City Solicitor Mike Jones: Gotcha or Botcha?

Did Mike Jones play “gotcha” or “botcha” in the charter amendment case?

     The case of  Patricia Smith, et al. vs. the Board of Elections of Scioto County, et al., involves the challenge to the results of the special election of Feb. 3, 2009. In that election the voters approved an amendment to the Portsmouth City Charter to limit the taxing power of the City of Portsmouth. That amendment  read, in part, “No taxes may be levied on the property owners of the City of Portsmouth for the retirement of any bonded indebtedness without the approval of such levy by a majority of electors [emphasis added] of the city of Portsmouth. Bonded indebtedness for the construction, acquisition and/or improvement of city property costing more than $100,000 in total may be incurred only by approval of  a majority of the electors [emphasis added] of the city at the next general election or a special election called by the Council. . . .” If instead of “electors” that proposed amendment had said “voters,” there would have been no court case and I would not be writing this piece, but the law, like life, is not an exact science, and mistakes are often made.

Too often life is a  matter of trying to minimize or, conversely,  to take advantage  of the consequences of mistakes. Smith, Evens, et al., represented by Rodeheffer and George L. Davis, the III and IV, is trying  to take advantage of the mistake the authors of the proposed charter amendment made when they used “electors” instead of “voters.” Electors are those citizens eligible to vote. Voters are those electors who actually vote. All voters are electors, but not all electors are voters. There were approximately 6000 electors who could have voted in the Feb. 3, 2009 special election. If a majority of electors was required to pass the proposed amendment, then it didn’t pass, because only 584 of those who voted were for it, and 584 is clearly not a majority of 6000+ electors. Smith, Evans et al. challenged the results of the special election in the Scioto County Common Pleas Court, which agreed with them and invalidated the results of the election.
   However, the Ohio Supreme Court reversed the lower court’s ruling, pointing out that Smith, Evans, and other residents of Portsmouth, including city officials, such as the city solicitor, should have challenged the language prior to the special election. The Supreme Court stated, “Appellees could have raised their claims in a timely pre-election protest to the petition,” and, “Election contests may not be used as a vehicle for asserting an untimely protest.” It was common knowledge in Portsmouth prior to the special election that City Solicitor Mike Jones was telling others with relish that  the language of the charter amendment was faulty and that if it did pass it would be challenged in court. Instead of objecting to the wording of the amendment prior to the election, Jones played the game of gotcha! That is how he, like the  city solicitor before him, saw his job: betraying the people on behalf  of Portsmouth’s puppet masters.  But we now know, from things like the “misfiring” of Mayor Kalb and the “mistrial” of  Harald Daub, that Jones plays the game of botcha! much better than he plays gotcha!

Will Democracy Triumph?

The case is now under consideration in the Scioto County Court of Common Pleas, with visiting Judge William J. Corzine presiding. After showing the persistence of a bulldog, Essman is no longer involved in the case, but four citizens, Jerry Conkle, Austin Leedom, Harald Duab, and Ray Mitchell,  have become defendants in intervention, petitioning the court to dismiss the motion of Smith, Evans, et al., to invalidate the results of the Feb. 3, 2009, election. Only time and Judge Corzine will tell whether democracy will triumph. In the meanwhile the results of the special election remain in effect, and the city government cannot pull the financial shenanigans it has in the past, such as it did when it unloaded the decrepit Marting building  onto the taxpayers of Portsmouth. The taxpayers owe a vote of thanks to Essman and the others who have worked so hard and long on their behalf.

Mr. Albrecht Goes to Washington

Jeffrey Albrecht speaking to WSAZ prior to his flight to Washington, D.C.

  

Do  Republicans really believe what Henry David Thoreau wrote in his essay “Civil Disobedience,” namely, “That government is best which governs least”? Tea Partiers seem to believe it in spades. Their motto could be, “That government is best which governs not at all.” But if Republicans believe this, do they practice it? Are Alaskan Republicans, for example, or at least the Palinistas,  rugged individualists or are they hooked on government aid as much as addicts in Scioto County are on Oxycontin? Are they hypocrites who denounce government aid except when it can help them build a bridge to nowhere? Because the Bachman family farm took government  subsidies, is Michelle Bachman any  less a hypocrite than Sarah Palin?

I thought about Republican hypocrisy when I heard that  Jeff Albrecht and three other Portsmouth businessmen, along with Portsmouth’s unelected Uncle Tom mayor David Malone, had flown to Washington, D.C., on 12 July 2011 in a corporate jet to lobby politicians  on behalf of a private corporation, the United States Enrichment  Corporation (USEC). The four businessmen flew to Washington to pressure elected officials and especially the president to co-sign  a $2 billion dollar loan to USEC so that it can proceed with its plans for a centrifuge project in Piketon, a small community located about 15 miles up Route 23  from Portsmouth. “Locals Lobby D.C. for USEC Approval,” was the headline of the story Frank Lewis wrote for the Portsmouth Daily Times. But they’re not lobbying for “approval.” They’re lobbying for a $2 billion dollar guaranteed loan. “Ohioans Go to D.C. to Push for Uranium-Plant Guarantee” was the more accurate headline of Jessica Wehrman’s report in the Columbus Dispatch (click here). In  a New York Times story (20 July 2007), “Cost Cutters, Except When Spending is Back Home,” the lede reads, “House Republicans who rode a wave of voter discontent into office last year may be pushing for spending cuts, but they’re also quietly funneling millions of federal dollars back home.” That’s what Republicans  Rob Portman and Jean Schmidt may be doing on behalf of USEC, risking not millions but billions of taxpayers’ money. 

Should the government be involved in co-signing a $2 billion dollar loan for  any private corporation, let alone one that critics say is badly mismanaged? According to principles Republicans swear by, shouldn’t it be the so-called free market, not the federal government, that decides whether USEC completes the centrifuge project in Piketon or whether it goes bankrupt, which it may if the government guaranteed loan doesn’t come through? What were these Republican businessmen from Portsmouth doing in Washington lobbying in favor of what may turn out to be Ohio’s version of Alaska’s bridge to nowhere?  Do Albrecht, Lute, Schmidt, and Glockner, the four Portsmouth businessmen, really believe in competition for everybody except themselves? Are they opposed to government intervention in business except when the business is in their backyard? Aren’t Republicans supposed to stand for free enterprise, not free lunches? Aren’t Republicans supposed to believe in “hands off government,” not “government handouts”? Aren’t Tea Party Republicans going so far as to threaten to shut down the government if it doesn’t stop spending and lending, if it doesn’t stop borrowing and “tomorrowing”? Don’t they understand that if  the centrifuge in Piketon goes kaput, the government as co-signer will have to  fork over  $2 billion of tax payer money to some bank?

It is ironic that the Portsmouth contingent seeking government financial support  was led by Jeff Albrecht, because he was the owner of the Ramada Inn, in Portsmouth. Over the years, the  Ramada scraped by with the assistance of public dollars: Shawnee State University lodged job interviewees and unhoused students in its spare rooms, of which there were usually plenty, and, in addition, government agencies  lodged non-violent offenders  waiting to appear in court to face various charges. If things were any worse, Albrecht might have reserved a floor for Section 8 tenants. Among seasoned travelers Albrecht’s Ramada gained notoriety as “The Queen of the Rust Belt.” (Click here.)  

Golden Opportunity for Government Assistance

Albrecht’s golden opportunity for government assistance came in October 2008, when presidential candidate Senator Barack Obama, campaigning in southern Ohio, had breakfast  at Albrecht’s Ramada Inn. Albrecht implied to Wehrman of the Columbus Dispatch that he  personally served the future president breakfast. In any case, Obama’s presence provided  Albrecht with an opportunity to ask for government help. According to Albrecht’s own account in the Dispatch, he asked Obama if he would support a loan for the United States Enrichment Corporation if he was elected president. Albrecht told the Dispatch reporter that Obama had promised him he would. This was good news for Albrecht because the USEC’s centrifuge project would be good for business in Portsmouth and therefore good for Albrecht’s  Ramada Inn.

On the basis of Obama’s alleged promise, Albrecht made an important business decision. He decided to transform his Ramada Inn, “The Queen of the Rust Belt,” into a completely renovated Holiday Inn. He made this important decision in spite of the fact that a Holiday Express Inn had not too long ago failed to make a go of it in Portsmouth, just a couple of traffic lights up Route 23. In fact, not only had Albrecht in his words “invested significantly” in transforming the Ramada into a  Holiday Inn, he had borrowed money to do it. He decided to borrow money at least in part because of the promise Obama had allegedly made to him to support a government guaranteed loan to USEC. Who in their right financial mind would have loaned Albrecht  anything based on a promise a campaigning politician, a Democrat,  had allegedly made to him during a campaign stop in Portsmouth?

From what I know of Albrecht’s ability as the operator of the Ramada Inn,  I think anybody who loans money to him  is engaging in unsafe financing. The Ramada had been mismanaged for a long time and did not improve in its dying days. Elijah on Yelp.com said in 2009, “Guests beware, your money is better spent by staying at a quality bed and breakfast rather than this dump.” Things weren’t any better in 2010, when  Nicole wrote, “The Ramada Inn in Portsmouth Ohio was one of the most unsanitary, gross hotel rooms I’ve ever stayed in!” Location! Location! Location! Albrecht's Holiday Inn is in downtown Portsmouth in the same location the Ramada was, with the same security problems, even though the Portsmouth Police Station is directly across the street. That fact had not stopped the police chief's son from dealing drugs at the restaurant in the Ramada, I was told. “During my stay,” one disgruntled guest complained online, “five vehicles including mine was broken into while parked in the Ramada parking lot. My car in particular was right in front of the lobby. When I told the front desk what had happened, they said that this happens all the time.” Critics are saying the same thing about USEC, whose reputation for mismanagement is not quite as bad as Albrecht’s, but USEC’s stock has plummeted like a lead sinker in a fishless pond.  Moody’s, the credit rating agency, downgraded USEC,  somewhat the way TripAdvisor, an online website, downgraded Albrecht’s new Holiday Inn. Although it is the newest of Portsmouth’s  four major motels, Albrecht’s Holiday Inn has been  rated last by TripAdvisor.

The Obama administration will probably back the loan to USEC, even though Fuel Cycle Week (click) a nuclear energy newsletter, says such a move would mean the federal government has formally adopted USEC “as a ward of the state.”  Guaranteeing the loan may be unwise but it is not hypocritical. Unlike Republicans, Democrats are not infected by the virus of free market fundamentalism, although the liberal Nobel Prize economist Paul Krugman is not so sure about Obama.  Ohio’s Democratic senator Sherrod Brown, once a critic of the centrifuge  project, is now a strong proponent. In the current depressed economy, Brown, Obama, and other Democrats cannot afford politically to oppose the project, even if its prospects for success are not very good, anymore than are the prospects of Albrecht’s Holiday Inn. The loan made to Albrecht, like the loan that will likely be made to USEC, may have to be written off. Let's keep our fingers crossed on the centrifuge project for the sake of USEC’s employees.

Chickens Coming Home to Roost

If USEC doesn’t get the  $2 billion dollar loan guarantee from the government, and if Albrecht’s Holiday Inn is no more profitable than his Ramada Inn, then he will no doubt blame President Obama not only for the jobs that aren’t created in Piketon but also for the guests who choose not stay in his Holiday Inn. It is much easier, to my way of thinking,  to tilt the playing field to favor Portsmouth Boys  or rig the bidding at an auction in Athens, Ohio, which Albrecht was suspected of doing (click here), than it is  to control what happens in  Washington, D.C. The four Republican businessmen who visited Washington, and Albrecht in particular, may learn that it is much easier to have  the mayor of Portsmouth in their pocket, and on their corporate jet, than it is to have the Democratic president of the United States keep his campaign promises, even if Albrecht once fed him bacon and eggs at the Ramada. Mr. Albrecht and his Republican cohorts may have flown to Washington for government assistance, but the chickens, which must make do with chicken feed,  will still come home to roost in Portsmouth.

Chickens coming home to roost at the Holiday Inn

We Got Trouble in River City: Ameresco, The Music Man, and the Portsmouth Boys

George P. Sakellaris, Founder and CEO of Ameresco

Established in 2000, Ameresco is an energy conservation company that grew rapidly  in its first  six years or so by aggressively marketing  its energy saving services to customers in both the private and public sector, to schools and hospitals, to businesses and municipalities both large and small, to everyone, that is, who could profit from the more efficient use of whatever kinds of energy they were consuming. Ameresco arrived on the corporate scene just as the Enron Corporation,  much of whose business was in gas and electricity, was about to implode ignominiously. Profiting from  massive fraud and deception, Enron had grown steadily in the second half of the twentieth century when most Americans  consumed much more than they conserved. Ameresco’s growth, by contrast, occurred at the beginning of the new millennium, by which time the conservation rather than the consumption  of energy was  becoming a big business. Energy conservation became a crusade not just for  those in the private sector, such as Ameresco, but for government as well, at the local, state, and national levels. Wearing its green hat, like the Jolly Green Giant, Ameresco cooperated with  public bodies and agencies  on behalf of conservation.  Instead “Keep America green, bring money,”  Ameresco’s slogan, referring to energy, is “Green, Clean, and Sustainable.” But for some brands, such as Salem Cigarettes, green has become a racket. “Think Clean Keep it Green” is the slogan on the green colored package of  Salems, a leading cause of preventable deaths in the United States.

The founder and CEO of Ameresco is the sixtyish Greek immigrant George P. Sakellaris, who  said of  himself, on Linked In,  “I am a hands on leader, and I bring the same professionalism and enthusiasm to every project.” His biography, or what we know of it, reads like the typical Horatio Alger American success story. “I have won many prestigious awards,” Sakellaris wrote. Among those prestigious awards was his  1999 Horatio Alger Award for Distinguished Americans. In the lexicon of American mythology, the name Horatio Alger is synonymous with success. But the prospects for Ameresco and for  the field of  energy conservation in general are not nearly as promising as they were before the Great Recession that began in late 2007.  Ameresco’s Initial Public Offering, in 2010, which had the aim of raising money for its expansion and for servicing its debt, was lackluster.  The disappointing response to  Ameresco’s  IPO could be a harbinger of hard times ahead, not just for Ameresco but for the whole energy conservation industry.  The  bloom may be off the green rose. When Ameresco’s first quarter earnings were released a few months ago, resulting in a stock market dip, Mr. Sakellaris ignored his company’s policy of not commenting publicy on fluctuations in its stock and hastened  to CNBC to  nervously explain that first quarter returns were normally the lowest of the four quarters for his company. So the 3.5% profit the quarter was nothing to worry about. He told CNBC, “Market Trends are very, very good.” His underlying message appeared to be, “Don’t Panic!” But if he doesn’t look panicked on that interview, he does look nervous, and maybe he has reason to be.

Ameresco’s Poor Report Card in Portsmouth

In regard to  promises made and not kept, Ameresco has a poor report card  in Portsmouth. Cynics might see a passing resemblance between Ameresco’s CEO and Harold Hill the traveling  salesman in The Music Man, who came to the fictional River City, Iowa,  shortly before July 4th, in 1912, to take advantage of its unsophisticated citizenry. (Watch “Ya Got Trouble Right Here In River City” by clicking here.) Though he prides himself on being a “hands-on” CEO,  Sakellaris did not himself come to Portsmouth. Ameresco grew too fast for him, headquartered in Massachusetts, to have his feet everywhere and his hands on everything.  But  his  Midwestern representative, Jeff Metcalf, out of Indianapolis,  was very much “hands-on” in Portsmouth. It was standard operating procedure for Harold Hill in his sales pitch to promise more than he could deliver. That’s what Mefcalf has been accused of having done  in the Ohio river city of Portsmouth: promised more than he delivered.

At the 13 November 2006 meeting of the Portsmouth City Council, Metcalf promised, according to the minutes, that “every meter in the City will be installed  within a year.” Four years later, in a 24 March 2010 memo to Mayor Jane Murray, Patricia Williams, the city’s Public Utilities Computer Programmer,  listed eight ways in which Ameresco had not lived up to its promises to Portsmouth, including Metcalf’s that the  meters would be installed within a year. Williams wrote in the memo,  (1)“We have changed over 500 meters that were supposed to have already been changed by Ameresco and were not.” She explained that the city had to pay city workers overtime to change the five hundred meters that Ameresco workers, four years later, had failed to install. Not only that, city workers found new uninstalled meters lying in pits next to the unremoved  old meters.  (2)Ameresco workers sometimes mixed up which meters went with which address, resulting in confusion and loss of revenue.  (3)“Meters were put into pits at vacant lots and inactive accounts. We have brand new meters sitting in pits of  vacated homes that will never be used unless we come upon them and pulled them to be used somewhere else.” (4)“We have lids that have not been drilled and meter transceiver units mounted [im]properly (too numerous to mention). ” (5)The workers who were hired by Ameresco were supposed to be certified plumbers and apprentices, but “[t]he people they hired were heating and air conditioning  people  who had no experience in this field.” (6)“Multiple repairs had to be made to various customers’ lines and property due to the fact of inexperienced people changing meters.” (7)“Inaccuracies in paperwork caused many billing nightmares. It took considerable time to correct inaccurate meter numbers and reads to make sure the customers were charged accurately.” (8)“We have changed 139 meters to date and many more need to be changed because they have already become non-registering. This causes loss of revenue not to mention the cost of ordering new registering.” Williams ended  her  damning memorandum with the comment, “In closing, I would not give Ameresco any good references.” (Williams’ memo can be found on Teresa Mollette’s Portsmouthcitizens website by clicking here.)

     I don’t think Jane Murray will be giving any good references for Ameresco either.  In an email to me (2 July 2011), she wrote, “[T]he Ameresco deal is about as preposterous as the financial instrument used for repayment. This called for a nearly $1 Million debt payment per year for 10 years. This decision was made at the same time that more than 60 homes were inundated with sewage thanks to the lack of public policy and code enforcement from the city, resulting in major storm water runoff problems from development at SOMC, Hillview, and others.” Murray  went on to explain, “The Ameresco deal essentially was to pay nearly $9.5 Million to have a company replace water meters, light bulbs, street lights, traffic lights, and windows. Director of the Water Department, Sam Sutherland told me that the whole thing was a disaster and that he pleaded with Jim Kalb over and over to not do the deal.” But the deal was done and Murray inherited a looming  financial disaster. She is not the only one in Portsmouth who thinks the Ameresco deal was a disaster.

The Ameresco Contract: “A Horrible, Disastrous Investment”

The dim-witted Portsmouth Mayor signs Ameresco Contract

When the traveling salesman of Ameresco began making visits to Portsmouth  around 2005, peddling energy conservation services, he found a number of easily bamboozled Portsmouth Boys in public office, including the aforementioned Jim Kalb, the dim-witted Portsmouth mayor. The Portsmouth Boys  fell for the Ameresco sales pitch hook, line, and meter. Three different witnesses have told me that after the meeting at which the city council had voted in favor of the contract, Ameresco representatives had whooped it up in the parking lot outside the Municipal Building as if they had just bought Manhattan from the Indians for $24 dollars. As a result, Portsmouth city government, which was getting by financially only by juggling accounts and cooking the books,  is now in  precarious  financial straits and is trying to increase the city income tax to bail itself out. Like the little boy in Hans Christian Andersen’s “The Emperor’s New Clothes,”  First Ward councilman Kevin Johnson has pointed out in an email to his colleagues in city government that Portsmouth is, as a result of Ameresco’s broken promises,  if  not buck naked, down financially to its last fig leaf. (Johnson is not a Portsmouth Boy and he was not on city council when Kalb signed the  Ameresco contract.) The  expensive services and equipment that Ameresco promised—the equivalent of the  musical instruments and the uniforms Hill promised in The Music Man—do not appear to be  paying for themselves over time, as Ameresco had promised. According to Johnson, that promise has not been and is not likely to be fulfilled.  “From a business perspective,” he wrote in his email, “I am most concerned as to how the $647,625 in ‘claimed’ savings for one year compares to the $940,000 payments the City of Portsmouth must make to BankAmerica each of ten years. . . . Even if  these ‘claimed’ savings are real and stay the same for the foreseeable future,” he continued, “it will  take the City 14.5 years to recoup its investment—at which time, if not before, much of this equipment will need [to] be repaired or replaced—therefore ending up as a horrible, disastrous investment by the City of Portsmouth” (emphasis added). On CNBC, Sakellaris said there was no cost to his customers, that Ameresco contracts were “revenue neutral,” because the energy savings the customers would make over the period of the contract would pay for the loans the customers got from third parties. In the case of Portsmouth the third party was the Bank of America. If a contract turned out not to be revenue neutral, Ameresco “guarantees” to make up the difference to the customer. We shall see what we shall see.

The American Dream or the American Nightmare?

George Sakellaris was a Horatio Alger Award winner in 1999,  but so was Enron’s CEO Kenneth Lay the year before—just prior to Enron’s unraveling. Lay was subsequently convicted of securities  fraud. Ameresco is located in Framingham, Massachusetts, not Houston, Texas, and  Portsmouth is a real river city in Ohio, not a fictional one in Iowa, but that did not stop the Portsmouth Boys from buying  $9.4 million dollars worth of trombones, in a manner of speaking. The Music Man ends with a miracle when the boys of River City, Iowa,  learn overnight to play the instruments, and Harold Hill, after falling  in love with a music teacher, sees the light. In real life miracles don’t happen. That’s why we have Hollywood. The workers Ameresco hired never did learn how to install the meters. By the standards of the  Horatio Alger myth, Horatio Alger, the son of a minister, was an abysmal failure for it was finally revealed a hundred years or so after it happened that he was a minister who had fled to New York after it was discovered that he  been  sodomizing  boys in his Cape Cod parish. Instead of being obsessed with the American virtue of making money, Horatio Alger, like the ancient Greeks he admired, was obsessed with boys. In his obsession with boys, which he sublimated  in his fiction, Alger neglected almost everything else. In 1899, when he died, he was practically broke. Are the Portsmouth Boys, after having been seduced by a traveling salesman, leaving the taxpayers of Portsmouth pregnant and barefoot? After she was recalled from office,  Jane Murray started a blog, WeGotTroubleRightHereInRiverCity. I wonder why she named it that?  

What does our current unelected Uncle Tom mayor say about Ameresco? “We still have our yearly payment that we pay to Bank of America,” David Malone  told the Portsmouth Daily Times (10 May 2011).  “But the project is still going,” he reassured the public. “Ameresco is still doing their part in the project contract. As far as I know everything is going along real well.” As far as he knows everything is going along real well? What Malone knows about budgets and spreadsheets, and about finances in general, is so minuscule that even a molecule of H2O would dwarf it. If he had been the mayor who negotiated the Ameresco contract, instead of a mere cheer-leading, mayor-in-waiting councilman, God knows where the city would be now.  I am expressing only my opinion, a right afforded me under the free speech provisions of the Constitution, but I think the lesson to be learned from this Ameresco business, at least where Portsmouth is concerned,  may be to beware of Greeks bearing gifts, even if they are wrapped in recycled green paper. The financial fireworks ahead for the city of Portsmouth, partly the result of Ameresco’s apparently broken promises, may make the fireworks on the Ohio River this Fourth of July look like sparklers.

Fireworks, Portsmouth, July 4th, 2011