Indiana Claims Illegal Immigrants Cost State $130 Million

Gov. Mitch Daniels' budget director, Adam Horst, has prepared an estimate of what he says illegal immigrants costs Indiana. According to an AP report, Horst sent a bill to Congress in the amount of $130 million. According to Horst's estimate, education expenses account for $110.6 million, while prison costs and welfare costs were $12.3 million and $8 million, respectively. The AP report is very short on details, which is no surprise. Horst prepared the estimate based on an immigration enforcement law the legislature past last year, parts of which are sure to be struck down after this past week's Supreme Court decision striking down most of Arizona's immigration enforcement law. Indiana's Office of Management and Budget didn't even bother to put any information about its estimate on its website. For all we know, Horst simply pulled the numbers out of his ass. Here's what SB 590 required his office to do:

Sec. 17. (a) As used in this section, "alien" has the meaning set forth in 8 U.S.C. 1101(a).

(b) As used in this section, "illegal alien" means an alien who has come to, entered, or remained in the United States in violation of the law.
(c) As used in this section, "total costs" includes, but is not limited to, costs related to incarceration, education, health care, and public assistance.
(d) Not later than July 1, 2012, the OMB shall, using existing resources, do the following:
(1) Calculate an estimate of the total costs of illegal aliens to the state of Indiana.
(2) Make a written request to the Congress of the United States to reimburse the state of Indiana for the costs calculated under subdivision (1).
(e) This section expires July 1, 2013.

The statute is poorly written. It is doesn't even specify the time period the "total costs" are to include. Is that how much it cost the state last year, the last ten years or some other period? The costs were suppose to include health care, but Horst's numbers as reported by the AP make no mention of health care costs. The Marion County Health & Hospital Corporation, alone, provides millions of dollars in free health care annually to undocumented aliens who lack health insurance or money to pay for their health care expenses. The bottom line is that the numbers furnished by Horst aren't worth the paper they're written on. His office didn't want to prepare the one-time estimate required by the law and obviously put no effort into compiling the costs. A more meaningful estimate would have also included an offset for the estimated taxes paid by illegal immigrants, many of whom file income tax returns using taxpayer identification numbers. Illegal immigrants also pay other taxes, such as sales, motor fuel and excise taxes that are used to pay for various state services. Some also own property and pay property taxes that help pay for schools.

22 Apply For Supreme Court Vacancy

The Judicial Nominating Commission issued a press release late this afternoon announcing that it had received applications from 22 individuals seeking to be appointed to the Supreme Court vacancy created by the retirement of Justice Frank Sullivan. Sixteen of the applicants are female. Most observers think that it would be highly unlikely that a woman would not be appointed this time around since the two most recent appointees were both men and there are no women currently on the Court. Several of the applicants applied for one of the two previous vacancies on the Court recently filled by Gov. Mitch Daniels. The Commission will announce its first round of interviews on July 6, 2012 and public interviews of those candidates will take place on July 17 and 18 at the Indiana State House. After the first round of interviews, the Commission will announce the semi-finalists, who will be interviewed on August 8th and 9th. At the conclusion of the second round of interviews, the Commission will announce the names of the three finalists it selects to send to Gov. Daniels for consideration. The entire list of applicants include the following:

1. Hon. Cale J. Bradford, Indiana Court of Appeals
2. Hon. Elaine B. Brown, Indiana Court of Appeals
3. Hon. Marla K. Clark, Johnson Circuit Court, Juvenile Division
4. Mr. Thomas M. Fisher, Indianapolis
5. Ms. Alicia A. Gooden, Indianapolis
6. Hon. Frances M. Gull, Allen Superior Court
7. Mr. Lyle R. Hardman, Granger
8. Ms. Carol Nemeth Joven, Indianapolis
9. Ms. Julia Church Kozicki, Noblesville
10. Ms. Abigail Lawless Kuzma, Indianapolis
11. Ms. Erin Reilly Lewis, Indianapolis
12. Ms. Andrielle M. Metzel, Indianapolis
13. Hon. Steven R. Nation, Hamilton Superior Court 1
14. Ms. Karen R. Orr, Monticello
15. Ms. Diane L. Parsons, Indianapolis
16. Ms. Brenda A. Roper, Indianapolis
17. Hon. Loretta H. Rush, Tippecanoe Superior Court 3
18. Mr. Geoffrey G. Slaughter, Indianapolis
19. Hon. Elizabeth F. Tavitas, Lake Superior Court
20. Hon. Marianne L. Vorhees, Delaware Circuit Court 1
21. Hon. Mary G. Willis, Henry Circuit Court 1
22. Mr. John P. Young, Indianapolis

Did Chief Justice John Roberts Switch Vote At The Last Minute?

Some bloggers who follow Supreme Court opinions with more than a passing glance are finding some tell-tale signs in today's opinion affirming the Affordable Care Act that Chief Justice John Roberts had originally joined the four conservative justices (Alito, Kennedy, Scalia and Thomas) in what was going to be a majority opinion striking down the Act in its entirety. Ed Whelan at the National Review online speculates on the possibility that Roberts had actually assigned the opinion to himself and then later switched on the idea that the individual mandate was actually a tax and not a penalty as the Act expressly provides, which became the basis for affirming the Act under the Congress' general power to tax. Under this scenario, his original draft opinion striking down the law was belatedly picked up and became the dissenters' joint opinion. The dissenting opinion typically distinguishes between the justice who authored it and the justices who joined the dissenting author. The dissenting opinion today named no specific author. The Volokh Conspiracy provides even more details that suggest the dissenters' opinion was originally written as a majority opinion here. Breitbart notes an AP report claiming that Justice Anthony Kennedy was visibly angry during the reading of today's opinion, which seems rather out of character for the justice viewed as being the swing vote on the Court. Breitbart's Joel Pollack echoes this sentiment in a blog post after today's decision wondering if the Chief Justice was bullied into switching his vote by Obama. Interestingly, the day after the Court conferenced following oral arguments of the case, Obama immediately went on the offensive and began attacking the Court as if he had been provided an inside account of the Court's vote in conference on the case and the vote was not favorable to the administration's position. It was as if Obama was threatening the Court if it dared to strike down Obamacare. Most people fail to grasp the fact that Barack Obama comes from the most corrupt element of the Chicago Democratic political machine. These guys will stop at nothing to get what they want. Who knows how they would have threatened Roberts. You can bet that Axelrod and Company has a dossier on every member of the Supreme Court, as well as virtually every member of Congress.

House Votes To Hold Holder In Contempt Of Congress

U.S. Rep. Joe Donnelly among Democrats supporting contempt resolution
The U.S. House of Representatives voted this afternoon in support of a resolution holding Attorney General Eric Holder in contempt of Congress for his refusal to produce documents subpoenaed by the House Government Oversight Committee related to the Fast & Furious Operation under which our government walked high-powered assault weapons across the border with Mexico and placed them in the hands of violent drug cartels. There were 17 Democrats who crossed party lines and voted with 238 Republican members in favor of the contempt resolution, including Indiana's U.S. Rep. Joe Donnelly, who is running for the U.S. Senate against Richard Mourdock. Holder becomes the first attorney general to be held in contempt of Congress in the nation's history. U.S. Rep. Andre Carson walked out with other members of the Congressional Black Caucus, who claim it's all about racism against an African-American president and attorney general, not the rule of law. Indiana's third Democratic member of Congress, U.S. Rep. Pete Visclosky, voted against the resolution.

Pence Compares Obamacare Decision To 9/11 Terrorist Attacks

Republican gubernatorial candidate Mike Pence is quickly backtracking on a comment he made to colleagues earlier today comparing today's Supreme Court decision upholding the Affordable Care Act to the 9/11 terrorist attacks. The Star's Mary Beth Schneider has Pence's apology issued after Politico first reported on the comments he made while speaking at the House Republican Conference following today's decision:

“I made an unfortunate statement,” Pence said. “Let me just say my remarks at the Republican Conference, following the Supreme Court decision, were thoughtless.”

Pence, in a call with Indiana reporters, did not address whether he was comparing the justices to terrorists.

Instead, he said he “certainly did not intend to minimize any tragedy our nation has faced, and I apologize.”

Asked for the context of his remarks, Pence said he made the comments at the GOP meeting within an hour of the Supreme Court decision being announced.

“I had the opportunity as a former chairman of the conference to address the group. As I said, my remarks following the Supreme Court decision were thoughtless and I never intended to minimize any tragedy our nation has faced and I apologize,” he said. “I certainly did not intend to make any such comparison (of the ruling to the 9/11 terrorist attacks) but let me just say to the extent that it’s been reported, to the extent that people interpreted my remarks that way, I apologize.”

I suppose some would agree with the similarities, particularly the 9/11 Truthers who remain convinced that our own government was at least complicit, if not a participant in a false flag operation intended to seize more government control over the American people's lives. If you agree with the four justices who dissented in today's Supreme Court decision, you see today's decision as placing "liberty at peril." Be that as it may, Pence's comments will be seized upon by his critics as a further indication that he is too much of an extremist to serve as our state's governor. Indiana Democrats, meanwhile, put out a press release applauding Chief Justice John Roberts for setting aside partisanship and voting to uphold the Affordable Care Act. The executive director of the Democratic National Committee was less diplomatic in reacting to today's decision. "It's constitutional, Bitches," Patrick Gaspard tweeted. He followed up by saying that he let his excitement "get the better of me."

Obamacare Survives

The political pundits and prognosticators really missed this one. The U.S. Supreme Court today upheld the Affordable Care Act, also known as Obamacare, in its entirety. Chief Justice John Roberts joined liberal members of the Court in finding that the individual health insurance mandate, the cornerstone of the Act, was a constitutionally permitted tax on Americans even if it does violate the Commerce Clause of the U.S. Constitution. The Act requires Americans who fail to obtain health insurance to pay a penalty to the IRS. Although the Act describes the payment as a penalty and not a tax, a majority of the Court determined that it was still a tax, although not within the meaning of the Anti-Injunction Act, which prohibits lawsuits restraining the assessment or collection of a tax. While the opinion delivered by Chief Justice John Roberts found that the individual mandate violated the U.S. Commerce Clause, the majority found that the authority for the individual mandate could be found in Congress' taxing power. The Court's opinion does impose some restrictions on the portion of the Act expanding Medicaid coverage but still upholds that portion of the Act as well as long as federal funding is not withheld from states that don't go along with the expanded Medicaid coverage provided by the Act. Justices Alito, Kennedy, Scalia and Thomas wrote in a dissenting opinion that they would have struck down the Act in its entirety based on their view that Congress had exceeded federal power both in mandating the purchase of health insurance and in denying all nonconsenting states their federal funding for their respective state Medicaid programs.

UPDATE:  The dissenter's opinion argues that a tax and a penalty are mutually exclusive. The Act clearly defines a "penalty", not a "tax" that affected Americans must pay if they choose not to purchase health insurance. And yes, it only applies to Americans. Undocumented aliens and prisoners will not be subject to the "penalty," but as we know, health care providers cannot deny services to undocumented aliens, which results in the government (i.e., the American taxpayers) picking up their health care tab. As the dissenting opinion points out, a penalty is "a punishment for an unlawful act or omission." "[T]o say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it," the dissent opines. Indeed, the Obama administration repeatedly argued during oral argument that it was not imposing a new tax on Americans. Nonetheless, the majority opinion written by the Chief Justice upholds it on that basis despite the contrary language used by Congress and the interpretation offered of it by the administration. The dissenting opinion is also very critical of the Medicaid expansion that essentially extorts the states into helping finance the massive expansion of the program by threatening to withhold funding for their existing Medicaid programs. "The fragmentation of power produced by the structure of our Government is central to liberty, and when we destroy it, we place liberty at peril," concludes the dissenters.

Pence Criticizes Daniels For Adding Too Many New Regulations

Gov. Mitch Daniels has been accused of a lot of things during his two terms as Indiana's governor, but overregulation of businesses hasn't been of them. Republican gubernatorial candidate Mike Pence believes Indiana has become too overregulated. He's calling for a moratorium on new regulations if he's elected governor. From the AP:

Indiana gubernatorial candidate Mike Pence said Tuesday he would issue a temporary moratorium on new business regulations pending a review of existing red tape because companies need a break from the hundreds of new rules imposed by fellow Republican and current Gov. Mitch Daniels.

Pence said that if elected, he'll issue an executive order to declare a moratorium on new regulations and ask his budget office to review existing rules, business fees, and regulatory performance metrics to ensure they were the least costly and had the least impact on job creation.

"The state has added almost 1,200 new regulations in the past four years," Pence said. "Businesses need relief, and they need it now."

Pence's Democratic opponent, John Gregg, thinks that Pence's announcement shows how "out of touch" he is. "This is what happens when you're out of state and out of touch: you call Mitch Daniels an overregulating job-killer," he said in a statement. I wonder how many of those new regulations came about as a result of federal laws passed by Congress or new regulations promulgated by federal agencies. I suspect federal mandates represent a significant share of those new regulations.

Incidentally, the Pence campaign does not include this blogger on its e-mail list. I don't know if that is an oversight or deliberate (I suspect the latter), but it doesn't reflect very well on his campaign in my opinion. I'm included on the mailing list for virtually every Republican and Democratic candidate's campaign without asking to be included, but I have received nada from his campaign other than the hokey fundraising solicitations that come through snail mail from his campaign.

IMPD Officers Asked To Pay For Tools As Budget Crisis Worsens

The budget crisis facing Indianapolis's Metropolitan Police Department seems to be worsening as the Department continues to lean on officers to pay for tools they need for their work and next year's budget is expected to be worse. From WRTV:

Metro police officers have been asked to dig into their own pockets to fund essential tools of the job, everything from hand sanitizers to ammunition. Late Monday afternoon, the department issued an email saying that officers should use "personal" funds if they wished to purchase back-up batteries for Taser guns.

In late March, the department issued another bulletin. It read in part that due to budget constraints, IMPD would no longer provide duty training and practice ammunition for personally owned off-duty or back-up weapons. Department policy requires officers who carry off-duty or back-up weapons to qualify with those weapons the same as they would their department-issued firearms.

To save money, the Department hasn't purchased new car in two years, and it's hired only one small recruit class. The Department requires officers to purchase their own notebooks and pens, latex gloves and even toilet paper to use at roll-call sites according to the report.

What really bothers me about the problems the city is facing in funding essential services is the large amount of funds it has socked away in TIF funds that it can tap for any number of so-called economic development-related expenses that arise, which typically involve using large sums of public money to finance private development projects. The excuse is always given that those funds are segregated and can only be used for their statutory purpose. Yet the administration and city council keep taking large swaths of property off the regular property tax rolls to expand and create new TIF districts, while they claim the state's property tax cap law is making it difficult to finance basic city services.

Judge Magnus-Stinson Takes Hard Line On Convicted Ponzi Schemer Durham

Judge Jane Magnus-Stinson showed no sympathy for convicted Ponzi schemer Tim Durham and his business associate, James Cochran, in ordering the pair to remain in jail pending sentencing. Their accomplice, Rick Snow, fared better. Judge Magnus-Stinson will allow him to continue on home detention before he is sentenced.  The judge spoke of her concern that money still missing from the company the two bilked from Fair Finance's investors might be used to finance their escape from justice. According to the IBJ's Cory Schouten, she even suggested the original $1 million bond posted by Durham's father-in-law, Beurt SerVaas, could have came from the missing funds.

Durham's former father-in-law, local businessman Beurt SerVaas, had put up $1 million bond pending trial. The bond will be released since Durham will now be held indefinitely.

Magnus-Stinson suggested the SerVaas bond assets could have been "put up with Fair money in the first place" based on some of the insider loans the company had issued to Durham family members. And besides, she said, the jury's verdict suggests Durham has "no respect for other people's money."

She also expressed skepticism at Tompkins' simultaneous claim that Durham doesn't have the financial means to attempt to flee and that he's essential to recovering more money for Fair's victims.

"It's the missing money the court is concerned about," she said.

Durham and Cochran likely will be transfered to a federal correctional facility in Kentucky. Snow was released following the hearing and will be confined to his home, which he shares with his wife of 22 years and teenage children (who are 14 and 16).

Durham's lawyer, John Tompkins, said he intends to appeal his client's convictions. U.S. Attorney Joe Hogsett said federal prosecutors will seek a life sentence for Durham. The sentencing hearing has not yet been scheduled.

Ashes To Ashes . . .

The continuing follies of America's out-of-control TSA agents hits close to home today. An Indianapolis man returning home from Florida with his grandfather's cremated remains suffered the trauma of a TSA agent at an airport in Orlando insisting on inspecting the container clearly marked "Human Remains." You know the rest of the story. The ashes wound up on the airport floor after the TSA agent dropped the opened container. The TSA laughs as the man scrambles to recover his grandfather's remains. WRTV has the story:

John Gross, a resident of Indianapolis' south side, was leaving Florida with the remains of his grandfather -- Mario Mark Marcaletti, a Sicilian immigrant who worked for the Penn Central Railroad in central Indiana -- in a tightly sealed jar marked "Human Remains."

Gross said he didn't think he'd have a problem, until he ran into a TSA agent at the Orlando airport.

"They opened up my bag, and I told them, 'Please, be careful. These are my grandpa's ashes,'" Gross told RTV6's Norman Cox. "She picked up the jar. She opened it up.

"I was told later on that she had no right to even open it, that they could have used other devices, like an X-ray machine. So she opened it up. She used her finger and was sifting through it. And then she accidentally spilled it."

Gross says about a quarter to a third of the contents spilled on the floor, leaving him frantically trying to gather up as much as he could while anxious passengers waited behind him.

"She didn't apologize. She started laughing. I was on my hands and knees picking up bone fragments. I couldn't pick up all, everything that was lost. I mean, there was a long line behind me."

TSA rules say a crematory container in carry-on baggage must pass through the X-ray machine at the security checkpoint.

But the agency's own website says human remains are to be opened under, “no circumstances.”

"I want an apology,” said Gross. “I want an apology from TSA. I want an apology from the lady who opened the jar and laughed at me. I want them to help me understand where they get off treating people like this."

Good luck getting that apology.

Arizona Ruling By Supreme Court Victory For Obama Administration

Arizona Gov. Jan Brewer declared victory today because the Supreme Court upheld one aspect of her state's law to crack down on illegal immigration. A closer look at the Court's opinion in the case, however, clearly shows that it reasserts and affirms the federal government's supremacy under the U.S. Constitution to make and enforce a uniform, national immigration law. States will not be permitted to pass laws that poke and prod the federal government into enforcing aspects of federal immigration laws it chooses to ignore or to only selectively enforce. Instead, the Court recognizes "broad discretion" whether and how to enforce immigration laws. That "broad discretion" was underscored when word leaked out soon after today's ruling that the Department of Homeland Security will no longer honor its current agreement with the state of Arizona to check the immigration status of persons lawfully detained by law enforcement officers for other purposes, the "so-called 287(g) agreements." That discretionary decision undermines the one victory the state of Arizona obtained under today's ruling.

The Arizona law contained an immigration status check provision that required local law enforcement to check with ICE to determine a person's status where reasonable suspicion exists that the person is an alien and is unlawfully present in the United States after a person has been the subject of "a lawful stop, detention or arrest." This was the only provision of the Arizona law that the Court upheld today, noting that Arizona's law provided that law enforcement officers were prohibited from considering the person's race or national origin in enforcing it. Under existing agreements with state and local governments, ICE officials already agree to check a person's immigration status after they are taken into the legal custody of state or local law enforcement officials. If ICE determines that further action is warranted, it will request the state or local law enforcement agency to place a hold on the individual's release in order for custody of such detained persons to be transferred to ICE officials for further processing in accordance with federal law, a process that is supposed to occur within 48 hours. No sooner had today's decision been handed down than the Department of Homeland Security signaled that it would no longer honor its 287(g) agreement with Arizona officials, a move that could render that provision of the law meaningless.

Federal preemption in the area of immigration enforcement resulted in the Court striking down three major provisions of Arizona's law as unconstitutional, including:

• A provision making it a crime not to carry valid immigration documents establishing a person's lawful presence in the country.
• A provision making it a crime to apply for a job in Arizona unless a person has valid documents establishing their right to accept employment in the United States.
• A provision allowing warrantless arrests of persons who state and local law enforcement officials have probable cause to believe has committed an offense that would cause the person to be removable from the country.

This third provision concerning warrantless arrests is very similar to a provision included in an immigration enforcement law enacted by Indiana last year. A federal district court has already enjoined enforcement of this provision, and it will likely meet a similar fate in the federal courts as Arizona's law in light of today's decision. The same federal district court has also enjoined enforcement of a separate provision of Indiana's law that prohibits the use of consular IDs for identification purposes. Today's decision did not address that issue, but it is unlikely to pass muster either.

Last year, the Supreme Court upheld a separate Arizona law that requires employers within the state to participate in E-Verify, a program that allows the federal government to confirm that a person applying to accept employment is legally authorized to do so. That state law penalizes non-complying businesses with the loss of business licenses. Indiana's immigration enforcement law subjects Indiana employers to tax penalties if they employ aliens lacking employment authorization unless the employers utilize E-Verify to determine the employee's status. Indiana's law also requires all state and local government agencies to utilize E-Verify, as well as businesses that contract with state or local agencies. Indiana's law also created new crimes for false identity statements and for persons engaged in trafficking of illegal aliens. The fate of these provisions of Indiana's immigration enforcement law is less clear after today's sweeping ruling recognizing federal preemption in immigration enforcement.

How Mourdock Won: A Tea Party Perspective

The Daily Caller's Ginni Thomas sits down for an interview with Tea Party leader Greg Fettig, co-founder of Hoosiers for a Conservative Senate, to discuss Richard Mourdock's landslide win over Sen. Richard Lugar.

Life Without Mitch

Gov. Mitch Daniels announced this past week that he will recuse himself from participating in partisan politics going forward now that he has accepted appointment as Purdue University's new president when he leaves office next year. The Northwest Indiana Times' Dan Carden discusses Daniels' withdrawal from politics will have on the political landscape. Because of his personal popularity, Carden says Republicans fret over the loss while Democrats are pleased.

. . . Privately, Republican candidates are grumbling about not getting to campaign side by side with a Republican governor who enjoys a 63 percent approval rating. Though the party's top official said Friday it's no big deal.

"One of the measures of a great leader is who comes after you to carry the torch," GOP Chairman Eric Holcomb said. "Thanks to the efforts of Gov. Daniels, we have a deep bench of Republicans on the field and ready to carry our party's message through November and beyond."

But it's easy to see the ways Daniels will be missed.

Republican U.S. Senate candidate Richard Mourdock could have used Daniels' fundraising prowess and national profile to replenish his campaign account following an expensive primary race against U.S. Sen. Dick Lugar.

Now Mourdock, who is tied in public opinion polls with Democrat Joe Donnelly, is stuck doing that time-consuming work on his own.

Mike Pence, the Republican candidate for governor, would have had an easier time making the case that he'll continue Daniels' policies if Daniels were traveling the state saying the same thing.

Pence must now campaign with nary a word from the man he hopes to succeed . . .

Indiana Democrats aren't publicly cheering Daniels' decision to drop out of politics. However, one party insider told The Times, "Now Mourdock and Pence can't sit on Daniels' shoulders and say that they're tall."

Both Pence and Mourdock will have no problem raising money for their campaigns with or without Daniels. Pence is already on track to raise more money for his first gubernatorial bid than any other candidate in Indiana history and has more of a national following than Daniels. National Republicans will fill any void that may be needed to help Mourdock with fundraising. The key to their success will be their respective messages, not Daniels' message or influence. In Pence's case, it is probably an advantage to him that Daniels won't be actively participating in the political process. At least he won't have to worry about Daniels publicly second-guessing the job he is doing as governor since Daniels will need his support more than he needs Daniels' support.

Jogger Attacked By Gang Of Teen-Agers On Canal

Yet another senseless attack has occurred along Indianapolis' downtown Canal. A man out jogging says a group of male teen-agers attacked him for no apparent reason and then ran off. From Fox 59 News:

Metro police officers are investigating another brutal attack along the downtown Canal after a man said he was jumped by a group of men while jogging.

J.R Keller said it happened around 10 p.m. Wednesday next to the fountain near Indiana and Michigan. He was jogging past a group of eight young men, ages 16-18, when he felt someone kick him in the back.

“I got kicked really hard, like right in the small of my back and that's what knocked me down. And so I hit the side of my face. And as soon as I hit the ground, I felt one kick in my face, like right on my cheek and then I felt another one right on the side of my head," recalled Keller. "I was just shaking. My legs were shaking,"

Keller suffered a black eye and a scraped knee. He said the men ran off without taking anything from him. Two women walking nearby called 911.

IMPD has been talking about stepping up patrols in the area after an out-of-town couple was senselessly attacked and robbed on the Canal during the Memorial Day weekend. Unsupervised teens roaming the Canal are blamed for the increased crime problem in the area.

Star Makes Light Of Daniels' Residency Problem

I may sound like a broken record by this point, but Charlie White was right when he said Indiana's residency laws were being applied to him differently than other politicians. I'll continue to repeat it as long as his convictions on charges that he violated the state's voter residency laws because he registered to vote at his ex-wife's home for a short period while in between homes continue to stand. I observed an AP report the other day which discussed the question of whether Gov. Mitch Daniels would actually move into the president's home on Purdue University's campus once he become its new president next year since he never resided in the governor's residence as required by law, although the article ignored the law-breaking aspect of the issue. During the debate over Charlie White's residency woes, the Indianapolis Star led the state's media in news reporting and editorializing condemning his actions and calling for his removal from office. An item in today's "Behind Closed Doors" column making light of Daniels' claim that he will reside on the Purdue campus is a testament to the paper's deference to Gov. Daniels' more serious disregard of the state's residency laws:

Daniels said Thursday that once he's president of Purdue University in January, he'll live in the president's mansion.

Though it may depend on what the meaning of "live" is.

After all, in October 2005, Daniels told reporters that after a home show allowing tours of the renovated governor's residence on Meridian Street in Indianapolis was completed the following spring, he and the first lady would "take up residence here."

Asked by a reporter what that meant, Daniels mocked the question.

"It's a common English phrase," Daniels said. "It means 'move in.' "

Which the Daniels never did.

In fact, they eventually moved into a home they built in Carmel.

The issue had dogged Daniels since shortly after he became governor in 2004. People, including in the Butler-Tarkington and Meridian-Kessler neighborhoods that are so proud of having the governor as a neighbor were disappointed. Other people took it as sign that the governor felt the fancy home just wasn't good enough for him.

And since the Constitution requires the governor to live in the state capital, his Hamilton County home didn't fit the bill.

So we'll be waiting to see. Will the Danielses "live" in Lafayette? Does that mean "move in?"

Or does that mean "a nice place to visit?"

Ironically, it was the Star that first raised the issue about the constitutional requirement when word leaked out that Daniels was building a new home in Carmel. I'm not sure why the item claims the issue has dogged Daniels. The newspaper certainly hasn't dogged Daniels like it did White. It dropped the issue almost as quickly as it raised it. After moving into the Carmel home, Daniels switched his voter registration from his former home in Marion County to the governor's residence, even though he resided in his new home in Carmel, a fact the Star has never reported. If you're Charlie White, you should lose your office and go to jail. If you're Mitch Daniels, it's just an item to make light of in the Sunday political gossip column.

Whose Interests Is Zoeller Representing In Stage Collapse Case?

The Indiana General Assembly approved $6 million in additional state funds to pay out to the victims of last summer's Indiana State Fair stage collapse during a Sugarland concert that left seven persons dead and about 60 other injured, some suffering serious and permanent injuries. Under Indiana's Tort Claim Act, the state's liability is capped at $5 million. The Star is reporting today that Attorney General Greg Zoeller is conditioning the payout of the additional state funds to the victims on their agreeing to release two other potentially liable parties, which have agreed to pay a combined $7.2 million in compensation to the victims.

The two companies contributing the $7.2 million are Mid-America Sound Corp. and James Thomas Engineering -- which were named as defendants in lawsuits stemming from the collapse.

All claimants who filed tort claims are allowed to apply for the supplemental funds, but to receive funds, they would need to release the two companies from further legal action, Zoeller said.

Victims can start applying next week. The funds would be paid out at the end of the year as provided under state law.

Am I missing a part of the legislature's $6 million appropriation? Did the law say that the victims couldn't receive that money until they agreed to settle their claims with these two particular parties. And why is Zoeller limiting this demand for the benefit of only these two parties? I find myself sympathizing with one of the victim's attorneys on this, who had this to say:

Attorney Kenneth J. Allen says Zoeller's plan seems like a "payoff" to protect the companies. Allen represents the families of three people who died in the stage collapse last August and others who were injured. He praised lawmakers for approving the additional $6 million this year.

I'm not familiar with all of the victims' claims, but the potential liability given the large number of victims is quite substantial given that there are seven dead people and 60 others claiming injuries. The combined $13.2 million that Zoeller is attempting to broker may seem like a lot of money, but when you divide that among a large class of plaintiffs, it's not a whole lot of money. State Rep. Ed DeLaney is also questioning Zoeller's move according to WTHR:

State Representative Ed Delaney credits Zoeller's creativity, but says this is not what lawmakers had in mind.

"No," he said emphatically.

Delaney pushed lawmakers to approve more money to cover the state's liability alone, but got just $6 million.

"That's not what this is, a public-private partnership," DeLaney told 13 Investigates. "This is an after the fact attempt to deal with a disaster and it's not ultimately the function of the state to protect private companies," he said, taking issue with the idea . . .

"We have a constitutional provision that says basically we're not suppose to settle individual cases and we seem to be dangerously close to doing that, don't we?" questioned DeLaney . . .

But What About Mitch's Residency Problem?

I know people are tired of hearing about the residency issue by this point, but I feel in the interest of fairness to former Secretary of State Charlie White, who was prosecuted for registering to vote at his ex-wife's home for a several month period, forced from office and lost his law license, that the issue needs to be thoroughly vetted with respect to others as well. Gov. Mitch Daniels was highly critical of the decisions White made with respect to his residency claims and called for his resignation early on after he was sworn into office. After yesterday's news about Daniels being named as the new president of Purdue University, reporters wondered whether he would choose to live on campus since he chose not to reside in the governor's residence. The Associated Press reports that Daniels says that he will live on the Purdue campus:

Indiana Gov. Mitch Daniels says he'll live in the president's house once he takes over at Purdue University but will go back and forth to his Carmel home.

Daniels was introduced as the university's 12th president Thursday after a unanimous vote by the Board of Trustees.

Daniels and wife Cheri chose not to move into the Indiana governor's residence after his election in 2004. They said the recently renovated home still needed $2.6 million in upgrades and that they planned to build a home in a gated community in the Indianapolis suburb of Carmel.

The governor's residence had been empty before. No one ever lived in the second governor's mansion in downtown Indianapolis in 1827, and the house was torn down 30 years later.

White, of course, complained to reporters at the time that the residency issues of others weren't being looked at in the same way his residency issue had been closely scrutinized by the media and prosecutors. The issue did eventually catch up with Sen. Richard Lugar and former U.S. Rep. David McIntosh, contributing to their election defeats this year. The Indiana Constitution is clear that the governor is required to reside in Indianapolis. Daniels hasn't hidden the fact that he chose instead to reside in his Carmel home. White complained that Daniels, nonetheless, registered to vote using the governor's residence as his voting address. Reporters were always dismissive of White's complaint, but it does seem to be a relevant question to ask. Daniels ignored the constitutional mandate to live at the governor's residence, and he got by with using it as his voting residence. White has a legitimate point about double standards and the rule of law not being uniformly applied.

Tort Claim Notice Of South Bend's Former 911 Operator Sheds Light On Content Of Recorded Conversations

Soon after taking office as South Bend's mayor earlier this year, Pete Buttigieg learned that the city's 911 operator, Karen DePaepe, regularly recorded phone conversations of not only 911 callers but also calls placed by the city's police officers as she had been directed to do by the city's former chief of police, Darryl Boykins. Buttigieg fired DePaepe and demoted Boykins after he had allegedly been told by the FBI that the recording policy violated federal wiretap laws. DePaepe had notified Boykins of the content of some of the conversations between police officers that concerned her, which triggered the investigation leading to her firing and Boykin's firing. Earlier reports had suggested that the content of those conversations included racially derogatory comments about Boykin, who is African-American. This week, DePaepe filed a tort claim notice with the city that sheds more light on the content of the recorded conversations in question, which included allegations of criminal wrondoing and efforts to convince Mayor Buttigieg to get rid of Boykins. The South Bend Tribune reports:

During her job, DePaepe has said she discovered — during random maintenance of the recording system — police officers within the department “engaged in serious acts of misconduct.” That allegedly included the potential commission of criminal offenses, to serious breaches of city policies and procedures.

The claim continued: “The content of some of the conversations contained racially derogatory statements relating to other ranking officers (including Boykins).”

The tapes, Duerring said, also contain discussions by the officers about schemes on how to influence then incoming mayor Pete Buttigieg to place certain individuals in positions of power within the police department. That, he said, included the ouster and replacement of Boykins.

DePaepe reported her findings to Boykins, and was later fired for doing so, Duerring said.

DePaepe’s firing has caused her to “suffer grievously,” according to the tort claim. Duerring added she was a 25-year veteran with no blemishes on her employment record.

The extent of damages cannot yet be determined, he said.

“Given the grievous and outrageous conduct of the city and the extent of the financial and emotional impact suffered by Ms. DePaepe, we are seeking damages,” including for loss of income, benefits and damages to her reputation and character. Duerring claims the investigation and firing has violated DePaepe’s constitutional rights and caused her “public humiliation.”

In making the decisions to fire DePaepe and demote Boykins, Mayor Buttigieg has suggested he was only acting on the advice of federal authorities; however, the U.S. Attorney's Office for the Northern District of Indiana announced three weeks ago that it would not be filing charges in the case. Boykins is also suing the city, claiming his demotion was racially motivated. A total of seven South Bend employees have filed tort claim notices over the incident.

Reaction From Ohio To Durham Conviction

The Akron Beacon-Journal has been doing an excellent job covering the Fair Finance travesty that cost small investors in northeastern Ohio more than $200 million. Reporter Jim Mackinnon has been covering the trial for the newspaper and had this reaction from investors:

Akron-area investors reacted to the verdicts, saying they have little expectation of getting their money back.

Tom Ries of Wadsworth had $72,000 invested with Fair Finance. He had been hoping to use the money to purchase a winter home in Florida. He’s had to settle for a mobile home, he said.

Ries said he’s been told to expect back no more than “pennies on the dollar.”

Still, “there is satisfaction in that [Durham] was found guilty and he won’t be out on the street,” Ries said.

Beverly Barabas, a Wadsworth widow, said she’s still not sure exactly how much she lost with Fair Finance, but she knows losing that money meant giving up all the little extras in life.

“I have grandchildren and children and I told them, ‘Grandma isn’t going to have the money for Christmas and birthdays,’ ” she said.

And while Wednesday’s conviction might not help get any of her money back, “Thank God they’re going to get punished for what they did to me and a lot of other people,” she said.

Mackinnon provides a brief recap of some of the evidence federal prosecutors presented to jurors that convinced them Durham and his business associates, James Cochran and Rick Snow, had intentionally engaged in a scheme to defraud them as opposed to the claims of defense lawyers that the trio was simply caught up in the bad economic conditions of the time:

The government’s evidence showed Durham spent $200,000 from Fair investors toward the $650,000 purchase of a 1929 Duesenberg Derham Phaeton on Jan. 20, 2005. He ordered wire transfers from Fair that sent $107,500 for him to use at the casino at Atlantis Paradise Island Resort in the Bahamas on Jan. 31, 2007.

Durham spent $131,235.97 from Fair to lease an ultra high-end sports car Bugatti Veyron on June 19, 2007. The base price to buy one is $1.7 million.

Durham ordered a wire transfer of $150,000 from Fair on Jan. 28, 2008, spending the money at the Rio Suites Hotel and Casino in Las Vegas.

Durham wired more than $168,000 from Fair to throw a Playboy magazine party in September 2008. The event included entertainment from Ludacris’ Disturbing tha Peace Records at a cost of $60,000, and appearances by Playboy bunnies and reality TV stars Kendra Wilkinson, Bridget Marquardt and Holly Madison, who were paid fees of $10,000 each.

Federal prosecutors told reporters following yesterday's verdicts that they intend to seek the maximum sentences against Durham, Cochran and Snow, which would mean life sentences for the three men. They are now being held in the Marion County Jail pending their sentencing.

Will Mitch Finally Return The Campaign Contributions He Accepted From Durham?

In a bit of irony, the same week we learn that Gov. Mitch Daniels will become the new president of Purdue University when he leaves office at the end of his term early next year, one of his largest campaign benefactors, Tim Durham, was convicted on all twelve charges that he ran a Ponzi scheme at the expense of thousands of small Ohio investors in the Fair Finance Co. A federal bankruptcy trustee, Brian Bash, has been working feverishly over the past couple of years trying to recover as much of the more than $200 million of their investments Durham and his associates squandered on their mansions, sporty cars, private jet, yacht, Playboy parties and gambling-fueled trips to Las Vegas. Durham also showered politicians like Gov. Mitch Daniels with large contributions.

Daniels received more than $200,000 from Durham, but he has been adamant in his refusal to aid Fair Finance's bankruptcy trustee by returning the ill-gotten funds. State Sen. Mike Delph was one of the first politicians to return Durham's contributions, and his lead was soon followed by a string of other politicians. Daniels has remained the last holdout. His campaign committee has returned only about $3,000 of the contributions he received from Durham. The bankruptcy trustee earlier this year sued Daniels to recover $90,000 from him. Daniels, who is personally worth more than $50 million, has defended his decision not to return the money based on the fact that the money is already spent. Perhaps the trustee of Purdue University should condition Daniels' appointment as the university's president on his agreement to settle up and at least repay the $90,000 the trustee has requested he repay. C'mon, if Jami Ferrell, the Playmate who received more than a quarter million dollars from Durham could repay $55,000 to the bankruptcy trustee, surely Daniels could find a spare $90,000 lying around somewhere.

The Party Is Over: Durham Found Guilty On All Charges

Tim Durham

Indicted Ponzi schemer Tim Durham became a convicted Ponzi schemer after a federal jury in Indianapolis deliberated for less than eight hours before returning guilty verdicts on all 12 charges against him, including 10 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit fraud. Durham's business associates, James Cochran and Rick Snow, fared only slightly better. The jury found Cochran guilty on 8 of the 12 counts, while Snow was found guilty on five of the 12 counts. All of the men could face decades in prison. Judge Magnus-Stinson ordered the three men held at the Marion Co. Jail until she can conduct a hearing Monday morning to determine whether the men can remain on home detention as they have since the indictments were first returned against them before the judge delivers their sentences. She is not likely to determine sentencing for the three men for a few months. According to the IBJ's Cory Schouten, federal prosecutors wanted the three men held in jail due to risk of flight:

Assistant U.S. Attorney Winfield Ong urged the defendants be taken into custody, telling the judge they are flight risks. The defense attorneys argued their clients should be released back to home detention pending sentencing.

"Tens of millions of dollars are missing," Ong told the judge. "All of them are facing life sentences. All it takes is $2,000 to get across the border."

U.S. Attorney Joseph Hogsett hailed the jury's decision, calling the case "the most significant piece of litigation the Southern District has seen in a generation."

The verdict was a huge victory for Hogsett's office and the FBI, which began investigating Durham more than three years ago. Hogsett vowed to seek the "full and maximum penalties." He said that makes it "entirely likely (the defendants) will serve the rest of their lives in jail."

As I've recently reported, federal judges have not had a tendency as of late to be lenient on criminals convicted of economic-related crimes involving Ponzi schemes. Those convicted are being sentenced as if they had been found guilty of capital crimes. A number of similarly-situated defendants have faced sentences in excess of 100 years. Each count carries a maximum sentence of 20 years. Thirty years is likely the least sentence Durham could expect from today's verdict. Given the staggering sum out of which he defrauded small Ohio investors of Fair Finance, in excess of $200 million, he will no doubt face a sentence that will put him behind bars the remainder of his life. Durham and his associates' convictions, however, provide little solace to those who lost their entire life savings so they could live their high-flying, Playboy lifestyles. The whistleblower who made today's convictions possible had this to say about today's news:

Who would have thought this would come full circle to my Mennonite step-mother and her family--you picked the wrong girl to stalk and harass year after year which caused me to dig. And, Greg Andrews did the rest along with Cory Schouten, who will forever be my heros. Thank you, Greg and Cory--for believing and reading the documents and daring to dig and running the stories so you got the tips from inside Fair. Thank you to Jeff S who put a stop to the public antics and slander that Carl [Brizzi] emitted because he's mad his friends got busted and the good times for him came to an end. And, thank you to God for putting Tim Durham away so I, and his other victims, can once again have a life. No one should be stalked and harassed and stolen from year after year and this verdict ensures Tim will never again be able to use the financial and or legal system to ruin someones life. And, on a side note I have never met Tim Durham despite the fact I am referred to as his ex girlfriend. Never met him, never been in a room with him, nothing. All I did was turn him in after I was asked to "get in on" a crime he was committing. He then decided to pay me back, because he was paranoid he would be investigated. Never could I have dreamed it would come full circle to my family, and that he was stealing their life savings and that of their friends. It's been surreal, that's for sure, but we will all survive and he will be locked away. THANK YOU GOD.

Obama's Autobiography Called A Fantasy

Former President Bill Clinton said Obama's life was just a fairy tale and now a liberal presidential biographer David Maraniss' new biography, "Barack Obama: The Story," documents dozens of fabrications contained in the President's autobiography, "Dreams From My Father." While the U.S. news media has discussed some revelations contained in Maraniss' new book, it has largely ignored the book's assault on Obama's autobiography. As usual, you have to turn to the foreign media to learn the truth about Obama since The Omedia will speak nothing ill of the man. From the U.K.'s Daily Mail:

A new biography of Barack Obama has established that his grandfather was not, as is related in the President’s own memoir, detained by the British in Kenya and found that claims that he was tortured were a fabrication.

'Barack Obama: The Story' by David Maraniss catalogues dozens of instances in which Obama deviated significantly from the truth in his book 'Dreams from My Father: A Story of Race and Inheritance'. The 641-page book punctures the carefully-crafted narrative of Obama’s life . . .

Maraniss also casts a sceptical eye on Obama’s grandmother’s tales of racism in Kansas, doubting whether she was ever chastised for addressing a black janitor as ‘Mister’ or ridiculed for playing with a black girl.

Obama himself, Maraniss finds, deliberately distorted elements of his own life to fit into a racial narrative. The author writes that Obama presents himself in his memoir as ‘blacker and more disaffected’ than he really was.

The memoir ‘accentuates characters drawn from black acquaintances who played lesser roles his real life but could be used to advance a line of thought, while leaving out or distorting the actions of friends who happened to be white’.

In the forward to his memoir, Obama wrote that ‘for the sake of compression, some of the characters that appear are composites of people I’ve known, and some events appear out of precise chronology’.

But Maraniss writes that Obama’s book is ‘literature and memoir, not history and autobiography’ and concludes: ‘The character creations and rearrangements of the book are not merely a matter of style, devices of compression, but are also substantive.’

Writing about his schooldays, Obama created a friend called Regina, a symbol of the authentic black American experience that Obama yearns for.

Maraniss found, however, that Regina was based on Caroline Boss, a white student leader at Occidental College. Regina was the name of Boss’s Swiss grandmother.

The book also notes that Obama removed two white roommates in Los Angeles and New York from his story. Obama himself told Maraniss in a 90-minute interview that a racial incident involving a New York girlfriend had in fact happened in Chicago.

A tale of the father of Obama’s Indonesian stepfather Soewarno Martodihardjo being killed by Dutch soldiers as he fought for Indonesian independence turns out to be ‘a concocted myth in almost all respects’, Maraniss finds . . .

According to the book, both Obama’s father and his paternal grandfather were abusive towards women and Maraniss finds that Obama’s story that he was abandoned by his father when he was two was false – in fact, Obama’s mother fled to Washington state a year earlier, possibly because she was being beaten.

A character in Obama’s memoir called Ray, portrayed as a symbol of young blackness, is in fact based on a fellow pupil who was half Japanese, part native American and part black and was not a close friend.

‘In the memoir Barry and Ray, could be heard complaining about how rich white haole [upper class white Hawaiian] girls would never date them. In fact, neither had much trouble in that regard.’

Obama notes of his own grandfather that he was apt to create ‘history to conform with the image he wished for himself’ . . .

The blogosphere has reported the fact that there never was an Obama family because Ann Dunham fled to Seattle to attend classes at the University of Washington within weeks of Obama's birth. Maraniss' book finally acknowledges this point ignored by the mainstream media. Maraniss' flattering reporting on Obama during the 2008 presidential election conveniently ignored many of the facts he now accepts as truth. Even Maraniss' stinging rebuke of the fabricated claims in Obama's autobiography doesn't go far enough. Jack Cashill and others have long ago established that Obama didn't even write the book; it was actually ghost written by Obama's long-time terrorist pal, Bill Ayers. My guess is that the Obama administration will have long come and gone before the American news media will ever get around to vetting Obama.

Daniels Decides On A Different Kind Of Presidential Job

Political observers were caught off guard by today's announcement that Gov. Mitch Daniels will become the new president of Purdue University at the end of his term, succeeding France Cordova. The IBJ reports that Purdue's trustees are scheduled to meet on Thursday to approve Daniels' appointment according to a source familiar with the university's selection process. A press conference to announce the appointment will take place Friday in Indianapolis at the JW Marriott. An interim successor for Cordova is expected to be named to serve until Daniels leaves office next January. This should finally remove any doubts about whether Daniels would be willing to be Mitt Romney's running mate. Daniels has insisted that he was not interested in being Vice President after turning down an opportunity to seek the Republican presidential nomination this year, but political pundits have persisted in throwing his name into the mix. I'm surprised that Daniels would be interested in being a university president. It will be interesting to watch the reaction of Purdue's academic community to this news.

UPDATE: The Star has some initial reaction from the academic community with some questioning his qualifications for the job while others lauded the news:

“I think the faculty would feel more comfortable with someone who has academic experience, someone who’s stood in front of a class of Purdue students after a long party weekend and gained their attention — these kind of challenges,” said Otto Doering, professor of agricultural economics at Purdue, who has advised Indiana governors since the 1970s.

To succeed, he said, Daniels will need to immediately reach out to faculty members and include them in his plans.

Last fall, the board’s search committee asked the University Senate to conduct a survey that asked students, faculty and staff what kind of expertise they wanted in their next president. All groups surveyed agreed it was “essential that the new president have academic credentials equivalent to a tenured full professor,” the committee wrote in its executive summary.

Daniels has an undergraduate degree from Princeton University and a law degree from Georgetown University, but he has spent his career in business and government settings, not in a classroom or research lab.

By contrast, Purdue’s presidents have usually been top scholars and lifelong academics, with degrees in medicine, engineering or physics. Córdova, the current president, is an internationally known astrophysicist.

That said, as word of Daniels’ selection reverberated around the campus, some faculty said they were softening their view that the next president must have an academic background.

“It got me thinking here’s an individual who’s been successful in business,” said David J. Williams, a veterinary professor of medical illustration and vice president of the University Senate. “Here’s an individual who’s been successful in the political arena who could harness all this creative energy at Purdue. I find that part of the idea of Mitch Daniels . . . that part of it I find exciting.”

Joe Rust, student government president at Purdue, said many students are excited by news of Daniels’ selection but concerned about his track record with higher education funding. Purdue lost about $45.5 million over two years in state funding, starting in 2009, in part because of Daniels’ instructions to the Indiana Commission on Higher Education to cut higher-education funding.

Still, many observers lauded the choice, calling Daniels a strong executive with a history of guiding large organizations, from Indiana government to his tenure as a senior executive at Eli Lilly and Co.

“It doesn’t concern me that he doesn’t have an academic background,” said Philip T. Powell, associate professor of business economics and public policy at Indiana University. “He’s a proven leader. He can bring a battleship of talent with him.” . . .

Carmel Palladium Needs More Money So Tenants Can Pay Rent

Carmel Mayor James Brainard is asking the city council to dip into the city's general fund to provide $840,000 in additional funding to the Center for the Performing Arts on top of the $5.5 million in funding the Palladium received to cover operating expenses paid from the Carmel City Center Community Development Corporation. The additional money is needed to cover a large budget deficit according to Mayor Brainard. If you read a little deeper into the IBJ story on the request for additional funding, however, you learn that additional money is also being doled out to several arts groups that pay rent for the use of the Palladium:

Brainard’s proposal would mean more money for 16 other arts groups as well. The Booth Tarkington Civic Theatre would get $190,000, Carmel Symphony Orchestra would get $200,000, and the Carmel Repertory Theatre Inc. would get $150,000.

All those groups are resident companies at the center, paying rent.

The proposed $1.62 million is much more than the council planned to spend last fall. At the time, the council approved $265,000 to support local arts groups, Brainard said.

The bigger allocation is possible now, he said, because the city's tax revenue increased by $6.5 million, thanks to the Indiana Department of Revenue's recently discovered accounting error.

Brainard says his goal is to reduce the annual subsidy to the Palladium to $2 million a year. He's hoping to cut its operating budget by having the city take over responsibility for paying for janitorial services and paying its utilities directly. The City of Carmel now officially spends more money subsidizing the arts than the City of Indianapolis despite being a fraction of its size. Indianapolis more than makes up for the difference, though, with its subsidies to professional sports teams. One has to wonder if the Palladium will ever become self-sustaining without a large endowment from a private benefactor. The Lucas Oil Palladium, anybody?

Durham Trial Likely To Go To Jury Before Week's End

Federal prosecutors plan to call only two more witnesses today in their case against accused Ponzi schemer Tim Durham and his business associates, Jim Cochran and Rick Snow, before resting their case. That means the case could go to jurors as soon as Wednesday, and the defense only plans to call a handful of witnesses. Attorneys for the defendants have not indicated yet if their witnesses will take the stand in their own defense according to the Star's Carrie Ritchie. Defense attorney Jack Crawford tells Ritchie that he thinks the government's case against the accused is strong:

"The government had a good week," said Crawford, who watched part of the trial. "That's my assessment. They have put this case together skillfully."

Prosecutors presented analyses from forensic accountants that show money from Fair Finance being used to help pay for an expensive Playboy party, Durham's classic cars and trips to luxury resorts and casinos.

Fair Finance's former owner, Donald Fair, testified that Durham and Cochran changed Fair Finance's business model after they took over the company in 2002. Instead of purchasing other companies' accounts receivables, or money that customers owed those companies, Fair Finance used investors' money to make loans to Durham, Cochran and their other businesses, Fair said.

Recorded calls played during the trial captured Durham and Cochran talking about excuses to give investors about why they couldn't cash in on their investments and why their interest checks stopped. The excuses, which included computer glitches and clerical errors, weren't true, one employee testified. Durham and Cochran were trying to keep as much money in Fair Finance as possible to keep it afloat.

And investors testified about losing their life savings.

All that will be difficult for the defense attorneys to overcome, Crawford said.

"The good guys and bad guys have been spelled out pretty well," he said. "You set up a scenario like that, and you have a jury that's prone to convict."

Particularly damaging to the defense were recorded conversations of Cochran's explanation to investors why they shouldn't take seriously a story written in the months prior to the FBI raid on the trio's offices by the IBJ's Greg Andrews that discussed the significant amount of Fair Finance's investor's money that had been used for related loans to Durham-owned businesses. Cochran told investors that the IBJ's owner, Mickey Maurer, had invested and lost millions of dollars speculating on Obsidian Enterprises' stock during a period of time when it was publicly-traded and the stock soared from $1.80 a share to $12 in the course of one month.

Cochran told the investor that a couple of Wall Street brokers contacted Durham to find out what was going on, and Cochran said he gave them his honest assessment that the stock was overvalued. "So lo and behold, you know, the next couple of days the stock dropped to a dollar fifty. You know Mickey Maurer never recovered any of the millions he put in," Cochran told the investor. He then goes on to suggest that Maurer had Andrews to write the negative story about Durham to get even with him. Cochran described the IBJ's reporting as "libelous" and "yellow journalism." When asked by the investor whether they planned to sue the publication for defamation, Cochran responded: "Well, um, our attorney, is looking at a lot of different things and this guy just loves controversy so we are um not able to talk to you about that right now." Cochran went on to tell the investor that it probably wouldn't be a good idea to sue Maurer because it would give him the opportunity "to raise thing thing up."

Presumably, Cochran's claim about Maurer investing and losing millions in Obsidian is untrue. The IBJ did not mention the exchange in its coverage of the trial, and the newspaper's past reporting has never mentioned any investments Maurer made in any of Durham's businesses. Judge Jane Magnus-Stinson sided with defense lawyers' arguments in keeping the text of the IBJ story in question out of evidence, although the article's content is discussed frequently in the e-mails and recorded phone conversations the government introduced as evidence.

UPDATE: A daily updated story during last week's coverage that I missed included a passage where IBJ reporter Cory Schouten discussed Cochran's claims and mentions that Maurer denied purchasing Obsidian stock:

Cochran said the story was payback from IBJ co-owner Mickey Maurer, who Cochran claimed had lost millions of dollars on an investment in Obsidian Enterprises before Durham took the company private.

Maurer said he never purchased any Obsidian stock.

More On Bad Broad Ripple Parking Garage Deal

Fellow blogger Pat Andrews continues to do yeoman's work in gathering information on the publicly-financed Broad Ripple parking garage that will be owned entirely by one of Mayor Greg Ballard's largest campaign contributors, Ersal Ozdemir. The Ballard administration used the excuse of Broad Ripple needing additional parking spaces as a ruse for using taxpayer dollars to finance Ozdemir's private real estate development project. The administration is giving Ozdemir nearly $6.5 million, or approximately one-third of the upfront payment the City received from the privatization of the City's parking meter assets, to build his parking garage, which the developer claimed without substantiation would cost about $15 million. The developer balked at having to construct the parking garage above flood plain levels due to the supposed higher costs of construction that would make development prohibitive. After the Board of Zoning Appeals denied the developer's request for a variance that would have permitted construction of the structure below the flood plain, construction is now moving forward. According to the structural permit Andrews found that was filed for its construction, she learned that the estimated cost of the structure is just $8 million, which means taxpayers are paying for about 80% of the cost of the structure that will be owned 100% by Ozdemir. Ozdemir was simply whining because he would have to pay a small percentage of the cost for a commercial development he alone will own. Presumably, taxpayers would have picked up 100% of the tab for construction if the zoning variance he had requested had been granted.

The Ballard administration tricked the public into believing the proposal was merely to construct a new parking garage, but when the developer's plans were publicly disclosed, we learned that it also features substantial retail/commercial development on the ground floor of the 3-story structure. At least 100 of the 350 parking spaces in the new garage will be needed for the retail/commercial space, leaving about 250 new parking spaces for public use. That translates into a cost of $26,000 to the public for each new parking space. The City will never recapture that investment since it is giving the developer 100% of the proceeds from the new development. It's just another example of how corrupt Indianapolis city government has become. The public is simply being raped to enrich one of the Mayor's campaign contributors. These sort of deals would attract the attention of the FBI and the U.S. Attorney's Office in Chicago, but this is Indianapolis where it's considered standard operating procedure and all law enforcement agencies turn a blind eye towards this sort of public corruption. The media in Chicago would also be all over such an outrageous deal, but the media here would describe it as just another successful public-private partnership.

Anthem Settlement Only Good For Attorneys

Class action lawyers leave a lot to be desired when they appear to pursue cases merely for the purpose of entering into settlements that ensure that they will pocket tens of millions of dollars while the plaintiffs they are representing receive settlements that are barely worth the effort of cashing the check for the settlement they receive. That pretty much sums up the deal the class action lawyers reached with Wellpoint over the demutualization of Anthem's Blue Cross-Blue Shield franchisees in Indiana and three other states. The settlement amount, $90 million, sounds like a large amount, but it really isn't. That's because it is divided among 700,000 policyholders after deducting the attorney's fees. The settlement agreement allows the attorneys to take up to one-third of the settlement amount, or $30 million, plus obtain reimbursement from the settlement fund for the expenses the attorneys incurred.

The Star reports the average payout to the policyholders is $128 per person, but that's before attorney's fees and expenses are deducted. Kathleen DeLaney of DeLaney & DeLaney, PC. boasts that it is among the largest settlements of its types; however, as the Star notes, Anthem would have been on the hook for a settlement reaching into the hundreds of millions of dollars if the case has gone to trial and the court found in favor of the class action plaintiffs. DeLaney is in the same family law firm with her father and mother, Ed and Ann, who would pocket about $7.5 million assuming the four law firms divide the attorney's fees equally among them. Ed is a Democratic state representative and his son, Tim, is a Democratic candidate running for the state senate against Scott Schneider.

The back story here is that the insiders who ran Anthem decided to convert the state-regulated, mutual health insurance companies into publicly-traded stock company, which today is known as Wellpoint. Before conversion, mutual insurance companies largely operated as nonprofits with the tax status nonprofits enjoy. The legislature passed a one-sided law back in 1999 that provided the basis for Anthem to demutualize. Gov. Evan Bayh's successor and lieutenant governor, Frank O'Bannon, gladly signed it into law. Ann DeLaney, is a former Democratic state chairman and worked on Bayh's staff as his legislative liaison. The legislation vested authority in the insurance commissioner to approve the conversion after a public hearing. Not surprisingly, one of the insurance commissioners who worked in the Bayh administration, Marjorie McGinn, later became a Regional Vice President of Industry and Political Affairs for Wellpoint. Even more interesting is the fact that Gov. Bayh's wife, Susan, was appointed to the company's board of directors after it became a publicly-traded company. She's made a fortune from her service on that board alone, not to mention all of the other corporate boards on which she has served, which were only offered to her because of the political positions her husband held.

My understanding is that the insiders all became instant multi-millionaires as a result of a large amount of stock they were awarded as part of the transactions, which paid pitiful cash benefits or token stock awards to the policyholders who actually owned the company. The state's Attorney General at the time of the conversion should have fought the transaction, but he didn't because the insiders who became instant multi-millionaires were politically influential persons. It's also the reason many people can't afford health insurance anymore because the health insurer no longer operates for the mutual benefit of its insureds; instead it operates for profit for the benefit of its stockholders. That's why I view this settlement as another slap in the face. The policyholders who got screwed at the time of the conversion are once are getting screwed again; only the attorneys benefit from this settlement in my opinion.

Ballard Now Wants To Privatize City-County Building

It's now apparent that there is no city asset that is so sacred as to not be within the grasp of Mayor Greg Ballard's political cronies to turn into a profit center. The IBJ's Kathleen McLaughlin has a story in today's edition discussing the Ballard administration's plan to privatize the City-County Building, which is currently owned by a municipal corporation, the Indianapolis-Marion County Building Authority, and leased to city-county government for $4.85 million annually, or about $7.29 per square foot, which includes unlimited utilities. The Authority floated bonds to construct the original 28-story building in 1959 for $32 million.

According to a Request for Information put out by the City, the administration thinks it would be better for it to exercise its option to assume ownership of the building at the end of its current 10-year lease with the Authority and then privatize it rather than continuing to make low lease payments to the Authority. The administration is hoping to shift cost of future repairs to the building to a third party without increasing the city's overall costs. Anyone with common sense knows that it's impossible to turn control of the building over to a private entity, expect that private entity to make necessary repairs to a 50-year old building and lease it back to the city for no more than the paltry $7.29 per square foot the City is now paying the Authority to use the space. The City is even anticipating an upfront payment from a private real estate manager as part of the deal to spend on infrastructure improvements. Apparently the City wants us to believe it is possible to have your cake and eat it too.

McLaughlin's story quotes the current chairwoman of the Authority, Abbe Hohman, as saying the Authority believes it has "offered to the city over a very long period economically attractive lease rate at the same time maintaining the building to the highest standards." The Authority also manages 19 other public facilities, including the Marion Co. Jail. Illustrative of what a great deal the city gets from its lease with the Authority is the fact that its annual lease expenses for CCB are less than half what the City is paying to lease downtown commercial space for the Marion Co. prosecutor's office and the public defender. Of course, those were sweetheart deals brokered by and for the benefit of John Bales, who has since been indicted by the federal government for corruption involving the leasing of office space for the Department of Child Services in Elkhart.

The IBJ story hints at one reason the City thinks it can have its cake and eat it too. A private operator would insist on consolidating offices scattered in other commercial buildings into the space contained in the CCB. Employees with permanent desk space would have to give their space up in favor of a shared space concept. While the City would have to pay more to lease the space from the private operator, it would hope to give up more costly leases elsewhere. There are currently 2,200 permanent workers in the building, not counting the thousands who visit the courts and government offices in the building daily. The City hasn't ruled out the possibility of a sale-leaseback. It prefers leasing the building to a private operator for a term of at least 30 years and then leasing it back from the private operator. I'm not sure why the administration simply isn't working with the Authority on a plan to achieve its objectives. It's the same way it was with the parking meter assets. The larger goal seemed to be to find a way to make a lot of money for a private company and its lawyers who shower Mayor Ballard with a lot of campaign contributions.

I found laughable a comment from David Rosenberg, Director of Enterprise Development, that the City wasn't going into the RFI with any expectations because "we don't want to bias the market." The RFI hit the street on June 6, 2012. Proposals not to exceed thirty pages are due back by July 2, 2012, less than 30 days after it hit the street. You can bet they've already met behind closed doors with the parties they want to bid on this proposal, and the RFI is all for show to make it appear the process is open and fair. They didn't even offer potential bidders an informational meeting at which questions could be posed and written responses provided to all interested parties prior to the deadline for submitting proposals. That should tell you something.

Ballard Vetoes Redistricting Ordinance

Democratic City-County Councilors had promised that things could become very contentious for Mayor Greg Ballard if he vetoed an ordinance recently passed by the Democratic majority to redistrict council district boundaries in conformance with state statute, but he did just that today. Ballard's office released the following statement on his decision:

"The City-County Council legally and fairly redistricted earlier this year.  As the city works to erase an estimated $47 million budget shortfall for 2013, this proposal was an unnecessary expenditure of taxpayer money."

Democrats take issue with the word "legally" used to describe a redistricting plan passed by the council Republicans while they were still in control of the council last year. State law required the council to redistrict this year following the 2010 decennial census. Republicans feared they might lose control of the council and began secretly drawing new boundaries before last year's municipal election. After the election where Democrats captured control of the council, the lame duck Republican-led council rammed through a redistricting plan. Democrats contend that it violated the spirit, if not the letter, of the state law providing for redistricting to be done this year. By waiting until after the first of the year to sign the ordinance into the law, Ballard claims the new redistricting plan satisfies the requirements of the state law.

Given that Common Cause has made redistricting software available for free use, I'm not sure why Democrats simply don't use that free software to devise a new map instead of spending as much as the Republicans spent last year on redistricting, which was about $250,000, if they believe the redistricting plan adopted by the Republicans is so unfair. Any fair analysis of the Republican-passed plan would show that Democrats stand at least a 50% chance, if  not better, of retaining control of the council under the newly-drawn boundaries. At least then the mayor would not be able to cite the unnecessary expenditure of taxpayer money as a reason for vetoing the ordinance.

Documentary Film Claims Frank Marshall Davis Is Obama's Real Father

Filmmaker Joel Gilbert's new documentary, "Dreams From My Real Father," makes the startling claim that Frank Marshall Davis, a self-avowed communist, is the true biological father of Barack Obama, not the Kenyan goat herder who came to Hawaii to earn a higher education where he met Obama's teen-age mother, Ann Dunham, during a Russian language class at the University of Hawaii. Gilbert has also uncovered a collection of racy photos he believes were taken of Dunham by Davis, an avid photographer, inside the home he lived in Honolulu that are depicted in the video above (NSFW). Davis' autobiography discusses the swinger lifestyle he and his wife led and mentions an underage girl by the name of "Anne" with whom he and his wife had sex. Nude photos taken of Dunham were published in several pornographic magazines. Gilbert's film claims that Obama's mother gave her father, Stanley Dunham, instructions to take young Barack Obama to visit with Davis regularly after she sent him back from Indonesia to live with his grandparents in Honolulu when he was only 10 years old. If Gilbert's claims are true, it would resolve doubts about whether Obama is a natural born citizen, but it also raises the specter that the biographical narrative Obama set out in his autobiography, "Dreams From My Father," which was actually ghost written by Bill Ayers, is pure fiction. Like Obama's mother, Davis was born in Kansas and later moved to Chicago where he worked as a writer. The FBI began tracking his radical associations after he moved to Hawaii. Obama speaks approvingly of Davis in his autobiography and is credited with helping him identify as an African-American. 

When Modern Technology Morphs Into UFOs

Motorists on the Capital Beltway outside Washington, D.C. see what appears to be a saucer-shaped craft being transported late at night on a flatbed truck and believe they've just witnessed a UFO. Last night's sighting is among a string of recent sitings of futuristic aircraft civilian witnesses believe are from another world. As it turns out, the aircraft witnesses saw last night was one of our own--a X-47B Unmanned Combat Air System being transported from Edwards Air Force Base in California to the Naval Air Station Patuxent River in Maryland for testing. America's military is increasingly deploying high-tech drones throughout the world for spying on other countries and carrying out targeted aerial strikes against persons our President deems to be hostile to U.S. interests. Iranians recently recovered an American drone that crashed on its soil and claim they are in the process of replicating the unmanned aircraft after its scientists were able to crack its encrypted code. Two days ago, a drone similar to the one being transported on the Capital Beltway crashed not far from the nation's capital in a marshy area near Salisbury, Maryland. Of more concern are reports that American officials are using drones to spy on our own citizens, using some drones described as being as small as golf balls. Those reports prompted Kentucky Sen. Rand Paul to introduce legislation requiring a court-ordered warrant before the government could deploy drones to surveil its citizens.

Laying aside privacy concerns, a larger question is how we would ever know that we have been visited by aliens from another world when aircraft of earthly origin take on the shape and size of documented UFO sitings over centuries of time predating the era when modern man first began building and flying aircraft. [See depiction of alien crafts in ancient artwork and other historical accounts here] Perhaps the most famous UFO siting in American history was the reported crash of a flying saucer at Roswell, New Mexico in 1947. A U.S. Army press officer initially released a press statement reporting on the crash and recovery of a "flying disc." A day later as media interest was sparked by the initial report, American military officials retracted the earlier press statement and reported that a weather balloon had been mistaken for the flying disc.  Numerous eyewitnesses contradicted the government's account and even reported the recovery of alien beings, at least one of which was reportedly alive at the time of the recovery. A few years later in 1952, numerous news reports documented unidentified flying saucers buzzing the nation's capital, which reportedly prompted President Harry Truman to place military jet pilots on a 24-hour nationwide alert against the flying saucers with orders to shoot them down. Given the design of today's most modern aircraft, the government would always have plausible deniability that what a civilian believes to be a UFO of alien origin is actually one of our own.