The “good news,” bad news” scenario is reflected in the results of the State Integrity Investigation conducted by the Center for Public Integrity, Global Integrity and Public Radio International. Indiana received a letter grade of C- and a numerical score of 70, ranking it 23rd among the 50 states
In matters of ethics
Ethics enforcement in the Hoosier State is handled separately by each branch of government. All three branches require certain officials to file annual financial disclosure forms identifying potential conflicts of interest, but many government watchdogs and journalists contend the forms are only marginally informative. Lawmakers, for instance, are required to list employers, financial interests and connections with lobbyists. But veteran statehouse reporter Lesley Stedman Weidenbener, now managing editor of The Statehouse File, said rather than broad categories, she’d prefer to see them provide detail about matters directly relating to the offices they hold or legislation they work on – “anything that’s clearly a conflict, not necessarily every stock that they own.” Weidenbener, in fact, said she scarcely looks at the forms anymore. “I didn’t find them to be that useful,” she said.
Indeed, the forms get scant scrutiny, if any, from the ethics bodies themselves. There’s no requirement that they be formally audited. On the legislative side, for instance, the House and Senate ethics committees are empowered with investigating only when complaints are filed.
Jon Schwantes, a former statehouse reporter who hosts a public television show, Indiana Lawmakers, said the disclosures are not much of a deterrent to ethical breaches partly because of the lack of oversight.
“It comes down to who is looking at them and doing something about them,” Schwantes said.
State law does charge the inspector general with reviewing executive branch disclosures and notifying those who have failed to file, but ethics officials acknowledge that review is superficial. “We review for completion to ensure that all questions are answered,” said Cynthia Carrasco, executive director of the state ethics commission.
Carrasco said there’s been little public demand to scrutinize the disclosure forms, and the state doesn’t make it easy for the public to access them. The inspector general’s website includes the most recent statements filed by statewide officials such as the governor, but older forms and those of lower level officials are not available online. The House of Representatives posts members’ disclosure forms online, but the Senate does not. And no judicial forms are available on the state’s website.
Beyond paperwork, critics say the ethics enforcement system suffers from a lack of independence and openness that renders policing patchy at best. The most independent of the agencies is the commission on judicial qualifications, which includes three citizens appointed by the governor and three attorneys chosen by the state bar.
But the legislative and executive ethics bodies lack similar independence. When the House ethics committee investigated and later reprimanded Rep. Charlie Brown, D-Gary, for failing to report consulting earnings, it was the first reprimand in the history of the House. That was in 1997, and the committee has done little in the way of investigations since.
That is despite an acknowledged need for stricter ethical standards, as reflected by the passage in 2010 of major new ethics rules, including restrictions on lobbyists’ gifts and a long-sought one-year “cooling-off” period for lawmakers who leave to join lobbying firms.
The Indianapolis Star in 2010 estimated that there were more than 30 former legislators serving as lobbyists. The Star cited some high-profile cases of the revolving door, such as Rep. Matt Whetstone, R-Brownsburg, and Rep. Robert Kuzman, D-Crown Point, who quit to become lobbyists shortly after being elected to new terms.
Under the new law, former lawmakers will have to wait a year before being allowed to lobby the legislature. Also, legislators must now report any gift from a lobbyist valued at $50 or more – a figure decreased from the previous $100 threshold. According to The Star, lobbyists in 2010 spent about $1.5 million on receptions, sports tickets and other gifts to legislators.
A ‘citizen’ legislature
The potential for undue influence by lobbyists, some say, pales in comparison to the issue of lawmakers’ built-in conflicts of interest. Because the Indiana General Assembly is a part-time “citizen legislature,” legislators are allowed to maintain outside employment. It is a common set-up among states, and proponents say it provides legislatures with instant expertise on the range of issues they face.
But critics believe that arrangement also poses real conflicts of interest. Ivy Tech Community College has been singled out as an example here because it has employed numerous lawmakers, including powerful members of the leadership and committee chairs such as Democrats Pat Bauer and Bill Crawford. Ivy Tech has enjoyed substantial increases in state funding in recent years. Indiana received low marks for legislative accountability on the state integrity survey because of such conflicts.
“A citizen legislature is the definition of a conflict,” said Schwantes, of Indiana Lawmakers.
While the legislature has been the focus of criticism, the executive branch in Indiana has also had its share of controversies, particularly the state ethics commission. The panel’s five members are appointed by the governor, who also appoints the Inspector General. Critics say the commission and the IG inevitably have blind spots. Democrats say it would make more sense to have legislators appoint the members of a body that oversees executive agencies. The lack of independence resulted in low scores on the integrity project’s questions about ethics agencies and political interference.
Disputes over the effectiveness of the commission erupted in 2010 after it approved a waiver of the state’s revolving door rule to allow an administrative law judge for the Indiana Utility Regulatory Commission to go to work for Duke Energy of Indiana. In the wake of that case, The Indianapolis Business Journal reviewed 27 post-employment rulings dating back to 2006 and found only three occasions when the panel enforced the one-year “cooling-off” period required by statute. The commission “has a long history of lenient decisions,” the IBJ concluded.
The commission has defended its decision-making with regard to the post-employment rule, saying that waivers have been provided only when the statute doesn’t apply. And Carrasco said the commission, working with the inspector general – an office created by Gov. Mitch Daniels – has been active in fulfilling its mission. “There is an increase in the activity the commission has undertaken in the past five (or) six years,” she said.
According to the IG’s 2010 report, the commission issued about five times as many formal advisory opinions (and twice as many informal opinions) to state employees from 2005 to 2010 as it did the previous five years.
But the commission and the IG also have been accused of exercising their authority in a partisan fashion. For instance, Inspector General David Thomas in 2006 investigated then-director of the Hoosier Lottery, Esther Schneider, for using $10,000 in lottery funds for luncheons aimed at supporting Republican women in political positions. Thomas found there was no ethical violation because the luncheons weren’t supporting a specific candidate.
Democrats criticized that decision in light of previous cases in which Thomas investigated – and the ethics commission fined – top transportation officials from the previous Democratic administration for hosting campaign fundraisers at which highway bidders were guests. Carrasco says the commission has “continuously applied the ethics code to the letter of the law.”
According to Weidenbener of The StatehouseFile, the ethics agencies generally do a good job on black and white issues of misconduct, but murkier cases tell a different story. An oft-cited example is that of Affiliated Computer Services. Former ACS Vice President Mitch Roob was appointed to run the state’s Family and Social Services Administration. Roob then presided over the controversial privatization of welfare services, with ACS as the main contractor.
The ACS contract highlights another area in which Indiana received low marks from the State Integrity Investigation: ACS has contributed thousands to Gov. Daniels’ campaign committee. Daniels has disputed suggestions of improper influence, but critics say this is represents a “pay to play” situation, in which would-be contractors make campaign donations to maintain favor with an administration.
In general, Indiana places few restrictions on campaign contributions. It is one of only 12 states that let individuals and political action committees give unlimited amounts. State law limits only labor unions and corporations, to an aggregate of $22,000 a year.
And even that limit is easy to get around. Corporations and unions can form PACs or make contributions from as many subsidiaries as they want up to the limits. Also, individuals associated with companies or unions have no limits. The Indianapolis Star has described the system as “Indiana’s anything-goes approach to campaign financing.”
Not only are Indiana’s contribution limits generous, enforcement of campaign finance rules is virtually nil. The last time observers can remember a significant fine being levied, in 2003, the Election Commission deadlocked along party lines in the case of then-state Rep. Brooks LaPlante, who was found to have repeatedly broken state election laws by failing to report contributions he made to his own campaign.
The commission had previously voted unanimously to fine LaPlante, R-Terre Haute, $10,000, and by a 3-1 vote agreed to refer his case to a prosecutor. But after the Republican members were replaced with different Republicans, the commission revisited the decision and deadlocked on both the fine and the criminal referral. Critics said the decision sent a message to candidates that there’s really no need to abide by reporting requirements. Vaughn of Common Cause-Indiana blames the partisan nature of the commission, which by law must consist of two Republicans and two Democrats. Good-government advocates would like to see an independent enforcement agency.
“Effectively we have no oversight at the state level because they are just really willing to look the other way,” Vaughn said. “They will call attention to math errors. They’ll check your math and call you if you forgot to carry a one or something.”
Indeed, despite all the filing requirements, campaign reports are never officially examined for legal compliance. The only “audits” are for those who file late or not at all. If there is a deficiency in a report, officials admit, it’s up to someone else to find it.
“We rely upon citizen complaint,” said Leslie Barnes, Democratic counsel to the election commission.
Ed Feigenbaum, a campaign finance expert who publishes the influential Indiana Legislative Insight, said the commission’s role is quite limited. “It’s more of a registry than a monitoring or enforcement agency,” he said.
Theoretically, the public can do its own monitoring of government activities by taking advantage of laws designed to give citizens access to meetings and documents. But in that domain, too, Indiana gets poor marks in the state integrity review. A recent survey by the National Freedom of Information Coalition and the Better Government Association gave Indiana a grade of F on government access.
The Access to Public Records Act allows any person to inspect and copy most public records of most government agencies. But the law doesn’t state a clear deadline for compliance by public officials in charge of records. That is, if an official acknowledges a request for records and says he or she is working on it, that represents compliance.
Further, the law currently doesn¹t contain any penalties for lack of compliance. Modest penalties will go into effect this coming July if the governor signs a bill just passed by the legislature. The bill allows for judges to issue fines up to $500 for violations of open meeting and open record laws. But penalties can only be levied in cases where an official intentionally violates the law and a requester takes the official to court.
The fact that a citizen must sue a non-complying official is "almost a punishment for the victim," says Tony Fargo, an associate professor at the Indiana University School of Journalism.
Fargo noted that the law has long included a provision making it a misdemeanor offense for officials to knowingly release confidential information.
In essence, he said, the incentive in Indiana has been "against disclosure instead of for it."
Update: This story has been amended since its publication to reflect a recent change in Indiana law. The new law, adopted by the legislature March 10 and signed by Gov. Mitch Daniels March 19, allows for fines of officials who violate the state public access laws.