Questionable electric car deal pointed out by union head

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INDIANAPOLIS, Ind. (May 17, 2015) -- Mayor Greg Ballard's top lawyer told CBS 4 News that the office under his direct supervision, his assistant corporation council, the city's controller, its public works director, as well as the CEO and the chairman of Vision Fleet and its attorney, none of them realized a $32 million seven-year deal the start-up alternative fuel vehicle company signed with the city of Indianapolis was a lease that would potentially violate city ordinances.

But Jerry Stewart knew it. He's a career mechanic who has worked in Indianapolis' Fleet Services Division for 27 years and is the head of the union local that represents 80 members.

"Absolutely that was brought up in one of the meetings," said Stewart, recalling conferences with city agency heads and attorneys in the spring of 2014. "My administrator and I, we had directly approached this, and we even had a copy of the ordinance, and at that point I would say that it was just basically ignored.

"One of the attorneys answered that the council did not have to sign off on it. These were not purchased vehicles. These would be leased vehicles and so they did not have to run these past the council."

Stewart said during the March 2014 meeting it was clear that the city considered the Vision Fleet deal a Lease Agreement.

"Even at the value of this amount of cars, why would you not go before the council?" he asked. "Why would you not get bi-partisan support on some long term huge investment? I mean, why would you not?"

City county councilors are asking the same question.

"Oh, I think the council was completely uninformed about this whole process, yes," said Jack Sandlin, a republican who represents Perry Township on the council.

Sandlin is a former IPD Deputy Chief of Investigations, grand jury investigator and is a license private investigator.

"I think that the process that went forward was deliberate to keep the council out of the process absolutely."

Council members have asked their attorney to determine if the Ballard administration broke the law.

Marion County Prosecutor Terry Curry and the FBI are aware of the differing accounts of the electric car deal and multiple lease and rental agreements uncovered by CBS 4 News.

In 2013 Mayor Greg Ballard, a former U.S. Marine who was in service during the Iraq War, announced he wanted to break foreign oil's grip on the city's municipal fleet.

Ballard announced that the so-called Freedom Fleet would put hundreds of electric and electric hybrid cars on the streets doing the city's business.

Under a "No Bid" contract, in February of 2014 the Department of Public Works signed a lease agreement with Vision Fleet, a California-based company that was not registered with the Indiana Secretary of State's office until March of that year, to provide 425 Chevy Volt, Ford Fusion and Nissan Leaf models to replace more than 500 gasoline-powered vehicles in the city's fleet.

Many of those cars are assigned to IMPD officers.

"'Who's going to take 425 Chevy Volts?'" Stewart said he recalled thinking at the time.

In February of 2014, city police cars and municipal vehicles had just come through a brutal winter where deep snow was an issue on impassable Indianpolis streets.

"Right away I'm thinking, 'We don't need Chevy Volts. What we need is four-wheel drive vehicles," said Stewart.

Not only did Stewart and his boss at Fleet Services think that the Volt was the wrong car for the wrong assignment, they also thought replacing hundreds of city vehicles enmasse was financially reckless as many cars about to be rotated out still had life and miles left in them, and a massive rotation would leave the city in dire straits in seven years when the leases on 425 cars would expire all at once.

Stewart told CBS 4 News that the technicians he represents are not trained to work on electric vehicles.

"We were concerned with, who is going to work on these cars?" he said. "That was number one, and knowing that it is an electric vehicle, are we going to be trained?"

Stewart said city ordinance requires AFSCME Local 3131 members work on leased city cars, though the Vision Fleet lease agreement permitted city mechanices to perform only simple tasks.

"To me, preventative maintenance means lube oil and filter," he said. "What about the rest of the car? What about brakes? What about any other things that would occur? It looked as if we were not given the full rights to work on these cars."

Stewart immediately wondered if the move to electric cars might cost union workers their jobs and he told DPW Director Lori Miser, her top aide Jeremiah Shirk and city lawyer so at a meeting in March of 2014.

"I would say half of the questions were answered. I would say the other half were either merged or not answered. I kind of felt like some of them were actually dodged and not answered."

Stewart was further outraged when he learned that the unsigned lease agreement he was asked to examine had already been signed weeks before he laid eyes on it.

"First off, I thought it was ridiculous to give us three days to respond to however many pages are here," said Stewart, flipping through a copy of the agreement provided him by CBS 4 News. "Later on I found out it was irrelevant anyway. This contract was supposedly signed (February 18th) but I did not find that out until maybe a month later in March I believe."

By then the Vision Fleet deal was rolling down the road after doing a detour around the City County Council and the Board of Public Works before it was decided to change the Lease Agreement to Master Services Agreement, also known as a rental contract.

"Well, leases are entirely different because you are acquiring an interest in property, whereas a services contract, there's entirely different legal requirements for that," Corporation Counsel Andy Seiwert told CBS 4 News during a contentious on-camera interview Friday afternoon as council members met with Vision Fleet personnel. Seiwert admitted that the Lease Agreement should have gone, at the very least, to the Public Works Board but didn't, "because it was a services contract and everybody understood it to be that."

Seiwert said, in effect, that even though the city signed a Lease Agreement with Vision Fleet where it would take possession and maintenance responsibility for the electric cars, no one on the city's side or the vendor's side caught wind of the mistake that everyone thought was rental agreement.

"Everyone understood it to be a services contract," he said. "That was done in error which I've just explained. It's a services contract. Always has been."

CBS 4 News challenged Seiwert's account of the Lease Agreement.

"So a contract is not a contract then if everybody thought, 'Well, it was something else, so we can just walk away and pretend this didn't happen?'" CBS 4 News asked. "You're saying a contract's not a contract when everybody signs it?"

"I'm saying the contract did not reflect what the parties intended," said Seiwert.

Councilors believe that the city, in essence, has two contracts with Vision Fleet since the misunderstood Lease Agreement was signed by all parties and dated February 18, 2014, and the Master Services Agreement, or rental agreement, which Vision Fleet drew up and signed in June, was then backdated and re-signed, reflecting a false February 18, 2014, signing date.

"It was backdated so that the parties and everyone would understand there was only contract ever and there wouldn't be any confusion over, 'Well, for this period of time we had this contract, for this period of time we had this contract,'" explained Seiwert. "We wanted to backdate it so all the parties knew and the contract would be uploaded to the city's contract web portal, there would be only one contract, the contract everybody knew we had."

It's noteworthy that DPW Director Lori Miser, who dated her signature on the misunderstood February 18, 2014, Lease Agreement, did not date her signing of the backdated June/February Master Services Agreement.

The signatures of Vision Fleet CEO Michael Brylawski and Chairman Rueben Munger appear to be authentic and personally signed in the February Lease Agreement but electronically signed in the backdated February Master Services Agreement and the June 12th and 13th typed dates below those signatures in the June Executed Version appear to have been manually whited out and handwritten February 18, 2014, dates have been affixed.

"In retrospect the prior contract from February should have been formerly voided," said Seiwert who was quoted in a Friday news release from Ballard's office claiming the earlier contract was recently referred to as a, "prior draft," though the word "DRAFT" does not appear in the document signed by all the parties. "Everybody knew that's what was going on. We superceded the first contract with the Master Lease Agreement."

For the record, the city does not have a "Master Lease Agreement" with Vision Fleet. It has a "Master Services Agreement" and a "Lease Agreement" as Seiwert's own inadvertent interchange of verbiage continues to sow confusion as to Indianapolis' contract to take possession of and drive more than 400 electric and electric hybrid cars.

"I can understand the first one being a draft and saying 'draft' right on it, but this first contract, or lease, was actually signed," said Councilman Frank Mascari, a democrat from Beech Grove. "It wasn't a draft. It was signed, so I think that's the one we need to go with, and it was totally illegal what they did. It should've went through Purchasing."

Union President Stewart agreed after finally receiving copies of the various city contracts with Vision Fleet from CBS 4 News.

His comments Sunday echoed those he made to city leaders in caution in the spring of 2014.

"We entrusted our city leaders, we even supported them," said Stewart whose union endorsed Mayor Ballard's re-election in 2011, "and to find out that there are some things that are in question here, that's troubling to me.

"I would hate to think my city Corporate Counsel just woke up," he said. "Listen, they're bears. They should've been awake the whole time. They shouldn't have been hibernating on this one."

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