-

Community Development

Larry Riley – January 12, 2020

Posted on Updated on

Six months before The Star Press discontinued my services as a twice-weekly columnist in 2016, I became concerned that the newspaper was growing more enchanted with the Dennis Tyler city administration in Muncie. The mayor himself had long complained to me personally that I was too critical of him. I had to remind him that when I thought he had done something good, I was quick to acknowledge and congratulate.
* * * * *
One such issue was the downtown hotel, the new Marriott Courtyard. While I disagreed with underwriting the financing of the hotel by the city and committing the Food & Beverage Tax for 20 years to the parking garage, I still wrote that Tyler single-handedly deserved credit for bring the hospitality giant downtown. I even told the mayor I got flak from readers who said I shouldn’t be applauding the mayor, but I told them they were wrong.
* * * * *
Yet the mayor kept complaining, not just to me, but to the top editor at The Star Press, repeatedly, and once asked the editor to come to the mayor’s office so Tyler could air his grievances. Around that time, one of my columns got spiked—newspaper parlance for getting pulled from publication. The column was an important one about the difference between municipal “bids” versus “quotes” for a public project.
* * * * *
The difference is that bids on a project are open to any vendor who wants to compete for the work, while quotes are only from “selected” businesses—including firms that don’t even do the type of work the project calls for. That’s one of the problems that brought the city into the FBI’s sights and a major transgression I first brought to light.
* * * * *
Tyler’s Building Commissioner, Craig Nichols, son of the retired firefighter mayor’s good friend and fellow MFD retiree and fellow former Democratic Party chairman locally, had submitted bills from his private business for demolishing houses on properties where, for starters, no houses had stood. But he got the contract because the only other business quoting the work didn’t even do demolitions and had quotes higher than Nichols, hence Nichols won. Quotes were rigged.
* * * * *
But the newspaper’s top editor killed my column because I had quoted a city employee, Gretchen Cheeseman. The editor had evidently become convinced Cheeseman was the bad guy in an ongoing battle—playing out in public—in Muncie’s Community Development office. The editor didn’t want me to use Cheeseman as a source. I said I could rewrite the piece without quoting Cheeseman, and later did. Cheeseman, whom the administration wanted out of the way, got dismissed on trumped-up accusations.
* * * * *
Spiking my column did make me think The Star Press’s was leaning more and farther into the administration, buying into the mayor’s complaints. Four months later, the newspaper jettisoned me. Yet the FBI’s investigation into city wrongdoing intensified, since resulting in indictments of two high-level Muncie Sanitary District officials and three contractors, all on charges of fraud and kickbacks. And a conviction of that crooked Building Commissioner. And, of course, the indictment of former Mayor Tyler himself, on charges of accepting a bribe to steer business to a contractor.
* * * * *
And Gretchen Cheeseman was as honest as anybody in the city’s employ. In fact, she was the only obstacle between Community Development’s $4 million federal house demolitions grant and the shell corporation of Tyler’s cronies aiming to siphon that largess into their pockets. The principal crony will spend most of this year in prison. Cheeseman, meanwhile, is new Mayor Dan Ridenour’s Community Development director, replacing the woman who wrongly fired her. Delicious irony.
* * * * *
One new piece of evidence arose last week that continues my theory about the newspaper as chief apologist for the Tyler administration: the lead for the front-page story about the Muncie City Council’s refusal to appropriate money for fire department equipment purchased by Tyler last year without legal authority. A reporter wrote that Council members “refused to sign off on what they considered a mistake by the old administration.”
* * * * *
“Mistake”? What? No, this was no mistake, this was a crime, and that’s what Council members thought. If you rob a bank, you won’t be arrested for “making a mistake.” Spending city money without authorization was no mistake. The Tyler administration purchased $1.5 million in equipment without approval. To their credit, the new City Council refused to abet the crime

Conflicts of interest. For non-facebook people

Posted on

Screen Shot 2019-09-30 at 7.29.46 PM

Larry Riley

I think this is the final leftover souvenir I saved from my last year at The Star Press. Or parts thereof. The contract itself is eight pages long, so I’ve cut and pieced together the more interesting components, some of which I’ve highlighted. This is the only known to me contract between the City of Muncie and shell company Capitol Consulting & Property Management.
* * * * *
The contract would seem to be standard boilerplate. You see the date of the agreement and the parties at the top. Seven houses were to be demolished, all east of old Indiana Steel and Wire, now becoming Kitselman Pure Energy Park, a private development (so why is government involved?) to be a “live-work-play” project, which mostly would also appear to be another phantom operation. The “work” part includes, ostensibly, assembling mobile electric generators.
* * * * *
I will say that the $74,950 price-tag for seven structures is only double the usual cost of demolishing a house, not quadruple the cost, which is what the city Building Commissioner’s other private business charged the city earlier that year to take down four houses using rigged quotes. I’m not sure this contract ever went out for bid. To recap, after the FBI got the Building Commissioner indicted, later convicted, on those four house demolitions, which never existed in the first place, agents started talking to the woman who had incorporated Capitol Consulting. She ran a tax preparation business on Muncie’s south side.
* * * * *
She admitted in a transcribed interview with federal agents that she agreed in 2015 to incorporate and sign off as representative for Capitol Consulting to hide company ownership by the Building Commissioner, who told her he was getting too much heat in the newspaper over his other firm, Advanced Walls & Ceilings, which raked in a small fortune in city money—including for the phantom demolitions. He wanted more privacy, she said. She said she “did not think he would do anything illegal, in part because of his position as a public official.” I don’t know how FBI agents or even she, kept a straight face when she said that.
* * * * *
So the city was dealing with a firm allegedly operated by a tax preparer who incorporated the business using her home’s residential address, who owned no heavy equipment, had no physical office location (mail went to a PO box), no employees, wasn’t licensed to do asbestos inspections nor employed anyone who did. And nobody realized it? Because they looked the other way.
* * * * *
In the image below, I underlined places that specify the role of the Building Commissioner. Then the entirety of the “conflict of interest” section, where the parties explicitly specify that they would not do exactly what the company did. I also underlined the sentence about the company doing at least 51 percent of the work and not subcontracting the work out—which again is exactly opposite what the firm did.
* * * * *
At the bottom you can see the signatures. Signing for the city was John Quirk, an attorney and Delaware County public defender who should know something about crime.
* * * * *
Here’s what’s worth keeping in mind now, connecting the recent past to the present: the fingerprints of Community Development Director Terry Whitt Bailey are all over this contract, literally and figuratively. Literally, because I got this contract from her. I got told she had the only copy of any contract between Capitol Consulting and the city. Her office handled demolitions for the city. I asked her for a copy of this public record and she provided it.
* * * * *
The figurative fingerprints come from her place right in the midst of what the city was preparing to do with $4 million in federal funds given to Muncie to demolish houses. The Building Commissioner set up Capitol Consulting before the city completed preparations for spending the $4 million. Bailey then fired the key Community Development employee most involved with demolitions, removing a woman who would not have looked the other way if Capitol Consulting got hundreds of demolitions contracts. In 2015, Capitol got $144,800 from city and MSD for demolition work. In 2016, the firm got $150,325 from them, including $40,000 in two checks directly from Community Development accounts. One has to conclude Bailey herself approved the payments.
* * * * *
The mayor of Muncie, a Democrat, has said nothing to the citizens of his city about the theft by his Building Commissioner, who’s currently in federal prison. Nor has he said anything about the FBI’s investigation into rigged bids and kickbacks at his Muncie Sanitary District, in which two high-ranking public officials and three contractors have been indicted. But Mayor Dennis Tyler made a decision not to run for re-election. Instead, Bailey now runs on Democratic Headquarters ticket to become mayor of Muncie. In six weeks, voters decide if she will.

Larry Riley “How uninvolved?”

Posted on

Larry Riley

3 hrs

Terry Whitt Bailey, Democrat candidate for Muncie mayor, has tried to separate herself from scandals at City Hall, where for years she’s led Community Development department, appointed by Mayor Dennis Tyler. “I was not involved in any of that,” Bailey wrote in today’s Star Press. How uninvolved?

In autumn of 2015, I was one of few people following Muncie’s building demolition program – this was months before the FBI got interested – and saw an odd new company enter the picture.

Capitol Consulting and Property Management began getting municipal, Muncie Sanitary District contracts for demolishing houses. I wanted a copy of city documents with the firm, whose sole contract person was an obscure south-side woman who had run an income tax prep firm. Company headquarters was her home in a residential neighborhood.

My request to the Board of Works for the Capitol Consulting contract was turned down: the board didn’t have a copy. That seemed odd, too, since the board, presided over by a city attorney named Quirk, is the official agency that handles city business. I was, however, told to ask Terry Whitt Bailey. Only she had a copy of the contract. Nobody else.
The city’s CD office had for years handled routine demolitions of abandoned and blighted housing, usually with a $100,000 annual budget covering 20-25 demolitions – at the usual price of $4-5,000 tops for tearing a structure down.

So I asked Bailey for a copy of the Capitol contract, a public record. She gave me a copy. I read it, checked with the Secretary of State’s office. Sole name I could find was the same south-side woman. The company incorporated only a few months earlier. I dug through records of Indiana Dept. of Environmental Management to find Capitol had *no* employees certified for asbestos testing or abatement. Yet asbestos work and demolition is what Capitol would do for the city and MSD. Law requires asbestos inspection prior to any building demolition. More oddities.

At the time, a confluence of events shaped up that I was trying to connect dots on. First, a new federal Blight Elimination Program had dumped $4 million on Muncie, but the city was sitting on the grant, taking forever to get its program underway. Admittedly federal and state requirements were complex, but was anything else at work?

Meanwhile, Bailey fired the one CD employee experienced in property demolitions. The employee was in charge of the city’s demolition program and worked with the city building commissioner and Unsafe Building Hearing Authority. She kept the records and prepared bids for demolitions. No one else knew as much about the process. I had known the employee for a long time: she worked hard and honestly.

About the same time, I uncovered phantom demolitions done by the building commissioner’s private firm under pretense of emergency work – billing the city more than $80,000 for razing just four houses, none of which actually had been taken down by the firm. I wrote that up in early 2016.

A few months later, for reasons unknown The Star Press decided to part ways with me.
Now, as is well known, the city’s former building commissioner Craig Nichols has started a federal prison term for those phantom demolitions that the FBI investigated. That strange new company Capitol Consulting? Turns out to have been a firm Nichols secretly owned, too. Capitol would bill the city, say, $800 for an asbestos inspection, then farm out the actual inspection to a certified firm from Fort Wayne who’d do the job for $500. Then another firm would be contracted to do the demolition for less than what Capitol was charging.

In retrospect, one can’t help but think somebody was putting all the pieces in place for the right people to siphon off lots of the federal millions coming up for demolition: get rid of an honest employee who wouldn’t have put up with the corruption and concoct a sham company to get the contracts. Amidst it all was the woman now chosen to be Democratic Party Headquarters candidate for mayor, to succeed Dennis Tyler, who decided not to run for re-election.

Bailey was at the nexus, a key to both the fired, honest employee and the bogus contractor.

At best, was Bailey manipulated and used by forces more powerful than she to do their bidding? At best, could she have been naïve beyond unbelief? At worst … well, you decide whether she “was not involved.” I always got along well with Bailey. She was always willing to see me. When the employee in question was let go, Bailey was the person I went to for comment. Bailey had none, but she confirmed the employee’s discharge. When I asked for the Capitol contract, she did not evade the request.

Yet she straddled the corruption of the Tyler administration. She was at the epicenter of wrongdoing and would appear to have been on the precipice of helping create an even bigger money grab at City Hall before the feds stepped in. Now she runs for mayor. The candidate of Democratic Headquarters.

%d bloggers like this: