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.