It was a welcome, and overdue, move when Gov. Mike Pence and the General Assembly approved legislation this spring to require the Indiana Economic Development Commission to be more transparent in its operations.
The latest example of why transparency is so critical is the frustrating case of Elevate Ventures, a private nonprofit hired by the state to stimulate business investment. It took an Indianapolis Star investigation, published July 14, to alert taxpayers to troubling conflicts of interest. The news story prompted a federal audit of Elevate Ventures.
Pence also has ordered an independent review of the state’s work with Elevate.
For their part, Elevate Ventures’ leadership team and the IDEC insist that no rules were broken when $800,000 in public funds were steered to companies run by Elevate’s founder, Howard Bates, and his son.
The feds may conclude differently. Their guidelines say a recipient of 2010 Jobs Act money can’t also be director of an entity investing the money, nor can a recipient be an immediate family member of a director.
The IEDC and the companies it works with have long tried to have it both ways: They use public dollars for economic development, but then claim exemption from scrutiny because, in the name of private enterprise, they need to protect trade secrets from competitors.
The contradiction would be more palatable if the results were proven. But Indiana still has fewer jobs than it had when the recession hit. And the potential jobs touted by IEDC and the companies it helps haven’t materialized in the numbers promised. That discrepancy is especially frustrating in a state with an unemployment rate of more than 8 percent.
The Elevate Ventures case is just one of several disturbing revelations regarding the IEDC in recent years.
A thorough check of the troubled business history of Bob Yanagihara, who promised to bring 1,100 jobs to Indianapolis, would have cast grave doubts on his ability to deliver. Likewise, Mynette Boykin’s record should have raised red flags about her plans to bring economic revival to the Southern Indiana city of Madison.
Yanagihara, now deceased, never came close to launching the proposed business. Boykin didn’t deliver either. With Yanagihara, at least, the cost was limited to embarrassment, disappointment and loss of credibility. Boykin got $1.5 million from the taxpayers in incentives. And in both cases, the problems came to light only because of Indianapolis Star investigations.
Then there was the strange case of Monica Liang, hired under a $100,000 contract by the IEDC to explore business opportunities in China when her only experience was as an interpreter for the city of Marion. She was quietly terminated after Chinese government officials accused her of soliciting a bribe, a charge the IEDC investigated internally rather than taking to the authorities. Offering little detail, the IEDC said it failed to substantiate the allegations.
Lack of openness, lack of due diligence, lack of measurable results — it certainly adds up to an agency deserving of the priority attention Pence assigned it shortly after taking office in January.
State Sen. Mike Delph, R-Indianapolis, author of the new law, says he is heartened by the governor’s strong words upon signing the legislation and believes the law should be allowed time to show its effectiveness. If a need for modification arises by the start of the General Assembly session in January, he added, he would be open to revisit the law.
“We don’t want to make companies disclose trade secrets,” he said. “But it’s a balancing act. I’m a strong believer in the public’s right to know how taxpayer dollars are being spent.”
So far the balance has been tipped to the private side. It’s time for the weight to be shifted back toward transparency and the public — the people who are paying the bills.
— The Indianapolis Star