Craig Nichols

Conflicts of interest. For non-facebook people

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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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?”

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Larry Riley

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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.

Not an April Fool’s Day Joke

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black and white dog
Are you pulling my tail? Photo by Helena Lopes

 

Do you all remember Hank the Dog?  If not, here’s a synopsis.  Once upon a time, there was a dog named Hank.  Hank was notorious for being picked-up by city animal control.  You might go as far as to say he was targeted.  The owner was summoned to city court, and although the details are a little murky, one thing we do know, the City of Muncie violated their own animal control ordinances.  You see, there was nothing about the number of times an animal could be picked up and nothing about an owner having to appear in court.    Later they did change the ordinance after they violated it.

Dennis Tyler hired a local attorney firm to represent the City of Muncie. (We’ll leave out Tylers Indy firm for now.)

First, we need to ask, “Why are we paying for their services?”   Did the law firm not read city ordinances pertaining to Hank the Dog?  Did they not know about the Indiana law from 2013? Mayor Tyler and his administration are surrounded by attorneys. Think about this for just a minute.

Funny, how the city’s attorney could find an ordinance that was decades old. Suddenly, the elected officials are concerned because they aren’t following this ordinance. City Code 32.33.

Sec. 32.33. Time and place for regular meetings.
The first regular meeting of the council shall be
held on the first Monday in January after the
general election of the members-elect of the council, at 7:30 p.m. as provided by IC 18-1-3-2. All
regular meetings shall be held on the first Monday evening of each month at 7:30 p.m. and may
be adjourned at the pleasure of the council. Adjourned meetings shall have all the force and
effect of regular meetings. Meetings shall be held
in the council chamber, unless otherwise determined by the president and designated on the
agenda.
(Code 1968, § 31.14; Ord. No. 620-80, 10-10-80)

The city council has been in violation of this for years.  So, what’s to stop them from violating a 2013 Indiana State law?  Or any law, for that matter?    As you can see, absolutely nothing.  Ah ha. Let’s have a meeting on January 1, 2018. Surely no one would show. And, and,  and we’ll be following an ordinance we have never observed.

As the City-run EMS began to heat up, the elected officials, who are supposed to represent the people were hoping to find a something that would weaken the DCEMS supporters on council turnouts.  Wrong on Muncie City Proper’s part.

Demolishing empty lots?  No problem.  We’ll change the addresses.   Who said anything about bid rigging?  Did you hear anything about bid rigging?

This has to be the most poorly run administration to date.  Or at least it comes close.  With all of the history and many of the old-timers would remember days gone by, there was quite a bit of action.  Have talked with a few and the stories they would tell.  Sadly, many have passed from this earth.  Oral history is most effective.

So just for fun, and possibly to jog a few memories, here is a clipping from the local newspaper dated February 21, 1993.  You would think the cost of corruption would be enough to throw these characters out on their ear.  Nope.  They are like a bad penny…just keep showing up again and again.  Most have been replaced with the younger generation.  Make no mistake they learn from their elders.

How do you define insanity?  Well, yes, it’s doing the same thing over and over and expecting different results.

Ex-building commissioner – going down

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MC900439169

Bad company corrupts good morals.

One who runs from corrupt people is wise indeed.

Birds of a feather, flock together.

Be sure, your sins will be found out.

Here we are nearly three weeks into 2019 and finally, the sentencing memorandum of Muncie’s ex-building commission has been made available.    So, let’s begin with the persons named in the memorandum.

Here is every name listed in the Nichols sentencing memo

(Full text of the memo is located at the end of the post.)

The names have not been changed to protect the innocent.   Some of the people were doing their jobs – their consciences could not be seared.  Those would be the ones who resigned or perhaps fired.

One name, Aaron Kidder, was a rising star in the city’s administration.  He was the right-hand man to Mayor Tyler.  Intelligent, well spoken and to his detriment (at least in this administration) honest.

“Nichols asked Kidder if he would be willing to say that he acquired quotes from Gibbs even though he had not. Kidder refused.”

And then there is Audrey Jones, the city controller.  She complied with an FOIA.

Jones gave Marsh copies of the original invoices, and then approached Nichols to inform him that she had turned them over during the FOIA request.

What exactly did Dennis Tyler know and was he aware of the bid-rigging, demolitions?  The answer would be yes.  Although when issues came up, he blew them off with a “nah” and a smile.  How could average citizens, people not privy to the inner workings of his administration, have information and the mayor didn’t know?

Note Ross Bater’s comment:

  • Brater states that had they been competitively bid instead of awarded to Nichols through fraud, it would have cost the Muncie taxpayers between $8,800 and $9,200 on average to demolish each property. Nichols (according to his own calculation) billed on average $19,500 per property.  Source: Muncie Star Press 1-18-19

Local columnist and what he knew

Three years ago Larry Riley wrote about the cost of demolitions done by Nichols’ company.    We might presume Gibbs Construction would be the one and the same.  Just a wild guess.  Amazingly, Riley had all the facts, figures and names and the column published in the local paper yet Mayor Tyler did nothing.  Larry was on top of it and the FBI confirms it.

Certainly having him give quotes to compare with Advanced Walls helped the latter immensely, as each Gibbs Construction quote was even higher, usually a few hundred bucks, than the unduly high Advanced Walls quote. Thus a cost conscious administration went with the lower quote.

The four demolitions averaged $20,375 each, or more specifically:

— 527 W. Wilson, an 850 square-foot house with no basement, razed for $22,000 by Advanced Walls.

— 424 S. Proud St., 1,700 square feet, two stories, plus 400 square-foot detached garage, for $19,500.

— 320 S. Beacon, 1,216 square feet, no basement, for $19,500.

— 909 S. Wolfe St., 964 square feet, half basement, for $21,500

Source: Muncie Star Press March 6, 2016

Check-out the full column below.

Larry Riley: More lair-razing questions

 

 No one would notice or no one would care

Given his powerful allies, Nichols figured that either no one would notice or no one would care, and he quietly submitted $81,500 in invoices to the City between August 7, 2015, and October 5, 2015 for work he didn’t perform. Nichols used his company, Advanced Walls and Ceilings, for this.

What did the mayor know and when

Did no one notice or did no one care?  The administration did notice and no one cared.  It’s amazing all the channels put in place and Nichols slipped by?   The public didn’t seem to care and so it continued.  But yes, considering all the information we have received in the past 24 hours and past articles, State Board of Accounts audits, and the continuous presence of the FBI should have been a wake-up call and instead, it was business as usual.

To read the full report click the link below (pdf).

craig-nichols-sentencing-memo 1-16-19

 

MC900439169

Saturday ramblings: City of Muncie – in trouble?

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Dennis Tyler at Homecoming

By now everyone in Delaware County and outwards has heard the news, Muncie Building Commissioner has been arrested and charged with 33 felonies.  He is on unpaid leave.

You may remember when Nichols’ company billed and was paid to demolish four buildings.  There were no buildings on these four properties.  Several people commented on social media the buildings had been demolished during Mayor McShurley’s administration.  She lost to Tyler in 2011.

In an attempt to cover up the fraudulent invoices,  Nichols claimed it was a mistake and submitted new invoices.  Journalist Larry Riley penned a column citing there were no demolition permits attached to the paperwork.  Mayor Tyler took no action.

Reviewing the Board of Public Works none of the 2015 minutes are available as of 2-18-17.  According to the indictment, many of the violations occurred in 2015.

Board of Public Works

nicholsindictment-2-14-17

Muncie City Board of Public Works approves payment of submitted invoices.  The president of BOW is John Quirk and his law firm represents the City of Muncie as well.  January 13, 2016, minutes reflects approval of a change order presented on behalf of the City of Muncie for Nichols company Capitol Consulting and Property Management in the amount of $14,000 bringing the total of services billed to $88,950.00.  bow-jan-13-2016-minutes-1 Read the rest of this entry »

Conflict of Interest and the City

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Conflict of Interest 2015
Source: Indiana Gateway for government units

W/R: Mayor Tyler’s conflict problem

Seems Mayor Tyler recently realized there may be a conflict of interest.  Stuff like that happens when the FBI comes knocking on your door

It took a handful of citizens working diligently for two or three years, investing their time and money to uncover several violations.

Within months of Craig Nichols appointment as the city’s building commissioner, his defunct business was reopened.  Shortly thereafter his company began receiving city contracts.  It took the local newspaper about nine months to report and even at that it was a lighthearted almost humorous article.

The paper is reporting Nichols had a conflict of interest statement filed in 2015.  The State of Indiana is not showing anything filed for Nichols in 2015.  The Conflict of Interest law states the form must be filed within 15 days with the State Board of Accounts and the county clerk.  (See picture).

Uodate: Newspaper responded on their story.

Keith Roysdon ·Watchdog reporter at The Star Press

In the Delaware County clerk’s office, there are separate state approved conflict of interest forms for Craig Nichols’ companies.”

Indiana Conflict of Interest law

For 2016 three council members, building commissioner and one attorney filed conflict statements.  Four of the statements were done at or near the time the investigation and Federal Lawsuit was reported to the public.

Another appearance of  conflict would be the street department superintendent and city contracts awarded to his nephew’s company.

“Obviously, I don’t see any problem with them doing work for the city because they are the best and the lowest,” said Campbell, a Democrat who is more high-profile this year because he’s running for Delaware County commissioner against incumbent James King. “They’re good guys.

“I know what people may think, but it’s all on the up-and-up,” Campbell added. “I don’t consider it a conflict. It goes by the book.” Duke Campbell, Muncie’s street superintendent

W/R: In politics, it’s all relative(s)

Not exactly sure how “goes by the book” is defined in this instance.  If the street superintendent’s nephews are awarded contracts to work on the streets one would think a conflict of interest statement submitted by Duke Campbel would be going by the book of Indiana State law.  There is no conflict statement for Campbell in 2015.

It’s not just about conflicts of interest, it’s the Federal lawsuit alleging contractors have been cut out of the bidding process in favor of friends and relatives of the Mayor and his close associates.

We will end this post with excerpts from the Muncie Star Press after the 2011 election.

“It’s not going to be a ‘good old boy’s club,'” Tyler said about the first Democratic city administration in 20 years.

At the same time, Tyler acknowledged that Democrats will now control both city and county government locally and with that control comes expectations.
“This isn’t going to be easy,” he said. “Democrats don’t have any excuses now. But I think people will be pleasantly surprised.” WALKER/ROYSDON REPORT: Tyler: No‘good old boys club’ Nov. 27, 2011