Saturday, October 30, 2010

Halloween? Bah Humbug!

Tomorrow will arrive my least favorite holiday (although technically it's not a holiday), Halloween.

I have never cared one bit for Halloween. I just don't get it. I have positively no interest in dressing up in a "costume" and going to parties. I have never been trick or treating. Growing up we lived in the country, with our neighbors a half mile away...then the neighbors after that another half mile away. Obviously we couldn't walk between the houses. We did often go to a Halloween party sponsored by the Catholic church I attended at China, Indiana. But my brothers and my costumes were pretty uninventive...whatever we could find in the house thrown together at the last minute. If a costume wasn't required, we probably would have went without one.

So let me get this straight, trick or treating involves going to a stranger's house and threatening to play some sort of "trick" on them (perhaps egging their house or TP'ing their trees, if they don't hand over candy or some other "treat?" Isn't that extortion and a felony?

Another reason I don't care for Halloween is the time of year of the celebration. Halloween represents the beginning of cold weather which I so detest. It doesn't have the good food that Thanksgiving has or the gift-giving and religious significance of Christmas. Like Halloween, I don't care much for New Years. I don't understand why we celebrate turning a page on the calendar. I really do not like attending New Years Eve parties. I would much prefer spending New Years Eve having a nice dinner and retiring to watch a good movie at home, avoiding the drunks that traditionally are out driving that evening.

Now Easter...there's an unappreciated holiday. During my childhood, it represented Easter egg hunts and eating chocolate bunnies. It also was a harbinger of the Summer, my favorite season.. Of course, as a Catholic, the holiday, like Christmas, has significant religious meeting....though going to Mass several days during Holy Week did get a little old when I was growing up.

It could be that I'm just a boring guy. Halloween is only one of many things I have no appreciation for. I have no interest in scary orsci fi movies or action flicks (I find too much action without a story line both confusing and boring.) I don't get "gaming" or fantasy role-playing games like Dungeons and Dragons. Growing up I didn't read comic books and certainly have no interest in them as an adult. Needless to say, I don't have any interest in going to the Gen Con convention.

One time, a friend dragged me to Rocky Horror Picture Show. I positively hated it. People were dressed in ridiculous outfits and yelling at the screen, interrupting the movie I was trying to watch. I couldn't wait for it to be over.

I don't like parades either...boring. I don't really get marching bands either. (My apologies to my dear friends, the Maguires.) I get and like bands...I just don't understand the whole "marching" part.

Yep, I guess I'm just a boring guy. Maybe that's why I have no interest in celebrating Halloween.

Thursday, October 28, 2010

City Agrees to Pay Veolia Water $29 Million To Walk Away From Contract (w/update)

Well, it turns out the Ballard adminstration was lying to everyone about Citizen's Energy continuing on with the Veolia Water contract after the city water and sewer utilities were "sold" to Citizen's. Today the Indianapolis Business Journal reports that the City will pay Veolia a $29 million fee to break the contract. (Of course, Veolia is a client of Barnes & Thornburg.)

The Indianapolis Business Journal reports:
Veolia will no longer have a role in operating Indianapolis Water after the city sells the utility to Citizens Energy Group—but the company will walk away with $29 million in the form of a contract-termination fee.

The contract-termination agreement announced Thursday, which must be approved by the Indiana Utility Regulatory Commission, came as somewhat of surprise. Citizens has been in talks with water system operator Veolia since at least July, when City-County Council members approved the sale.
“It’s a little tough to argue with the city’s choice here, given the very unique position Citizens holds,” Clarke said. “We’re very proud of what we’ve done” managing Indianapolis Water.

Veolia has managed the city water utility since 2002 under a contract that was to have expired in 2022. Mayor Greg Ballard proposed selling the water and sewer operations as a way to generate cash for city infrastructure improvements.
To see the rest of the article, click here:

Bottom line is that the City undoubtedly knew this breakup was in the works, yet intentionally kept that information from the Council and the public during the debate over "selling" the city's water and sewer utilities to Citizen's Energy. Now we taxpayers have to pay $29 million to break the contract with Veolia. Of course, Veolia is a Barnes & Thornburg client.

The City, of course, tries to explain it away by saying that this is an okay deal because we're taking the money out of a different pot. Where does that money though originate? The taxpayers.

Gary Welsh reviews the IBJ article and says it better than I ever could:
This is just another example of the Ballard administration lying to the public to get a deal through the city council by withholding relevant information from the public while the debate is taking place. We saw this with the bailout legislation for the CIB last year when the public was repeatedly assured the new revenues being raised from higher hotel taxes, state revenue sharing and a state loan would not be used to provide any payments to billionaire Herb Simon's Indiana Pacers in order to secure City-County Council approval. Later, we learned the city had planned all along to divert excess property tax revenues from a downtown TIF district to make possible a $33.5 million give-away to the Pacers. Now we learn that the city planned all along to
pay a huge termination fee to Veolia it said was not advisable in order to secure approval of its controversial utility transfer deal from the City-County Council.

It cannot be doubted that both Citizens and the Ballard administration knew this was to be the outcome. The Ballard administration expects us to be happy with the termination fee because it says it won't lead to higher utility rates. Higher utility rates were already a foregone conclusion because the Ballard administration insisted Citizens pay it $460 million as part of the deal, the cash payments for which Citizens simply plans to borrow the money and pass on the costs to ratepayers in the form of higher rates. Chris Cotterill, Ballard's chief of staff, defends the move because he says the $29 million fee is being paid out of an escrow account the administration had set up last year to cover "unanticipated costs". Isn't it funny how there are always these surprise pots of money sitting out there that magically appear when the money needs to be found?
Yet more campaign fodder for the Democrats and yet another issue to alienate fiscally conservative Republicans from supporting Ballard for another term.

Update: A few people for proof that Barnes & Thornburg represents Veolia. B&T doesn't lobby for Veolia. Rather B&T represents Veolia in litigation. See the attorneys who filed this answer to a class action lawsuit filed in 2008. They are identified on page 20 of the answer, the last page. Once again, the City has manuevered to funnel millions to a B&T client.

What Motivates Jackie Nytes?

On Monday, Democratic Councilor Jackie Nytes was the sole Democrat to cross over and vote for the CIB budget, which included the $10 million taxpayer gift to the Simons for the Pacers. She was the only Democrat who crossed over to vote with the Republicans. Christine Scales was the only Republican who voted against the CIB budget.

Several theories have been offered for Nytes often casting votes to pass Ballard-sponsored spending measures, that quite often happen to be politically unpopular. Earlier this year she voted for the CIB tax increases once again providing the Republicans with the key vote to pass the measure.

Let's run over the theories.

The first theory is that Nytes has never met a spending program she would not support and that her votes in favor of the CIB and other Ballard spending proposals are simply with her reckless spending philosophy. There seems to be strong support for this theory in her voting record.

The second theory is that Nytes has profited from millions the city money funnelled to her community development organization and business sent by the City and Republican candidates to a printing company, Printing Partners, that she owns. Gary Welsh of Advance Indiana has repeatedly laid out the case for this theory. Frankly, it's hard not to connect the dots between her getting money from a Republican administration and Republican candidates and her votes in favor of the Ballard administration proposals.

I though have another theory. From a political strategy standpoint, the best thing that could have happened for the Democrats on Monday is if that CIB budget, with the $10 million gift, passed. Sure it wasn't good for taxpayers or in the best interests of the City. But as an issue to use against council Republicans in 2011, well it is absolutely gold. Same with the CIB tax increases that Republicans (except Scales) and Nytes supported. Democrats will tear Council Republicans (and Ballard) apart with those issues next year.

If those measures failed, their use as campaign fodder would have been much more limited. People forget the things that anger them that fail to pass. They remember the things that anger them that are passed despite their opposition. Voters will not forget the CIB tax increases and Pacer $10 million gift. And if they do, the Democrats will surely remind them.

As an analogy, I remember all those Senate campaigns where Evan Bayh campaigned as never having raised taxes as Governor. People forget that Bayh proposed raising taxes while Governor, it just didn't pass the Republican dominated legislature. The proposed tax increase just didn't have potency as a political issue once it failed. Same with the CIB issues.

My theory is that Nytes is deliberately voting for unpopular Council Republican measures as part of a master Democratic strategy to ensure that unpopular Republican measures pass and can be used against the GOP in the Fall 2011 election. Sure that's a cynical theory that cast doubts on the Democrats' sincerity, but hey I'm a cynical guy who looks at the possible political motivation on everything.

Frankly, I'm not 100% sure that's what's going on. Likewise, I'm not sure that the three theories cited are mutually exclusive. Certainly Nytes voting with the Republicans would be clever political strategy, albeit they are certainly not votes that are in the best interest of the City.

Wednesday, October 27, 2010

Marion County GOP Chairman Tom John and His Conflicts of Interest

The issue came up during John Keeler's tenure as Marion County Republican Chairman. Should a county chairman also be a lobbyist? Keeler had signed a "gag agreement" with his firm, Baker & Daniels, that as Republican County Chairman he would not criticize the administration of Democratic Indianapolis Mayor Bart Peterson. That was a condition for the law firm to get city legal work.

The issue is rearing its ugly head again with present GOP Chairman Tom John. On Monday, Council Republicans drank the political Kool-Aid, voting to aid Herb Simons' ownership of the Pacers with $10 million more of our tax dollars. The Simons family and Pacers are, of course, represented by Barnes & Thornburg, which in addition to running the 25th Floor, also employs the Council President Ryan Vaughn who pushed hard for the Republican caucus to support the deal for his firm's clients. Next up also presents other conflicts of interest: the ACS parking deal and the North of South (No-So) project.

Despite the public expressing almost solid opposing to the 50 year, no bid ACS parking contract, it continues to be pushed. ACS is also a Barnes & Thornburg client. B&T partner, Joe Loftus, who is on the payroll as counsel to the Mayor and lobbyist for the City, also, conveniently, lobbies for ACS. Vaughn was also listed in state records as lobbying for ACS...that is before he had those records changed. Despite clear conflicts of interest, Vaughn has indicated that he is going to vote for the deal because it's so important for his law firm...sorry, I mean, his "constituents."

The ACS deal though involves another conflict of interest. The law firm of Ice Miller supposedly drafted the contract and did the initial legal work. One of the attorneys at Ice Miller identified as working on the ACS deal is none other than Tom John, the County Republican Chairman. The contract says the City will pay Ice Miller up to $500,000, even if the Council votes the plan down.

Undoubtedly other legal work involving ACS will be on the horizon. Tom John and his law firm stand to profit should the deal pass the Council. But given the deal's terrible unpopularity, what are John's responsibilities as county chairman? Doesn't he owe a duty to the county GOP that he doesn't push for an unpopular deal that will hurt Republicans at the polls?

With regard to the No-So project, Tom John's conflict is even worse. He is listed as a lobbyist to the Mayor for Buckingham Companies, who the Mayor has backed a loan for using $86 million of our property taxes. This is for a project that is deemed too risky for every lender who has looked at it. Once again, Tom John the lobbyist will be pushing for a deal that is almost certainly not in the interest of the Republican Party, including those Republican councilors who will be voting on the project. Do any of those Councilors dare oppose John on the deal and perhaps get "Fishburned," i.e. having the county chairman recruit and fund a candidate to run in the primary against the person who dared oppose him?

If Tom John wants to lobby the City and do legal work on City projects that come before the Council, that's perfectly fine. He just needs to resign as county chairman. Until he does that he has a huge conflict of interest in representing his legal clients and the Republican Party. His continuing to wear both hats while threatening and twisting arms of Republcian elected officials until they agree to commit political suicide, is nothing short of unethical.

Desperate for Cash, County Does Retroactive Property Tax Assessments

I'd be curious as to whether this is going on in other parts of the state.

My client, who lives in Nevada, has a company that builds houses for the disabled. He has built a number of houses in Indiana, including eight in Grant County, i.e. Marion, Indiana. The houses were built on in 2003, but the assessing official didn't get around to assessing the property until 2007. Thus the property for years was billed as a vacant lot rather than with the new house on it.

What Grant County has done, I can only assume in an effort to get more tax revenue in the era of property tax caps, is to go back and issue "special assessments" for the period 2004-2006, charging him with property taxes for that period he would have been paying had the Grant County Assessor (actually back then it might have been the township assessor) done his job and timely assessed the houses. Not only that, they have also billed my client for penalties for not paying the higher tax bill for 2004-2007 (which would have reflected a house n the property), even though the county had never sent him a bill for those taxes on which penalties were assessed.

The county's position is that it was my client's responsibility to track down government officials and ask them to reassess the property. He didn't hide anything - building permits were filed, deeds were recorded, etc. Frankly, he didn't know they had not reassessed. The taxes were escrowed in mortgages and he owns so many houses he wasn't tracking reassessment dates on them to make sure government officials did their jobs.

A separate issue is that Grant County officials continue to mail notices to the wrong place. On one property they were mailing things to the 2003 owner of the property. On another, they had a Westfield, Indiana address listed for my client who lives in Nevada and never lived in Westfield. Anyone who has dealt with counties know that they often mail tax notices to the wrong address.

Returning to the original issue - retroactive special assessments - I'm confident of prevailing in Indiana's appellate court once I traverse the local Grant County PTABOA. Indiana law says that when there is a reassessment it takes effect the NEXT assessment date. Here Grant County is doing a reassessment and then trying to apply it backwards to years prior.

I'd be curious though if this is just a Grant County phenomenon or whether county government officials are doing retroactive assessments in other parts of the state. Please let me know. My law firm email address is

Tuesday, October 26, 2010

RIP: Prof. Henry Karlson

Probably my favorite professor in law school was Henry Karlson. At some point, Prof. Karlson acquired the nickname "Hammerin' Hank." To detractors, it was a nickname that was meant to be derogatory. But to those of us who knew him and appreciated his intellectual, confrontational nature, the nickname was a high compliment indeed.

Hammerin' Hank's area of expertise was criminal and constitutional law. But Prof. Karlson also had an extraordinary intellect when it came to other areas of the law. He had a gift for dissecting cases and making you think of legal positions you had never before considered before. Those intellectual challenges helped polish many a student for a future in the law.

I never had the pleasure of having Prof. Karlson for a law school class. I always ended up in the "other" criminal law or procedure class. Instead where I got to know Prof. Karlson was in the "gray lounge."

In the old law school, there was a lounge area in the middle of the classrooms. We students, being clever sorts, called it the "gray lounge" because all the chairs in the lounge were, well, gray. In later years, the school bought non-gray furniture and renamed it the "Dailey Lounge." Not sure if the name stuck.

We students hung out in the gray lounge, often talking about law and politics. All the professors ignored the students, heading directly to their offices after class, shunning any interaction with the students. Professor Karlson was the lone exception, sitting with students in the lounge debating the politics and legal cases of the day. Fiercely opinionated, a conservative in a bastion of liberalism, Professor Karlson debated issues with conservative and liberal students alike, challenging those students to consider other ways of looking at the issues. For many law students, who had for years gotten by simply regurgitating the liberal views of their professors, suddenly being challenged by a politically conservative intellectual threw them for a loop. Prof. Karlson "hammered" opened more than a few liberal minds at the IU-Indianapolis law school.

Probably the best compliment I ever heard paid about Prof. Karlson came from a most unlikely source. A friend of mine, now an attorney in the city, was one of the most liberal students in my class. Constantly spouting socialist nonsense and advocating limitless judicial power, he and Prof. Karlson often could be found at loggerheads in the gray lounge, embroiled in some legal or policy debate.

I graduated convinced my friend disliked Prof. Karlson for his right wing views. Then the other day, I ran into him. While reliving our old law school days, he began talking about how much he enjoyed those debates and respected Prof. Karlson. He said it meant so much to him that Prof. Karlson would take time out of his day to sit down and talk to the students outside of class. Prof. Karlson's willingness to do that enriched a lot of law students' lives, making them not only better future lawyers, but better people. Rest in peace, Prof. Karlson. We will miss you.

Council Republicans' Shameful Vote; The Future of the Marion County GOP and the Birth of the Republican Action Coalition

Yesterday was one of the most shameful chapters in the history of the Marion County Republican Party. In nearly a party-line vote, the Republicans, on the Indianapolis City-County Council voted to spend $10 million of our tax dollars to help subsidize the billionaire owner of the Indiana Pacers, Herb Simon.

That's not MY Republican Party.

I learned my politics from my father during the late 1960s and 1970s. Having dropped out of high school to take a job to help out his financially-struggling parents, my grandparents, my father spent most of the years of my childhood working in a factory struggling to make ends meet. Every evening over the dinner table he would talk politics. Most of his comments involved bitter complaints about various Democratic officeholders. He often blasted Birch Bayh and the Kennedys for their liberal political philosophy.

But my father was also a dyed-in-the wool Democrat. So one day I asked him if he disliked the Democrats so much, why not vote Republican? I'll never forget his answer: "Son, the Republican Party is the party of the rich man. The Democrats stand for the working man."

My college years brought the Reagan years and a new type of Republican Party, one that embraced working man (and woman) as an essential part of the party's coalition. For the first time in decades, scores of union workers cast votes for a Republican Presidential candidate, someone who blue collar workers felt identified with them.

While the Reagan version of Republicanism was not without fault, it represented a stark change in direction to the elitist GOP my father warned me about. I tell people that I CHOSE to become a Republican because, under Reagan, the party had shed its elitist reputation and began embracing working men and women, the sort of folks I grew up with. That is why in 1986, I became a precinct committeemen in Pike Township, beginning my service in the Marion County Republican Party.

Last night, however, I was embarrassed by how far my local Republican Party has fallen. In a nearly unanimous vote (Republican Christine Scales voted "no"), the Republican members of the Indianapolis City-County Council voted to hand a billionaire sports owner $10 million of our tax dollars during the worst economic downturn since the Great Depression. Meanwhile, the library, bus system and parks get cut, services enjoyed by ordinary citizens. In a few weeks, that same Republican caucus will likely vote pass a 50 year parking contract to make ACS, a politically-connected company wealthy at the expense of future generations of Indianapolis residents

In the backdrop of this we have conflicts of interest and ethical problems that have become endemic within the Republican Party. A top legal advisor to the Mayor lobbies for ACS. The Republican President of the Council refuses to recuse himself even though it is his law firm represents ACS and the Simons. The Chairman of the Marion County Republican Party works on the ACS contract and lobbies the City in support of the Buckingham North-South development, to the tune of $86 million of our tax dollars.

Handing out corporate welfare and insiders using government to line their and their friend's pockets, is not what I believe the Marion County Republcian Party should be about. That's the reason I started my talk about what was going on in the local political scene.

I believe though that simply standing on the sidelines and complaining is not enough. During the early 1970s, when the local GOP organization lost its way, some Republicans organized the Republcian Action Committee which provided a structure for those wanting reform in the local GOP. While times have changed, the need for networking opportunities for like minded Republicans continue.

In the spirit of the Republican Action Committee, I am taking steps to form the (Marion County) Republican Action Coalition. The Coalitiion will be initially an opportunity for like minded Marion County Republicans to network and exchange ideas. Hopefully in the not too distant future, we can begin having meetings (looking for a free or cheap downtown location) and endorsing and promoting candidates. Where the RAC will lead, I frankly don't know. I do know though that there is a need for an outlet for Republicans who believe the local party does not stand up for the best interests of taxpayers and working men and women who are essential to any future success of Republicans in Marion County.

Please look at the website I have set up. I have set forth what I believe should be guiding principles of the Republican Action Coalitioin and needed reforms within the Marion County GOP organization to make the critical grass roots of the organization stronger. Feel free to provide feedback.

While last night's vote represented a troubling chapter in the history of the Marion County Republican Party, it may turn out to be a blessing. The vote will doom the political futures of many Republicans, including the Mayor. A stinging election defeat in 2011 will set the stage for a new kind of party, one quite diffent than that represented by the council vote last night.

Monday, October 25, 2010

Problems With ACS Parking Contract Persist

Wednesday of last week, the administration of Indianapolis Mayor Greg Ballard announced changes to the ACS parking contract. Democrats and Republicans had both panned the 50 year, no bid deal. Administration officials assured reluctant council members that the changes would alleviate their concerns. Tonight I spent some time flipping through the pages of the proposed new contract to see if that is true. It isn't. The deal still stinks.

Before getting into the specific flaws of the deal, let's not forget that the Ballard administration has never come close to making the case that the City can't do parking modernization itself and keep 100% of the profits rather than steer hundreds of millions of dollars to politically-connected ACS. The City's answer is that doing so is "risky." It's a disingenuous response. The City would be spending $10 million on fixed assets - the meters - which aren't going anywhere. We also know within a very narrow range, the amount of money Indianapolis can gain from the meters. This isn't the situation where you are going to lose your investment - the meters - or not know you're going to make money.

Looking over the revised contract, these are the problems I note:
  • If the administration was truly interested in the best deal for taxpayers, the deal should have been reopened for other companies to offer proposals rather than simply letting ACS make a new proposal.
  • Section 2.1 It is still a 50 year agreement. It is very unfair for today's generation of leaders to contractually obligate those who will be in power decades from now. As a side note, the legislature needs to pass legislation prohibiting local governments from mortgaging the future by entering into multi-generational contracts like this one.
  • Section 2.1. Upfront payment reduced almost in half. It's a mystery why the administration thinks getting $20 million upfront was better than getting $35 million. Of course, the administration will point to a better cut of the annual revenue as the reason. Of course, there's problem with that too.
  • Section 2.4(e) If ACS decides to cancel the deal because the Council doesn't approve the ordinance, the City is on the hook for $500,000.
  • Section 3.2(e)(iii) ACS gets to keep all the revenue from issuing parking tickets, while the City has to fund the adjudication of those tickets.
  • Section 3.15(a) ACS, under the revenue split, gets to keep most of any advertising revenue.
  • Section 7.4 The City can only remove 200 of 3,649 parking meters in 50 years without paying ACS a penalty. It's not a stretch to think that the City will change dramatically in the next 50 years, including in ways that may require the removal of hundreds of meters. Yet if we in 2010 can't accurately predict the future, we'll be paying ACS.
  • Section 7.8 If the legislature passes a law relating to parking ticket enforcement, or a court issues a decision affecting enforcement, the City will have to pay ACS a penalty.
  • Section 8.1(c) The City is not entitled to review ACS's records to ensure it is being provided the money it is entitled to under the contract. Rather the City is required to rely on ACS's volume figures and its calculations with no right to review ACS books to determine if those numbers are accurate.
  • Section 18.1. The penalties are substantial should the City wish to cancel the contract. If ACS is doing a poor job and the City wants to cancel nine years in, the City has to pay ACS back $19,800,000 of the $20 million ACS paid to the City. This decreasing liquidated damages provision actually makes it costlier for the City to get out of the contract. Before, the City could have urged a court to cancel the contract should ACS's performance be so poor as to indicate a breach. If successful, the City wouldn't have to pay a penalty; under the liquidated damages provision, now the City certainly will have to pay.
  • Section 18.2 It appears that the contract prohibits the City from borrowing money to pay ACS the liquidated damages provision (Section 18.1) to get out of the contract. The City is also prohibited for 2 years after termination to contract out parking to another vendor.
  • Section 19.4 I personally think it's wrong to obligate the City to use arbitration instead of the judicial process to resolve disputes.
  • The 200 job promise is still not in the revised contract. Although ACS has promised to bring the City 200 jobs (not specifying salaries or even that they'll be full-time jobs), the parties have gone out of their way to put the promise is in a separate letter rather than the contract. The contract has an incorporation clause saying there are no agreements outside the contract. The jobs promise, made outside the contract and without consideration, is completely unenforceable. The contract revision could have included the 200 job promise. It did not. The City's counters that the the jobs pledge can't be in the contract because it doesn't relate to parking. That claim has no legal basis whatsoever. I would note that the battery recycling program ACS has pledged to enact doesn't relate to parking either, yet that promise is in the contract.

Those of just some of the things I noticed in a quick review. I won't even get into the conflicts of interest involving members of the Mayor's staff and ethically-challenged Councilor Ryan Vaughn, who insists on casting a vote for the ACS deal even though his law firm lobbies for ACS as does his boss, Joe Loftus a top paid adviser to the Mayor. Indeed state records even showed Vaughn lobbied for ACS...that is before Vaughn had the records changed.

Saturday, October 23, 2010

Upcoming Indianapolis City-County Council Votes That Will End Republican Political Careers

The Mayor's people, who seem to be trying to profit as much as they can before this administration leaves office, are, by their actions, jeopardizing the political futures of Republican council members. This will be especially true when it comes to a couple votes coming this Fall.

Mayor Greg Ballard has given the Democrats limitless political fodder. Expect the themes against a second Ballard administration to be: 1) numerous tax and fee increases supported by the Mayor; 2) corporate welfare; 3) the Mayor's junkets; and 4) problems at IMPD. There is also an excellent chance at a "pay to play" scandal in the administration given that the people surrounding the Mayor seem to be doing a lot of things behind the Mayor's back

When the Democrats begin "defining" Mayor Ballard by these issues in 2010, the Republican political waters will be lowered. People turn out in the municipal election to vote for the Mayor. In particular, if Republicans don't like Mayor Ballard or are turned off because he doesn't seem to hold their conservative values, those voters may well not go to the polls. That alone could endanger Republicans in marginal races and also help knock off the at-large Republican candidates.

But the fate of Republican councilors' re-election bids do not end there. Imagine it is a year from now, what is going to be happening? Lots of direct mail. Challengers in certain targeted races against Republican incumbents are going to be sending out mail pointing out that, in the Fall of 2010, the incumbent Republican Councilor voted to give the Pacers $10 million of their tax dollars and also voted to sell off the City's parking meters for 50 years to a politically connected company. The public is extremely angry about both of those proposals. Reminded of both votes right before the 2011 election, the incumbent Republican will have no way of defending his or her vote to save the councilor's re-election. Any possible rationalization that can be offered is too long. Imagine a response piece, where the Councilor tried to explain the Pacers' vote? It wouldn't work. All the voters will hear is that the councilor voted to give $10 million dollars of their tax dollars to the billionaire Herb Simon, this during the worst recession since the Great Depression. There is no listening after that.

The Mayor's advisers will be twisting a lot of arms these next few weeks in an effort to get Republicans Councilors to vote for these unpopular proposals. If Republican councilors hope to get re-elected, they'll tell the Mayor "No."

Friday, October 22, 2010

Prosecutor Candidate Mark Massa's $1,000 Club

This is a list of contributors who have given Marion County Republican Prosecutor Candidate Mark Massa more than $1,000. I have included the most recent regular pre-general election report as well as the supplemental reports filed since. Sorry I can never get Blogger to do columns or any other kind of formatting.


Type Last Name First Name Amount Job
Individual Ackey Richard 2,500 Executive
Individual Alley Michael 1,000 Executive
Individual Anderson Devin 3,500 Executive
Individual Aziz Sherif 2,500 Executive
Individual Barrett William 1,500 Attorney
Individual Barth Michael 1,000 Executive
Individual Betz Holly 2,000 Executive
Individual Browne William (Jr.) 1,000 Executive
Individual Burdick Brian 1,258 Attorney
Individual Carter Cameron 1,500 Executive
Individual Clark Murray 1,750 Attorney
Individual Cochran Kendall 1,650 Executive
Individual Crage Kenny 1,000 Executive
Individual Dickman Theodore 1,700 Executive
Individual Dilts Michael 1,000 Executive
Individual Downey Mark 1,000 Executive
Individual Fehsenfeld Fred Mehlert 5,000 Executive
Individual Finch Robert 1,000 Executive
Individual Freihofer Walter 1,000 Executive
Individual Frick David 1,000 Attorney
Individual Goad Robert 10,000 Executive
Individual Goad Robert (II) 2,500 Student
Individual Godby Thomas 1,000 Executive
Individual Goldman Steve 1,000 Executive
Individual Gonso Harry 1,500 Attorney
Individual Goode Earl 1,000 Executive
Individual Grand Robert 2,758 Attorney
Individual Griffith Perry 1,500 Executive
Individual Gutting James 1,000 Attorney
Individual Hammond John (III) 5,100 Attorney
Individual Hawk Robert 2,500 Executive
Individual Hefner Thomas 1,000 Executive
Individual Hennessey Richard 1,000 Executive
Individual Hinton Michael 2,500 Executive
Individual Hoover John David 2,050 Attorney
Individual Hubbard Alan 12,000 Executive
Individual Johnson Blake 4,000 Executive
Individual Jones Steven W. 1,500 Executive
Individual Keeler John 1,000 Attorney
Individual Kite Al 3,430 Executive
Individual Knowles Marlin (Jr.) 1,600 Executive
Individual Lange Alexander 2,500 Executive
Individual Loftus Joseph 1,258 Attorney
Individual Longest James 3,000 Executive
Individual MacAllister P.E. 3,000 Executive
Individual Massa Donald 3,000 Executive
Individual Melich Nicholas 1,000 Executive
Individual Morris James T. 7,500 Executive
Individual Mutz John 2,000 Retired
Individual Myers Byron 1,000 Attorney
Individual Nugent (cont. returned) Peter 1,350 Executive
Individual Reilley Thomas 2,500 Retired
Individual Sandlin Jack 1,150 Executive
Individual Schenberg Ted 2,500 Executive
Individual Sebring Les 2,000 Executive
Individual SerVaas Beurt 4,000 Executive
Individual Shane Anne 1,500 Civic Leader
Individual Sherman Dollyne 1,500 Executive
Individual Shiel Andrew 1,000 Executive
Individual Simon David 1,000 Executive
Individual Simon Skjodt Cindy 12,800 Executive
Individual Sinclair James 1,500 Executive
Individual Slusser Jerry 10,000 Executive
Individual Sondhi Jason 1,000 Executive
Individual Spahn James 5,000 Physician
Individual Steel G. Donald 1,100 Executive
Individual Thomas Robert P. 10,000 Executive
Individual Von Arx John (III) 1,000 Executive
Individual Weaver Michael E. 12,000 Executive
Individual Whitaker John 1,150 Executive
Individual Wiley Joe Bill 1,100 Executive
Individual Woo Daniel 1,000 Executive
Individual Yerkes Wendy 1,000 Executive
Individual Zink Darrell (Jr.) 4,000 Executive
Loan Todd Rokita Election Cmte 25,000
Non-Indiv. Aiming Higher PAC 60,000
Non-Indiv. Baker and Daniels 5,158
Non-Indiv. Borror for State Rep. 1,000
Non-Indiv. Bose McKinney & Evans 2,500
Non-Indiv. Bowen Engineer Corp. 1,000
Non-Indiv. Brightpoint Eclipse Indiana (returned $500) 2,500
Non-Indiv. Carlisle Insurance Agency 1,000
Non-Indiv. Cmte to Elect Paul Ricketts 5,000
Non-Indiv. David Long for State Senate 6,000
Non-Indiv. DLZ Indiana, LLC 5,000
Non-Indiv. Duke Energy 1,000
Non-Indiv. ESG Security 1,000
Non-Indiv. FOP PAC 3,600
Non-Indiv. Friends of Mike McQuillen 5,000
Non-Indiv. Frost Brown Todd 1,000
Non-Indiv. Garrison Law Firm 1,000
Non-Indiv. Ginovus 2,000
Non-Indiv. Hall Render Killian 1,000
Non-Indiv. Hirons & Co. ($3,000 returned) 5,200
Non-Indiv. Hoosier Supporting Buyer for Congress 1,000
Non-Indiv. Indiana Merit-Construction 2,000
Non-Indiv. Indiana Multi Family Housing 1,000
Non-Indiv. Indiana Republican State Cmte 5,209
Non-Indiv. Indpls Metro Bd of Realtors 2,000
Non-Indiv. K&L Logistics 2,000
Non-Indiv. Lewis & Wilkins 2,861
Non-Indiv. Local No. 150-IUOE PAC 2,000
Non-Indiv. Macallister Realty LLC 1,000
Non-Indiv. MC Republican Party Central Cmte 40,000
Non-Indiv. MKM Distribution Services 2,000
Non-Indiv. Northeast GOP PAC 2,000
Non-Indiv. NPC Leasing, LLC 2,500
Non-Indiv. NRA-Political Victory Fund 1,000
Non-Indiv. Nursing Home Real Estate Group 1,000
Non-Indiv. Paul Mannweiler Cmte 1,000
Non-Indiv. Payless Liquors ($500 returned) 2,500
Non-Indiv. Poindexter Excavating 2,000
Non-Indiv. REI Real Estate Services, LLC 10,000
Non-Indiv. Steve Carter for AG 1,000
Non-Indiv. Tabbert Hahn Ping Global Strategies 1,267
Non-Indiv. Teresa Lubbers for State Senate 1,000
Non-Indiv. Todd Rokita Election Cmte 25,000
Non-Indiv. Torr for State Rep. 1,000
Non-Indiv. Trucking Industry PAC 1,500
Non-Indiv. Unicare Life & Health Ins. Co. 2,000
Non-Indiv. United Surety Agents 1,000
Non-Indiv. Vision Concepts 5,000
Non-Indiv. Weaver Popcorn 1,000
Non-Indiv. Zink Properties, LLC 10,000
Returned Cont. Keefe Maureen 1,000
Returned Cont. Mackey Larry 1,000
Returned Cont. Newman Scott 800
Returned Cont. Riggins Kenneth 100
Supplemental Appel Daniel 1,000
Supplemental Barnes & Thornburg 1,000
Supplemental Barrett William 2,500 Executive
Supplemental Bislich Jeff 3,000 Engineer
Supplemental Chanceloor Steven W. 1,000
Supplemental Cmte to Elect Ryan Vaughn 2,500
Supplemental Downey Mark 1,000 Executive
Supplemental Frick David 1,000 Attorney
Supplemental Greg Ballard for Mayor 3,000 Executive
Supplemental Hancock Frank 1,000 Executive
Supplemental Heerens Joseph 1,000 Executive
Supplemental Ind. Republican State Cmte 50,000
Supplemental Indpls Airport Development 5,000
Supplemental KEI Construction, LLC 1,000
Supplemental Mahoney John G. 1,000 Executive
Supplemental Maron Co. Republican Central Cmte 2,500
Supplemental McNeely J. Lee 1,000 Attorney
Supplemental Mike Pence Cmte 5,000
Supplemental Nursing Home Real Estate Group 3,000
Supplemental Oesterle William 10,000 Executive
Supplemental Petri Christine 1,000
Supplemental Schneider W.E. 1,000 Executive
Supplemental Seeney James (II) 2,500 Attorney
Supplemental Semler Jerry 1,000 Executive
Supplemental Thomas Robert P. 5,000 Executive
Supplemental Throgmartin Jerry 1,000 Executive
Supplemental Turner Michael 1,000 Executive
Supplemental Wade James (Jr.) 1,000 Executive
Supplemental Wood Richard D. 1,000 Retired
Supplemental Woodard Turner 1,000 Executive

Prosecutor Candidate Terry Curry's $1,000 Club

This is a list of contributors who have given Marion County Democratic Prosecutor Candidate Terry Curry more than $1,000. I have included the most recent regular pre-general election report as well as the supplemental reports filed since. Sorry I can never get Blogger to do columns or any other kind of formatting.


Type Last Name First Name Amount Job
Individual Baker Hugh 1,000 Attorney
Individual Barteau William 1,500 Attorney
Individual Boerste Dean 1,000 Chief Marketing
Individual Broyles Nancy 1,750
Individual Bryan Tom 1,225 Business Owner
Individual Burke Craig 1,050 Attorney
Individual Chinn Scott 1,000 Attorney
Individual Crane Steven 2,500 Investor
Individual Crist Brian 3,381 Attorney
Individual Curry Lois 1,500 Retired
Individual Curry Terry 26,119 Attorney
Individual Delaney Kathleen 1,020 Attorney
Individual Drago Billie 1,150 CEO
Individual Duncan Mark 1,000 Constable
Individual Garvey Chip 1,200 Attorney
Individual Hahn Greg 1,285 Attorney
Individual Hall William 1,500 CEO
Individual Hays Lisa 1,450 Attorney
Individual Hogan Alan 2,500 Consultant
Individual Jackson Michele 1,350 Attorney
Individual Jongleux Lynn 1,250 Attorney
Individual Kammen Richard 1,000 Attorney
Individual King Alonzo 1,250
Individual Kosene Gerald 1,000 Kosene & Kosene
Individual Ladd Alan 1,420 Attorney
Individual Leach James 1,000 Business Executive
Individual Mahern Ed 1,100 Consulting
Individual Marshall Sheila 4,184 Attorney
Individual Moreau William 1,025 Attorney
Individual Pence Linda 1,085 Attorney
Individual Pope William 1,125 Attorney
Individual Purucker Jim 1,000 Gov't Affairs
Individual Richardson Gerald 1,000 CEO
Individual Riley Michael 1,250 Attorney
Individual Rimstidt David 1,035 Attorney
Individual Riordan Sarah 1,050 Attorney
Individual Rose Doug 1,277 Real Estate (Carmel)
Individual Sablosky Larry 1,500 Executive
Individual Scanlon Christopher 2,000 Attorney
Individual Schellinger James 5,000 CSO Architects
Individual Schloss Alice 1,976 Retired
Individual Schloss Alice 2,476 Attorney
Individual Schwitz-Pope Linda 1,350 Director
Individual Short Frank 1,300 Trustee
Individual Shrewsberry Brenda 1,000
Individual Simon Deborah 5,000 Philanthropist
Individual Simon Herb 2,500 Business Owner
Individual Southerland Dennis 1,000
Individual Stack Ann 7,750 Retired
Individual Stack Christopher 2,000 Doctor
Individual Taylor John 1,000 Attorney
Individual Tew Kip 1,000 Attorney
Individual Yosha Buddy 1,000 Attorney
Non-Indiv. Auto Dealers Exchange 2,000
Non-Indiv. Auto Sales & Service PAC 2,000
Non-Indiv. Baker & Daniels 5,057
Non-Indiv. Barnes & Thornburg 5,075
Non-Indiv. Bose McKinney 2,500
Non-Indiv. Browning Investments 1,000
Non-Indiv. Central Canal, LLC 1,000
Non-Indiv. Citizens for Excellence 5,000
Non-Indiv. Citymark 1,000
Non-Indiv. Coalition of United Professionals 3,500
Non-Indiv. Firstsource Capital 3,500
Non-Indiv. Frost Brown Todd 3,000
Non-Indiv. GRIDCO 2,500
Non-Indiv. Hall Render Killian 1,000
Non-Indiv. Indiana UAW-S.A. 1,000
Non-Indiv. Lee Cossell 1,000
Non-Indiv. Local 135 Drive 1,250
Non-Indiv. Marion County Democratic Cmte 32,000
Non-Indiv. Tabbert & Hahn 3,404
Non-Indiv. Taft Stettinius & Hollister 3,500
Non-Indiv. UAW PAC 10,000
Non-Indiv. United Ass'n of Plumbers 2,500
Non-Indiv. Victory 2010 Cmte (Jim Schellinger) 12,500
Non-Indiv. Vision Concepts 5,000
Non-Indiv. Zink Distributing 5,000
Supplemental Andre Carson for Congress 5,000
Supplemental Beth White Cmte 2,500
Supplemental Brenda Duety 1,000
Supplemental Frank White Cmte 5,000
Supplemental Herb Simon 2,500
Supplemental IUPAT-PAC 1,500
Supplemental Jennifer Simon 1,000
Supplemental Local 135 Drive 1,000
Supplemental Marion County Democratic Cmte 5,000

Did the Indiana Department of Administration Violate the Law In Allowing Ryan Vaughn's ACS Lobbying Record to be Deleted?

To reset the scene, the Indianapolis City-County Council is currently debating entering into a 50 year contract with ACS to taking over the City's parking operations, including the parking meters in the City. ACS is the same company that, along with IBM, played a role in screwing up the FSSA Medicaid privatization program. According to the Indianapolis Business Journal, the original contract proposed by the Ballard administration could be worth up to $1.2 billion to ACS.

Joe Loftus, a partner at Barnes & Thornburg, is on the City's payroll to advise the Mayor. He is also a paid lobbyist for ACS. We have been assured that Loftus takes off his ACS hat when he talks to the Mayor. Okay, right.

Council President Ryan Vaughn also works at Barnes & Thornburg and was listed as a lobbyist for ACS on the State's Department of Administration website, a fact first pointed out by Gary Welsh of Advance Indiana. I published the information on my blog.

When Nuvo's Austin Considine asked Vaughn about his ACS lobbying record at DOA, Vaughn declared it was a mistake and that he would have someone from his office fix the record. Indeed shortly thereafter the record of Vaughn lobbying for ACS disappeared from the DOA's website. It was told to me that people simply register on line as a lobbyist and that the system allows people to go back later and change the records.

While looking through the Indiana Administrative Code yesterday, I stumbled across the DOA regulations dealing with lobbying. If what I was told is correct, DOA is not at all following the executive lobbying regulations.

First, 25 IAC 6-2-1 outlines what must be in the initial registration statement. While most of that information is contained in the statement, it must be signed under oath. According to 25 IAC 6-2-3, any amendment to the report needs to be filed within 15 days of the change. If for example, someone was intending to lobby the Department of Insurance, and it never happened, the amendment to the registration needs to be made within 15 days of that change. Here the lobbying records were from 2009. The time for amending the records were long passed.

Finally under 25 IAC 6-3-1(h) the Department of Administration is to "preserve statements and reports filed under this article for a period of four (4) years from the date of receipt.

Assuming Vaughn's firm could go in and change records, DOA's allowing lobbying records to be deleted or changed by the lobbyists is clearly in violation of Indiana law.

By the way, Robert Wynkoop, is the Commissioner for the Department of Administration. His Linkedin resume lists him as having worked as a Sr. Client Executive at IBM, which was ACS's partner in FSSA's Medicaid privatization project.

Pictured: Ryan Vaughn and Robert Wynkoop.

Thursday, October 21, 2010

Massa Scores Several Large Contributions This Week

Of note in Republican candidate for Marion County Prosecutor Mark Massa's supplemental reports filed this week:

Jeff Bischler, Engineer on 10/11 gave $3,000.

Indianapolis Airport Development, on 10/12 LLC contributed $5,000.

William Oesterle on 10/15 gave $10,000.

Mayor Greg Ballard's campaign contributed $3,000 on 10/18.

Nursing Home Real Estate Group, Inc. gave $3,000 on 10/20.

The surprising one though was the Indiana Republican State Committee contributing $50,000 to Massa on 10/19, which was reported yesterday. One would think the State Republican Party would be spending its money to capture the majority in the House or to bailout Charlie White out of a possible upset in the Secretary of State's race.

AP Hits Barnes & Thornburg on Conflicts of Interest in $5.25 Million FSSA Contract, Reveals Governor's Office Asked that Contract be Awarded

Associated Press Ken Kusmer reports on the Barnes & Thornbug conflict of interest in being awarded a $5.25 million contract to represent the State in the lawsuit against IBM, the general contractor on the Medicaid privatization project. This is something I had blogged about a few days ago, however, Kusmer connects the dots that apparently lead straight to the Governor's office:
Indiana's human services agency is paying $5.25 million to a private law firm, including the brother of a key aide to Gov. Mitch Daniels, to represent the state in its fight over a canceled IBM Corp. welfare outsourcing contract.

Barnes & Thornburg of Indianapolis was hired despite several conflicts of interest arising from the fact that it also represents former IBM partners involved in the welfare deal. Bryan Corbin, a spokesman for the state attorney general's office, said in an e-mail to The Associated Press that "hiring this firm was a specific request of the Governor's Office."
The Barnes & Thornburg team includes longtime Republican activist Peter Rusthoven at a rate of $475 per hour, John Maley at $465 and Brian Burdick at
$405. Burdick is the brother of Betsy Burdick, Daniels' deputy chief of staff.

Signed by Brian Burdick and members of the Daniels administration in August, the contract covers Dec. 18, 2009 -- a few days after IBM's state contract ended -- through June 30, 2012. The case is scheduled to go to trial next September.

"This just smells to the highest heaven," said Rep. Charlie Brown, a Democrat from Gary and chairman of the General Assembly's Health Finance Commission.

Brown questioned the legality of a contract not signed until eight months after work began, but Barlow said it's normal for the state to sign contracts after a vendor has started a project.

Three pages of the 9 1/2-page contract detail Barnes & Thornburg's conflicts of interest from having represented ACS Human Services, a division of Dallas-based Affiliated Computer Services; Arbor Education and Training; and other subcontractors involved in the IBM deal. Arbor and ACS have new eight-year contracts with the state totaling $853.2 million.

The contract says Barnes & Thornburg attorneys, in representing the human services agency, expect to make claims against its other clients but will not share with the state any "potentially relevant" information gained from representing them. It said the state's case will be screened from other clients.

The state agency also should expect that IBM's attorneys "will look for creative ways to exploit the fact that (the firm) represented and continues to represent" the other clients, the contract says.

Julia Vaughn, policy director for the government watchdog group Common Cause/ Indiana, said the conflicts of interest were "handing IBM a potential hornet's nest to bat around."

"For a lot of different reasons, it screams that Barnes & Thornburg isn't an
appropriate firm to put in charge of this case. It looks like their political connections overrode common sense," Vaughn said.

Barlow, the human services agency spokesman, said "any law firm that could handle a lawsuit of this size would have conflicts."

To see the rest of the article, click here.

Some observations:

Barlow's claim that it is normal to enter into a state contract for professional services eight months after the work begins and pay that contractor for that work for those months when there was no contract, is something I'm pretty sure the State Board of Accounts would not agree with. Further, as an attorney, the first thing I learned in private practice is that you do not do any work for a client, until that client signs a contract. I'm pretty sure the attorneys at Barnes & Thornburg, the state's largest law firm also know that.

The email statement form the Attorney General's Office that "hiring this firm was a specific request of the Governor's Office" is telling. The reason why you do a written response to a reporter's query is that you want to carefully control what is being said. Reading between the lines, it would appear that Attorney General Greg Zoeller is laying the blame at the feet of Governor Daniels and that the AG probably did not agree with the decision. That doesn't absolve the Zoeller of criticism, but he may well have gone along with it rather than pick a fight with the most popular Republican state wide officer holder.

Just a couple weeks ago, the Governor's Office took action over an IURC administrative law judge who went from presiding over cases involving Duke Energy to a well-paid position as Duke's attorney. The Governor deserves credit for going after an ethical problem within one the state's agency. The problem here though is even worse. First of all B&T is a big contributor to Governor Daniels. His Deputy Chief of Staff Betsy Burdick is the sister of Brian Burdick, one of the Barnes & Thornburg attorneys hired by the State pursuant to the $5.25 million contract. How is that not as bad as the situation involving the IURC attorney?

Then you have the huge conflict of interest involved in the hiring of Barnes & Thornburg to represent FSSA. That alone is far worse in terms of damage to the public than that presented by the Duke Energy-IURC matter. Barnes & Thornburg was in the middle of the Medicaid Eligibility project representing several subcontractors who worked with IBM. It is inevitable in representing FSSA against IBM that issues dealing with B&T's clients, including FSSA, will be deeply involved in the litigation. It is inevitable that IBM and the subcontractors will start pointing fingers at each other, and ACS and other B&T clients could be brought in as co-defendants by IBM. How exactly is that to work - B&T's attorneys being on both sides of the litigation.

If that conflict wasn't bad enough, you have another one outlined by Kusmer:

The contract says Barnes & Thornburg attorneys, in representing the human services agency, expect to make claims against its other clients but will not share with the state any "potentially relevant" information gained from representing them. It said the state's case will be screened from other clients.
So let me get this straight, in providing legal representation, B&T says in the contract that it may on behalf of FSSA go after its own clients for screwing up the Medicaid eligibility project...the very deal they worked on on behalf of those clients? And Barnes & Thornburg is supposed to somehow divorce itself of this conflict of interest? Of course, B&T's clients should love being pursued by their own lawyers on the project. B&T will, on behalf of the State, cut a pretty good deal to let ACS and the other contractors off the hook...because, well, they want to keep them as a client. The contract even specifically says that B&T will continue to representing ACS and the other subcontractors.

This isn't the first time, B&T immersed itself deeply in a conflict of interest involving government. In April of this year, Gary Welsh of Advance Indiana reported on stories out of Lake County where B&T acted to screen applicants to consolidate trash processing in Lake County. B&T actually had represented the winning applicant, Earl Powers. According to Powers he had severed his relationship with B&T a few months before signing the contract with Lake County, a fact that was disclosed to the county. Anyone who has worked as a law firm knows that's a disingenuous claim. Relationships with clients, especially business clients, continue over the course of years, even though there may be no pending cases. It's easy to claim that an attorney-client relationship has been terminated when it may well be instead that there is simply no existing legal work taking place.

Locally I've seen the same thing. Barnes & Thornburg represents the local Pike Township School district. CSO Architects has won projects in Pike to build new schools. Who represents CSO? Barnes & Thornburg. Who advises the school district about matters relating to CSO? Barnes & Thornburg.

In typical B&T fashion, the firm claims that it will simply take off its ACS hat when representing FSSA and take off its FSSA hat when representing ACS. That's what Bob Grand said when his law firm represented the Pacers and he sat as President of the Capital Improvement Board which dealt with matters involving the Pacers. It is pure nonsense that supposed internal "ethical screens" within the firm somehow divorces the firm of blatant violations of conflicts of interest we attorneys are obligated to follow.

Contrary to the assumption contained in the the conflict of interest provision of the FSSA-Barnes & Thornburg legal services contract, not every conflict can be waived by getting a client's consent.Rule 1.7(b) deals with four conditions that must be met all be met before conflicted lawyer can provide representation, even if his clients consent. One of those is Rule 1.7(b)(3) which says that if the representation "involve[s] the assertion of a claim by one client against another client represented by the lawyer in the same litigation" that conflict is not waivable. That is precisely what is going on in this case.

There should be an investigation of who in the Governor's Office insisted that the State enter into such a foolish, conflict-ridden contract that by any measure is not in the best interests of the State of Indiana. This deal unfortunately makes a mockery of the conflict of interest laws that every attorney in the state is supposed to be following.

Note: Photograph is of Brian Burdick.

Tuesday, October 19, 2010

Committee Approves $10 Million Taxpayer Gift to Pacers; Councilor Angel Rivera Praises CIB for "Good Management"

When most people in the City think about fiscal responsibility, they do not think the Capital Improvement Board. Remember the constantly shifting deficit numbers during the plea to the General Assembly for a bailout? Remember the sweetheart deal for the Colts that resulted in the CIB paying to run the stadium while the Colts get almost all the revenue from the building. Remember how this summer the CIB entered into an even worse deal with the Pacers, paying the team to run the building while the team gets to keep ALL the revenue from the venue. Remember that during discussions of renegotiating the Conseco Fieldhouse Contract, the CIB insisted that the Pacers could break the contract without when in fact the team faced over $150 million in penalties if they did? Remember how the CIB commissioned a phony study (which contradicted virtually every academic study on the subject) to justify giving the Pacers bring millions of dollars in subsidies? Remember how the CIB just recently used the Metropolitan Development Commission to funnel property tax money to the Pacers as part of the deal?

Backing up a bit, remember how how the CIB included in an extra $15 million in its deficit calculation as an annual gift for the Pacers, even though the CIB had never even voted on it? Remember how the CIB has never demanded that the Pacers open their books to back up their claim that the team has lost money for decades? Remember how the CIB supported tax increases to give more money to the billionaire sports owners and borrowed millions from the State, without establishing a sinking fund for repayment?

Well, tonight at the Muncipal Corporations Committee, Angel "Yippie Dog" Rivera looked at what the CIB has done and declared it "good management." Once again, Rivera opens his mouth and embarrasses the council and my Republican Party.

By a 5-2 vote tonight the Municipal Corporations Committee approved the $10 million taxpayer gift to the Indiana Pacers contained in the CIB budget. All the Republicans voted for it, including Rivera, Jeff Cardwell, Bob Lutz and Barb Malone. Jackie Nytes, who has never seen a spending measure she has opposed, was, of course, the sole Democrat who voted for the measure. Malone closed the meeting by making a comment about how they really didn't have any choice because the Pacers would leave if the City didn't agree to give them more money.

Really? When I appeared before the Municipal Corporations Committee and, during the public comment section, pleaded for two minutes to give a legal analysis of the contract to show that that the CIB was misrepresenting the penalty and that the cost for the early termination of the contract was in fact nearly $150 million, Councilor Malone adamently refused to allow me to address the committee. Apparently she wasn't interested in hearing an interpretation from a lawyer who planned to contradict the lies she was being told by the CIB.

I am not sure what the Republican Councilors plan to run on in 2011, but it certainly can't be fiscal conservativism.

Crystal Ball Reveals Election Results

We are two weeks out. Time for some election predictions.

To simply things, I'll pick the race and the R-D spread in the election result. Let's start off locally:

Prosecutor: (D) Curry over (R) Massa by 3 pts.
Note: If Curry starts tying Massa to Brizzi more or he gets tied to another scandal, then I can see the spread widening.

Sheriff: (D) John Layton over (R) Dennis Fishburn by 14 points.
Note: Layton leads the Democratic county ticket.

Other County-wide Races: (D) County Candidates over the (R) County Candidates by 11 pts.


Next up the state-wide races:

Secretary of State: (R) Charlie White over (D) Vop Osili by 4 pts.
Note: Having survived the political fallout over a possible election law violation, the bigger problem will prove to be running the office while a cloud hangs over his head.

Other State Wide Races: (R) State Candidates over the (D) State Candidates by 14 pts.


Moving on to the federal offices:

U.S. Senate: (R) Coats over (D) Ellsworth by 12 points

U.S. House (2nd District): (D) Joe Donnelly over (R) Jackie Walorski by 6 pts.

U.S. House (7th District): (D) Andre Carson over (R) Marvin Scott by 20 pts.

U.S. House (8th District): (R) Larry Buschon over (D) Trent Van Haaften by 18 pts.

U.S. House (9th District): (R) Todd Young over (D) Baron Hill by 10 pts.



Indiana House: Republicans pick up six seats for a majority of 54-46
Indiana Senate: No pick up.

U.S. House: Republicans pick up 50 seats for a majority.
U.S. Senate: Republicans pick up 8 seats and are left in the minority 51-49.

There are the results. Bet the farm.

Saturday, October 16, 2010

Conflicted Barnes & Thornburg Receives $5.25 Million Contract From State to Sue Former Client IBM Over Medicaid Privatization Effort

On August 27, 2010, the State signed off on a $5,250,000 consulting contract with Barnes & Thornburg. The work to be performed is described in an Executive Document Summary, which along with the contract is posted here.
This agreement is to retain legal counsel to provide advice and consultation on contract administration and interpretation issues relative to the Eligibility Masters Service Agreement between FSSA and IBM for the Eligibility Modernization Project.

The justification cited in the Executive Document Summary is:
Contract was based on the legal experience of Barnes & Thornburg counsel, and the resources in their legal department. The Attorney General's Office has ratified our selection of this firm and counsel is willing to provide legal services under the term and conditions negotiated.

Notice how the justification goes out of its way to say the Attorney General approved the hiring of this law firm? That's a CYA provision. The likely reason why it is inserted is spelled out at the end of this column.

The filing includes an attached letter from the Attorney General's Office which outlines the work and the legal fees legal fees we taxpayers will be paying for the Barnes & Thornburg attorneys Here is part of the letter:
Scope of the work: Perform legal services in connection with IBM Contract with FSSA. Services may include, but are not limited to, contract review, negotiations, and litigation.

Hourly rate: John Maley - $465; Bryan Burdick - $405; Peter Rusthoven - $475; Patrick Price - $255; Curtis Greene - $265

Not to Exceed: $5,250,000

Term: December 18, 2009 to June 30, 2010.

First, the legal fees the State has agreed to pay Barnes & Thornburg are ridiculous. You can't tell me that the Attorney General's Office does not have attorneys perfectly capable of handling this breach of contract litigation, with the only cost being their salaries. You can can bet B&T will have multiple attorneys working on this matter, billing the state their hourly fee at the same time. The contract also calls for separate non-B&T counsel to be provided because of the extensive conflicts of interest B&T has in all the subcontractors the firm represented in their dealings with IBM on the project.

Next, according to the Attorney General's letter, the term of the contract is from December 18, 2009. Why then was it executed in August of 2010? Are we paying B&T attorneys for work performed from December 2009 to August, before the contract was eve executed? Is that even legal? Why would the Attorney General's Office sign off on a contract so that fees could be paid retroactively?

The biggest problem though is that the contract sets out one of the the worst conflict of interest I have ever seen in my 23 years of practicing law. Barnes & Thornburg has previously represented IBM and represents ACS and scores of subcontractors on the Medical Eligibility Project, whose interests are intertwined in the lawsuit. To its credit, the legal services contract specifically mentions that conflicts in a lengthy section extending from page 4 to 7 of the contract, saying on page 5 that these conflicts "may create some challenging issues." You think?

Why in the world would the State even suggest that B&T represent the State in a lawsuit against IBM, which is a former client of B&T, to recover money because the project failed? B&T represented numerous subcontractors, including ACS, whose interests may be jeopardized by aggressively litigating the action against IBM. And why would the Attorney General's Office ever approve such representation that involves such a blatant conflict of interest at a cost to taxpayers of $5.25 million dollars?

Thanks to Gary Welsh of Advance Indiana who pointed out the Barnes & Thornburg representation of FSSA in this matter. I'd missed the story.

UPDATE: Contrary to what a lot of attorneys think, not all conflicts of interest are waivable. After reviewing the relevant disciplinary rules and comments, I think the conflict of interest by Barnes & Thornburg in its representation of the State of Indiana against IBM, which involves scores of B&T subcontractor clients on the Medicaid Project as witnesses if not possible defendants, is a nonwaivable conflict of interest in violation of Rule 1.7 of the Indiana Rules of Professional Conduct:

Rule 1.7. Conflict of Interest: Current Clients

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

Clearly Barnes & Thornburg's representation involves a concurrent conflict of interest under Rule 1.7(a), a fact that the parties recognize in the several pages of the contract which discuss the conflict. But the contract also anticipates that the parties Barnes & Thornburg represented in the Medicaid eligibility program can simply waive the conflicts under part (b). Not so fast. All FOUR conditions in part (b), however, must be met to waive the conflict in (a). The problem is No. #3, that the representation not only involves "the assertion of a claim by one client against another client represented by the lawyer in the same litigation." It doesn't matter if IBM's past and former clients' waive the conflict, it appears to be a nonconsentable conflict under the rule.

Let's look at the comments to the rules, which illustrate why B&T's conflict can't be waived:
"Prohibited Representations

[14] Ordinarily, clients may consent to representation notwithstanding a conflict. However, as indicated in paragraph (b), some conflicts are nonconsentable, meaning that the lawyer involved cannot properly ask for such agreement or provide representation on the basis of the client's consent. When the lawyer is representing more than one client, the question of consentability must be resolved as to each client.

[17] Paragraph (b)(3) describes conflicts that are nonconsentable because of the institutional interest in vigorous development of each client's position when the clients are aligned directly against each other in the same litigation or other proceeding before a tribunal. Whether clients are aligned directly against each other within the meaning of this paragraph requires examination of the context of the proceeding....
That's the Rule 1.7(b)(3) problem. The Indiana Rules of Professional Conduct do not allow Barnes & Thornburg to provide the representation for the State against IBM even if all of B&T's former and present clients agree because there is an "institutional interest in [the] vigorous development of each client's position." In short, the Indiana Supreme Court is saying that in those situation the concurrent representations in the same matter are so bad that policy reasons prevent the conflict from being waived even if the parties involved consent to waive the conflict.