Tuesday, May 21, 2013

U.S. Attorney Hogsett Lambasts Indianapolis" "Culture of Corruption" As Questions Mount As to Why Administration Officials Failed to Act

In a press conference announcing the arrest of five individuals, including two city employees, in a bribery and kickback scheme involving the Indianapolis Land Back, U.S. Attorney Joe Hogsett, said Indianapolis' "culture of corruption" would not be tolerated.

U.S. Attorney Joe Hogsett
The comment was the first public recognition by an government official of the systemic corruption in Indianapolis that bloggers like Gary Welsh of Advance Indiana and others have written about for years.  While bloggers have often led the way in discussing the issue of corruption, the Indianapolis Business Journal and to a lesser degree, television reporters have done excellent stories broaching the subject. Meanwhile the Indianapolis Star and politicians have remained silent.  Until today.  At the press conference this afternoon, Hogsett stood up and told the truth, that there exists in Indianapolis a culture that is inviting to those who want to engage in conflicts of interest and make themselves and their friends rich at taxpayer expense.

Due to my work in the mortgage and real estate industry, I am familiar with scams involving property.  Most scams are so complicated lay people can't possibly understand them.  But this was one was remarkably simple.

The Indianapolis Land Bank acquires title to numerous abandoned properties in Indianapolis.  Under Indiana law, the properties are to be auctioned off with the high bidder receiving the property. But the law had an exception for non-profits which were allowed to buy the properties from $1,000 to $2,000 apiece.  The indictments allege that the Indianapolis Land Bank sold the property to nonprofit organizations which then sold them at much higher prices to investors.  The nonprofits and Walton, and some instances Hawkins, at the Land Bank, allegedly received a kickback.  Walton also, is accused of being a silent partner with one of the for profits companies that received property.

While it is certainly good to see the action Hogsett has taken on this case, the circumstances that led to the indictment of Department of Metropolitan Development Land Bank Director Reggie Walton and John Hawkins, a senior project manager for the city-county Department of Metropolitan Development and one-time special assistant to Indianapolis Mayor Greg Ballard, raise other questions.

It is difficult to believe that whistleblowers did not tip off the Indianapolis Mayor's Office about what was going on at the Land Bank.  But even if that didn't happen, in a November 3, 2012 article, IBJ reporter Cory Schouten laid out the details of what was going on at the Indianapolis Land Bank back.   That was 6 1/2 months ago.  That was plenty of time for Mayor Ballard to order an investigation in response to the story and make sure the heads of those responsible rolled.  That didn't happen.  Walton and Hawkins remained in their jobs until today when they were suspended them without pay.

There is unfortunately an explanation for why the Mayor and his staff failed to take action and it is not pretty...namely that what Walton now stands accused of doing isn't qualitatively different than what is going on throughout city government where officials, government contractors, and attorneys are using their positions to enrich themselves and their friends.   Yes, it is a "culture of corruption."  U.S. Attorney Joe Hogsett got that right.


Bob Cardwell said...

Excellent article.

Paul K. Ogden said...

Thanks, Bob.

Citizen Kane said...

That was 6 1/2 months ago. That was plenty of time for Mayor Ballard to order an investigation in response to the story and make sure the heads of those responsible rolled. That didn't happen.

Exactly, I will guarantee to you that every employee of DMD not on the 20th floor (Reggie's world) would tell you the same thing.

Jeff Cox said...

Paul, Joe Hogsett is not an elected official.

Paul K. Ogden said...

Yeah, Jeff, I know that but had a brain fart when I wrote it. I fixed it to say "government official."

all hear this said...

in other words *what* did Ballard know and *when* did he know it? This might be the central line of questioning by authorities, however it seems doubtful that the mainstream media will approach the question from this angle. At present it seems Ballard is claiming he knew less than a week before the investigation became public. --Will this hold?

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