Tag Archives: Mayor

Krieg Calls for Feds to Investigate McDermott Campaign Finance Issues

26 Nov

by Ken Davidson

In the wake of recent FBI activity in Lake Station, political activist and former county surveyor candidate Eric Krieg planned to call on the Lake County Board of Elections to refer Mayor Thomas McDermott’s campaign finance reports to the office of United States Attorney David Capp. Krieg will have to wait until the Board meets in December to present his allegations as this month’s meeting was cancelled.  In a statement provided to the press prior to the planned meeting, Krieg compared McDermott’s payments to his wife with the recent conviction of Former Congressman Jesse Jackson, Jr. He outlines several allegations of impropriety in the reports including:

-Payments to Kelly Consulting, Inc. of over $300,000.  The payments ranging from $3,000-$4,000 per month span a period of over ten years. Krieg alleges that Kelly Consulting, Inc. is owned by Marissa McDermott and that Indiana law requires a written contract on file with the election board in order to pay family members for campaign services;

-a one time consulting fee paid to David Woerpel. This payment is alleged to have been in the amount of $6,000 and paid around the time that Woerpel was charged with a crime in Lake Superior Court;

-A single payment of rent for McDermott for Mayor Headquarters in the amount of $1,000. Krieg alleges that free rent should be reported as an in-kind donation on the finance report.

Krieg explained that the contributions to Kelly Consulting, Inc continue in non-election years. The address for Kelly Consulting is listed as 7134 Knickerbocker, Hammond, IN 46323. Documentation was provided from the office of the Indiana Secretary of State showing that Marissa McDermott is listed as President of Kelly Consulting, Inc. Total payments to Kelly Consulting from the McDermott campaign for the years 2005 to present totalled just over $330,000.

The lack of payment to Kaplan controlled Pyramid Development may be the most damaging allegation. As reported previously, Pyramid Development is owned by McDermott friend and contributor Greg “Krazy” Kaplan. Kaplan later sold the building to the Purdue University Foundation for a reported $1M. Politically connected WJOB radio has announced that they will move into the building sometime next year. So far, they are the only announced tenant.  While not illegal on its face, the entire transaction certainly seems to require some explanation. To date, we have heard none.

You can see Mayor McDermott’s 2011 campaign report here:  http://lwvcalumet.org/files/cfb.mcdermott_jr_thomas_m_2011_annual_rpt.pdf

Van Til Reportedly "Frazzled" Over Impending Trial Date

25 Nov

by Ken Davidson

Some even go so far as to suggest that George Van Til is mounting a Vinny the Chin Gigante defense.  Van Til is reportedly out of sorts after learning that his trial, scheduled for December 9, 2013, will not be continued as requested.  Van Til has been charged with 6 counts of Wire Fraud and two counts related to Obstruction of Justice.  Witnesses who work closely with Van Til now report that he is a different person.  “He comes to work looking like he did not sleep” according to one source.

Van Til is represented by former Gary Mayor and Democratic Political insider Scott King.  King requested a copy of the Government’s witness list but that request was denied.  Standard practice is to provide the list immediately before trial. That seems especially appropriate where an indicted defendant remains in a supervisory position over potential witnesses.   Sources say that Van Til maintains meticulous files on Lake County politicians and has a lot of information to trade for his freedom.  We will see if he is willing to pay that price.

See also <a href=”http://nwigazette.com/2013/11/25/johnson-sentencing-delayed-again/“>Johnson Sentencing Delayed Again.</a>

False Jobs Report: Sen. Coats Calls for Investigation

24 Nov

by Ken Davidson

Citing “serious trust issues”, Senator Dan Coats has penned a letter to the heads of Commerce, Labor and Securities requesting a full investigation. The scandal comes after a Philadelphia area employee alleges he was told by a supervisor to submit false numbers. The New York Post alleges the scandal goes straight to now Chicago Mayor Rahm Emmanuel. The reports allegedly caused the official unemployment numbers to drop below 8% in the weeks prior to the 2012 elections providing Americans with a sense that the economy was doing better than it actually was.
 

This is a serious allegation that can have serious impacts on our
economy and our markets. The monthly jobs report provides critical data
that influences markets, industry and Federal Reserve policy. As the
ranking member of the Joint Economic Committee and a member of the
Commerce Committee, I am calling for an investigation into this matter.

One of the jobs reports in question, released in October 2012 just
ahead of the presidential election, showed that the unemployment rate
had dropped sharply from 8.1 percent to 7.8 percent even though the
economy had added only 114,000 jobs.

This administration has a serious trust deficit with the American
people. From Benghazi to the IRS enemies list and most recently, the
many broken promises with Obamacare, we have seen an alarming pattern
of a lack of transparency and a lack of accountability from this
administration.

These recent allegations regarding the jobs report only add to the
mistrust the American people have of this administration.

Gary Airport Authority Fails to Comply with Davis-Bacon; Other Legal Requirements

21 Nov

by Ken Davidson

The Indiana State Board of Accounts has issued a comprehensive report indicating that the Gary Chicago Airport Authority (GCIA) failed to comply with the Davis-Bacon Act which requires prevailing wages be paid on public works projects. The stunning finding was just one of many findings by the Board. In so finding the Board stated:

Davis-Bacon Act

Airport Management relies upon paid consultants to ensure compliance with the Davis-Bacon Act
(payment of prevailing wages).

1. The contractors submitted payment applications to the Project Engineers. Before the Project
Engineers approved the payment, the Project Engineers must receive the certified weekly
payrolls from the Contractor. The Project Engineers stated that they ensured the wages paid
equal or exceed the applicable prevailing wage rates. However, no indication was made on
the copies of the certified payrolls or other forms of documentation maintained as evidence
that such reviews were conducted.

2. A system of controls to ensure all certified payrolls were received did not exist.

3. The management of the Airport Authority did not receive any correspondence from the paid
consultants to ensure compliance with the Davis-Bacon Act.

Additionally, the Board pointed out that the GCIA was required to repay nearly $10 million to the Regional Development Authority because it failed to properly account for the money. It appears that this finding may result in an additional $10 million in Federal and State grants requiring repayment. The Board found that the Authority billed invoices to the RDA, the US Department of Transportation and the Indiana Department of Transportation and received reimbursement from each. The system was supposed to provide a total of $9,917,559.93. Instead the GCIA received that amount from both Federal and RDA coffers.

The Board also found that the GCIA awarded change orders totalling over 20% of the bid price. The law states that change orders cannot exceed 20% of the total bid price.

The report goes on and on, reporting a litany of violations. This report covers the time period before the current board took over. You will recall that the Gazette has reported that Nathaniel Williams was President of the GCIA Board at this time. Nathaniel Williams was also in charge of maintaining the records at the Gary Housing Authority when they lost hundreds of properties to tax sale, failed to make repairs with grants that had been awarded and failed to utilize insurance proceeds to repair burned out properties. Mayor Karen Freeman-Wilson appointed Williams to the Airport position after many of the issues at GHA were discovered.

Sources Say LS Mayor, Wife Targets of FBI Probe

16 Nov

by Ken Davidson

 

On Friday FBI agents walked into the offices of Lake Station, Indiana at 1969 Central Avenue and ordered all employees to step away from their computers according to sources close to the investigation.  Although the Gazette has confirmed no computers were seized, the FBI reportedly got all the information it needed by using high tech equipment to download from the City servers.  This represents a significant step in an ongoing investigation.  You will recall that the indictment and arrest of George VanTil, the most recent indicted politician in Lake County, was preceded by a similar public FBI raid.  Not only is judicial review in the form of  a warrant required before FBI agents can take such action, the US Department of Justice has strict guidelines dealing with public corruption cases.

Sources say that the crux of the investigation centers around two incidents.   The first relates to using campaign funds for personal use.  Sources tell me this aspect of the case is unclear.  Several point to various expenses which appear to be personal but there is none that stands out when viewing reports of similar local politicians.

The second investigation is related to an “add-on” charge by a street contractor.  According to a source close to the investigation, the Mayor suggested he would get an additional charge approved on a construction project that was in progress.  In exchange, the contractor would pay the Mayor’s wife a sum of money.  Such charges are often scrutinized by the State Board of Accounts as well as Federal Prosecutors because they can be used to award bids to friendly contractors.  In many cases, the bid comes in low and the contractor then submits additional charges which are approved by the municipality.  Other contractors have no opportunity to compete because they are not assured of having additional charges approved later.  In this case, however, sources say the contract was awarded prior to the time of Soderquist’s election.

Soderquist is also on the governing board of the Lake County Democratic Organization.  If indicted, Soderquist would be the second current sitting member who is under federal indictment.

Lake Station Indiana FBI raid

A Lake Station construction contract appears to be at the center of a recent FBI raid on city offices.

FBI Visits LakeStation IN.

15 Nov

FBI agents arrived at the office of Lake Station Mayor Keith Soderquist on Friday. Federal investigators had subpoenaed documents from Lake Station’s Board of Works. Sources say the computers were removed from the building and at least Three FBI agents were seen going into City Hall and talking to the Mayor.
In February, the State Board of Accounts audit ordered Soderquist’s stepdaughter Miranda Brakley , former court employee, To repay the city $13,130, money she wrongly received after she was fired in 2012. Miranda Brakey was a deputy court clerk responsible for collecting bond payments for the Lake Station. In 39 cases she neglicted to deposit The Funds totaling $16,464. A week after she was fired, the Lake Station City Council, moved two deputy positions from City Court Judge Christopher Anderson’s budget to the Clerk-Treasurer’s purview and Brakley was rehired. She received $468 for seven days vacation and $12,661 for unused compensatory and sick time even thought she only had 30 minutes of vacation remaining . Two weeks later, Lake County Superior Court Judge Calvin Hawkins issued a temporary restraining order against the Brakley’s rehiring…. more to follow later.

Mayor's Statement Dodges Police Questions

12 Nov

by Ken Davidson

 

gary police and code enforcement working overtime

2 Gary Code Enforcement Officers sit outside a business at 11th and Grant on Saturday evening

In response to the Gazette article regarding a large police presence at 11th and grant on Saturday November 2, the Mayor issued a statement which we will attach below.  The Gazette asked the Mayor for specific details on the use of police officers at that location including who authorized the use of most of the Gary police department.  You will recall that the Gazette reported that at least one officer remained at the property during most of the night.  Up to 9 officers were involved according to witness reports.

The statement issued is as follows:

"On Friday, November 1, 2013 the Code Enforcement Department, in conjunction with the Building Department, placed a "Do Not Occupy" sign on the building located on1434 West 11th Avenue and padlocked the gates surrounding the property.  Inspectors from the Code Enforcement, Environmental Affairs, and Building Department had previously inspected the property, and it was determined that there were serious safety issues concerning the structure. City ordinance allows for the Building Commissioner to make the determination that a building or structure cannot beoccupied. It was determined by the City of Gary that the structure posed an imminent threat to the health and safety of the public. On Friday, members of the CodeEnforcement team and legal department were present at the property to execute the
"Do Not Occupy" order issued by the Building Commissioner. On subsequent days, necessary measures were taken to ensure that the "Do Not Occupy" order was followed.

There is a hearing scheduled on November 15 on the City of Gary's Motion to Cease and Desist, which was filed August 2, 2013.  The City staff regularly reviews public nuisance related complaints and citations to ensure effective prosecution."

-Karen Freeman-Wilson

The Gazette continues to follow this story.