Monday, November 24, 2014

Criminal Justice Center To Cost At Least $1.75 Billion Over 35 Years

Now that the bids from the three handpicked bidding teams led by foreign investors for construction of a new criminal justice system have been submitted, the Ballard administration has finally disclosed to the public that bidders had to agree to charge no more than $50 million a year for construction of the nearly half-billion dollar project according to the Indianapolis Star. The Ballard administration has refused to disclose the contents of the RFP it issued to the competing bidders up until now in clear violation of Indiana law. The administration plans to upload the RFP to the City's website for the first time later today.

The Ballard administration claims it will actually save taxpayers money by having a new center built to house the county's jail system and criminal courts. It says it currently spend $120 million annually for the criminal courts and the county's two jails. Part of the deal means ending the $19 million a year contract the sheriff currently pays to Corrections Corporation of America to operate Jail II. City-County Council member Angela Mansfield (D), who chairs the Administration and Finance Committee, says she doesn't trust the administration's cost estimates. "This administration has a history of rising costs on projects and doing things halfway and not in public," she said. "I don't trust it. The plan doesn't consolidate all of the criminal justice agencies at the new center as originally envisioned--a move apparently made to hold down the buy-in costs. The plan, however, includes an opportunity to the P3 operator to expand the existing project in future years to further consolidate all agencies at the new center.

Taxpayers have already shelled out over $12 million for no-bid professional services contracts the administration issued last year to begin work on the project. The Ballard administration claims those costs are being repaid if the council approves the 35-year deal; however, the taxpayers turn around and repay those costs again with interest since they are rolled into the $50 million fee being paid to the private operator over the 35-year period. The notion that a $50 million annual expense is being traded for the current $120 million costs is extremely misleading. There are many costs not included in that $50 million figure that are included in the $120 million figure. Make no mistake about it. At the end of the day, it will cost more annually for the criminal new justice system than what is currently being spent. In addition, the $1.75 billion figure is arrived at by multiplying the $50 million annual payment times 35 years. I'm pretty certain the $50 million is just for starts. There is likely an escalator clause that increases those payments during the life of the agreement if it is structured like other P3 agreements.

UPDATE: Sure enough the RFP allows for escalating payments to as high as $68 million a year. The center's payments will cost at least $2 billion over the 35-year period. If my math is right, the City could borrow the money by issuing 30-year bonds at today's low interest rates, have annual payments of about half, or $25 million  less than what it will be paying to the P3 operator and would wind up paying less than half what it will wind up paying to the P3 operator, or about $1 billion less.

Carmel Has Spent Over $35 Million On Parking Garages

As part of the City of Carmel's development efforts in recent years, six parking garages have been constructed using city tax dollars, two of which are owned by Pedcor, the politically-connected developer with close ties to Carmel Mayor James Brainard whose owners have become multi-millionaires, in part, thanks to the many city-subsidized projects Brainard's administration has approved. According to a summary of those parking garage projects detailed in a story by the Star's Chris Sikich, taxpayers have financed at least $35 million of the constructions costs for those six garages. In addition, City taxpayers are shelling out at least $400,000 a year on maintenance fees associated with running the four owned by the City. The actual costs of those parking garages is much higher since interest payments are made on bonds issued to finance construction of the garages.

Mayor Brainard is currently seeking council approval for yet another parking garage as part of a public subsidy being offered for yet another private development project. That parking garage will cost city taxpayers $13 million. Debt service on all of the parking garages are repaid using tax increment finance dollars. Missing from Sikich's story is the fact that Brainard is a big booster of a multi-billion dollar metropolitan mass transit plan that will be financed by raising income taxes on taxpayers in Marion and the surrounding suburban counties. Similarly, the City of Indianapolis continues to subsidize construction of one new parking garage after another at the same time Mayor Greg Ballard says an expanded mass transit system is essential to making Indianapolis a "world class city." Does anyone else see the disconnect between their words and policies?

Sunday, November 23, 2014

Council Moves Forward With Yet Another Tax Increase

Next year your property tax bills are going to increase under a plan passed by the Public Works Committee with little discussion or even general understanding by the Indianapolis City-County Council members who voted on what the plan encompasses. The proposal will increase stormwater management fees that appear as part of your property tax bill, which do not apply against the property tax caps mandated by the state's constitution, to triple the amount currently collected annually from $10 million to $30 million. Those increases will fall primarily on homeowners, and it's not just a one-time increase. Automatic rate increases can be imposed over the next 20 years without any council action.

As is the case with so many proposals before the council, the members appeared completely ignorant of what exactly it was that they were voting upon. Fellow blogger Pat Andrews tried to educate the members on the shortcomings of their proposal, but her comments largely fell on deaf ears. According to Andrews, the proposal raises an additional $10 million to pay for operations, or a total of $15 million. About $15 million a year will be made available for capital projects; however, at least $5 million of that amount will be used to pay off old bonds. The effect of the proposal is to free up about $10 million in the current city-county budget that is spent to cover operating expenses concerning stormwater management according to Andrews. It supposedly provides a sufficient revenue stream to address the cost of undertaking stormwater management projects over the next 20 years.

One of Andrews' most pointed criticisms of the past stormwater fees approved by the City-County Council is that the past fee never lived up to its promises of being put towards new stormwater management projects. Instead of putting the initial $5 million a year towards new capital projects, most of the money wound up getting used to pay off old bond debt. A subsequent $5 million a year increase actually provided the additional $5 million a year needed to fund new capital projects--until the Ballard administration decided to sell off the sewer and water utilities to Citizens Energy. We've all seen our sewer and water bills skyrocket, in part, to pay higher debt to pay for the nearly half billion overpayment Citizens Energy paid to the city to buy the utilities, which was used for infrastructure projects, including the mayor's cricket field. More importantly, DPW lost $6 million a year the utilities spun off to pay for its operating expenses with the sale. As a consequence, the city diverted money intended for stormwater projects to cover DPW's operating expenses.

So now the City-County Council is going to allow DPW to triple the amount collected from stormwater fees, plus allow the fees to be raised annually for the next 20 years with the promise the money will get spent this time to pay for the projects the first two stormwater fee increases supposedly funded. The fee increase on homeowners is being masked as a fairness issue. Homeowners currently pay a flat fee per parcel. Under the proposal, they will now pay a fee based on the amount of stormwater runoff theoretically generated by their property, which can result in four-fold increases in some cases. As Andrews surmises, it's likely a plan designed to shift DPW's funding to provide additional funding elsewhere. At any rate, homeowners will be hit with another $20 million tax increase and every year thereafter for the next 20 years, on top of the 10% income tax increase you will start paying on January 1. The council committee's discussion was alarming in the sense of just how wilfully ignorant the council members are when making decisions that affects their constituents' pocketbooks. The local media won't tell you about that fact, but now you know. It's also obvious why the Democrats didn't want Andrews on the council when she ran the last time. God forbid we elect someone who actually knows something.

Saturday, November 22, 2014

Varvel Taken To Woodshed Over "Extra Guests This Thanksgiving" Cartoon On Obama's Executive Action On Immigration

Gary Varvel cartoon original (Indy Star)
The Indianapolis Star's editorial cartoonist Gary Varvel created quite a firestorm with a depiction of a white family sitting down for Thanksgiving dinner with Mexicans climbing through their window to join them in response to President Barack Obama's sweeping executive order on immigration. The caption read, "Thanks to the President's immigration order, we'll be having extra guests this Thanksgiving." After the newspaper began fielding complaints over the cartoon, the Star airbrushed out the bushy mustache on what appears to be a Hispanic man climbing through the window. Later, executive editor Jeff Taylor removed the image altogether from the newspaper's website and admitted an error in allowing it to be published. Taylor writes today:
On Friday, we posted a Gary Varvel cartoon at that offended a wide group of readers.
Many of them labeled it as racist. Gary did not intend to be racially insensitive in his attempt to express his strong views about President Barack Obama's decision to temporarily prevent the deportation of millions of immigrants living and working illegally in the United States.
But we erred in publishing it.
The cartoon depicted an immigrant family climbing through a window of a white family's home as Thanksgiving dinner was served. I was uncomfortable with the depiction when I saw it after it was posted. We initially decided to leave the cartoon posted to allow readers to comment and because material can never truly be eliminated once it is circulating on the web. But we are removing the cartoon from the opinion section of our website, as well as an earlier version posted on Facebook that showed one character with a mustache.
This action is not a comment on the issue of illegal immigration or a statement about Gary's right to express his opinions strongly. We encourage and support diverse opinion. But the depictions in this case were inappropriate; his point could have been expressed in other ways.
Cartoons are seldom intended to be read literally. And Gary did not intend this one to be viewed that way. He intended to illustrate the view of many conservatives and others that the president's order will encourage more people to pour into the country illegally.
The illegal immigration issue evokes strong opinions and emotions. And it's important to encourage a vigorous public debate on issues of this magnitude, but with respectful discourse. That is what we believe at IndyStar and that is what we will continue to do – to publish views from all sides as we explore the important issues that will define the future of our nation, state and city.

Friday, November 21, 2014

Human Rights Campaign Co-Founder Charged With Molesting 15-Year Old Boy

Terry Bean, the co-founder of the Human Rights Campaign, has been arrested by Portland police on allegations he molested a 15-year old boy. The USA Today describes Bean as "a big money Democratic donor and liberal political activist with connections inside the Obama White House." Bean raised more than a half million dollars for President Obama's 2012 re-election campaign. The 66-year old's former boyfriend, Kiah Lawson, 25, was also charged with having sex with the same boy. After Bean and Lawson broke up, Lawson went public with accusations that Bean had a penchant for secretly-videotaping his sexual encounters.

Bean's attorney, Kristin Winemiller, claims her client is the victim of an extortion ring being carried out by several men. Winemiller says Bean's arrest is connected to an ongoing investigation of the extortion case in which she says Bean has fully cooperated. Bean says he had been paying Lawson a $400 a week allowance after they began their relationship a year ago, and he accompanied Bean on a trip to the White House where he introduced him to President Obama. Bean accuses Lawson of placing a hidden camera in a smoke detector above Bean's bed which recorded him having sex with various men. He claims Lawson used the videos to extort money from him. Records obtained by Williamette Week show that Bean offered to pay Lawson $40,000 to return the videos and refrain from disclosing information about his sexual encounters with six individuals.
Bean with Lawson in happier times

Republicans And Democrats Upset With Obama's Executive Action On Immigration

President Barack Obama announced sweeping actions he's taking by executive action to change the nation's current immigration laws. The greatest attention is focused on a plan to grant so-called deferred action to an estimated 4.4 million undocumented aliens who arrived in the country on or before January 1, 2010, have remained in the country continuously and have U.S. citizen children. If the so-called Deferred Action Parents ("DAP") can clear a background check and pay back taxes owed to the government, they would be eligible to apply for work authorization for a period of three years, subject to re-authorization at the expiration of the authorized period of deferred action during which they could not be subject to removal from the country for mere unlawful presence.

The proposed regulations aren't available yet so it's unclear how the back taxes would be calculated. The President emphasizes that work authorization will not allow these undocumented aliens to be eligible for benefits under the Affordable Care Act; however, under current law they cannot be denied health care when they show up for emergency care at a hospital based on whether they have insurance or are able to pay for their health care.

The President is also expanding his earlier deferred action program for childhood arrivals known as DACA for so-called Dreamers. That program offers deferred action with work authorization for period of two years, subject to reauthorization, for undocumented aliens who arrived in the country prior to their 16th birthday on or before June 15, 2007, had obtained or were obtaining an education and had remained continuously in the U.S. for five years. The President is upping the authorization period for DACA beneficiaries from two to three years and expanding its coverage to include those who arrived on or before June 15, 2010.

Gov. Mike Pence reacted sharply to the President's announcement, suggesting he may join other state executives in challenging the legality of President Obama's executive authority to change current immigration laws and policies.
“Tonight the President announced his plan to by-pass Congress by issuing an executive order changing American immigration laws. While reasonable people can differ on ways to improve our nation’s broken immigration system, the President's unilateral action is an unacceptable end run around the democratic process and must be reversed. The proper place to debate immigration policy is through the legislative process defined in our Constitution. The State of Indiana will carefully evaluate the details of the Executive Order and take any available legal actions necessary to restore the rule of law and proper balance to our constitutional system of government.”
Gov. Pence's office tells the Indianapolis Star it has started discussions with Attorney General Greg Zoeller's office on potential legal action the state might take in opposing the President's executive actions. It's not just Republicans complaining about Obama's action. Sen. Joe Donnelly (D) is not happy with President Obama either. "I am frustrated as anyone that Congress is not doing its job, but the president shouldn't make such significant policy changes on his own, "Donnelly told the Star. 

There are many other changes the President is proposing to make, including changes to make it easier for employment-based immigration applications to be approved and expanding investor-related visas and national interest waivers. The President also plans to make it easier for undocumented aliens with qualifying U.S. citizen relatives to obtain hardship waivers to allow them to become permanent residents, as well as expanding changes previously made to benefit those undocumented aliens to include spouses and children of lawful permanent residents. 

Law enforcement will not like the President's proposed changes on enforcement. He plans to do away with the Secure Communities program under which detainers are placed on aliens who have been arrested. The detainers required local law enforcement to hold aliens being released from jail until they could be picked up by Immigration and Customs Enforcement ("ICE"), processed and given a Notice to Appear before an immigration court for hearing on their legal status in this country. Detainers are expected to be replaced with notifications to ICE when incarcerated aliens are about to be released by local law enforcement. The administration is supposed to release a very strongly-worded memo regarding the exercise of prosecutorial discretion to avoid many removal proceedings that are initiated under existing laws and policies. 

Existing ICE memos regarding enforcement priorities and prosecutorial discretion are to be replaced with a priority on the following categories of immigrants: (1) suspected terrorists, convicted felons (including aggravated felonies), convicted gang members and persons apprehended on the border; (2) persons convicted of multiple or serious misdemeanors and very recent border crossers (those entering after January 1, 2014; and (3) those who, after January 1, 2014, failed to leave under a removal order or returned after removal. Again, the emphasis is on the use of prosecutorial discretion to limit the number of removal cases. Some ICE officials are grumbling that their enforcement capabilities are effectively being neutered by the President's action. So essentially, if you are an undocumented alien who is arrested for misdemeanor offenses like drunk driving, traffic-related offenses, domestic battery, as long as you haven't had multiple similar arrests, ICE will be told to stand down and not take enforcement action against you.

UPDATE: The Associated Press fact-checked some of the claims Obama made during his address last night. True to form, he lived up to Jack Cashill's "YOU LIE" tag.

OBAMA: “It does not grant citizenship, or the right to stay here permanently, or offer the same benefits that citizens receive. Only Congress can do that. All we’re saying is we’re not going to deport you.”
THE FACTS: He’s saying, and doing, more than that. The changes also will make those covered eligible for work permits, allowing them to be employed in the country legally and compete with citizens and legal residents for better-paying jobs.
* * *
OBAMA: “Although this summer, there was a brief spike in unaccompanied children being apprehended at our border, the number of such children is now actually lower than it’s been in nearly two years.”
THE FACTS: The numbers certainly surged this year, but it was more than a “brief spike.” The number of unaccompanied children apprehended at the border has been on the rise since the 2011 budget year. That year, about 16,000 children were found crossing the border alone. In 2012, the Border Patrol reported more than 24,000 children, followed by more than 38,800 in 2013. In the last budget year, more than 68,361 children were apprehended.
* * *
OBAMA: “Overall, the number of people trying to cross our border illegally is at its lowest level since the 1970s. Those are the facts.”
THE FACTS: Indeed, in the 2014 budget year ending Sept. 30 the Border Patrol made 486,651 arrests of border crossers, among the fewest since the early 1970s. But border arrests have been on the rise since 2011.
The decline in crossings is not purely, or perhaps even primarily, because of the Obama administration. The deep economic recession early in his presidency and the shaky aftermath made the U.S. a less attractive place to come for work. The increase in arrests since 2011 also can be traced in part to the economy – as the recovery improved, more people came in search of opportunity.
* * *
OBAMA: “When I took office, I committed to fixing this broken immigration system. And I began by doing what I could to secure our borders.”
THE FACTS: He overlooked the fact that he promised as a candidate for president in 2008 to have an immigration bill during his first year in office and move forward on it quickly. He never kept that promise to the Latino community.

Wednesday, November 19, 2014

DECA Financial Services Executive Faces Federal Fraud Charges

Todd J. Wolfe, the CEO of Fishers-based DECA, a credit collection company now in bankruptcy, faces bank fraud, wire fraud and bankruptcy charges in a federal indictment handed down by the U.S. Attorney's Office for the Southern District of Indiana today. Wolfe's fraud involved the theft of more than $5 million according to Acting U.S. Attorney Josh Minkler, who said Wolfe was taken into custody by federal officials this morning.

Wolfe is accused of filing false financial statements with BMO Harris bank in order to obtain an inflated line of credit from $1 million to $7.5 million, which he allegedly tapped for personal use. Wolfe is accused of using some of the money to make payments on his house, an automobile, personal credit card accounts and a lake house.

In June 2013, Wolfe allegedly sold $1 million worth of stock to an unnamed individual for a 5% stake in DECA, which he failed to provide to the stock purchaser. Wolfe allegedly used some of the money to purchase an Audi automobile for himself. Creditors forced Wolfe into personal bankruptcy earlier this year. The U.S. Attorney claims Wolfe's attorney represented to the bankruptcy court Wolfe had access to a $14 million living trust to help repay creditors. The actual value of the trust was $52,000, a misrepresentation the U.S. Attorney says delayed the appointment of an independent trustee to oversee DECA.

Wolfe could face up to a decade in prison and be liable for significant fines if found guilty of the charges. The U.S. Attorney's Office says the indictments against Wolfe were aided by a joint investigation of the FBI and the U.S. Bankruptcy Trustee.

Marion County Election Board Concedes It Illegally Enforced Unconstitutional Slating Statute

The Marion County Election Board finally threw in the towel and has agreed that its efforts to enforce Indiana's unconstitutional "slating statute" against Democratic state legislative candidate Zach Mulholland in the 2012 primary election was illegal. Taxpayers will now be forced to pay not only the hundreds of thousands of dollars it spent on outside attorneys to defend its actions but also pay to compensate Mulholland and his attorneys at the ACLU of Indiana for their costs and fees. The Board unnecessarily ran up legal fees in the case by taking a frivolous appeal up to the 7th Circuit Court of Appeals. Fellow blogger Paul Ogden shares a press release Mulholland's attorneys put out today about their settlement with the Board:
Indianapolis--Political parties in Marion County cannot prevent the free speech activities of candidates they do not back for election, and county officials cannot enforce an unconstitutional law used to impede such speech, a federal judge affirmed today.
Judge Sarah Evans Barker of the U.S. District Court, Southern District of Indiana, in approving an agreed judgment filed by the parties, ruled that Indiana's "slating" statute -- Indiana Code § 3-14-1-2(a)(2) and (3) -- cannot be enforced. The order also provided that the Marion County Election Board cannot convene further hearings concerning the 2012 primary election or the plaintiff in the lawsuit, Zachary Mulholland, and required compensation and fees to be paid to Mulholland and to the American Civil Liberties Union of Indiana, who brought the case on his behalf.
In 2003 the Election Board conceded, in an approved judgment in a separate federal lawsuit, that Indiana's slating statute -- which made it a crime for a candidate in a primary election to publish election materials linking him with other candidates without prior permission and notice to the Board -- violated the First Amendment. Still, during the 2012 primary season, the Board enforced the statute against candidate Mulholland by seizing his campaign literature at polling sites on Election Day and demanding he appear for a hearing.
In March the ACLU of Indiana won an appeal in the U.S. Court of Appeals for the Seventh Circuit on behalf of Mulholland, a candidate for state representative, and the case was remanded to federal court for a final judgment. Seventh Circuit Court Judge David Hamilton wrote in the opinion that the Election Board's pursuit of action against Mulholland "shaves very close to harassment or bad faith prosecution."
"The Judge's decision today is a major victory for our plaintiff and for the First Amendment," said Kenneth J. Falk, ACLU of Indiana legal director, who argued the case with ACLU of Indiana senior staff attorney Gavin M. Rose. "Government agencies cannot enforce laws that have been declared unconstitutional, and the Election Board cannot prevent voters from receiving information about candidates for public office."
"We agree with the Seventh Circuit that this has been an outrageous misuse of power," said Jane Henegar, ACLU of Indiana executive director. "The Election Board has wasted hundreds of thousands of taxpayer dollars on private attorneys' fees in defense of actions that are indefensible. If the Board had admitted the unconstitutional nature of its behavior two years ago, the total cost to the taxpayers would have been a couple of hundred bucks, the cost of the seized pamphlets."
The decision, Zachary Mulholland v. Marion County Election Board, 1:12-CV-01502 SEB-MJD,was issued by the U.S. District Court for the Southern District of Indiana, Indianapolis Division, on Nov. 18, 2014.

Gannett Grabs One Of The Only Legitimate Investigate Reporters Left At The State House

I'm sure Tom LoBianco considers his move as a State House beat reporter for the AP to the Gannett-owned Indianapolis Star a career advancement, but I doubt the management folks at the Star had the same thing in mind when they hired him. Under Gannett's management, the Star's State House reporting efforts have been decimated to the delight of the politicians. As a reporter for the AP, LoBianco was doing the hardest hitting reporting at the State House, which made the politicians uneasy. When I see some  of the disinformation flacks reacting in a giddy-like fashion to LoBianco's move, I can only assume they are showing their delight in knowing that a reporter who has not been under their thumb has now been neutered. They sure as hell aren't hoping he continues doing the investigative reporting other State House reporters were neglecting to do. The agenda-driven Gannett buries many stories in order to protect the establishment it represents. I hope I'm proven wrong, but their past track record leaves little hope that I'm wrong.

Here's a tweet LoBianco's new colleague at the Star, John Russell, posted:

Tuesday, November 18, 2014

GTECH Expected To Miss Hoosier Lottery Revenue Target By 10%

The Hoosier Lottery learned it private operator, GTECH, expects to miss its revenue target this fiscal year by $31 million, or 9.7% below its contracted revenue target without incurring a penalty according to the Northwest Indiana Times. GTECH contractually agreed to a return of $320 million this fiscal year, but it now forecasts it will generate $289 million. The lottery attributes the lower-than-expected revenues to "lackluster ticket sales for Powerball and other big money draw games." If the revenue forecast holds up, GTECH expects to pay the maximum penalty of $16 million under its 15-year contract with the Hoosier Lottery. Officials with the Hoosier Lottery are not concerned about the lackluster performance because the lottery's revenues under GTECH's management are still higher than they were under state management.