Tony Cook

tony.cook@indystar.com

The FBI is looking into whether any foul play was involved in the creation of the state's controversial vaping law.

Agents have interviewed at least two lawmakers and a manufacturer of liquids used in electronic smoking devices.

“They asked me if I knew of anything anyone might have gotten out of this legislation,” said state Sen. Phil Boots, who said he talked to an agent last month. “I think that’s what they’re looking at — Did someone in the legislature gain from the legislation?”

Boots, a Crawfordsville Republican who has expressed concerns about the legislation, said he wasn't aware of any lawmakers who benefited financially from the legislation, but could understand why the FBI is asking questions.

The law gave only a handful of e-liquid producers control of the Indiana market, shutting out dozens of other manufacturers that had operated in the state. Lawmakers passed the measure in 2015 and amended it this year.

The FBI also has interviewed Evan McMahon, an e-liquid producer and leader of Hoosier Vapers, a consumer and industry organization that opposes the law.

“They didn’t say who they were investigating, but they said they were looking at antitrust and corruption,” McMahon said.

Agents wanted to know which legislators and lobbyists were “cheerleaders” of the legislation, he said.

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FBI Special Agent Wendy Osborne declined to comment, saying the agency does not confirm or deny investigations.

The new regulations require any company that wants to produce e-liquid for sale in Indiana to be certified by a security firm by June 30. But because of how the law was written, only one security firm in the entire country qualified to perform the work — Lafayette-based Mulhaupt’s Inc.

The company has approved only six producers while turning away many others.

Mike Gibson, co-owner of Mulhaupt’s, did not immediately respond to a message from IndyStar.

A seventh manufacturer was awarded a permit after a federal judge ruled in its favor Friday.

U.S. District Judge Richard L. Young found that Florida-based e-liquid maker GoodCat was likely to succeed in its claim that the security requirement violated the U.S. Constitution's commerce clause, which implicitly prohibits states from enacting laws that excessively burden interstate commerce.

Young said the new law “effectively delegated a policy of economic protectionism to a private entity” and found “that the burden on interstate commerce clearly exceeds any purported benefits.”

Attorney General Greg Zoeller, whose office is defending the law, emphasized that Young's ruling applies only to GoodCat.

“The state contends that decisions about how to regulate the businesses that manufacture the chemicals used in e-cigarettes ought to be made by the people’s elected representatives in the legislature — and if this current statute is found to be inadequate, then legislators should consider revising the law next session,” Zoeller said in a statement. “From a public health standpoint, we maintain that Indiana should maintain the ability to regulate these chemicals and devices within its borders.”

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A key lawmaker behind the amendment that was approved this year, Sen. Ron Alting, R-Lafayette, said he has not been contacted by the FBI.

“I have not been involved in any of that nor do I anticipate I would,” he said. “I am kind of shocked. I know nothing about this. I’m kind of shocked by it. I honestly don’t think there is anything there. I don’t know what it would be.”

When asked who proposed the language for the amendment, he referred IndyStar to Sen. Carlin Yoder, the Middlebury Republican who led the charge for the original legislation in 2015.

Yoder did not immediately respond to messages from IndyStar.

Sen. Vaneta Becker, an Evansville Republican who ultimately opposed the vaping law, confirmed she was interviewed by the FBI. She said she was asked about the legislative process.

“I said I can’t speak to anybody’s motivations because I don’t know,” Becker said, recalling her meeting.

A primary force behind the legislation was Zak Laikin, who with his Indiana Vapor Co. hired a team of four high-powered lobbyists to advocate for the law. His company did not receive a permit to produce, but his newly created Vapor Association of Indiana is now representing the few companies that have been approved.

Laikin did not immediately respond to a message from IndyStar.

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Alting said he plans to advocate for changing the law when the legislature reconvenes in January.

“Everything was very transparent and open,” he said. “We don’t always hit a home run, and that was certainly not a home run. Businesses have had to close. That was never the intent of that amendment.”

IndyStar reporter Chelsea Schneider contributed to this story.

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.

Indiana vape shop owners say new FDA rule will crush industry

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