The crony capitalism in Indianapolis is reaching epic proportions even as city leaders plead poverty every time a request is made to adequately fund basic city services. Gov. Mike Pence and Mayor Greg Ballard, who both have received large campaign contributions from Angie's List executives, stood with the company's co-founders, Angie Hicks and Bill Oesterle, to announce another $25 million taxpayer giveaway to the company that has yet to make a dime in its nearly two decades of existence. The company is pledging to invest $40 million to expand its corporate presence to a former Ford plant on East Washington Street near downtown currently owned by IPS and add an additional 1,000 jobs if the state and city fork over another $25 million in taxpayer subsidies to the company. Two years ago, the state and city kicked in a combined $14 million in public subsidies to the company in exchange for a promise by the company to hire an additional 850 employees. Instead, the company has been laying off hundreds of workers at its downtown offices in recent months. But this time they really mean it when they say they'll create new jobs.
Mayor Ballard plans to spend $9.6 million from the downtown TIF to build a new parking garage for Angie's List's employees in addition to the $7.1 million the city gave the company two years ago for infrastructure improvements. Mayor Ballard plans to donate another $6.75 million to IPS to offset its relocation costs from the former Ford plant. Gov. Pence will make an outright grant of $2 million to the company from the IEDC for infrastructure improvements. The state will also provide the company another $7 million in tax credit and job training grants based on the same job-creation claims it made two years ago but never delivered upon. The company's stock had been in a free-fall due to continued financial reports showing the company bleeding cash badly as it continues its perfect record of losing money every year that it has been in business. An insider recently leaked to a financial publication a claim that the company was considering a sale, which sparked interest in its stock, leading to an artificial bump in its stock price. Nonetheless, the company's stock continues to trade around $8 a share, a fraction of where it was trading more than a year ago when its stock traded for more than $25 a share near its peak.
Today's announcement raises serious questions about whether our elected officials should have discretion to award such large public subsidies to private companies. It's inexcusable for state and city officials to offer such lucrative public subsidies to a company that has to date failed to deliver on the promised job creations that accompanied the incentives offered to it only two years ago. The original deal was brokered by the Daniels administration. Angie's List's CEO, Bill Oesterle, formerly served as Mitch Daniels campaign manager. Oesterle has also made generous campaign contributions to the campaign committees of Gov. Pence and Mayor Ballard. Many objective business observers question the Angie's List business model, which now relies on the service providers for whom it supposedly provides objective consumer reports to consumers for nearly three-fourths of its revenues. Critics accuse the company of letting service providers buy good ratings. The company has only been able to remain afloat all of these years by continuing to swap out one group of investors for another group of duped investors. That's the classic definition of a Ponzi scheme. Despite the lack of profits during the company's nearly two decades of existence, both Hicks and Oesterle have become multi-millionaires from their hefty executive pay and generous stock incentives provided to them.
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