Saturday, July 31, 2010

Sheriff Frank Anderson: A Man Who Believes He's Above the Law

The Indianapolis Star has a story on the tragic shooting of a 3 year old girl. The mother, Fiona Lee, was charged with three counts of neglect of a dependent, felony possession of cocaine and misdemeanor possession of marijuana. She was held Friday in the Marion County Jail on an initial $200,000 bond. My guess is that bond will be lowered some.

The article mentions that Lee might not be able to attend her daughter's funeral unless she can bond out.

Why not get an order from the criminal court judge overseeing her case releasing her for the funeral? Others have done that only to find that Marion County Sheriff Frank Anderson refuses to comply with those court orders. I have had inmates, jail employees and chaplains all confirm that Sheriff Anderson refuses to comply with court orders that an inmate be released for a family funeral.

The Sheriff's non-compliance can hardly be challenged. By the time the failure to comply with the court order to release the inmate for the funeral is apparent, it is too late to get the Sheriff in court on contempt. The issue is mooted with the funeral.

I have heard heart-breaking stories of people jailed on DUI charges or even child support, missing the funeral of a parent or child. It is understandable that not everyone arrested should qualify for release, in particular if that person is accused of committing a serious crime or constitutes a flight risk. But when a judge has looked at the situation and determined that an inmate should be released for a family funeral, what makes Sheriff Anderson feel he does not have to comply with that order?

This is not the only time Sheriff Anderson has shown he believes he is above the law. Several news accounts (follow links at bottom of WRTV report for additional stories) have detailed improper and often illegal expenditures from the jail commissary funds. Sheriff Anderson has used the jail commissary fund as his office slush fund, buying fancy new cars for sheriff's deputies and paying his private law, Frost Brown and Todd (formerly Locke Reynolds) and political contributor millions of dollars in legal fees, an expenditure that is clearly not permitted by Indiana law. That law firm employs his No. 1 campaign supporter, Kevin Murray, whose name is on many of the requests for payments from the jail commissary fund.

What is the most sad though is how Sheriff Anderson, the first Democratic Sheriff in Marion County for decades, has deliberately exploited the poor during his tenure. People in jail are generally those who are accused of a crime who cannot afford bail and have to remain incarcerated until trial. Early in his first term, Sheriff Anderson entered into a private telephone contract for the Marion County jails, resulting in inmates paying a private company 31.5 cents a minute for local calls. As a result of the contract, millions of dollars are now funnelled by the private company into the jail commissary fund for the Sheriff to spend with no real oversight. It is not clear what legal authority there is for this money to go into the commissary fund as opposed to the county's general fund over which the Council does has oversight. But, hey, complying with the law has never been important to Sheriff Anderson.

If those incidents are not bad enough, in nearly eight years Sheriff Anderson has never conducted an investigation of any death or injury resulting from the privatized medical care in any of the county's jails. When told, repeatedly, that inmates were not being given their medication or given expired or the wrong medication, Sheriff Anderson responded by looking the other way. When a CCA doctor testified under oath that he had ordered a round of medication at Jail #2 cut out because the facility was "short-staffed" (i.e. the private company wanted to make more money by hiring less personnel), Sheriff Anderson didn't care one bit that inmates who were to receive their medication three times a day now only received it twice.

Sheriff Anderson has refused to investigate documented security lapses at Jail #2 such as surveillance cameras and radios that don't work, attacks on inmates and staff, and unarmed, untrained nurses being forced to escort dangerous inmates, at the facility because the private company, CCA, didn't want to hire additional security personnel to do the job.

If African-Americans think they have a friend in Sheriff Anderson, an African-American, they should think again. Sheriff Anderson has refused to even look into the allegations of racial discrimination regularly lodged by African-American employees working at Jail #2 run by CCA. Anyone who wants to contact me, I can give them a list of black employees whose complaints have been consistently ignored by an unconcerned Sheriff Anderson.

I often hear Democrats crow about how Republicans don't care about the poor, the downtrodden, or minorities, while Democrats care about those people. Bunk. I defy anyone to show how Sheriff Anderson, who lives in a million dollar home in Geist, has, during his 7 1/2 years in office, demonstrated an ounce of concern for the poor, the downtrodden, or even the thousands of minorities who have worked at or been incarcerated in Marion County jails during that time. The most conservative, law-and-order Republican Sheriff could not have shown any less concern than Sheriff Anderson has demonstrated for 7 1/2 years.

Sheriff Anderson's lack of compassion for is one thing - his refusal to comply with the law is another. Now Sheriff Anderson is running for state senate wanting to make the laws he doesn't feel compelled to follow as Sheriff. Hopefully the people in northeast Indianapolis will see Sheriff Anderson for the man he really is - someone who arrogantly believes he is above the law - and send him into much-needed political retirement.

Thursday, July 29, 2010

The Ogden Family History

A few years ago, in preparation for a family reunion just like the one I recently attended in Madison early this week, I prepared a presentation on the family history. I have sort of fallen into the role of the family historian, gathering information on both sides of the family. Both the paternal Ogden and maternal Buchanan side of the family had interesting characters and stories. With the advent of the Internet, research several generations back into the family tree without leave my home office was quite easy.

I'll focus here on the Ogden family.

I went into the research project expecting, like other family researchers, to tell tales of famous relatives or at least brave military service by my descendants. Unfortunately that linkage was not there. There were two early noteworthy Ogden's - Pilgrim John Ogden (who came in the second wave of Pilgrims) and whose family settled in New England. Captain Amos Ogden is the other Ogden. Amos Ogden fought in the French and Indian War and led settlers from New York to what is now southwest Mississippi during the same period when my family arrived in that part of the country. But my branch of the Ogden family arrived from England landing in the South, with no connection to John "The Pilgrim" Ogden or Captain Amos Ogden appearing in any record.

Both of my parents' descendants arrived before the Revolutionary War. The Ogdens, in particular Richard "The Tailor" Ogden, settled in the Pee Dee Valley in northern South Carolina in 1740. In 1780, the Ogdens suddenly pulled up stakes and move to what is now southwestern Mississippi, before the state even became a territory. In 1780, a strip of land along the Gulf Coast, including the southern parts of what is now Georgia, Alabama and Mississippi, was known as Western Florida.

In 1780, Western Florida was British territory. 1780 was a year known for revolutionary war battles in the Carolinas between Americans who supported the revolution and those who were supported British. The Americans loyal to the British crown lost the battles and many left. While a book entitled "History of the Baptists" suggest those who migrated from the Pee Dee Valley in 1780 supported the revolution, frankly I have to question that fact. Why would someone pick up and move from American territory to British territory if they were supportive of the revolution?

The book also details the story of an Indian attack as the Ogden descendants were making their way to the Mississippi delta. It seems there were three boats going down the Holston River. The Baptist preacher Curtis was in the first boat, the second boat had the Ogden family and the third boat contained people who were unidentified. The third boat floated further back than the rest because the occupants had small pox. The Indians attacked the Curtis boat but were repelled. The Ogden boat floated by while the attack took place apparently unnoticed by the Indians. The Indians turned their attack to the third boat killing everyone on board except for one person they took hostage. The Indians reward was to also contract small pox.

It's interesting to think if the Ogden boat had not escaped the attack of the Indians, yours truly wouldn't be here today.

Arriving in the Natchez area of now Mississippi, the Ogden family set up a homestead. The Western Florida area was shortly thereafter acquired by the Spanish and several years later claimed by the United States. (Mississippi became a state in 1817) Having arrived as one of the first settlers, the Ogden family remained in southwestern Mississippi, in what is now Wilkinson County for the next 70 years. If you go there today, Wilkinson County is very rural and one of the most poor counties in the country. In 2002, the per capita personal income in Wilkinson County was $16,041, while the national per capita income that year was $30,906. 68% of the population in Wilkinson County claims an African-American ancestry.

My ancestors owned a number of large farms in Mississippi (I'm not sure how large makes a "plantation." Inventories to wills also indicate they owned quite a number of slaves. So much for the proud Ogden family history.

The Ogden family suddenly pulled up stakes in 1850 and headed north. Around that year the family matriarch Kesiah (Kizzy) Ogden moved the family from the delta to the Bedford, Kentucky across the river from southwestern Indiana, and the Madison community which I claim as my home. There they lived for the next 100 years. Around 1950, my father met my mother and relocated to the Madison, Indiana area, eventually residing on a small farm outside of tiny China, Indiana in southwestern Indiana. There I was born.

Wednesday, July 28, 2010

The Star's Slanted View of the City Utilities Deal

Right before I left town on Sunday I read the Indianapolis Star's staff editorial supporting the sale of the city's water and sewer utilities to Citizen's Energy. Then when I arrived back today, I read a column by the Star's Matthew Tully also supporting the deal which passed the Council on Monday

Let me say from the outset that I favor the transfer of the utilities to Citizen's Energy. I believe that Citizen's Energy can operate the utilities more efficiently than the City.

While I expect proponents and opponents to selectively argue the facts in advocating their position, I expect a more objective approach to the facts from those who write for newspapers, including those whose views end up on the editorial page.

The Star's editorial and Tully's column were both noteworthy in the facts they chose to ignore. While both are correct that infrastructure improvements are solely needed, they failed to address the folly of using 30 year loans to pay for improvements, like road resurfacing, that have a life-span of 10 years or less. That would be like taking out a 30 year loan to buy a car. The loan and what you're buying with the loan should last approximately the same length of time, or less. Otherwise you are digging yourself into a financial hole filled with debt.

Rather than make an intellectually sound argument justifying 30 year loans to pay for 10 year improvements, the Stars' editors and Tully simply ignored that problem with the deal.

Tully went a step further, praising, through former IUPUI political science professor and now dean Bill Blomquist, that the $1.5 billion in utility debt the city owes will be wiped out through the sale.


The City does not exist as some unaffiliated entity. The City is people, people like you and me. We, the people, also also own Citizen's Energy which is taking over the debt. There is no savings to the public. It's just a $1.5 billion IOU moved from the taxpayer's front to the back pocket.

There are solid arguments for transferring the sewer and water utilities to Citizen's Energy to run and maintain. It is the "sale" and the 30 year loans to pay 10 year improvements where the logic in the "sale" as opposed to a straight transfer, breaks down.

While I expect Democrats and Republicans to ignore problems with the sale and borrowing associated with the deal, I expect those who regularly opine for our daily newspapers to directly address those problems and tell me the benefits outweigh those problems. Instead the Star's editors took an advocate's approach, simply ignoring the problems while praising the benefits. The Star's readers deserved a more honest editorial approach than what the Star offered on this issue.

Attorney General Drops Ball, Again, on Notice of Tort Claim Investigation

Awhile back, I published a plea to the Indiana General Assembly to take a look at revising or eliminating the notice of tort claim requirement, which is not at all working as the General Assembly intended. Let me give you some background on the law.

Any time you sue a government entity in the State of Indiana, you have to do written notification of an intent to sue outlining the facts of the possible lawsuit. The obvious legislative purpose behind the act is to tip government off in advance of possible litigation so that an investigation into the facts can be conducted and a possible settlement can be reached prior to the onset of expensive litigation.

The Notice of Tort Claim requirement has never worked as advertised. I have never known the Attorney General's Office to conduct an actual investigation. For example, in my whistleblowing case against the Indiana Department of Insurance, not a single witness was ever contacted by the Attorney General's Office regarding the claims I made. Instead at the end of the ninety day period, the AG's office responded as it always does - that an "investigation" had been conducted and the State of Indiana was found not to be liable.

In late April, I served the State of Indiana with a Notice of Tort claim for a possible inverse condemnation action I was considering filing for residents of a Greenwood subdivision. The State of Indiana had widened a state road in the area and had taken down a number of trees that acted as a buffer between the busy road and the homeowner's subdivision. As a result, the value of their homes dropped substantially.

Today when I returned home from my family vacation, I found waiting for me a response from the Attorney General's Office to the notice of tort claim:

To Whom It May Concern:

On the date of the incident, Linkel Company was performing roadway services at the accident location under Project Number IR-32984. Because Linkel Company has entered into [a] contract with the Indiana Department of Transportation, the State of Indiana holds no liability in this matter."

This Claim should be filed directly with Linkel Company as the
Indiana Department of Transportation is insured through them in this matter. I have contacted the contractor regarding this matter and forwarded a copy of your Notice of Tort Claim to them. In order for you to preserve your legal rights it is necessary for you to contact them directly.

Contact the contractor listed below for any information regarding this matter and note that in light of the above information we consider this matter closed.



Todd V. Vansickle
There are so many flaws in this letter, I don't know where to begin. Let's begin though with what "accident?"

Second, the Attorney General's Office suggests they bear no legal liability whenever they contract out a service. Since when? The State of Indiana can most certainly be successfully sued for the action of a contractor. It's unfortunate that the Attorney General's office is peddling that false legal conclusion to people who may not have the legal sophistication to know better and may walk away from a valid claim.

Third, since when does a contractor provide "insurance" to the State of Indiana? The term "insurance" has a definite legal meaning and most certainly Linkel is not an "insurer." Perhaps what Vansickle is saying is that Linkel has to indemnify (pay any claim against the State) the State of Indiana for damages done in the course of its contract work. Indemnification though is not insurance. Even if the Linkel has to indemnify the State of Indiana, the plaintiff would still have to sue the State of Indiana to get that indemnification.

Fourth, the letter completely overlooks the fact that Notice of Tort Claim is about a possible inverse condemnation action. Contrary to the false representation made in the letter, that inverse condemnation action would have to be filed against the State of Indiana which has condemnation authority, not the Linkel Company. It wasn't Linkel Company that came up with the plan to widen the road and take the trees. The State of Indiana did that.

If the law had worked as intended, the notice of tort claim we served would have triggered an actual investigation and the concerns of the homeowners could have been addressed...without litigation. It's obvious though the Attorney General's Office has no interest in conducting actual tort claim investigations and resolving matters before litigation is filed. I would again urge the General Assembly to reconsider the Notice of Tort Claim requirement as a prerequisite to litigation filed against government.

See also: Thursday, September 25, 2008, Recommendation to Indiana General Assembly - Drastically Modify or Repeal Notice of Tort Claim Requirement

Rumors of My Demise Have Been Greatly Exaggerated

Sorry, I haven't been blogging the last few days. On Sunday I went down to Clifty Inn at the Clifty Falls State Park in Madison, Indiana for the biannual Ogden family reunion. I intended to blog when I was down there but I did not have computer access. Will get up to speed shortly.

Sunday, July 25, 2010

Council Committee Chair Refuses Public Comment on Pacers' Deal

I had plans last week to attend the meeting of the Municipal Corporations Committee meeting. The Capital Improvement Board had been summoned to come before the committee and to explain the need for the Pacers deal and what was involved in the $33.5 million giveaway.

In preparation for the Tuesday meeting, I put together a power point handout consisting of ten pages where I went through and did a legal analysis the Early Termination provision in the 1999 Pacers contract. I also included at the back of the handout a few pages of the contract which showed where I obtained the information.

My legal analysis, which was picked up by the Indianapolis Business Journal, has never been challenged by anyone, including attorneys from the City or the CIB. That analysis showed how the two penalty formulas in the contract worked and that the penalty was in fact $130 million not the "about $20 million or so" penalty that CIB officials had represented to the public and the media.

During the almost hour long presentation to the committee, several councilors, including committee chair Barb Malone and Democrats Jackie Nytes and Dane Mahern, repeatedly asked Paul Okeson, CIB Treasurer and chief "negotiator" on the Pacer deal, what the penalty would have been if the team had exercised the early termination option. Okeson kept avoiding the question, saying he wasn't an attorney and it was unclear what the penalty would have been since the team could set off loans and losses against the penalty.

Let's assume the unlikely scenario that Okeson truly did not know what the contractual penalty was. Why in the world would someone go into negotiations and not know the most critical factor affecting the leverage the Pacers might to insist on renegotiating the contract?

After the nearly hour long conversation, Chair Malone asked if there was any "public comment." I got up to talk. When Malone saw it was me, she apparently suddenly realized I was about to publicly contradict Okeson's testimony with verifiable facts from the contract. Malone suddenly changed her mind about public comment. I pleaded for just two minutes to address the committee and she still refused.

Lest anyone think this was all Barb Malone, I clearly saw Councilor Nytes shaking her head when I asked for two minutes to address the committee. Nytes had been the most persistent asking legal questions about what the penalties were under the current contract. Yet when presented with an attorney who had done a legal analysis of the very contractual provision she had repeatedly asked about and not been given answers, Nytes did not want to hear the information. Her supposed anger at the Pacers $33.5 million giveaway appears and questions regarding what the penalty would have been apparently was nothing more than an act.

It's a shame that our elected councilors, as well as the major newspaper in town, the Indianapolis Star, go out of their way to remain in the dark when it comes to the facts regarding the ability of the Pacers to walk away from their contract. The penalty was $130 million.

At the conclusion of his presentation, Okeson said that it was not well-known that the Simons actually had an offer to move the team. Yeah, right. Okeson, the CIB and City officials defrauded Indianapolis taxpayers to the tune of $33.5 million. The Pacers, facing a $130 million penalty, were going nowhere.

Friday, July 23, 2010

Black Expo Hires All White Public Relations Firm

A frequent refrain you hear from Democratic elected officials is the need for contract set-asides for minority-owned firms or at least firms that hire minorities. Thus it was surprising to learn that when Indiana Black Expo needed a public relations firm, IBE hired Myra Borchoff Public Relations, a firm that does not have a single African-American employee on staff. Reportedly, Mayor Ballard was behind the IBE's hiring the Borchoff firm and wanted the firm in place to speak for Black Expo as the firm also does PR work for the Colts, Pacers and is the Super Bowl Committee.

Thursday, July 22, 2010

Indiana Civil Forfeiture Law - Where is the Money Going?

It appears that millions of dollars of civil forfeiture funds are being kept by law enforcement agencies, prosecutor's offices, and private attorneys hired by prosecutors, rather than turned over to the State for education as required by Indiana law.

According to records obtained from the Treasurer's Office, Indiana's 92 counties only paid $95,509.72 in civil forfeiture funds into the common school fund for the past two years, an amount that is only slightly more than $1,000 per county.

Indiana's civil forfeiture law works like this: When property or money is seized in connection with certain crimes, often drug related, the prosecutor, or a private attorney hired by the prosecutor, can file a civil action against the property or money acquired. Once it is shown that the property or money was involved in a crime, the court is to make a determination of the law enforcement cost of the action, a figure which can include attorney's fees. Once those costs are paid, the remainder of the forfeiture proceeds are to be paid into the common school fund maintained by the Treasurer of the State of Indiana.

The problem appears that only one county in the State of Indiana - Wayne County - is complying with the law.

Between August 29, 2008 and July 19, 2010, Wayne County made 18 payments into the common school fund, totalling $38,835.56. One other county, Montgomery, made two payments. Three other counties, Putnam, Vigo and Dubois made one payment each in the two year period. Vigo's payment was for only $84.50. Eight-seven counties, including Marion, Allen, Vanderbugh, Lake, and Hamilton, paid not a single dime into the common school fund for that nearly two year period.

Many forfeiture actions are handled by private attorneys hired by county prosecutors. WIBC radio host Greg Garrison's law firm handles many contingency cases for Marion County Prosecutor Carl Brizzi on a 30% contingency contract. Attorney Christopher B. Gambill handles them for the Putnam County Prosecutor's Office pursuant to a 33% contingency fee contract. In a forfeiture judgment in February of 2010 involving $325,612 in cash and a 2007 pickup truck valued at $13,825, Gambill was given $113,145.67 in fees.

It is not entirely clear where all the money is going or where the breakdown in the system is that has left only a trickle of money going into the common school fund. Possibly it could be that prosecutors or their hired private counsel aren't closely analyzing law enforcement costs and are simply assuming that on every forfeiture case law enforcement costs and attorney's fees consume the entire amount of the proceeds seized.

Or perhaps judges aren't properly making the determination as to how much the law enforcement costs. The law simply requires that, once the judge makes an evidentiary finding that the property or money has been used in connection with a crime, that the judge make a "determination" of law enforcement costs with the excess to go to the common school fund. It is not clear whether this "determination" also requires evidence of law enforcement costs. Most likely judges are simply signing off on whatever form has been given to them by the prosecutor or private forfeiture counsel.

There are other possibilities. Rarely do criminal defendants contest forfeiture. Unlike in criminal cases where they can get a public defender and the prosecution has a high burden of proof - beyond a reasonable doubt, those protections are not available in civil proceedings like forfeiture. Most defendants will cut a quick settlement to get their property back or will simply walk away from their property.

The result is there may be many private settlement agreements that escape the purview of the courts. Likewise, there may simply be default judgments or dismissals where the law enforcement agencies and the attorneys keep the money when they find out the defendant isn't going to fight to recover the property seized.

In 2008, a scandal of sorts broke out in Delaware County in which the prosecutor Mark McKinney was accused of entering into "secret" settlement agreements with forfeiture defendants. In addition to his official duties, McKinney and others in his office had a 25% contingency fee contract with the county for forfeiture work. In findings by the Delaware Circuit Court which looked into numerous forfeiture proceedings in that county, the court gave a description of how civil forfeiture actions are handled:

Asset forfeitures occurred, and these did not appear to be seriously contested. Most cases were resolved by default or agreed judgment, or by secret agreement. A contested matter was practically non-existent. Thee cases most probably could have been conducted in a streamlined manner; unfortunately, the results never met the statutory requirements. In most cases, whether there were an agreed or default judgment or secret agreement, the cash usually went to the City of Muncie General Fund, Seizures and Forfeitures Account.... Some cash did go to City of Muncie General Fund Account...; however neither of these accounts were true general fund accounts accessible to the City Common Council; they were false designations whose effect was to deceive the court. The accounts were accessible to the [Drug Task Force]. On a few occasions, forfeited cash went directly to the DTF.
The Delaware Circuit Court's investigation into civil forfeiture in that county uncovered forty-five "Confidential Settlement Agreements" which the court referred to as "secret agreements." It noted that in 40 of these agreements, over $151,000 went to the DTF account, while $63,946.57 was returned to the defendants. There is no mention of any money being paid to common school fund. The court determined that these settlements should not have resulted in McKinney or another attorney being paid since their contractual arrangement required court judgments in order for them to be paid. With regard to the confidential settlements there were no judgments. McKinney has since lost re-election and is facing possible disciplinary action for his handling of forfeiture cases.

The complaints with regard to McKinney were about the "secret agreements" and the conflict of interest in an attorney acting as prosecutor and private forfeiture attorney. In addition, the Republican Mayor accused the Democratic Prosecutor McKinney of paying forfeiture proceeds to the wrong government entities in Delaware County. One has to wonder though, given the scant amount of money going into the common school fund from 91 counties, whether McKinney's handling of civil forfeiture proceeds in Delaware County is the norm rather than an aberration.

Clearly the legislature included the requirement that excess forfeiture funds be paid to the common school fund so as to not turn civil forfeiture into a profit-making venture for prosecutors and law enforcement agencies. It appears though that as many as 91 counties are ignoring the law and getting around that legislative safeguard.

Tuesday, July 20, 2010

Whatever Happened to the Council Redistricting Plan? (With Update)

Remember that crazy plan the Republican majority leadership on the Council had to redistrict before the 2011 elections using old census data?

Indiana law prohibits redistricting within a year of the municipal elections. Since the 2010 census data wouldn't be available in time to do it before entering that one year window, the plan was to use old data to redo the districts before November 2010 for the 2011 election. The law would of course require the districts to be redone once again after the 2010 census data came out. The plan was to spend $290,000 in 2010 to redistrict before the year window, then spend $290,000 in 2011 to redistrict for the 2015 election using the 2010 census data.

It's hard not to overlook spending the ridiculous notiont that redistricting should cost $580,000, far more than larger legislative bodies spend to redistrict. This though is Indianapolis. You have to pay off the big law firms and political consultants. That's how you get to $580,000.

The plan would have been nothing more than a naked power grab. Hopefully cooler heads have prevailed.

Update: Apparently cooler heads have prevailed. I was told by a reliable source that the pre-2011 redistricting plan based on old census information has been dropped.

Is The Transfer of City Real Estate to Citizen's Legal?

One thing I've learned about Indianapolis politics is that both Republican and Democratic administrations do things that aren't always strictly legal. I was reminded of this when another blogger chided the Democratic council members for failing to have good legal advice on their proposed amendments to the transfer of the city's water and sewer utilities to Citizens' Energy.

Those living in glass houses shouldn't throw stones. For the first 2 1/2 years of Ballard's administration, City Legal suffered with highly inexperienced attorneys like Chris Cotterill (5 years legal experience when appointed head of City Legal) and Jonathan Mayes (2 years when appointed as head of litigation) playing key leadership roles. That situation appears to have finally been addressed with new, more experienced leadership at City Legal.

Back to the utilities transfer, er sale. I wonder if the Ballard administration's attorneys have thought through all the legalities of the deal. In the final draft of the plan, it came out that transfer of ownership of Geist Reservoir, Morse Reservoir, the Central Canal and the Canal Towpath, from the City to Citizen's Energy was part of the deal.

But what of the municipal property disposal rule that governs the sale or transfer of property city property? The rule in IC 36-1-11-4 requires an appraisal, notice of the intended sale and bidding. If the property is worth over $50,000, the sale or transfer has to be approved by the Council. While the approval of the Council will be forthcoming, what about the lack of an appraisal and a lack of bidding?

The "disposal of a municipally owned utility under IC 8-1.5" is specifically excluded from the property disposal rule. However, if you look at IC 8-1.5, you will see that article does not apply to consolidated cities which, of course, Indianapolis is.

I've been around the law enough to know that the Indiana Code has many twists and turns. I assume the City's lawyers have done their homework and this transfer, er sale, of the utilities won't be subject to legal challenges. Then again, you would have thought the City's attorneys would have reviewed the Early Termination provision in the Pacers contract more closely before handing the billionaire Simons $33.5 million of our tax dollars and that never happened. So maybe I shouldn't assume.

Monday, July 19, 2010

ISO's Simon Crookall Wants More of Your Tax Dollars, Cites to Pacers $33.5 Million Deal as He Begs for More Public Spending on "Culture"

You knew it was coming. On Sunday, Simon Crookall, President and CEO of the Indianapolis Symphony Orchestra in Sunday's paper pens a plea for more public support for the arts. In the article he praises the City's $33.5 million gift to the Pacers then uses that as an excuse to ask for more money for the arts locally.

Poor Mr. Crookall. He only makes a quarter million dollars a year in his current position. ISO only has $119 million net assets in 2007, with revenues of $10,492,587 that year. What is a poor executive to do?
Crookall though just doesn't make a plea for more public funding of ISO, he also throws in other cultural attractions like the Eitlejorg Museum, the Children's Museum, the Indiana Museum of Art as well as others.

I hadn't looked at the Eitlejorg's tax returns before. The 2008 tax return shows revenue of $5,084,028, total assets of $40,171,321. The President and CEO of the Eiteljorg makes $256,797 according to the 2008 return. Susan Lewis, a VP of Administration, makes "only" $110,000.

I have examined the Children's Museum's finances before. Astonishingly, the Children's Museum pays its President Jeffrey Patchen more than $500,000 a year in salary and benefits, while seven other employees make over $150,000 a year. Those are just the top employees. Since the Children's Museum paid out salaries and benefits totalling $14 million in 2008, the museum apparently has other handsomely paid employees. It is not difficult to pay those kind of salaries when the Children's Museum has income in 2008 of $29,608,00 along with net assets of $262,754,690.

I took a quick glance at the tax return for the Indiana Museum of Art. Same story. The Art Museum is raking in millions while paying lavish salaries. I'll take a closer look at that organization later.

Every day, I see people panhandling for money at the corner of Market and Delaware, right in front of the City-County Building. Are those people really any worse than professional panhandlers like Crookall, Jim Morris of the Pacers, Don Welsh of the ICVA, Susan Williams of the Indiana Sports Corporation and David Lawrence of the Indianapolis Arts Council who do their public begging inside the building and regularly walk away with millions of our tax dollars?

Sunday, July 18, 2010

Mayor Ballard's Political Suicide

I have been meaning to write about the political ramifications of the Pacers' deal but got sidetracked. Today's column by Matthew Tully though got me back on track. Unfortunately the Tully column discussing political issues including the Pacers bailout doesn't appear to be on-line.

Remarkably Tully concludes that the Mayor has survived the Pacer deal and suggests there was little public outrage giving the Pacers $33.5 million while libraries are cutting hours, schools are laying off teachers, and the parks budget is slashed. I can only assume Tully lives out of state and emails in his column because he seems completely out of the loop when it comes to public opinion in our City. At the very least he should read the letters to the editors published today and comments to Pacer articles. Every letter and virtually every comment to Pacers articles are filled with utter contempt for the Mayor's deal.

Tully suggests that the Mayor succeeded by putting together a bipartisan coalition of (downtown) business leaders. I'm trying to remember a corporate welfare scheme those leaders have not supported. They don't oppose them because they know doing so might endanger their handout when they ask for one. You see it in the Star today where Simon Crookall, the CEO of the Indianapolis Symphony Orchestra, applauds the Pacers bailout and then asks for a similar public investment by the City in the arts.

Tully also makes reference to the Mayor's promoting the Pacers' deal by going on television and radio shows. (Mayor Ballard also penned a letter in today's Star promoting the deal.) While Tully suggest this media blitz was a good political move, in fact it was one of the dumbest political moves I have ever seen. The deal was going to pass without Mayor Ballard's help. The Mayor's efforts swayed very few people when swaying folks wasn't even necessary. All you do by sending the Mayor out there in the media is to tie the Mayor even more directly to a highly unpopular issue. I used to teach a political strategy class. The Mayor's media blitz would be Exhibit A on what not to do politically.

The political impact of the Pacers' deal will ultimately be judged by what happens at the polls in November 2011, and possibly May if the Mayor runs for re-election and has an opponent. When looking at the impact of a political issue there are certain factors you look at in determining the likely impact of the issue on the election.
  1. Is the issue one that is easy to explain and understand?

  2. Has the issue been well-publicized?

  3. Does the issue involve strongly held opinions?

  4. Is there an intensity of opinion on one side that's not on the other side?

  5. Are there other issues that keep the spotlight on the issue so it will still be in people's minds on Election Day?

  6. Is the issue one that hurts the candidate with his base?

  7. Is the issue one that opponents will actively exploit during the campaign?

Here's the scorecard:

#1 Extremely easy to explain and understand. The Mayor supports giving away tens of millions of taxpayer dollars, in the middle of a recession, to a billionaire sports owner while funding for schools and libraries are being cut. The Mayor's pro-Pacer subsidy side is much harder to explain and takes too long for a conventional soundbite.

#2 The Pacers $33.5 million deal has been extremely well-publicized. You'd be hard pressed to find people in Indianapolis who don't know about the giveaway.

#3 Opinions are extremely strong. People are livid about the deal.

#4 The anti-Pacer bailout side has a much stronger intensity than the pro-Pacer bailout side. Plus, the pro side got what it wanted and will have moved on to other issues. It's going to be a "voting issue" (an issue that affects your vote) on the anti-side but not on the pro-side.

#5 Absolutely. Every time stories are written about the libraries cutting hours, bus routes or the parks' budget being cut, people are going to be reminded of the $33.5 million giveaway to the Pacers.

#6 When a candidate takes a position that is unpopular with his base, the political fallout is far worse than what it would otherwise be. While this issue angers voters across the board, it particularly angers fiscal conservatives who make up the heart of the Republican Party, people who Ballard desperately needs to have any shot at winning at 2011. It also angers populists not all of whom are fiscal conservatives. Populists were the core of Ballard's support in 2007. Their support of Ballard now is virtually gone.

#7 This is the only factor that works in Ballard's favor. Melina Kennedy, the likely Democratic nominee, has made some milquetoast criticism of the Pacer deal but has not attacked it directly. Kennedy has long supported the elitist downtown establishment and will only go so far in taking them on. So she can't fully exploit the huge anti-Pacer deal public sentiment.


In summary, Factors 1-6 all are against the Mayor and speak to why the Pacers deal will be a horrible thing for him politically. Only Factor 7 works in his favor. But even that factor isn't that good for him. Here's why. Virtually every election involving an incumbent is a referendum on that incumbent. Even if Kennedy doesn't make it an issue, the blame for the Pacers deal will fall on the shoulders of the incumbent, Mayor Ballard. The buck, or actually $33.5 million bucks, stops at the Mayor's desk. It's his responsibility and he will get the blame, no matter what Kennedy does.

While I never thought the Mayor had much of a chance at re-election, the unpopular and unnecessary Pacers deal sealed his fate as a one term politician. Members of the Ballard staff might want to update their resumes. Any hope of a Ballard second term is gone.

Saturday, July 17, 2010

Indianapolis Mayor Greg Ballard's Character Flaw

Over the past year, I have had a chance to talk, off the record, to Ballard administration staffers about things going on in the Mayor's Office. After asking that I promise to keep their names a secret, which of course I will do, they proceed to give me extraordinary insight into the Mayor and why he is making the decisions that often are contrary to positions he had as a candidate.

There is a common theme in what those insiders told me about the mayor. One described it as "character flaw." According to the insiders, Mayor Ballard doesn't have the ability to listen to an assortment of views and then make a decision. Rather whoever gets to Mayor Ballard first, locks in the Mayor's views on that issue, and the Mayor from that point blocks out any information that contradicts his position on that issue. In short, Ballard has tunnel vision. It doesn't matter if 80% of the public are screaming for the Mayor's head on an issue like the Pacer bailout, the Mayor is not hearing those folks.

Many of us thought Mayor Ballard was an anti-tax populist who was turned into a supporting of the establishment by being surrounded by the city's elite once elected. The latter might well be right. But it could be that Mayor Ballard was never an anti-tax populist at all, that he was merely a political chameleon who mere blended into whatever group surrounded him at a particular time. When Candidate Ballard was around tax activists, he spoke against country club politics and corporate welfare schemes. When he was elected and became surrounded by the downtown elite, Mayor Ballard became an elitist politician with a fondness for corporate welfare.

The political future of Mayor Ballard is not bright. Astonishingly he has apparently penned a letter to the editor to appear in Sunday's Star in which he expresses support for the Pacers $33.5 million deal. It is obvious that the Mayor and those surrounding him have not a clue when it comes to political strategy. When 80% of the public is screaming about this boneheaded and unneeded Pacer bailout scheme, for the Mayor to appear publicly in the Star supporting it just further ties him to the unpopular deal. Sometimes I wonder if Ballard's political people are deliberately trying to sink the Mayor's political career. At this point, I can't complain. I just want the long nightmare of his administration to end.

Say It Ain't So Andy; Gammill to Leave the Star to Go To Law School

Don't count me as a fan of Indianapolis Star's education reporter Andy Gammill. After the stunt he pulled that resulted in getting members of an education reform group videotaping an IPS meeting booted, Gammill should have been at least been suspended. However, after reading on Ruth Holladay's blog that Gammill intends to leave journalism to go to law school, I'd like to offer him a piece of advice - do NOT do it.

I know what Gammill is thinking - newspapers are cutting back on jobs, reporters' salaries are getting cut and those who continue to work end up churning out superficial story after story with constant deadlines. So why not go to law school and get on a more profitable career track?

If Gammill thinks his salary and employment prospects are going to be better as an attorney he will almost certainly be disappointed. There are about 500 new attorneys entering the legal profession every year in Indiana. I tell people to go online and look at the job board for open legal positions. Usually there are five or six Indiana attorney jobs advertised. In the Indiana Lawyer, often there are no openings listed. Do the math. The odds are not good.

I know a 15 year attorney who was doing typing for another attorney to make ends meet. I know an attorney who worked loading packages on the back of a UPS truck because he couldn't get a job in the legal field. A few years ago, I ran into a law school classmate of mine, an attorney who was working the cash register at a computer store. I know a postal carrier and semi-truck driver who went to law school, passed the bar and then returned to their former professions because those jobs paid a lot better than the law.

The sad thing is that many of these new lawyers have amassed huge amounts of debt in law school, sometimes as much as six figures. They are promised by law schools they'll get comfortable salaries and instead find themselves working, if they can get a job, for $30,000 a year with no benefits.

I often get asked whether law is a good background for other fields. It's actually an excellent background. However, non-legal employers don't see it that way. If you have a legal background, they will pigeonhole you as an attorney and say you're overqualified." The lawyer won't be hired for a non-lawyer job because of the misplaced belief that the person would leave and get a six figure legal job, jobs which don't exist. So don't be thinking that law degree will open the door to other fields.

I don't know how much Gammill makes as a Star reporter. But if he thinks he's going to get out of law school and make more money as a lawyer than as a writer for the Star, he's almost certainly going to be disappointed. And paid benefits as a lawyer? Yeah, good luck with that one.

Gammill could turn out to be one of the lucky ones. I always tell new lawyers that if they're going to enter the profession, they have to develop a niche, an expertise that other lawyers can't bring to the table. If a general practitioner, that lawyer is little different than virtually everyone else in the field. Maybe Gammill could use his journalism background to go into some sort of journalism law that will make him stand out from the hundreds of other attorneys out there looking for a job. I'm not optimistic it will happen but it could. Best of luck to him.

Friday, July 16, 2010

Why I am Optimistic About Joe Hogsett's Nomination as U.S. Attorney

I'm getting caught up on my blogging. One topic I wanted to hit was the nomination of former Secretary of State Joe Hogsett as the next U.S. Attorney for the Southern District of Indiana. While blogger Gary Welsh of Advance Indiana and I are usually on the same page on the issues, it's a safe bet to say that I am much more optimistic about Hogsett's nomination than what was revealed in Gary's take on the nomination.

Yes, Hogsett started out his career as a protege of Secretary of State turned Governor turned Senator Evan Bayh. I think it's safe to say where it not for Bayh's help, Hogsett career would have turned out far differently. But to classify Hogsett as a "political hack" I don't think accurately represents where he is today politically. I have had a chance to work with Hogsett on a few government reform projects where issues like lobbying and redistricting reform were discussed. I'm not sure if it is because Hogsett's views have evolved over time or not, but he certainly seems sincere about supporting reform efforts that are against the interests of many career politicians.

Hogsett's lack of criminal experience has been raised. But the last confirmed U.S. Attorney Susan Brooks had boatloads of criminal law experience and look how bad she was. Brooks continually looked the other way while white collar crime ran rampant in Indiana.

The U.S. Attorney does not have to be experienced in all the areas the office deals with, but rather it requires someone who surrounds himself with quality people and provides a direction to the office. The U.S. Attorney's office, after the inactivity of Brooks and acting U.S. Attorney Timothy Morrison, needs a shot of adrenaline as well as direction.

I don't really care that Hogsett has lost some elections, elections that by the way were very tough for any Democrat to win. (I would point out that he beat very popular Indianapolis Mayor Bill Hudnut in a state-wide election for Secretary of State.) I admire people who put their reputations on the line in tough political battles.
I've been warned that Hogsett may use his position to revive his political career that's been on hold for some time. I can't criticize political ambition. If Hogsett does a good job as U.S. Attorney I say more power to him using his good work to run for an elected political office.

I am optimistic about the direction Joe Hogsett is going to take the U.S. Attorney's office. Here's the political calculation why. Hogsett knows that any ticket to political success in the future is dependent on his turning the U.S. Attorney's office around. That means aggressively pursuing white collar crime and political corruption in both parties. Even if Hogsett isn't the political reformer I hope he might be, he's smart enough about politics to know that the being a Susan Brooks/Timothy Morrison style U.S. Attorney offers no political payoff. Is it a cynical political calculation? Absolutely. But so what? We would all benefit from an aggressive U.S. Attorney's Office. Who cares if the motivation for changing direction of the office is politics? Politics is not always a bad thing.

Not A Surprise: CIB Rubberstamps Pacer Deal

Even though Capital Improvment Board President Ann Lathrop isn't sure whether the CIB would still have to pay the Pacers $10 million next year in the event of a lockout, the CIB still voted today to approve the $33.5 million plus Pacer giveaway. The Star reports.

One board member Douglas Brown, voted against the giveaway. His problem? The giveaway to the Pacers wasn't for a long enough period.

Reportedly the CIB will be called before the Council's Muncipal Corporation Committee next Tuesday.

Thursday, July 15, 2010

Come Back Chris Worden of IPOPA

While I enjoy Gary Welsh's brutally frank commentary on Advance Indiana, Jon Easter's and Pat Andrews' objective and thoughtful views on their blogs, what I really miss about now is Chris Worden's expertise and critical analysis of city issues. This has been particularly true in light of the pending city utility "sale" and the $33.5 million plus giveaway to the Pacers. Chris, Gary and Pat are really knowledgeable about details surrounding the utility sale, much more than me.
Please come back, Chris. That law gig really doesn't pay well. Blogging is where the real bucks are at. Seriously maybe you can share a blog so you don't have to do this full-time. I miss hearing what you have to say.
P.S. The picture is of a Chris Worden. Not THE Chris Worden. He'll have to stand in for Chris until the real Chris Worden returns.

Ogden on Baseball

While a life-long baseball fan, I've never been a fan of the All-Star game which just took place a day or so ago. There is something phony about a "game" in which players are constantly shuttled in and out of the lineup. It's not a true test of which league has better players.

But the All-Star break, which ends today with the start of the second half of the season, is a chance to reflect on the national pastime, baseball, the game of my youth. Growing up in Southeast Indiana, I was a fan of the Big Red Machine. While everyone else was a fan of the more popular and flashy Pete Rose, Johnny Bench, or Joe Morgan, I was a fan of the quiet slugger, first baseman Tony Perez. All are in the Baseball Hall of Fame. Well, actually Rose isn't but should be. Rose's sins were committed as a manager not as a player. And man what a player Pete Rose was. The all-time hits leader epitomized what baseball is all about.

The game has changed so much from when I was a kid. A few years back, I spent hours combing over the 1975 and 2006 New York Yankee rosters to see whether I was right about my memory that players growing up were much smaller than players in 2006, near the end of the steroid era. Boy was I right. I'm working off memory here as I can't find the research, but the players on the 2006 roster are about 32 pounds heavier and nearly 2 inches taller than the Yankees of 1975.

Baseball is a beautiful sport. Unfortunately the professional game has lost a lot of appeal it had in my youth. These are my recommendations for turning around the game:
  • Shorten the season. Scheduling playoff games on cold November nights detracts from the quality of play and makes for a miserable expedience for those attending the game. I would love to see a graph on how the starting temperature of World Series games have plummeted over the years. Some of the games end up in temperatures at or below freezing.

  • Bring back scheduled double headers. Major league baseball could shorten the season by a few weeks by bringing back doubleheaders. Imagine every Sunday featuring a doubleheader. Two games for the price of one. Some revenue would be lost, but there would be increased attendance for those games.

  • Stop playing playoff games so late into the evenings. Some of the games are lasting until 11 pm or midnight. The games are scheduled late to take advantage of a bigger prime time audience, but it is a short-sighted strategy. MLB is making is sacrificing building interest among the youth for better ratings today. Young people can't stay up to watch games lasting well into the night.

  • Bring back more day baseball games, primarily on the weekends. The best baseball is baseball played in the sunshine.

  • Get rid of the American League DH. Every poll shows it is still unpopular among fans some 34 years after it was adopted. Yet it still persists. Baseball gets knocked because it is a game that lacks a lot of strategic maneuvering. The ultimate strategic decision is whether to pull a pitcher for a pinch-hitter. The AL takes that decision out of the game.

  • Speed up play. One thing different from my youth is that multiple pitchers are used virtually every game. It's nothing for a team ieven n a low scoring game to use four or five pitchers. The parade to the mound has meant more delays during pitching breaks. Partly as a result of that, the length of games has increased substantially. Baseball fan's attention span for most games is no longer than 2 1/2 hours. Most games need to be shorter than that to keep the attention of sports fans in this world of many entertainment options. MLB needs to do a thorough study of where the delays are in baseball and find a way to reduce those delays.

  • Reevaluate interleague play. The novelty has worn off. It might be time to cut back on the number of interleague games.

  • Do NOT expand the playoffs. Every sport ends up doing this, with the NCAA men's basketball being the latest. Expanding the playoffs devalues the regular season and with an 162 game season stretching over six plus months you don't want to do that. The one wild card has been a great success, adding interest to the late season pennant races. But I know the suggestion will soon be made to add another wild card or perhaps two more. Too much of a good thing becomes a bad thing.

Those are some thoughts. I would be happy to listen to others.

See also: Wednesday, October 28, 2009, There is No Cold in Baseball; Major League Baseball Turns Its Back on Youthful Fans

Another Non-Profit Profitting at the Expense of Taxpayers - Welcome to Indiana Humanities Council, Inc.

The Indianapolis Business Journal website has a puff piece about Keira Amstutz, who in 2008 became CEO of the non- Indiana Humanities Council. Amstutz had been chief counsel and policy director for Indianapolis Mayor Bart Peterson.

The Humanities Council is according to its Bylaws attached to its 2007 (latest available) tax return an outfit "to promote the humanities as a means of enhancing civil life throughout Indiana." According to the IBJ, this comes down to "develop[ing] programs and encourag[ing] discussion about Indiana culture in the context of history, politics, the arts, agriculture and other areas vital to Hoosier life." In the video she makes a suggestion about fundraising.

The pitch should include going to government and asking for tax dollars. In the 2007, return $759,250 of the $832,324 in income that year came from government contributions. That's 91% for those of you scoring at home.

Like with most Indianapolis non-profits, the Humanities Council pays its officers and employees well. According to the 2007 return, Catherine O'Conner, VP for administration raked in $118,800, Nancy Conner, Grant Director made nearly $100,000, Keira Amtutz, then listed just as "President" made $78,465, Andrew Lee, Controller, made $46,074, Kerry Benjamin, also listed as a "Controller" made $61,019.

Compensation of the Indiana Humanities Council's "current officers, directors, and key employees" on the 2007 tax return is listed as $684,178, which is 82% of the income received in 2007. That is 82% BEFORE considering any other administrative expenses of the Council.
One has to wonder how much money at the end of the day trickles down to the "cause."
Here's the way to wealth in Indianapolis. First, get a high ranking position in city government. Second, leave the government job and start (or join) a non-profit that is supposedly doing some noble cause. Third, go back to government and get a grant, or several of them. Fourth, pay yourself and your friends handsomely from the grant money. Fifth, if there is any money left over, spend a few dollars on the "cause."
The Internal Revenue Service might want to take a closer look at these non-profits to see if they're truly pursuing their mission or whether they're more about allowing people associated with the non-profits to live the high life at taxpayer expense. When non-profits don't pay taxes, we taxpayers pay more.

Wednesday, July 14, 2010

State Lawmaker Speaks Out Against Pacers Deal

State Representative Scott Reske D-Anderson has announced opposition to the Pacers deal and has expressed fears the CIB's $33 million plus gift to the Pacers will trigger another return to the Statehouse by the CIB to beg for another bailout. The Anderson Herald-Tribune reports:

State Rep. Scott Reske, D-Pendleton, believes the Capital Improvement Board’s $33 million deal could mean a case of deja vu for Indiana lawmakers.

“The city of Indianapolis has pledged $33 million that they don’t have. I’ve been around long enough to know they’re going to show up at the state legislature wanting funding,” Reske said Monday.

Last year, the CIB approached state lawmakers asking for a bailout as it faced a $47 million deficit.

The bailout never made it past initial committee hearings, but the state did give the CIB a $27 million emergency loan to stay afloat amidst threats by CIB officials that Lucas Oil Stadium would be closed without state assistance.

The CIB initially wanted lawmakers to increase food and beverage taxes statewide in order to bail out the board.


Now that the CIB has reached a $33 million deal with the Pacers, Reske fears the board will once again come to lawmakers for a bailout.

“We may have to relive the whole scenario all over again and just like before, we’ll stop it again,” Reske said.

Reske said the CIB’s problems are Indianapolis problems, and won’t be solved on the backs of Madison County taxpayers.

“If they think Madison County taxpayers are going to bail them out, they’re wrong. As long as I represent this district, Madison County won’t pay for the mismanagement in Indianapolis,” he said.

It may be a matter may be a matter of time before state legislators also reconsider that $27 million promised loan to the CIB. I doubt legislators passed that proposal believing the money would simply be given to the Pacers by the CIB. For those of us here in Indianapolis, though the gift to the Pacers and the continued fiscal irresponsibility of the CIB and the Mayor's office is not a surprise.

To see the rest of the article click here.

Tuesday, July 13, 2010

Exhibit A: How Mayor Ballard Sold Out Taxpayers and the Fiscally Conservative Republicans Who Supported Him

Letter Sent to Republicans From Mayor Ballard (with editorial comment):

I wanted to update you on today's announcement regarding the 3-year agreement reached between the City's Capital Improvement Board and Pacers Sports and Entertainment. As you know, since I campaigned in 2007 my pledge has been to tackle the City's challenges in an honest and responsible manner and to improve City services while maintaining my top priority of protecting our taxpayers. The CIB agreement with Pacers Sports and Entertainment honors that pledge. (I don't recall you campaigning for more corporate giveaways of tax dollars to billionaire sports owners. In fact, I recall just the opposite...a refreshing candidate who questioned the handouts to the downtown elites.)

This agreement is about Conseco Fieldhouse. The Pacers did not ask and we would not consider helping with team operating costs. The Fieldhouse is a City-owned public building that must be run with or without the Pacers. It is less expensive for the City, and therefore the taxpayers, to keep the Pacers as the prime tenant. (Very disingenuous. Money is fluid. If we pick up building operating costs that allows the Pacers organization to divert money to team operating costs.)

When you spend as much time out in the community as I do, you hear a lot of opinions. I understand there is a lot of frustration with the recent performance of the Indiana Pacers and I know there are people who don't want the City to do anything to keep the team here. But the value and impact of keeping the Pacers in Indianapolis goes far beyond their most recent win-loss record. (I actually agree the focus should not be on the team's recent performance, but rather the team's value to the community during the good times and bad. That's why we need to be demanding disclosure of finances and honest studies of the fiscal impact, not "homer" studies you commission to support an irresponsible waste of taxpayer money.)

It's imperative for people to know that the economic impact of losing the Indiana Pacers was estimated at $55 million per year with a direct impact to local government of $18 million per year. Also, nearly 1000 jobs are directly related to the Pacers and Fever playing in Conseco Fieldhouse - and the number of jobs grows exponentially when you include all activities in the Fieldhouse and the nearby employers dependent on downtown activity. (Of course all those events, indeed more, could still be booked in Conseco without the sports teams there. And of course you're overlooking all those academic studies that say that professional sports are a bad investment for municipal governments. If you spent time to review those academic studies you'd find that with professional sports, you're just moving discretionary spending around...there is no net increase in jobs or spending. I doubt you're interested in the facts though.)

In addition to considering the loss of jobs and tax revenue, it's critical for residents to understand that Conseco Fieldhouse is a City-owned building. Without the Pacers as the prime tenant, taxpayers would have to shoulder the entire cost of operating the Fieldhouse without the benefit of tax receipts - a total estimated at $15-18 million per year. Finally, it is important to factor in our City's status as a sports capital and the role it plays in recruiting employers and conventions to Indianapolis, which in turn generates significant tax revenue. (So now we'll be paying $10 million per year to run a building on which we give all the revenue to the Pacers. Yes, brilliant move.)

Even while considering all these facts, the agreement was not reached easily, but the alternative was far worse. We could not afford to lose the Pacers to another city. (That was never in danger and you know it, Mayor. First, the 1999 contract gave the Simons no right to move the team whatsoever. Second, the penalties for selling the team and relocating it were enormous, approximately $148 million. The whole notion that we were about to lose the Pacers is nothing more than a fraud perpetrated on the public by the CIB and your administration to justify giving away millions more of our tax dollars.) Therefore, we reached a 3-year agreement which preserves the $55 million annual economic impact, the $18 million annual direct impact to local government, and we protected thousands of jobs and taxpayers. Most importantly, the $10 million in financial assistance to operate our City-owned facility for 3 years comes without any additional tax increases. (Of course, spending millions more on the Pacers means less money for things like parks, buses, schools, roads, etc. Taxpayers only have so much money.)

The millions of dollars generated by tax revenues from the Fieldhouse and downtown activity help fund improvements in your neighborhood, and many of the 66,000 people with jobs tied to our hospitality industry are your neighbors. (First, that 66,000 figure is all of central Indiana. I'm pretty sure most are not my neighbors. Again, you're ignoring all the studies that say professional sports involves a reallocation of discretionary spending. It doesn't generate NEW spending. ) I'm asking for your help to communicate some of the lesser known facts behind this decision over the coming days because preserving the economic and marketing viability of our City affects all of us. I hope I can count on you to voice your support both publicly and privately. (You can count on me to communicate how you continue to sell taxpayers and fiscally conservative Republicans like me down the river with your outrageous corporate welfare schemes.)


Gregory A. Ballard
Mayor of Indianapolis

How The Indianapolis Star Failed The Community On the Pacers Deal

I'm not one of those who thinks blogs will replace newspapers. As a "blogger" I see myself first and foremost as a commentator. Occasionally I do original reporting but for the most part, I leave that to the professionals. I think newspapers will continue to play an important role in the 21st Century.

The performance, and failures, of the Indianapolis Star in covering the Pacers bailout story though should be examined. This is not a knock against the reporters. Francesco Jarosz who did much of the reporting did a fine job. As a writer though at the end of the day you're limited by what your editors will allow you to investigate and say. There are many fine writers at the Star. Unfortunately they often type with editor's handcuffs that limit their reporting.

Let me examine the failures in the Star's reporting on the Pacers deal.

  • The Star never once mentioned in its reporting that it had invested in the Conseco Fieldhouse. Basic journalism ethics requires the newspaper to have pointed the newspapers conflict of interest.
  • The Star never once demanded that the Pacers open their books to prove they were losing money. Instead the Star simply took the word of the Pacer officials that the team was losing money.
  • With only a few exceptions the Star failed to report that the 1999 Conseco Fieldhouse contract did not allow the Simons to pick up and move the team. Under the contract, it is clear that the Early Termination provision could only be exercised if: 1) the Pacers were losing money; 2) the team was being sold; and 3) the team was being relocated outside of Indianapolis. Instead, the Star simply treated it as a fact the Simons could pick up and move the team.
  • In the end, the Star simply accepted the word of CIB officials that the penalty provision in the 1999 contract was only about $20 million. There was no attempt by the Star's editors to look into what the penalty provision actually said. Yours truly has analyzed the contract and sketched out in extraordinary detail on this blog how the penalty provisions worked. Nobody ever challenged my legal analysis, which analysis produced a penalty of $148 million in 2010. I'm fine with the Star not accepting my word, my question is why didn't the Star hire a law school contracts professor to give them an analysis of how the contractual provision works and what penalties were involved? I hate to be cynical but I think the Star's editors didn't want to hear the truth. If the penalty was north of $100 million, which it clearly is, they would have had to question why the City was even negotiating with the Pacers.
  • The Star's editors simply accepted it as a given that spending tens of millions more to subsidize the Pacers and were will to swallow hook line and sinker the Hunden insider study commissioned by the CIB, which contradicted virtually every academic study that's ever been done on the wisdom of local communities investing in professional sports. Again, why did the Star accept as fact the figures reported in the "homer" Hunden report rather than the views of unbiased academics?

Again, I don't fault the reporters. I know they're itching for the opportunity to do more hard hitting, better investigative reporting. Ultimately though their hands are tied by the Star's editors who appear to have an agenda that they intend to promote not only on the editorial page, but also on the news stories which appear in the paper.

Monday, July 12, 2010

Jose Evans Stays on Bench, Misses Opportunity to Score Points on Pacers Deal

It was the perfect opportunity for José Evans, my counselor from the northwest side and a second tier Democratic candidate for Mayor. With the Mayor's very unpopular announcement of a three year ballot for the Indiana Pacers costing taxpayers well over $30 million dollars, at the same time as library hours, bus routes and the park budget are being slashed, Evans had a chance to speak out against the Pacers deal and distinguish himself from insider Melina Kennedy, the leading Democratic mayoral candidate, As expected, Kennedy remained silent about the deal, ceding the ground to Evans to take verbal command. Instead Evans seems to have chosen to pass up the opportunity.
The rhetoric on José Evans campaign website seems tailor made to a candidate willing to take a very popular stand for taxpayers against the downtown elite.
Here in Indianapolis, politicians are too pre-occupied with giving sweetheart deals and tax breaks to wealthy downtown businesses even as our neighborhoods are declining and our people are out of work....If you are looking for politics as usual, José is not your candidate. But, if you are looking for a new approach to leadership - one that focuses as much on revitalizing our neighborhoods and creating jobs as we do about revitalizing downtown - we hope you will join the campaign to bring real change to city hall.
Probably 80% of the public would agree with Evans that City leaders are too preoccupied with passing out sweetheart deals and tax breaks to the wealthy of Indianapolis at the expense of working men and women. But you can't score points if you stay on the bench when the game is being played.
P.S. I read that Marion County Democratic Chairman Ed Treacy sent out a press release in which he criticizes the Mayor because the multi-million tax dollar giveaway is only for three years. In it he apparently suggests Ballard just delayed dealing with the "problem." What problem? The Pacers couldn't have moved anyway under the 1999 contract anyway. It's bad when both Republicans and Democrats are fighting to hand out corporate welfare, even though the public overwhelming is against it. Anyway, if anyone has the Treacy press release, please send it my way:

Pacer Press Conference Notes: It's Not a Giveaway, It's a Loan!

Mayor Ballard opened with a prepared statement. He talked about a plan for downtown 40 years in the making. He cited to the bogus insider study by Hunden Strategic Partners to illustrate the fiscal impact of the Pacers, ignoring all the academic studies out there staying professional sports are a bad investment. He proceed to lump the general in with the specific, making it sound like all events at Conseco depend on Pacers being at the Fieldhouse. Ballard then starts talking about funding libraries, Indygo, neighborhoods. (I was left wondering who on his staff thought it was a good idea to bring up these additional budget items he's neglecting by giving tens of millions of dollars to the Pacers? Bad media strategy. )


Next up is Jim Morris President of the Pacers Sports and Entertainment Group. He talks about "synergy." (This is code for "I cannot articulate specifics, but trust me anyway.") For the first time, he calls the $30 million a "loan."


Ann Lathrop, President of the CIB is next up. She talks about how the approach was conducted with "honesty and integrity." Really? Neither the CIB or the Pacers were honest about the penalties under the contract or the fact that the Simons did not have the right to move the team.

Lathrop also calls the $30 million a "loan." She says the amount of the loan that has to be paid back declines every year. (I thought to myself, I want one of these loans.)

Lathrop says that the amendment will modify the Virginia Avenue parking garage provision in the 1999 Agreement to match current practice, i.e. the Pacers only pay $1 per year to use the garage. Millions more given away. (Gary Welsh has rightly been complaining about the parking giveaway in violation of the contract for a long time.)

Lathrop also says that one source to pay the Pacers $30 million "loan" is the State's $27 million loan to the CIB. (Our friends in the legislature will love that.)

Lathrop and Morris but made a reference to the cable franchise fee which I didn't understand. It sounds like they might want to revive it.

Lathrop says that the CIB didn't ask the Simons to fork over the non-Pacer revenue from the building as it wouldn't have been enough to offset the $10 million pery year loan. (These are really crack negotiators.)

Don Welsh, President and CEO of the Indiana Convention and Visitors Bureau was next up. He talked about how he came from Seattle and how that city was so hurt by losing the Supersonics. Like Mayor Ballard, he throws in non-Pacer events, which wouldn't be lost without the Pacers, in his discussion of how Indianapolis would be affected by the loss of the Pacers.

Next came Q & A

Mayor Ballard was asked if the City would be back in the same position 3 years from now. Ballard ducked the question. When asked how the operations will be changed so that it is more profitable, both Mayor Ballard and Morris said that Conseco Fieldhouse was being utilized as best as possible and there wouldn't be any changes. That reminded me of Mayor Ballard's bailout of the CIB when he decided to raise taxes for the CIB without making any demands for changes in its operation.

Mayor Ballard said that the Pacers didn't get all they wanted since it costs $14 to $18 million to operate the building and they only got $10 million per year.

Abdul of WXNT was asked about penalties under the current contract should the Pacers have broken it. Abdul mentioned the penalty was mentioned as being between $50 million and $150 million. Morris, looking very uncomfortable, responded that it was "substantially less" than those figures. No follow-up question to pin him down was asked. Morris undoubtedly knows the penalty would be close to $150 million. So much for the "honesty and integrity" Lathrop claimed was involved in the proces.

A further lack of honesty and integrity was evident in Morris' next answer. Morris denied any such offers from other cities wanting the Pacers, but said that if he did get those offers he could have moved the team right away. The suggestion is a bald-faced lie. The contract is crystal clear that the Simons have no right to pick up and relocate the team during the 20 year life span of the contract. The only way the contract can be broken is: 1) the team losing money; 2) the team being sold; and 3) the team relocating out of town.


Being at that news conference illustrated the problem with how our City is run. The room was filled with the downtown elite, the people who run this City and regardless of whether the Mayor is a Republican or a Democrat. Those people are nothing but parasites, living off the blood of taxpayers. We need real leadership in Indy who will finally kick these parasites to the curb.
Note: Pictured is Jim Morris.