Federal government asking questions about lease deals

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The federal government is asking questions about how the Indiana Family and Social Services Administration handles office leasing after an IBJ investigation raised questions about potential conflicts of interest.

A regional program manager with the U.S. Department of Health and Human Services asked in a July 14 letter for information on whether the FSSA followed state and federal rules as it leased office space across Indiana.

The federal agency also wants to know whether Venture Cos. owner John M. Bales of Indianapolis has any ownership interest in properties being leased through his contract for services with FSSA or subrecipients under the Temporary Assistance for Needy Families, or TANF, program.

"If so, how does that ownership relationship comport with the state's standards of conduct regarding real or apparent conflicts of interest?" wrote the manager, Steven Krasner.

Bales, a politically connected real estate broker who represents several state agencies in lease deals, orchestrated deals to put the company that runs Indiana’s welfare-to-work program into at least two buildings he owns in Indianapolis, IBJ found. The parents of a Bales partner at Venture own a third building, in Kokomo, that landed the same tenant.

The rare federal inquiry is the first time the FSSA has received questions about its leasing practices, said spokesman Marcus Barlow.

Barlow said the "current political environment creates a situation where everything is under higher scrutiny, which we invite.”

“We’re putting together a response to show them that what we’ve done is well within established leasing practices,” Barlow said. “The prices that we paid were actually better than market rates.”

Indiana House Speaker Pat Bauer requested in June that the Department of Health and Human Services investigate real estate leases Bales brokered with state agencies.

Bauer, D-South Bend, sent a formal request letter to HHS Secretary Kathleen Sebelius with a copy of IBJ’s April 24 article, headlined “Politically connected broker’s deals raise conflict questions.”

Bauer cited the IBJ article as the impetus for his request.

Bales is a friend and business partner of Marion County Prosecutor Carl Brizzi, the subject of a series of IBJ investigative articles over the past several months.


  • Bob Grand, the #1 fake republican
    Bob Grand of Barnes & Thornburg is in the middle of all of this. He pretends to care about people and champion Republican causes. He is so deep in bed with Brizzi I think he could father a child by Brizzi.

    The whole Brizzi mess stinks. People like Bob Grand belong behind bars as bad as Brizzi does.

    Bob Grand is knee deep in this one, siding behind and helping Brizzi as quietly as he can.

    What a joke.

    Bob Grand should be fired from Barnes and Thornburg and Brizzi should go to jail.
  • FSSA is a cess pool
    Every other day I read about investigations and findings adverse to FSSA. That whole agency needs to be cleaned up from top to bottom because it stinks of corruption.
  • Reply to Ethics 101
    All great points...

    Yeah, Barlow is full of crap. The fact that the STATE have not adequately investigated the dubious arrangements as CLEARLY reported by the IBJ that Bales and his former or current partners Wendy and Rankin had relatives owning interests in buildings and further Bales or a colleague provides inside information to Messrs. Brizzi and Page so they can go and get under contract the LBABS Elkhart Property and once the Lease is in the "BAG" Brizzi(undisclosed principal) and Page proceed and close on the land and building (no risk).

    Did Bales make a commission on the building sale to LBABS unnecessarily driving up the states lease cost and lining his pocket? Then made his commission on the lease to his buddies. What other properties were looked at for that location. The state has not come clean and disclosed crap to the taxpayers...
    Who are they protecting?

    Did RFP's go out?

    Neither Page and Brizzi are from Elkhart so they were told what to purchase? By whom?

    Also note Page has a $1,350,000 personal judgement entered against him from First Internet Bank according to the IBJ and was having many developments either sued or defaulting on loans... I'll bet the LBABS mortgage from Huntington COULD only be APPROVED "with" a state lease in hand....based on what has transpired with all Pages failed real estate dealings which Wachovia, CNL Bank, First Internet Bank, JPM Chase, Fifth Third Bank...

  • A fair test-
    Mr. Barlow's statement isn't really the appropriate test of whether Mr. Bales fairly represented the entities. Some of the questions to be asked include the following-Did he inform the prior owners of the buildings of the tenants' commitments to lease the buildings? Would they have sold the buildings at the prices they accepted had they known of the tenant? Would they have been willing to lease the space at equal or lesser rates? Were there similar offerings of space at lower rates at the time the leases took place? Were there any RFP's for space put out to these other options? It would be interesting to hear from the former owners of the buildings and from owners of competing properties at the time the leases were signed.
    • Pics of hotties?
      You cant leave us hanging on this Regnadkcin!

      Where are the pics of the hotties on the yacht?!
    • Three's Company
      Might also add that Bales & Durham are connected at the hip. Just see the photos of Bales, Brizzi & Durham on the latter's yaht along w/ several hotties w/ questionable emplyment histories. Where there's smoke...
    • Carl again!!
      Is anyone surprised Brizzi is friends with this guy?? There are going to be a lot of his friends hurting when his term ends. Can't wait to see what comes out of the wash on this one. It is never ending with the Brizzi circle. Always trying to make a buck at someone elses expense.
    • The Jig is Not UP!
      What is the issue is special access to the making of the deals. The deals are lower than market rates, but all government deals are typically below rates, as they involve no taxes on materials, and can often have long-term price points. What is at stake is the ethical nature of the deals. Did Mr. Bales overly profit? If not, he skirts by, if he did, how will it be weighed and divided? So he loses a laundry!
    • Kudos to Cory and Greg!
      That pesky Greg, how did he find Cory to dig up the rest of this dirt. We had it made, man. We had it made, man.

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