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The Notorious C.I.B.

I’ve been waiting all weekend to use that one.   Once again, things are never as simple as they appear.  Although there are numerous plans at the Statehouse to solve the Capitol Improvement Board operational shortfall, and whatever comes out of session will likely be a hybrid of them all, the news out of the Indianapolis Business Journal this weekend puts a nice little monkey wrench into things.

Greg Schenkel, Pacers V.P. of  corporate relations said they weren’t the ones who asked for $15 million to operate Conseco and that it was the CIB who came up with that number.   Here’s the excerpt,

“Greg Schenkel, the team’s vice president of corporate relations, said discussions about additional funding for operation of the fieldhouse were initiated by CIB, not the team, and that the $15 million annual figure also did not originate with the Pacers.”

This is not good.   If the Pacers didn’t ask for $15 million, who did?  Already there is tension behind the scenes with Indiana lawmakers on both sides of the aisle who don’t think the Pacers and Colts  are contributing enough to cover the operational shortfall at the CIB, and they may look for ways to “encourage” their participation.

But I have to say, if the Pacers didn’t ask for the $15 million, then it’s obvious they don’t need it.  So the operational shortfall must now be down from $47 million to $32 million.  I wonder impact that revelation will have on talks at the Statehouse.

  • Taxpayer 834512

    How about, “Open the books.”

  • arnie

    And the hits just keep on coming in a straight line to Grand and Early.

  • Wayne Kirk

    The IBJ Article is a very powerful piece and coupled with the research by Gary Welsh and Paul Ogden, and with Ed Coleman’s stance for the taxpayers, the heat just got turned up another two notches.

  • Greg

    I do not have the legal background sufficient to backup this statement, but; “there needs to be an indepth look at our so called political insiders in this city and possible civil and criminal charges”. Look at the names of the chosen few who seem to have their hands in almost every aspect of our local infrastructure. Same names. None elected. But all right there to maintain control. Ballard had a chance to hit into this mob, but took the easy way out right at the start. Before he even knew what hit him, all his new best friends were the same old behind the scenes powerbrokers. Who in the fair city has the power and the stones to dive into this mess? I for one don’t know. Sure, people will say that we could be in for a mess if we made too many changes, too quickly. However, there is the “Chaos Theory” that suggests the possibility for significant gains for those with the courage to embrace it.

  • Wayne Kirk

    The one thing a Capitalist and a Communist can agree upon is efficiency because both acknowledge that resources are scarce.
    .
    In our city, we have seen a complete lack of efficiency with our tax dollars. Republicans can agree that the best function of government is through it’s limitations. Democrats can agree that the public should not be funding “For-Profit” businesses with public monies when we have sewers, schools, and roads to repair…might I add that our roads are in horrible shape.
    .
    I find it troublesome that our government is in bed with corporations and both parties have been playing it like a fiddle. Some may consider this union as a form of fascism. Some have dubbed the word as Corptocracy.
    .
    Defination of a Corptocracy: Government of, for, and by large, multinational corporations.
    .
    I believe that people are starting to see that it is now virtually impossible to ignore the ties between members of our businesses and our government and the fraud associated with these associations.

  • Shorebreak

    RICO

  • Chester

    The heat only got turned up a few notches if you make sure your City-County Councilor reads the blogs and the IBJ. I just got off the phone with my councilor and he did not know anything about the IBJ article and he claimed that the Pacers had asked for the money.

  • Nick

    The Pacers didn’t ask for $15 million a year from taxpayers for operating expenses.

    Great, now if the Colts return the $20 million a year of operating expenses Fred Glass gave them that was not covered at all at the RCA Dome, then the CIB operating deficit is only $12 million a year.

  • Think Again

    Damn, hell must have frozen over. I kinda agree with Shore.

    But beware: Schenkel was a corporate whore lobbyist for years. He can split a verb better than anyone…slick use of words is a specific trait of his. He’s relatively new to the Pacers…I am sure someone bitch-slapped him this morning after that article appeared. (If they didn’t they should have).

    In the words of the late great Tip O’Neill: “A a billion here, a billion there, and pretty soon you’re talking real money.”

    If we don’t get more transparency in lobbying, state/local govt and all related activities pretty soon, Lowe’s is gonna have a run on pitchforks.

  • Think Again

    Oh yeah, Abdul, the headline is rich.

  • http://www.ogdenonpolitics.com Paul K. Ogden

    Excellent post, Abdul. I think Schenkel may have inflicted some serious damage on the CIB cause.
    .
    If you were Pat Early and Bob Grand picking up the IBJ and seeing the Pacers laying the entire blame on the CIB for the $15 million, I would think they would be plenty steamed.

  • http://www.seanshepard.org/ Sean Shepard

    @ Think Again: I *ALWAYS* agree with Shore. ;-) If we all would just agree with Shorebreak then we’d all be right most of the time.

    @ Wayne Kirk: Absolutely the heat is up a bit and I can’t believe Lutz tried to chastise Coleman the other night for daring to point out the conflict of interest. Councilor Coleman just had the [self-censored plural noun] to say what most everyone in the know is thinking.

    @ Abdul: Excellent job thus far reporting on this in a “fair and balanced” way.

    re IBJ: that article was just devastating to the CIB / Pacers / Colts case. Wow. It was beautiful to behold and read and hopefully other reporters and outlets pick up on the kind of work and intellectual honesty it takes to put that kind of piece together.

  • Wayne Kirk

    This next week is going to get very interesting watching damage control from the Mayor’s office, Governor, Statehouse, the City County Council, CIB, Pacers, Colt’s, and many of the CPA & law firms who have violated the trust of the people.
    .
    I see certain members of the media starting to stand up and I must thank them for showing the resolve in helping the people uncover this mess because it costs us all and increased taxes effects the entire community.
    .
    I also would like to see a deeper investigation into the Library Board’s conduct in regards to the recent lawsuit they lost. It’s very upsetting to see people act in such irresponsible ways and all of us pay for their actions. The reality is that if they want to be public servants, it’s their duty to put the people’s interest ahead of their own and this goes for all of our public servants too!

  • Libra

    Think Again,
    Tip O’Neill may have said that..but he was repeating the even greater (although late as well) Everett Dirksenn

  • Libra

    Sean,
    Councilor Lutz has lately shown signs he is becoming the type of representative neither party needs: One who tries to silence dissent/questions which may conflict with his parties current ideology. Tough and unpleasant situations/questions demand honest answers, and sometimes they are not pleasant to hear…but that doesnt make the necessity of answering them any less. Kudoes to Coleman; jeers to Lutz.

  • Think Again

    Libra: maybe you’re right, but I’ve never heard that line attributed to Sen. Dirksen.

    Recently got some old recordings of the “Ev and Charlie Show,” which was a radio broadcast from the late 50s. It featured Dirksen, in his role as Senate Republican leader, and Rep. Charlie Halleck (Indiana), in the same role from the House.

    Priceless stuff.

  • http://www.hoosiersforfairtaxation.com Melyssa

    The CIB came up with the idea that the Pacers need $15 million? How much of that $15 million would the lawyers for the Pacers get for doing the paperwork?

  • Think Again

    I heard the radio gabfest today, Abdul. You mentioned privatization of COnseco management.

    You really ought to look into Pacers Sports & Entertainment Corp. That’s the entity formed to run Conseco. In a privatization ploy.

    Only, get this: it’s privatized with subsidies. Which, at the end of the day, isn’t really privatization.

    Seriously, you ought to look into PSEC. It’s a plethera of stories: none good.

  • Shorebreak

    Hmmmmm….. privatization with subsidies? It’s no wonder Indianapolis wants it’s schools to produce idiots. Give ’em a colliseum to watch the games, and tax the hell out of them to make the game owners happy. The leadership mentality around here is Precambrian at best. It’s no wonder they hate the blogs – who can speak the truth without fear of losing position, title, and salary. Does this state actually have an AG who can pursue an agenda that’s not politically expedient at the moment?

  • Wayne Kirk

    Stock Tip (from a unlicensed opinion–please consult your own licensed security broker):
    .
    I believe that the equities/financial sector is going to take a huge dump in the giving week which I also believe the overall market will be down. This morning, I will be putting all my eggs into FAZ (Financial Bear 3X) at my first instant. In pre-market trading at 8:53 a.m., it already shows that the FAZ (financial bear) is up by 9%.
    .
    If anyone is not aware, the USA is in deep financial trouble. Our government is continuing to increase the amount of dollars (credit) into the marketplace along with increasing their spending–this all flies in the face of conventional wisdom and IS a HUGE mistake! A Harvard economist who I read his macro and micro economics books in college (see link below) wrote an interesting piece about his view of lowering interest rates down to a negative value. His article is one of the most senseless pieces of hogwash I have ever read for not only does he endorse stealing people’s money, but he also advocates the destruction of contracts.
    .
    What have we done here in the USA to allow these people to be the negotiators of our nation’s wealth?
    .
    Ok, that’s enough of my rant for the day. I want you to be very careful with any advice I offer especially stock tips as again, I am not licensed in securities and must ask you to do your own homework and consult professional advice.
    .
    http://www.nytimes.com/2009/04/19/business/economy/19view.html?_r=1&em

  • http://www.ogdenonpolitics.com Paul K. Ogden

    Privatization is an example of a good idea horribly bungled in practice. Contractors wanting to do business with a government entitty kick money to the polilticians. They then get long term contracts to shield them from competition (which is what privatization is supposed to be all about.) There is generally no oversight during the period of the contract, no one watching to ensure the company complies with its contract. If the contract is not profitable, government might kick in shoveling more tax dollars to the private company. We saw that last year with a very questionable $225,000 gift by the CCC to private jail company CCA, the explanation which (for inmate meals, inflation adjustment) did not hold up if you look at their contract.

  • Wayne Kirk

    Bankruptcy is the best option with the CIB. Why should we continue to reward those in our community for bad behavior? We can flush out this debt and let another company who actually knows how to run this business at a profit and remove the taxpayers from carrying this burden.

  • Wayne Kirk

    Please read my latest blog on the “Stress Tests” results: http://www.PropertyFreedom.blogspot.com

  • The Real Deal

    Abdul,

    Why hasn’t anyone made the connection between the Pacers, Pat Early and the Democrats.

    Isn’t Pat Early the pick of the County Commissioners? Aren’t all the Marion County Commissioners all Demcorats? Aren’t the Simons big Democrat contributors? Didn’t Joanne Sanders and the Council Democrats “forget” to include any contribution from the Pacers in their proposal?

    I’m surprised you haven’t reported on this yet.

  • Abdul Hakim-Shabazz

    Bankruptcy is *NOT* an option. State law doesn’t allow units of local government to file for bankruptcy. And that isn’t going to happen in the next 10 days. How many times do I have to tell people this?

  • Nick

    Call it want you want, but CIB will be in default on its bond obligations by the end of this month without any meaningful concession from the Colts or Pacers, cash infusion or loan.

    They are projected to be insolvent sometime between June and September.

  • Shorebreak

    It sounds to me as though there are three choices:
    – cover the shortfall 100% with tax increases
    – cover it with a mixture of tax increases and private contributions
    – or cover it 100% with private contributions.
    .
    As much as I despise taxes of any sort (label me an extremist, but I’d almost rather live like the Amish than to have my money taken by irresponsible government by decree), I believe that there needs to be a compromise here. The compromise needs to be 100% linear, and it needs to involve retro-active contributions from private beneficiaries if the payment structure hasn’t been linear in years past.
    .
    For example – open the books to CIB and all private parties who have been involved in CIB finance dealings. Look at the cost/return margins for private organizations vs public coffers. Align all CIB bailouts with the profit ratio that is equivalent to private:public and include terms assuring that private recipients make good on prior disparities – going back at least seven years.
    .
    Also, if during the course of audits it becomes apparent that there is a disparity in the ratio between public:private profits, let the arrangement state that involved parties will be investigated and convicted if any influence peddling is involved. Those who want to avoid prosecution may begin contacting the AG and/or prosecutor as soon as today to work out a plea arrangement.
    .
    It seems as though this mess is too deep to wade out of without some sort of compromise. But – make the compromise eqiuivalent in nature to the public/private profit ratio, make the audit process a formal/public effort, and hold any wrongdoers 100% accountable for any suspected and/or obvious disparities that benefit private parties with the use of public monies.

  • http://www.ogdenonpolitics.com Paul K. Ogden

    Abdul,

    Please point to the law that says that. I think you’re probably misinterpreting the law. There is no state law that I know of prohibiting mucnipal entities from filing bankrutpcy. Such a law would be idiotic since the BK code expressly clearly allows it.

  • Abdul Hakim-Shabazz

    Paul,

    Chapter 9 lets municipalities file for bankruptcy if there is a provision in state law that allows them to. There is no provision in Indiana Code to do that. I’ve confirmed this with a couple different reliable sources who could not find it either. If you know where it is in state law, please show it to me.

  • http://www.ogdenonpolitics.com Paul K. Ogden

    Abdul, thanks for the info.

    I think I said in one of my posts, that given the language of Chapter 9, the legislature may well have to specifically give the CIB the authority to file bankrutpcy, if it is not already in the CIB’s general grant of power, which I haven’t looked at lately. That though only involves inserting the authorization in a bill in conference or passing a simple resolution – an easy fix while the legislature is in session. Even if the legislature adjourned, you could reconvene the legislature for one day to pass a bankrtupcy authorization.

    When you made your comment, I thought maybe there was a specific prohibition on muncipal entities filing BK. That would be a much more difficult thing to overturn than simply getting a bankruptcy authorization for the CIB.

  • http://www.ogdenonpolitics.com Paul K. Ogden

    The Real Deal,

    Pat Early is the son of former Republican State Chairman, Rex Early. I’m pretty sure he’s not a Democrat. This CIB mess was a Republican and Democrat screw up.

  • Wayne Kirk

    12:42 Stock Market update.
    .
    (Again, I am not a licensed securities trader and my ideas should not be treated as a professional–please seek professional advice before making a trade)
    .
    Before the market opened, I placed a market order for FAX (Financial Bull 3X Index Stock) and once the market opened, the price was at $9.95 per share. Currently, the stock is at $10.73 per share and rising.
    .
    Also, for those who like to see a visual picture of the major players in the marketplace, please click on the following website: http://finviz.com/map.ashx?t=sec

  • Wayne Kirk

    Oops…I meant to write the stock ticker is: FAZ

  • Robert – NW Side

    “Chapter 9 lets municipalities file for bankruptcy if there is a provision in state law that allows them to. There is no provision in Indiana Code to do that.” — Abdul at 28

    “Under the U.S. Constitution, the federal government enjoys the exclusive power to promulgate bankruptcy laws. U.S. Const., art. I, 8. “Because bankruptcy law is federal law, enacted pursuant to the constitutional grant of bankruptcy power, it preempts state law . . .pursuant to the supremacy clause . . . .” Renges, Inc. v. PAC Financial Corp., (1987), Ind.App., 515 N.E.2d 563, 566 (quoting In Re Safren, 65 B.R. 566, 573 (Bankr. C.D. Cal. 1986))” — Joseph Hammes, Trustee O v. Jennifer Brumley, Supreme Court No. 49S02-9512-CV-1382, 30 Dec 1995

    Regardless if there is a state statute ‘allowing’ for a unit of government to file bankruptcy, it appears that federal law preempts any state statute, or lack thereof.

    Besides, since no state statute exists explicitly DENYING a unit of government to file, that doesn’t mean that it is prohibited either.