Tony Cook

tony.cook@indystar.com

Recent ethics scandals in state government have highlighted weaknesses and loopholes in the state’s ethics laws, according to experts gathering at the Statehouse today for Common Cause Indiana’s annual ethics conference.

Here are five such loopholes — and the stories that exposed them.

Loophole No. 1: Write your own ethics policy.

Want to slam your political opponents using state computers? Just write yourself a policy.

While state officials are restricted from using government resources for political purposes, an ethics case involving former Indiana schools chief Tony Bennett exposed an easy way for officials to get around it.

Indiana Inspector General David Thomas found that Bennett or his staff used state computer accounts to track his political calendar, respond to political emails, and store lists of political donors.

But Thomas’s investigation also noted that Bennett would have been safely within the law if he had simply penned a policy allowing such behavior.

Of course, that was before an Associated Press story earlier this month revealed a previously unreleased IG report that alleged more than 100 instances in which Bennett or his employees violated federal wire fraud law. According to that report, Bennett falsified mileage logs to cover fund-raising trips and used two separate state workers as campaign drivers.

Loophole No. 2: Obtain an ethics waiver without the public knowing.

State law requires a one-year cooling-off period for state employees before they can take a job with businesses they regulate or award state contracts to. The idea is to discourage companies from dangling jobs before public officials in order to win lucrative government contracts or favorable regulatory decisions. State workers who want the rule waived can make their case to the state ethics commission during a public meeting.

Or they can just ask their bosses in private.

A loophole in the law allows supervisors, rather than the ethics commission, to grant waivers without any kind of public meeting.

The Indianapolis Star found that more than 100 such waivers have been approved since the law went on the books in 2005.

The issue came to light when Troy Woodruff, a top official at the Indiana Department of Transportation, sought a job with an engineering firm for whom he had played a key role in awarding more than $500,000 in state contracts.

Loophole No. 3: Advise the state on policies that could affect your other clients, get paid by both.

State employees can’t take jobs with state contractors lest their loyalties be divided. But in Indiana, individuals who provide consulting services to the state aren’t held to the same standard.

Take the case of Seema Verma, a powerful healthcare consultant who has been paid millions of dollars by the state for her advice on Medicaid policy. At the same time, she was working for one of the state’s largest Medicaid technology vendors, which potentially had a lot to gain or lose from those policies.

Other states and the federal government have rules to prevent those kinds of potential conflicts of interest. But not Indiana.

Loophole No. 4: Rather than voting down a bill that could hurt your private business, just kill it in private.

Lawmakers are banned from voting on legislation in which they have a direct financial interest. But the ethics rules don’t prevent a lawmaker from influencing others.

That became an issue when Rep. Eric Turner worked to successfully kill a proposed ban on new nursing home construction during a private Republican caucus meeting in the waning hours of the last legislative session.

Turner and his family were heavily invested in various nursing home development companies.

A House ethics committee cleared Turner of any technical wrongdoing, but found he failed to meet the “highest spirit of transparency.” That case has prompted House leaders to prioritize ethics reform during the upcoming legislative session. Turner has resigned and has denied any wrongdoing.

Loophole No. 5: Disclose only some of your private business interests.

State lawmakers must disclose their personal financial interests on an annual form. The idea is to make sure their votes aren’t intended to benefit themselves rather than their constituents.

But there’s a big loophole. The language on the disclosure form requires lawmakers to list “every partnership and limited liability company of which you or your spouse are a member.”

The problem with that wording is that it could allow a lawmaker to set up a company over which he has sole control, then create a second company which is controlled solely by the first.

Under that scenario, the lawmaker would completely control both companies, but wouldn't have to list the second company because its sole “member” is the first company.

Under that loophole, Turner didn’t have to report the full extent of his interests in various nursing home companies.

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