FBI Investigation

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.

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