to lobby for it, both of whom have registered as lobbyists.

The City says it has notified everyone who is registered with the Indiana Lobby Registration Commission of the City's new ordinance. Shields' story notes the $250 fine for not complying with the law may not be much of a deterrence to complying with the registration and reporting requirements. One law firm that is erring on the side of caution is Barnes & Thornburg, which employs City-County Council President Ryan Vaughn, who authored the new lobbying ordinance. According to the database, nine employees of the firm have registered to lobby, including former CIB President Bob Grand and a former Deputy Mayor under Steve Goldsmith, Joe Loftus. The firm lobbies for: Corrections Corporation of America, which operates Marion Co. Jail II; Microsoft; Emmis; Katz, Sapper & Miller; National City Bank; Holladay Partners-Midwest, Inc.; Malcom Pirnie, Inc.; The Hagerman Group; Republic Services of Indiana; Town of Fishers; ACS State & Local Solutions; Crowe Horwath; Schneider Corporation, Johnson Controls and the Smoot Corporation. A number of those registrations indicate the firm's lobbyists are lobbying the mayor's office. Both Grand and Loftus advise Mayor Greg Ballard under a contract for which they are paid more than a $100,000 a year, creating the potential for serious conflicts of interest.

The database indicates that some former city officials have began lobbying the City after leaving their government jobs. Former Public Safety Director Scott Newman, who is also a former partner at Barnes & Thornburg, is paid to lobby for ESG Security, the firm that provides security for the CIB's facilities. Former DPW employee, Kyle Walker, is lobbying for Commonwealth Engineers, Inc. after leaving his job last year. Kevin Taylor, the former head of the Bond Bank who recently left his city job to join City Securities as a Vice President, is not registered to lobby. City Securities has been involved in previous financial transactions, in particular, related to the water company's financing. Former mayoral chief of staff Paul Okeson also is not registered to lobby. He now works for Keystone Construction, which has numerous contracts with the city-county agencies to do construction-related work.

There are also a number of registrations of people closely related to the local parties. Frank Short, a former Democratic city-county councilor and Washington Township Trustee, is lobbying for the Indianapolis Convention and Visitors Association. Marion Co. GOP Chairman Tom John is lobbying for The Consultants Consortium. The software consulting business employs newly-appointed at-large City-County Councilor Angel Rivera. John played a key role in getting Rivera appointed to the council. Michael Biberstine, a former executive director of the Marion Co. GOP, is lobbying for National Heritage Academies, a charter school-related organization. Marion Co. GOP Vice Chair Jennifer Ping, who also serves on the local alcohol licensing board, is lobbying for A&F Engineering, Beam Longest & Neff, CSO Architects, Daniels Associates, Hannum Wagle & Cline and  L'Acquis Consulting Enterprises.

As a candidate, Ballard pledged to enact an ordinance barring lobbyists from serving on city-county boards, but in one of his first acts as mayor, he appointed Bob Grand to serve as president of the CIB. Grand has been succeeded by Ann Lathrop of Crowe Horwath. Her firm lobbies the City through Joe Loftus, Grand's partner at Barnes & Thornburg. Frank Short serves on the waterworks board while he lobbies for the ICVA and Ping lobbies for numerous business interests while serving on the alcohol board.

I found it interesting that nobody is registered to lobby for either Veolia or United Waterworks. Or for the Pacers or the Colts. Bose Public Affairs Group, one of the largest lobbying firms in town, also has no registrations. There are no registrants for Baker & Daniels, one of the City's largest law firms. Toby McClamroch of Bingham McHale, the general counsel for the CIB, is registered to lobby but his registration lists no clients. I found this to be the case with several of the attorney registrants. Also, former Mayor Steve Goldsmith has spent a considerable amount of time on the 25th floor in the mayor's office since Ballard took office. A firm that employed Goldsmith, Capital Source, won a nearly $1 million contract to advise the mayor on the transfer of the utilities. Goldsmith did not register as a lobbyist. He recently became a deputy mayor for New York City's Mayor Michael Bloomberg. He has been rumored to be involved in a number of initiatives undertaken by the Ballard administration.