Monday, August 3, 2009

Former Bond Bank President and Deputy Mayor/Chief Of Staff Pocketed Hundreds of Thousands of Dollars as Consultant for Bond Bank

As the end of 2003 was drawing to a close, the City was progressing with plans for an expansion of the convention center. The Indianapolis Local Improvement Bond Bank was a key player in the project. At a meeting of the Bond Bank Board on December 15, 2003, the Board considered Resolution #13, 2003 to hire a consultant to assist in matters related to the expansion. The consultant the Bond Bank Board was considering was none other than John J. Dillon, III, the Chairman of the Board.

Dillon passed the gavel to another Board member, Mary Chandler, and asked that the record reflect that he was recusing himself from consideration of the proposal to hire him. Robert (Bob) Clifford, Executive Director of the Bond Bank, introduced the resolution. The minutes of the meeting reflect Clifford's statement that the resolution:
authorizes the Bond Bank to bring Mr. Dillon in on a part-time basis, approximately 20 hours a week, for about three to four months. Mr. Dillon would be there to help the City get the architects and engineers, determine the right location for expansion, review the feasibility studies being done by the CIB and be the liaison for everyone
Contrary to the representation Clifford offered, neither Resolution #13 nor the consulting contract being considered included any cap on the hours Dillon would work or the length of time which the contract would run. Dillon's compensation under the contract, which was to be at $140 an hour, was to be paid initially by the Bond Bank according to Clifford, which would then be reimbursed for such expenditure from the Capital Improvement Board or the Marion County, Convention, Recreation and Planning. (It is unclear whether the latter reference in the minutes might actually be to the Indianapolis Convention and Visitors Association.)

It was not the first time Dillon, a former Insurance Commissioner for the State appointed by Governor Evan Bayh, had acted as both Chairman of the Bond Bank Board and a consultant working for the Bond Bank. On August 2, 2001, Dillon received a consulting contract from the Bond Bank to last for nearly six months until January 31, 2002, for the purpose of providing "due diligence and transition planning relating to the acquisition by the City of Indianapolis ("City") of certain assets of the Indianapolis Water Department." For work performed during those six months, Dillon was paid $79,593.58. The last invoice on the contract, for $17,733.68, was not submitted until July 1, 2002, over five months after the contract ended.

Dillon made the most of his supposed part-time, convention center consulting contract that was only to last a few months. Over the next two years, the Bond Bank paid Dillon, or his company Appomattox Corporation, $354,934.61 for consulting work (which amount includes some small cell phone reimbursements), while he was serving as Chairman of the Bond Bank Board almost the entire time. When his consulting work for the Bond Bank began to wind down in summer of 2005, he began another consulting project for IndyGo on August 29, 2005 at $12,500 per month.

Dillon officially opted out of his consulting contracts for IndyGo on November 1, 2005 and the Bond Bank on December 31, 2005. Shortly thereafter his appointment by Mayor Peterson as Deputy Mayor was to take effect. (He a few months later also assumed the position of chief of staff.) Right before the appointment as Deputy Mayor, he submitted a flurry of invoices to the Bond Bank. These included 13 invoices on November 17, 2005 for a total of $72,940 and 13 invoices submitted on November 29, 2005 in the collective amount of $72,800. The invoices were all paid by the Bond Bank.

A review of the invoices submitted in November of 2005 reveal that the work Dillon requested payment for consisted almost entirely of attending lengthy meetings that had taken place months earlier, including meetings dating back to early January, 2005. Unlike previous years, the 2005 invoices related to consulting work on the "stadium," even though Dillon's Bond Bank consulting contract only authorized him to do consulting working relating to the "expansion of the Indianapolis Convention Center."

A sampling of four days of Dillon's invoices reveals how lucrative the part-time, temporary consulting venture had become:

Quantity Description Rate Amount
1.5 4/11/05 Meeting Fred Glass 140.00 210.00

1.5 4/11/05 Meeting with Mayor's working group 140.00 210.00

6 4/11/05 Hunt Construction Meeting 140.00 840.00

2 4/11/05 Hunt Construction Meeting 140.00 280.00

10 4/12/05 HKS Design Meeting 140.00 1,400.00

9.5 4/12/05 Colts & HKS Meeting 140.00 1,330.00

5 4/13/05 Labor Contract Talks 140.00 850.00

6 4/13/05 Hunt Construction Meeting 140.00 210.00

1.5 4/14/05 Lobbyist Meeting 140.00 280.00

2 4/14/05 Mayor Working Group 140.00 280.00

4 4/14/05 Working Group 140.00 560.00
It is not clear whether anyone questioned such entries as the 19 1/2 hours of work Dillon billed for meetings that supposedly took place on April 12, 2005.

Dillon's December 2005 appointment as Deputy Mayor brought to a close to his work as Chairman of the Board of the Bond Bank and consultant. However, there were still a few more invoices to go. On December 30, 2005, he submitted 8 more invoices to the Bond Bank for $22,400 in the name of John J. Dillon dba Appomattox Corporation. On February 28, 2006, the Bond Bank approved the payment of $22,400 to Appomattox Corporation.

Clifford had earlier been appointed by Mayor Peterson as Controller, taking that position in January of 2005. That necessitated Clifford's resignation as Executive Director of the Bond Bank. However, the resignation was replaced with a consulting contract with the Bond Bank a few days later for $30,000 a year at a meeting presided over by Chairman Dillon. Ironically, for almost all of 2005, the Bond Bank had under contract as consultants for the Bond Bank, Chairman Dillon and former Executive Director Clifford, who was also serving as City Controller.

In his 2001, 2002, 2003, 2004 and 2005 Statement of Economic Interest, Dillon never mentioned his consulting work on behalf of the Bond Bank. In his 2006 and 2007 Statements he finally reported that consulting work including that he owned, Appomattox Corporation, the entity set up in 2004 under which he had began doing consulting work. Clifford never reported the $30,000 a year consulting contract with the Bond Bank on any of his Statements.

In the days that followed, a new set of players would take the reigns at the Bond Bank and eventually at City Hall with Mayor Peterson's loss to Greg Ballard in November of 2007. The new administration, however, has continued the Peterson administration's practice of treating conflicts of interest as mere inconveniences that can be dealt with by simply passing the gavel. Ballard's appointment of Bob Grand as President of the CIB, whose law firm represents the Simons, owners of Indiana Pacers who have been in critical negotiations with the CIB over the team's Conseco Fieldhouse contract, demonstrates that the present occupants of the 25th Floor have learned little from the conflicted practices of their Democratic predecessors.


Diana Vice said...

Wow, is his name John Dillon or John Dillinger?

jabberdoodle said...

This is somewhere between disgusting and obscene. No-bid contracts need to be totally eradicated. I have to wonder two things - how do these particular 'anointed' get themselves into these choice positions, and what percentage of our tax money goes to these schemes? Did anybody on the Bond Bank Board vote 'no'? Do you have a list of those names? Rubberstamping, do-nothing Boards are a time honored tradition, no doubt, but its time they go. They end up costing us too much money and bad government.

Who knew attending meetings could be so lucrative?

Paul K. Ogden said...

In the minutes I saw, a few people asked questions about whether it was a market rate for consulting ($140 an hour)and whether the position had been made available to others. The votes I saw were always unanimous.

Actually a far bigger problem is on the back end. There is no supervision over the person's work and no questioniing of the invoices sumbitted. He was submitted bills in November for work supposedly done as early as the previous January. Yet the bills were all paid.

I'm not sure if the CIB ended up reimbursing the Bond Bank as was discussed in the minutes of the meeting I talked about. My guess is "yes."

Downtown Indy said...

The mayor makes, by my calculation, less than $53/hr (using the very low figure of 1800 hrs/yr).

Zirk said...

This is just not right. There needs to be some safeguards passed so that this cannot happen again. What can be done?

Claudia Beck Treacy said...

What can be done? The way our government is set up now, probably nothing.

It is not that those of us out here don't care. I really know of nobody who is not trying to keep their own head above water. Crooks steal when our backs are turned or our minds are concentrating on something else. It is next to impossible to worry over who has their hand in the public pot, while at the same time keeping watch over our own pots.

Paul is amazing. I find it incredible he has been able to get this information.

The only way to pull in the reins is to get rid of what we call "money." That is not going to happen? On the other hand,I hear more than rumors of a new financial system.

varangianguard said...

Not surprising that this issue is a non-starter. Most are likely hopeful that they too can one day swing a gig like this for themselves. making a case out of it might turn the tap off for them later on.
Very, very disengenuous for a Mayor to laud the "volunteers" who work organizations like the Bond Bank out of civic duty. They do it so they can squeeze some loving out of the consulting turnip.
The behavior is so ingrained that the people doing it very likely think that there is absolutely nothing shady, unethical or wrong in what they are doing.

I know said...

What can be done? PROSECUTION OF WHITE COLLAR AND PUBLIC CORRUPTION once and for all will at least give some radiation to the disease.

After the prosecution then help good and decent people get elected and make them continue to be those good and decent people.

The United States of America is supposed to be a free democratic union and not a brothel for the hundreds of people that forgot what hard work, virtue and honesty are supposed to be about.

The families after World War II came together when the soldiers came home and went to work. They didn't have fancy college degrees. THEY remembered what they went through in their saving this country and quite frankly the world.

Generations after that have learned in their lives in education, business and life how to cut corners, skirt the law and take as much as they can because no one ever held them to the standards of sacrifice, hard work and honesty.

What a shame this country has become and the shame we place on ourselves. What did our fore fathers and the greatest generation do all the sacrificing for?

The people who know what is going on, have the power to do something about it and don't are just as guilty as those committing the crimes.

Freedom Fighter said...

John Dillon is, and always has been a joke. This man does not have the intelligence to operate a toaster. He is an arrogant, corrupt egocentric. Good job in exposing this corrupt Bozo. Citizens of Indianapolis should call for a Justice Department investigation of John Dillion, Bob Clifford, Bob Grand, Joe Loftus and other corrupt local politicans.