Sunday, September 21, 2008

City-County Council: It is Time to Investigate Public-Private Partnerships

During the past several months, I have had the opportunity to take a look at some of the city's public-private partnerships efforts. While what I viewed was only a brief glimpse, it was frightening. For years, leadership of this city, both Republicans and Democrats, have lauded public-private partnerships as good for the taxpayers. What I saw though was much more ominous. It appears that these efforts have too often involved degraded into insider deals which government officials and private businesses profit at the expense of taxpayers. Time and time again, I ran across deals, cloaked in secrecy, in which the players moved seamlessly from a public decision-making role to a private profit role.

The private interests wanting a place at the public trough kick back money directly to the public officials in the form of campaign contributions or indirectly in the form of hiring politically connected law firms which then turn legal fees into campaign contributions. Time after time again, I saw the same players involved. It was as if the money trail was a big circle, a circle the taxpayers were closed out of.

An example: Michael Browning in 1985, as Vice President of the Sports Corporation, signed the Redevelopment Agreement with the City for the Sports Corporation to develop Square 88 in Indianapolis, a city block which includes Pan Am plaza. The Sports Corporation then contracted with a developer to develop Square 88. That developer? Michael Browning.

As a side note, the city in 1985 floated bonds to buy the lots in Square #88 and then gave (for free) the property to the Sports Corporation. Our city leaders did not even include a requirement that the Sports Corporation pay off the city's debt when the property was developed and sold. What happened to that debt the city incurred to buy Square #88 lots? We're still paying on it it. The Square #88 bonds were rolled into the Circle City Mall debt.

What is most disturbing is the secrecy in which these public-private partnerships are allowed to operate. For example, the Sports Corporation refuses to disclose details regarding its sale of Square #88 property. Government boards working with those private companies have historically been very guarded about disclosing information about those deals and the numbers provided often turns out to be misleading or inaccurate. Those boards are often filled by people who have a self-interest in the public-private deals. In some cases individuals sit on the government board and are also on the board of the private company that does business with the government board. An example of that is Bob Grand, who, in addition to advising the mayor, chairs the Capital Improvement Board while also on the board of the Sports Corporation which regularly receives money from the CIB for various projects.

For too long, city leaders have looked the other way while politically-connected individuals have used public-private partnerships to enrich themselves rather than do what is in the best interest of taxpayers. It's time for leaders on the City-County Council to step up and take a closer look at these deals and ensure that, in the future, they truly are in the taxpayers' best interest.

1 comment:

Anonymous said...

I've been screaming about the fraud of public-private partnerships, tax abatements for 20 years inside government and I have found that no one cares. Most people inside and outside of government have been drinking the kool-aid, as most of them are hoping that they can figure out how to get their slice.

Government needs to be uninvolved in the marketplace except for the enforcement of sound regulations, but they don't want to do that because that might prevent one of their friends from benefiting from government largesse.

It's all a big game and the general public always loses.