Corruption Charges in Indianapolis Land Bank

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December 19, 2013; Indianapolis Star

Around the nation, nonprofits are actively advocating for city-sponsored land banks to hold and maintain abandoned land and homes until development financing and development sponsors can be recruited and put into action. In Philadelphia, for example, which is soon to be the largest U.S. city with a municipally established land bank, the nonprofit advocacy community represented by the Philadelphia Association of Community Development Corporations and the Land Bank Alliance has spearheaded the pressure on the city to create a land bank. In Detroit, that city’s land bank has been valuable in helping protect middle class neighborhoods such as the historic Boston-Edison neighborhood.

In Indianapolis, however, a long established municipal land bank is mired in scandal with charges of bribery, kickbacks, and wire fraud. The latest of the scandals apparently concerns a former land bank administrator who steered a mowing contract to a firm in exchange for the promise of kickbacks. The administrator, Reggie Walton, another land bank employee, John Hawkins, and three non-city employees stand accused of earlier charges of selling land bank properties in return for kickbacks. In October, Walton was charged along with a local nonprofit director with fraud associated with land bank transactions.

In one of the scams allegedly used by Walton and his associates, they would turn properties over to nonprofits that would then flip them, earning a profit, to for-profit developers, who otherwise would have had to bid for the properties at much higher prices.


One article named David Johnson with the Indianapolis Minority Aids Coalition, Randall Sargent with New Day Residential Development and Aaron Reed with Naptown Housing Development as three of the nonprofit directors charged along with Walton earlier this year. Johnson’s organization is elsewhere identified as the Indiana Minority AIDS Coalition.

It is odd to see the Indianapolis Star question the adequacy of the city’s “vetting” of nonprofits participating in the land bank property dispositions when the multiple charges and indictments seem to center on city land bank administrators. Nonetheless, the integrity of an important municipal tool for redevelopment is at stake. Land banks work, but not when they are corrupted from the inside. It doesn’t matter whether the corruption is a mowing contract or the illegal flipping of houses by nonprofits. Any corruption of this sort undermines the public’s trust in the process—and in this case, the public’s trust in nonprofits engaged in neighborhood redevelopment.

As always, there are insinuations that the charges have some sort of political underpinnings, as the U.S. Attorney who filed the charges, Joe Hogsett, is rumored to have mayoral ambitions. Our feeling is: Who cares? If there’s corruption in the public, private, or nonprofit sectors, it must be vigorously attacked and rooted out. There is no such thing as an acceptable level of corruption, nor an all-purpose “political campaign” defense. Let’s hope that Indianapolis’s nonprofit community can lead the way in righting the ship of the Indianapolis land bank by helping eradicate every scintilla of fraud and corruption, even if it means taking on potentially corrupt or corrupted nonprofits.—Rick Cohen