Public Assets, Private Profits, Politics

And the beat goes on.

Over the past several years, Indiana government has entered into a variety of deals in which public assets have generated or guaranteed private profits. The toll road lease probably received the most attention. Daniels’ ill-fated privatization of the welfare application process–and the ensuing lawsuits– was high profile for a time, but his Administration’s thirty-year agreement with Leucadia National Corporation to purchase the output from its Rockport coal gasification plant (coincidentally managed by a long-time political ally) received significantly less coverage.

Locally, of course, we’ve seen a number of dubious transactions, notably the 50-year parking meter contract.

More recently, a politically-connected developer has been given long-term control of the Indiana Dunes. 

The parkland surrounding Indiana’s towering dunes was intended to keep industry away from a geological marvel molded over thousands of years at the southern tip of Lake Michigan.

Yet five years after a politically connected developer suggested officials should hire a company to rehabilitate a dilapidated beachfront pavilion at the popular tourist destination, a small construction project has ballooned into a decades-long privatization deal with the state. It includes two beachfront restaurants, a rooftop bar, a glass-walled banquet hall promising “the best view in Indiana” — and there is potential for more development to come.

What’s more, the company ultimately picked to do the job was co-founded by Chuck Williams, the developer who pitched the initial idea. Williams, a regional chairman of the state Republican Party, worked behind the scenes for over a year with the administrations of two GOP governors, shaping and expanding the plans.

There are times when so-called “public-private partnerships” make sense. There are times they don’t. The problem is, these deals increasingly occur without the public vetting required to make that determination.

In the case of the Indiana Dunes, critics characterize the deal as a “usurping” of public land in the name of private development, and charge that the state Department of Natural Resources did not hold public meetings or seek out more competitive bids. Worse still,

Preliminary figures submitted to the DNR by Williams suggest the project will yield a handsome profit. In its first year, the development is expected to turn a $141,000 profit — a figure projected to climb to nearly $500,000 in a decade.

In return, the DNR will get 2 percent of the company’s annual revenues and $18,000 a year in rent for property that state parks Director Dan Bortner describes as having a “million dollar smile.”

The merits or flaws of this particular contract aside, Hoosier citizens need to demand a halt to the steady sell-off of public goods at both the state and local level until a full public debate can be held to consider the rules–and the ethical guidelines– that should govern privatization agreements.

In far too many cases, the risks are socialized and profits privatized–with We the People guaranteeing the revenues of politically-connected cronies.

And we wonder why citizens are cynical….


  1. “And we wonder why citizens are cynical….”
    Yes we are cynical. When will these crooks ever be prosecuted and put behind bars for their criminal ways? Behind the scenes…. Under the table…. crooked stuff for sure. But they smile and take pictures with Governors and Presidents. WHEN are they going to jail? Maybe having an experienced federal prosecutor for our Mayor can be a start. I sure would like to see some jail time for the crooks in Indianapolis. Electric Cop Cars? Lease / Purchase / Who Knows? Silly electric cars all over town at public expense? Who voted for that? Who is making the profit? Who got paid off to make it happen. Time for some JAIL time. Lets make a start in Indy. I bet the rich Republicans will NOT like jail. Could be interesting for sure. They are fearless now. Maybe fear could slow them down a bit.

  2. Yes I am cynical and I have following all the things you mention. It is a gouging of the citizens who have no voice in any of it. I am thinking it is time to move out of Indiana because it does not look to me like times are changing, at least not for the better here!

  3. I had the opportunity/misfortune yesterday to be driven from East 16th Street and Arlington Avenue, across and through downtown Indianapolis, through the maze of curving streets with confusing or no signs to reach the VA Hospital. Whoever the hell has the traffic barricade barrel business is a rich man/Republican. There was nowhere that construction signs, barrels, blockages and detours were not in place with little evidence of work being done. And I thought it was bad in the suburbs! The condition of street surfaces actually made me nauseated and the bumping and pot-holed areas caused disorientation due to my inner ear disease. Driving through downtown took us through areas of new, modern, ugly boxlike buildings, some in many colors, that makes up the modernization of what used to be a beautiful downtown Indianapolis area. Nothing seems to be near completion, traffic is snarled with the ins and outs traveling in all directions. Blocked sidewalks added to the feeling of confusion; being forced back and forth across downtown city streets on foot to get anywhere must be a nightmare.

    Public Assets, Private Profits, Politics! I saw it all yesterday and was sickened; Ballard is probably leaving office because he sees no way out of the current on-going mass confusion that is the “growth” of downtown Indianapolis. My daughter-in-law had driven the same route last December to visit my daughter in Eskenazi Hospital; I thought it was bad at that time but it didn’t make me physically ill…and heartsick at the sights of construction and demolition mass confusion that is our city. Can’t help but wonder if it isn’t deliberate to make it more difficult, if not impossible, to “follow the money”.

  4. You forgot to mention some of the worst culprits in changing public money into private…”Ed Reformers”. At least when it’s dumping tax money into a construction project that’s “just” money lost. When Ed Reformers do it, not only does the money not go to something more important, it is actually directly taken away from impoverished children.

  5. One way to tell good privatized anything from bad is the one advantage that capitalism has over socialism. Competition.

    Without it public projects done by private companies is just license to steal.

  6. I agree with Scott Armstrong. Plus, when we privatize public education, we allow the system to write curriculum (both for the privatized schools which are not answerable to the public and for the public schools which have less power because their resources and powerful constituents are gone to the private schools) that makes kids less effective at resisting further effects of the corporatist/extractionist movement. They can’t vote against these guys when they get old enough to, because they don’t know how to understand the political process and don’t question what they were taught as fact.

  7. patmcc,

    You’re absolutely 110% right. Just the right encouragement I need. Tomorrow, “may the Gods strike me dead, if I don’t or the Klan, if I do” I’m going to initiate the prosecution of the OLIGARCHY here in Jacksonville even if I don’t have a license to do so. What else can you do? They have the District Attorney in their pocket.

    In order to fund the NFL franchise, the Police and Fireman’s Pension Plan was not funded for 11 years. The City now has a shortfall in its pensions plans of over 2.7 billion dollars. I tried to warn on both radio and TV as to what was going to happen, but I got over powered.

    Everyone is scared to buck the oligarchy. Even if it was a criminal enterprise behind the swindle of the Police and Fireman’s Pension Plan. It’s so bad in Jacksonville that the police and fireman are scared to do anything although their pensions are now worth about 40% of their original value.

    Ultimately, I believe the only way to spark this type of response in Jacksonville is to convince the players in the NFL with all their money to threaten a STRIKE along with the police and fireman. You have to start somewhere.

    It’s not IMPOSSIBLE. My best friend and I started the first mixed sports management firm in Dallas back in 1980 with the most popular player in the NFL as our third partner. In addition, my best friend growing up was a long time member of the police force and the acting sheriff of the adjoining county.

    You have to leverage the oligarchy. There is no other way other than a revolution which is not my kind of thing.

  8. Furthering Scott Armstrong’s comment, the awarding of over 300 IPS elementary school children to privately owned and publicly funded Phalen Leadership Academies charter school may be the most egregious local example. With the changing of school boundaries by the current IPS Board, which seems to result in replacing nearly half of last year’s 103 children with an equal number of children from neighboring IPS 94. Interestingly, 94’s Istep pass rate was over twice that of 103 in 2014, the most recemt year for which Istep scores have been released. Phalen has a $3 million plus 5 year contract with IPS to run the school. It will be judged on how much the school’s Istep scores increase. And why were those boundaries changed again?

  9. There are many things that make zero sense to privatize once we understand that it’s competition that makes capitalism work. Nothing else. Education is certainly one, healthcare, infrastructure like highways and bridges, prisons and jails, police and military, and energy.

    We’ve tried hard to make privatized banking work too but it seems a failure to me.

  10. It is all organized crime and the politicians that accept payments from private corporate thugs are all prostitutes.

  11. Privatization = Socialization of costs and Privatization of Profits for the politically selected has become arrogant in the extreme. This Crony Capitalism had a slow start in Indianapolis with the RCA Dome, but quickly moved forward at warp speed, with the Down Town Mall, the Pacer Fieldhouse, subsidies for down town businesses, the Public Park Golf Courses, etc. Any Government asset that can be exploited, can and will be by the Crony-Capitalists.

    These various schemes that are hatched in the toxic stew are protected by our three branches of government, if it is illegal there is no prosecution, or just re-write the laws to make it legal. We never see any meaningful prosecution of the Crony-Capitalists and their political enablers. They protect each with an interlocking defense that includes our intellectually vacant McMega Media here in Indianapolis. We have for all intents and purposes a Republicrat Party in Indianapolis.

  12. Let us begin the reform process with the correct terminology. It is NOT privatization; it IS piratization.

  13. I can’t think of any time that public-private partnerships make sense. You end up with the public assuming the risk while the private entity walks away with the money. Privatization is slightly different. Privatization can work under certain circumstances IF it is about leveraging the market place to provide public services. Too often though, there is no competition, the companies end up with long term contracts, and politicians manipulate who the winners of those contracts are. Using the power of government to create business monopolies, does not protect the consumer.

  14. You have to prosecute the city officials like they were war criminals. A good example would be the trial against the Nazi cronies conducted by the Nurnberg War Crimes Tribunal .

    Actually, we successfully did something similar in April of 1991 in Dallas. It was started by a political illusion called A.L.A.R.M. (Americans Lending Assistance to Responding to the Mayor). The prosecution was initiated in the form of an indictment labeled: Report on the State of Investigation of Crimes Against the People of Dallas by Mayor Annette Strauss. It was backed up by 15 documents. You have to have enough proof for conviction.

    At the time of the Report, Dallas was under a national boycott by African-Americans for racial discrimination as well as the scene of the national battle for one man-one vote.

    Within weeks of the Report which was submitted on television to the Dallas City Council all of the above problems were successfully concluded. Texas is a mess. but not the City of Dallas nor the surrounding suburbs.

    It’s been my long experience that the deviant oligarchy is powerful but not individually strong. There is a big difference between power and strength. Remove their cover and my personal on the ground observation has been, so far, that they will run.

  15. For profit privately owned corporations operate under the single directive of make more money regardless of the cost to others. Many not for profits too. Make more money includes executive compensation as well as profit. Workers are paid the least that they can be given the labor market.

    All of that maximizes consumer value only if there is effective competition. Of course competition also reduced worker compensation as well.

    Socialism in a democracy works because management serves at the pleasure of customers; voters.

    Both economic systems have advantages and disadvantages depending on the particular markets they are employed in.

    Capitalists like us to believe that capitalism is magic. Socialists that capitalism always sows the seeds of its own destruction.

    But virtually all modern counties employ both so even the terms socialistic and capitalistic are meaningless nowadays.

    As we’ve learned before hardly anything is as simple as entertainers advertising make it seem.

    Good economics requires educated experts and deep thought and analysis not slogans.

  16. I totally agree with what everyone has expressed so eloquently, so there is no need for me to add a comment, except for this:

    JoAnn, I live on the eastside, and you need to take I70 downtown. Get on at Emerson or Shadeland, take I65 N very briefly to the MLK exit, turn left, then right, and you are almost to Eskanazi or the VA. Yes, state & local govt contractors are all crooks, but the interstates are better maintained than city streets.

  17. “In far too many cases, the risks are socialized and profits privatized”

    This morning, inveterate communist Doug Masson published one of his periodic testaments to his belief in his alien government by repeating his government’s position that there is no such thing as private property, that all property colloquially considered private is merely a temporary grant of control from the state to a governed person. As anyone conversant is systems of government well knows, state ownership of all property is a foundational and essential belief of communism. That belief belongs to no other governmental philosophy.

    Championing communism is hardly a new position for Masson, and he breaks no new ground with this morning’s statement. Every reader of Masson knows he’s a communist, and his devotees stop by his website by their periodic party rallies.

    What is stunning and unforgivable is to see your pithy endorsement of Masson’s communism by stating simply “Bravo” in Masson’s Comments section, explicitly endorsing the entire foregoing article. This is inexcusable. A communist is unemployable in America. A communist cannot live in America. At a minimum, a communist should never, under any circumstances, collect a single dollar in wages from any American government. Putting the sharpest point on the subject, our entire history of arms and force and the most hallowed sacrifices of our military was all to ensure a communist can never be allowed anywhere near any student in America. This most sacred debt demands that their sacrifice be defended and repaid by each true American, using all possible means.

    With the weight of American blood, sacrifice and honor bearing on this question, I’ll ask you to clarify whether you believe property exists in America by inalienable right or by grant of the state.

  18. Sharon; thank you so much. My daughter-in-law, Anne, and I both wanted to avoid I 70; after what we drove through, it might be better to grit our teeth and take the interstate next time.

  19. Here’s a link to the blog that Gopper is ranting about.

    As Gopper is a leftover from Joe Mccarthy’s days in his world there’s a Communist behind every tree.

    In this case the point made in the blog is that private property requires a government to defend it. Otherwise nations stronger militarily than the private owner would come and take it. That has nothing to do with Communism, it’s merely a fact.

    We are of course in the era ushered in by colonialism whereby militarily strong nations took over militarily weak people and took their land. Our Native Americans are just one example.

    Gopper really likes that arrangement because it advantages him over others. He feels entitled to that.

    Someday this era will end under the pressure of environmental realities and mankind will adopt the next thing. Nobody knows what.

    In the meantime mankind will continue to make progress and Gopper will continue to rant about his entitlements one being to have the past back. It won’t happen and we’ll move on and his ranting will recede behind us.

    Cultural and physical evolution is irresistible but that doesn’t prevent some from trying to resist it.

  20. So ” Every reader of Masson knows he’s a communist”? Man, you could have fooled me and all the others who comment and read his site. But aside from the name-calling, maybe Gooper needs to provide some intelligent contribution that would inform us where Masson’s argument is flawed . He does some to have some bona fide legal opinions on the matter, but maybe Gooper can make a sensible contribution, not only to this site but to Masson’s site, and keep the comments relevant. Of course, I think we can all understand why that might present a problem for him.

  21. I wondered why Gopper freaked out about Doug Masson’s blog subject “Property is Government” in his “A Citizen’s Guide to Indiana”
    (see saying “Masson is an inveterate communist”, so I clicked Masson’s blog, read it, and concluded that there must be something wrong with Gopper. What subject stuck in Gopper’s craw? Was it public/private property rights? Was it trade unions? Or was it the intelligent fleshing out of these subjects that nettled Gopper? What is an “inveterate communist” anyhow? If the Chinese are “inveterate communists” it’s serving them stupendously well in their practice of 21st Century Capitalism.
    Does anyone know where Gopper is coming from?

  22. Name-calling doesn’t help and is frequently used to divert attention from the issue. We already have socialism for the rich and that’s not name-calling. When ordinary income is redefined as “carried interest” in order for the superrich to pay a maximum of 15 percent which resulted in Mitt Romney’s paying 13.7 percent income tax on 21.7 million dollars in 2010 while the people who mowed the lawn on his estate(s) paid at a higher rate, it is clear to me that the idea of a progressive income tax is dead. Whether Romney is a right wing deadbeat Republican need not be discussed; only arithmetic and progressivity of the income tax is up for discussion.

  23. Pete says of Masson: “In this case the point made in the blog is that private property requires a government to defend it.”

    Not quite, Pete. You wish he said that.

    Masson said:

    “property rights are …an artificial construct, not “natural.” ”

    That’s communism.

    That’s dangerous.

    That’s anti-American.

    Masson is well known as an enemy of natural law, intrinsic human rights, inalienable rights, and all the other Enlightenment products that form American government.

    Masson categorically denies the central American Jefferson argument:

    “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed”

    Masson absolutely hates that passage. Masson believes that people are born into a government and that they do not create their own government.

    Masson is very much not a Founder American, and it’s questionable what sort of American he is, at all. He doesn’t seem to want to be American; he rather seems to want to change America to fit his preference.

    The question remains of Sheila why she’s saying “Bravo” to any of that, especially in her role in the ACLU. Masson will not believe in civil liberties, at all. The best you’ll get from him is a legal permission to act, but it’s grounded in nothing deeper than a floor vote in a legislative session.

    Again, “With the weight of American blood, sacrifice and honor bearing on this question, I’ll ask you to clarify whether you believe property exists in America by inalienable right or by grant of the state.”

  24. OMG, I believe why the fearless posts have not mentioned Mike Pence is that I doubt that there is proof that he has been connected with criminal activity that is detrimental to the State. That is a prerequisite. If he has, then that can be a different story.

    The new Mayor Lenny Curry here in Jacksonville, Florida is connected to criminal activity that is detrimental to the city. That makes a big difference.

    The spotlight needs to be on Jacksonville. What happens here can even effect the likes of a Mike Pence.

  25. OMG asks, “Does anyone know where Gopper is coming from?” No, no one does, not even Gopper. He only knows hate and fear. Must hate something. Must fear everything. He embodies everything wrong with delusional right wingers today.

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