Chairman Treacy Gives Ballard Lump of Coal for Christmas

Having landed in the new digs, Ed Treacy, the Marion County Democratic Party Chair, is now bringing the holiday poetry:

'Twas the night before Christmas, when all through the city,
No Mayoral vision appearing, not even for pity,
The citizens were worried, for their city they do care,
In hopes that the Mayor soon would be there,
The Republican Caucus nestled snug in their beds,
While hopes of bold vision danced in their heads,
And the city did brace for the coming cold snap,
Having just gotten over the last snow plowing flap,
When from city hall there arose such a clatter,
I sprang from the bed to see what was the matter,
Away to the window I flew like a flash,
Then did Steve Goldsmith appear, from the far distant past,
The moon on the breast of the new-fallen snow,
Gave the lustre of mid-day to objects below,
When, what to my wondering eyes should appear,
But a set of new problems, even worse I did hear,
With a misleading care for the local taxpayer,
I knew in a moment it must be the Mayor,
More rapid than eagles his supporters they came,
And he whistled, and shouted, and called them by name -
"Now, Cotterill and Vane! Now, Bego! Now, Brizzi and Karn!
On, Grand! On Loftus! On Durham and Vaughn!
To Chinatown go and seek out the cricket ball!
Now dash away! Dash away! Dash away, all!
As CIB taxes rose up to the sky,
When they meet with an obstacle, they cannot deny,
So new taxes on hotels around they flew,
With taxes on food and beverages too,
And then, in a twinkling, I heard from the news,
The Mayor did plan to raise fees, quite a few,
As I looked at the fees, increases galore,
No longer a friend to the tea partiers, not anymore,
He was threatening to veto any smoking ban,
And his advisors still haven’t concocted a plan,
A free cop car he had flung on his back,
And he looked like a peddler just opening his pack.
His eyes -- how they twinkled! His dimples how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow,
And somehow the original poem was so apropos,
The lack of a smoking ban with any teeth,
The smoke it encircled his head like a wreath,
He had a broad face and a little round belly,
That shook, when he laughed like a bowlful of jelly,
He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself,
A phone call to Bales, parks traded for cash, instead,
Soon gave me to know I had everything to dread,
He is someone who once ran a car pool,
And despite what’s been said by his stooge, Abdul,
Just by laying his finger aside of his nose,
And by giving a nod, the taxes and fees they all rose;
He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle,
But I heard him exclaim, ere he drove out of sight,
"Higher taxes to all, and to all a good-night!"

Chairman Treacy Gives Ballard Lump of Coal for Christmas

The Williams-Durham Fallout

Democratic mayoral candidate Brian Williams is an idea machine. His columns for the Indianapolis Business Journal are all extremely thoughtful, as are his campaign website "letters." The website also has a few good “internet commercials.” (Yes, I did think his campaign slogan “braves ideas” was awfully close to Andre Carson’s “bold leadership,” but, hey, how many original campaign phrases are left?!?)

Brian may dispute this, but most people I talk with say he does not have deep grassroots support in the Democratic Party. But he fits a prototype of a Democrat who can win in an Indianapolis that is, respectfully, dominated by the wealthy, be they individual (think Simon, DeHaan, McAllister) or institutional (think Eli Lilly & Barnes & Thornburg).

Brian fits the potent “Peterson” model as a guy who came up Democrat but turned wizard in a largely Republican-dominated field, such as real estate development, finance, or mergers & acquisitions. This type of candidate can gain the support of, or at least negate the influence of, small “r” Republicans by virtue of the shared joy of capital formation.

A guy like Williams, running against a mayor that many Republicans can’t stand, could theoretically raise a lot of “cross-over” money, hop over “party insiders” and avoid slating, get on TV, and win a primary and general election. Just as Peterson did, Williams could say, “Hey, I’m a Democrat, but you have nothing to fear, Republicans.” (Of course, this might terrify Democrats. You decide).

Then came Tim Durham.

Durham’s legal troubles have been nauseatingly chronicled, and some pundits proclaimed Williams’ campaign was over. It will definitely be a tricky needle to thread for Williams.

Nothing damages an entire party like a good scandal, in particular one that has Playboy bunnies, fancy cars, and a yacht (think Lonely Island and T-Pain's “I’m on a Boat”). Accordingly, Democrats will work the phrase “Tim Durham” into everything, even when Carl Brizzi steps down.

Marion County Democratic Chair Ed Treacy on Christmas? “Democrats believe that Christmas is about giving…not about taking money in a ponzi scheme like Tim Durham, the Marion County Republican Party’s biggest donor.”

Ed Treacy on grilled cheese? “Democrats believe grilled cheese is pure Americana, a fusion of delicious ingredients for an even better taste, not a ripping apart of investor’s hearts and wallets, leaving a bad taste in their mouths, which is what GOP b.f.f. Tim Durham did.”

This one is actually true. Democratic prosecutor front-runner Terry Curry sent an e-mail to supporters today saying our contributions can “send a strong message to both the Republican Party and to their powerful friends that the Marion County criminal justice system is not for sale.” (Get ‘em, Terry!)

Can we dispute it would be logically challenging to churn the Durham angle in 2010 then hand the reins to a guy in 2011 who is “connected” with Durham? The answer lies in the nature of the connection and whether the voting public is indiscriminate.

Having reviewed a stack of legal documents, this is what I’m pretty sure I know. In 2000 or shortly thereafter, Brian became a member of Obsidian Capital Corporation, LLC (“OCC”). However, the operating agreement designated Williams, who only had a 5% share, as a Class B member, which meant he had no ability to control the management of the company any more than a minority shareholder can tell Bill Gates what to do at Microsoft. Williams also apparently signed the Obsidian Capital Partners, LLP operating agreement on behalf of an entity known as the 77th Street Partners. (In other words, if I'm reading the handwriting correctly, Williams was “down with OCP”). But, again, Williams had no managerial control.

As Williams pointed out in an interview with Amos Brown, in 2005, he and several other investors recognized that Durham was moving away from the stated mission he had given to Williams, which was the purchase and resale of manufacturing and distribution companies. According to Williams, he “started to extract himself, or tried to extract himself” from the relationship.

It’s unclear what specific steps Williams took, however, until December of 2007, when Williams and numerous other investors (who I’ll collectively call “the investors”) demanded through their counsel, John Taylor, that Durham “cash out” their interests.

A flurry of correspondence ensued. One e-mail from Taylor, dated March 12, 2009, states that the investors “do not regret” the investment they made, but they just wanted out. As an aside, nobody can attribute this alleged lack of regret to Williams, as it’s most likely legal puffery employed to make Durham a more amenable buyer.

In response, Durham’s counsel, John Egloff of Riley, Bennett, & Egloff (a big Mayor Ballard donor, by the way) asserted that neither Williams nor the other investors had any contractual basis to request a “buy out.” Nonetheless, Durham stated he would agree to an appraisal of the companies for the purpose of facilitating a purchase at fair market value.

For reasons unclear to me, the investors did not agree but instead gave Durham a deadline to make an offer in the range of 10x to 15x their initial investments. When Durham refused, Taylor seemed perplexed, and in a sales pitch I cannot ever imagine working (which I'll call "the Hyman Roth stategem") said essentially that the investors thought that Durham would want to share his largesse so people would know he made money for his partners. Clearly exasperated with Durham's incalcitrance, Taylor asks, “Is Tim just all washed up? Is that the underlying problem?”

Durham then turned the tables on the investors and on April 21, 2008, sued them in Marion County, claiming they were engaging in bad faith and arguably extortion by telling him to pay them inflated values to avoid litigation when they had no right legally to any “buy-out.” (Not to bore the non-lawyers, but under the operating agreement (a/k/a “the owners manual”) for Obsidian’s Capital Corp. LLC, only a vote of the majority of Class A members (Williams was Class B) could “terminate” the company, which would require it to pay all liabilities, sell all property, and distribute what’s left to the members. Without the ability to force the same, Williams had no way out, and the 3 other Class A members in addition to Durham were Durham associates).

Notably, in the counterclaim, Williams and the investors alleged that “Durham, Obsidian Capital, Obsidian Partners, Fair Finance, and Fair Holdings have been within the zone of insolvency or have been or are insolvent” and further, that Durham “has equity interests in over 50 companies.” Yes, you read that right. Fifty! In short, the investors suspected Durham was crashing in early 2008.

The next thing reflected in the Court file is a stipulation of dismissal, which is what parties do to say they don’t want to go forward because the case settled.

Then on January 9, 2009, the same group of investors filed separate suits against Durham in Hamilton County. The complaints said that Durham breached promissory notes held by the investors with a collective value of $313,130. Under the promissory notes, Durham was to pay three installments on 9-30-08, 12-31-08, and 3-31-09 to each investor. Durham made the September payments, but then failed to pay in December.

Initially, I thought these promissory notes were loans, which would have suggested that Williams and Durham was an ongoing concern. Williams clarified, however, that the notes were part of the Marion County settlement. This, of course, makes sense if you’re Durham. Instead of possibly having a judgment entered against you that people can see, you have a settlement on paper only.

The Hamilton County lawsuit concluded almost immediately with a settlement agreement, except this time the terms were more transparent. Durham was to make payments to all plaintiffs on the 15th of each month from February through June of 2009, with the greatest portion to be paid in the first month and lesser amounts each month thereafter.

This time Durham paid his debts on time, but this second settlement let him off with paying roughly 70 percent of the note values. For example, though his initial promissory note was for $43,510, Williams walked away with only $31,321 (paid out monthly in the amounts of $10,297, $5,320, $5,277, $5,234, and $5,194, respectively). 77th Street Partners’ initial promissory note was for $65,619, but it walked away with only $46,420 ($15,262, $7,885, $7,821, $7,758, and $7,694).

What kind of multi-millionaire needs six months to pay off a total of $219,000?

But back to Williams. What’s fair here? Williams’ situation is different than Brizzi's. When Williams got a whiff of something foul, he tried to get out, while Brizzi kept following Durham (and his stock picks) even when smoke surrounded him. Brizzi only stopped when the heat of public scrutiny sent him running off the board of Fair Finance.

Yes, Williams still touts his connection to Obsidian on his website, which might not seem the smartest politics at first blush. In fact, it almost reads as if Williams is taking credit for the name. It states:

Obsidian was a great name for a company that wanted to invest in manufacturing, service and distribution related companies. Entrepreneur Tim Durham warmed to the name and Brian invested in Obsidian Enterprises, a holding company with a diverse portfolio of businesses.

(The website for Gazelle TechVentures features the following description about their "advisor" Brian Williams: "Co-Founder of Obsidian Capital..." It's not clear if Williams can control what Gazelle writes, but they certainly exaggerate Williams' 5% interest to his detriment).

But all things Obsidian are catch-22's for Williams. If he tries to erase history, people will think he has something to hide. He does. But it’s only that he invested in Tim Durham, and he chose poorly. Does that make him unable to serve as Mayor? Is a person making a bad investment and losing his own money to an alleged ponzi schemer who hides information worse or better than a mayor making a bad investment despite available information and losing the public’s tax money?

Can we say Williams is any different than any of the savvy folk who got taken by Bernie Madoff? Can we expect Williams to read into Tim Durham’s soul in 2000 and foretell that he would be seduced by the money and power later? No, we can't.

But a lot of people still will.

Some will wonder how a guy whose campaign is based largely on being savvy found himself in a corporate entity with no clear ability to exit should things go awry, and we’ll ask why he wasn’t more aggressive in his “extraction” from Durham. (In fairness, Williams' reasonable defense is that you don't divorce your spouse the first day you think things aren't going well, and how can you fault a guy who simply trusted someone who turned untrustworthy?). We might even ask whether the investors took a 30% cut on the promissory notes because they feared that if they didn't get their money before the litigation flood gates opened up, they might end up completely empty-handed.

Being plagued with questions is what most of us do in hindsight....which is too bad because that’s not the kind of vision Williams was touting for Indianapolis.

The Williams-Durham Fallout

How Greg Bowes Is Right and Why It Won't Save Him (My Opus in Response to His Opus)

Marion County Assessor and prosecutorial candidate, Greg Bowes (D), dropped a four-paged, single-spaced letter that was the the campaign equivalent of War and Peace into D precinct committeeperson mailboxes this week. Bowes should expect to feel more war and less peace.

The letter's main points are:

(1) Bowes is qualified to be prosecutor based on his 25 jury trials and 85 criminal appeals in attempted murder, rape, child molest, and battery cases;

(2) Bowes is the most viable candidate because he won county-wide, managed a large office, and "successfully navigated the intense scrutiny that came with the property tax crisis" (as an aside, he did?); and

(3) The D's new slating agreement is unfair, so he won't sign it.

For the newbies, let's do a quick "slating 101."

Before the primary election lets self-identified D's, R's, or L's to decide who are "their" parties' candidates, the parties' hold "primary conventions" during which only precinct committee people get to choose who "the party" endorses. Why, you might ask, would parties host what is essentially a mini-primary before an actual primary?

Precinct committeepersons register voters, put up yard signs, staff the polls, and get out the vote. PCs do this for free (except in Lake County where precinct organizations routinely seek "walking around money" from statewide candidates). Slating is the one PC perk (if you discount getting invited to State Representative Greg Porter's annual barbecue. Tasty!)

Parties want to reward hard work, but when patronage got snuffed, this was what was left - the right to participate in a non-smoke-filled room with people who really are the party.

I understand the appeal. It's not right (or productive) that two DINOS (Democrats in name only) who never donate to, work for, or advocate for, the party's candidates might trump a PC's primary vote. It's like letting people who never show up for church but who call themselves Catholic have a vote equal to the members of the church board. This is why I support the general idea of slating.

But here's the problem. It's easily rigged.

The voting pool consists of all elected precinct committeepersons and their appointed vice-committeepersons, but Democrats never have enough elected PCs (those who run as candidates in the precincts they actually reside) to fill all the slots. According to Bowes, the current number of elected folk is only 260.

One might think, "Well, that's your voting pool. Go to it." Oh, no, my friends. State party rules gives county chairs the right to fill vacant slots, and the appointed PC need not reside in the vacant precinct. This appointment right is a commonly employed perquisite in Marion County politics. To illustrate how abuse might occur, here's a conversation I had within the last eighteen months:

Me: (Ring, Ring). Hello?
Caller: Would you like to be a precinct committee person?
Me: Sure. What do I need to do?
Caller: Do you like (insert candidate's name)?
Me: Yeah.
Caller: You're good.
Me: Is this in my precinct?
Caller: No, it's (insert township ward and precinct).
Me: It doesn't matter I live downtown?
Caller: No.

Shortly after slating, Marion County consolidated its precincts, and I lost my "home precinct."

Nobody can dispute Greg Bowes is putting it in Ed Treacy's eye when he writes "one might also think that the MCDP county chair might want to wait until PCs and VPCs have made their decision before he takes any action in support of one candidate or another." But Bowes is right that appointing PCs (or removing them) before slating is the best way to "stack a slating field."

Bowes is also right that this system can circumvent geographic representation, as some townships can gain a disproportionate share of influence by having its members spread throughout the vacant PC slots county-wide. This is completely counter-intuitive because a D PC working the "hard areas," such as Franklin Township, shouldn't see his or her vote diluted. There is little incentive to work for candidates hoisted upon you by perceived (or actual) political manipulation.

Admittedly, if the county chair likes your person or cause, you'd love the current system. By the way, guess who gets to elect the county chair? PCs! But my rule of thumb for how anything should be fairly structured is, "How would we set it up without regard to how it works for us right now?"

Unfortunately, that's not how we operate, and as a result, few candidates have confidence in the slating process, which makes slate challenges all the more likely. And this is the value of the new agreement.

One might think that the best way for the party to fend off slate challenges is to just destroy the unslated candidates in the primaries, right? Great idea. Except the MCDP gets beat often, in particular by African-American candidates (in particular women) with names at the top of the alphabet.

Bowes notes that people who have run against the slate include such party stalwarts as Julia Carson, Rozelle Boyd, Bill Crawford, and Billie Breaux (and I'll add both Linda and Kim Brown).

Normally, you "freeze out" or punish your political opponents, but if the MCDP loses a slating fight, the second the election results are certified, those opponents are the MCDP's candidates with whom it has to play kissy-face. Moreover, if a slate buster is part of a key D constituency group (such as African-Americans, labor, GLBT), the county chair can't even bash him or her publicly for fear of alienating the larger constituency, which might sit it out and damage the remaining slate.

That's got to be pretty frustrating for a county chair.

What to do, what to do.

So Ed Treacy put forth an idea in consultation with elected county Democrats. Here's how it works. You pay the slating fee, which is 10% of the salary of the office you seek. Normally, all but 25% of this would be refundable to unslated candidates.

Under the revised plan, you sign an agreement that says if you are not slated, you may not run in the primary. If you do, you forfeit your slating fee in total, and you cannot participate in slating for six years. The agreement also says that, if you are slated, you must be listed on promotional materials with the slate, the whole slate, and nothing but the slate. If you are an elected official, you must back all future slates during your term. If you do not comply on either count, you get the six-year ban.

I like this idea on the surface. If you swim in our pool, you don't get to pee in it with impunity. The idea that elected officials must back their fellow Democrats is appropriate. But will we actually enforce it equally? It would have been really amusing seeing Linda Brown not support her own sister, Kim, had this agreement been in place earlier.

But herein lies Ed's genius. He didn't get this approved by precinct folks. He got it approved by elected officials. This agreement is theoretically iron-clad, incumbent protection. It says "us and only us." Where can a candidate who isn't slated turn for comfort? Not to the party apparatus!

Now Ed just has to hold it all together. I'm told he approached some affinity groups about committing to only backing the slated candidates, too, but it was rough going. That's not surprising. Can anybody see labor standing with somebody who is lukewarm on their issues, or the Stonewall Democrats backing a homophobe, just because they were slated?

In sum, Ed Treacy has a good idea. And Greg Bowes knows how to make it better. But I don't see this peanut butter to coming together with this chocolate anytime soon. I'm pretty sure only one of these guys is still viable in Marion County Democratic politics.

How Greg Bowes Is Right and Why It Won't Save Him (My Opus in Response to His Opus)

Treacy Steps Up on Gray Matter

With apologies to Chamillionaire, Monroe Gray is no longer "riding dirty," thanks to his payment of three year's worth of auto registration fees. The big kudos in this story, though, go to Marion County Democratic Party Chairman, Ed Treacy, who said the following regarding Gray's failure to register in the first place:

"I think once someone has had a problem in the past, it's incumbent on that person to probably make sure they have all the, the i's dotted and the t's crossed. (Gray) ought to be more introspective about in terms of not subjecting himself to further criticism."

Many people will say, "Are you crazy? This is nothing!" Ladies and gents, the hardest thing anyone can do is criticize a member of one's own party when that person has powerful friends. I thought this was major because it's the first public criticism of an elected Democrat by a party leader in Marion County that I can recall. (Like I said in my prior post, Mayor Peterson didn't do it). Also, politics is a field of closed door fire but public smoke. Might one hope that in the places where cameras and microphones don't go, somebody was getting their hindquarters chewed?

Does it go as far as I would have liked in terms of outcome? No. But you can't say it's not a pretty clear warning shot across the bow. Does it mention Doris Minton-McNeil? No. But you can't say it's not directed at her by implication. There is a simple rule in politics - when you know people are inspecting your house, keep it in order. All Treacy did was restate the rule for many people who should have already been living by it. But, in so doing, he said a lot.

Treacy Steps Up on Gray Matter

With Family Like This, Who Needs Enemies?

Kudos to Jen Wagner at http://www.hoosierpoliticalreport.com/ for catching that Sam Carson, cousin to Andre Carson, is running against Ed Treacy to fill the vacancy for Marion County Democratic Party Chair. Sam Carson has no political track record that anyone can find, so why he is doing this is a mystery. What we do know is that the Congressman is strongly supporting Treacy, which shows that Carson is politically astute.

Some will say, “Let Democracy work. Treacy will win easily with the Congressman’s support.” Unfortunately, it’s a sad reality that a single contest for county chair might not draw a quorum among precinct committee folks for the meeting, which is this Wednesday. If the county fails to fill the vacancy, by state party rules, the Indiana Democratic Party takes over and selects the next Marion County Chairman. That would be quite embarrassing for Marion County (though I suppose most Marion County Democrats have grown somewhat accustomed to this feeling over the past two years).

City-County Council legal counsel and Monroe Gray attorney, Aaron Haith, was also making phone calls to gauge support for his candidacy, but he smartly opted not to challenge Treacy. Though Haith is likeable and well-known for supervising GOTV efforts for the party, had he prevailed (he wouldn't have), he might as well have painted a bull’s eye on his chest for Republican County Chair Tom John. If Haith is interested in moving up the political hierarchy, he needs to wash the Gray out of his hair.

With Family Like This, Who Needs Enemies?

Clash of the Titans Averted!

For those Republicans looking forward to a divisive "clash of the titans" between former Marion County Democratic Party chair Ed Treacy and UAW legend, Terry Thurman, your hopes have been dashed.

Though Thurman's feet have been touted to fill outgoing Democratic Party Chair Mike O'Connor's shoes (and though Thurman himself has expresseed interest in Democratic circles), Thurman has agreed for party unity (and for some as-of-yet undisclosed concessions) to step aside and support Treacy.

There is collective relief for many Democrats, who were skittish about a protracted in-party fight and who almost uniformly view Treacy as a superb tactician.

In fact, but for Treacy's involvement on behalf of his wife, Rebecca Pierson-Treacy (and the supposedly suspicious but not confirmably improper manner of her slating for Judge), you would be hard-pressed to find much criticism of Treacy.

Does Treacy have enemies? Sure, but you cannot tell people "no" as much as a county chair has to without alienating somebody. And both parties have their "colorful personalities" (a/k/a "the crazy people") who a chair has to continually foil in their electoral efforts without looking anti-democratic.

Whatever public faults Republicans voice about Treacy, their private gripes will surround him winning too many elections.

Clash of the Titans Averted!