Why Is A Libertarian Lobbying So Hard For Libertarian Ed Coleman's Vote In Favor Of Ballard's Bad Parking Meter Lease Deal With ACS?

That's a question on the minds of some following a forum held by Marion Co. Libertarians last night to discuss Mayor Greg Ballard's plan to lease Indianapolis' parking meter assets to ACS for the next 50 years for a relatively small upfront payment of $20 million and the immediate doubling of parking meter rates. A Libertarian's support of the proposal certainly couldn't be based on party principles, could it? Yet attendees at last night's forum describe Brad Klopfenstein as a vocal proponent of the deal who is urging Republican-turned Libertarian Councilor Ed Coleman to cast a vote in favor of the highly-contentious deal. [See update below with Klopfenstein's explanation.]

Klopfenstein is the former head of the Indiana Licensed Beverage Association and currently works as a private consultant who found himself in the middle of the bribery scandal that led to Republican Councilor Lincoln Plowman's resignation from the council and as a high-ranking IMPD officer after Plowman was ensnared in an FBI sting operation. Klopfenstein had served as a paid campaign consultant to Plowman, who engineered Klopfenstein's appointment to the Board of Zoning Appeals early in the administration of Greg Ballard.

During an FBI sting operation, Plowman was accused of accepting a $5,000 cash payment from an undercover FBI agent to aid in obtaining a zoning variance for a fictitious business seeking to open an upscale restaurant with a strip club in the downtown area. Klopfenstein told reporters at the time Plowman had contacted him to discuss the prospects of obtaining a zoning variance while he was sitting on the BZA but denied any wrongdoing. A federal grand jury indicted Plowman on attempted extortion and bribery charges in September. According to the indictment, Plowman planned to use his official actions and influence to facilitate the opening of a strip club in Indianapolis.

Indianapolis lobby records do not indicate Klopfenstein is registered to lobby Indianapolis city councilors. While he worked as executive director of the Indiana Licensed Beverage Association, he advocated issues on behalf of his organization that came before the Indiana General Assembly but was not registered to lobby with the Indiana Lobby Registration Commission. In the interest of full disclosure, Libertarians may wish to ask Klopfenstein to disclose to whom he provides consulting work as he seeks to influence the vote of their lone member of the city council on this contentious issue.

UPDATE: Brad Klopfenstein informs me he is not lobbying on behalf of any interest for the parking meter lease deal. He says he just believes it's a good idea. He also clarified the purpose of a payment Plowman's campaign made to him last year. He says the payment was reimbursement for radio ad buys he made on behalf of those opposing the smoking ban ordinance, which Plowman also opposed. He did serve as Plowman's campaign manager, but he was not compensated for that work he says.

UPDATE II: Urban planner Aaron Renn has some more thoughtful views on the parking meter proposal in a recent article discussing the "Privatization-Industrial Complex":

Consider Morgan Stanley. An arm of Morgan Stanley was the winning bidder on the Chicago parking meter lease. That deal is widely seen as a disaster, giving the idea privatizing meters a black eye, and engendering such headlines as “Morgan Stanley's $11 billion makes Chicago taxpayers cry (Bloomberg) and “Company [Morgan Stanley] Piles Up Profits from City's Parking Meter Deal” (NY Times).


Now Morgan Stanley is back, this time advising Pittsburgh and Indianapolis on potential parking meter privatizations. Morgan Stanley has a huge structural incentive to want those deals to go through. It would restart the market for parking meter privatization, and position the firm as the preferred advisor to cities. Even where they were not the city's advisor, a restarted parking meter market means they could potentially bid on many more assets.

If you make money on privatization transactions, then no deals means no money. So obviously these firms have every reason in the world to promote privatization and see deals go through regardless of whether any particular deal is good or not. This doesn't mean they are crooks, it's just the reality. These firms now form of the core of the “privatization-industrial complex” with an incentive to cheerlead for leading public assets because that's how they make their money. They need deal flow, the more transactions the better.

This was picked up on by Harrisburg, PA. Facing bankruptcy, the state offered an $850K grant to hire Scott Balice Strategies of Chicago, one of the nation's top privatization financial advisors. The city council turned it down. As one city councilor noted, “Their recommendation is always the same: 'sell assets'”.

Many of these investment banks, operators, financial advisers, and law firms also have tight links with each other, and participate on deals together, often as partners, other times as opponents. The Pittsburgh Post-Gazette noted how many of these firms have ties to Chicago’s earlier round of privatization. “When Pittsburgh proposed leasing its public parking facilities, the city became a magnet for a passel of firms – many of them connected to Chicago by blood, politics or business – that pursues similar deals around the country. The firms may be partners in one city, rivals or referees in the next.” The winning bidder on the Pittsburgh parking transaction is actually Morgan Stanley's partner in the Chicago deal, for example.

These potential conflicts make it very difficult for cities to know they are making a good deal, especially since they lack the experience necessary to independently judge it. Right now, they often are at the mercy of their advisors. And ask yourself this: when was the last time a city or state looked seriously at one of these deals and their advisors told them not to do it?

This is frequently combined with traditional clout driven contracting. Many of the Chicago parking meter firms had tight links to the Daley administration. Similarly, in Indianapolis a city-paid chief advisor to the office of the mayor is conveniently also a registered lobbyist for the winning bidder. This combination is a recipe for disaster, resulting in very long term deals that could be very bad for the public.