The Indiana Economic Development Corporation (IEDC) is now facing investigations and a detailed audit ordered by Governor Mike Braun. The governor announced on Thursday that his office has reported “impropriety” to the state inspector general and hired an independent forensic auditor to determine how the agency and its affiliates have spent hundreds of millions of dollars. “Where we have found impropriety or even the appearance of it, we have reported it to the inspector general,” Braun told reporters at the Indiana Statehouse.
“We are not rushing to conclusions. We want to make sure things are reviewed independently; only then will we take any and all appropriate action.”
The IEDC has received substantial funds to attract businesses to the state, but is now under renewed scrutiny following allegations of secret deals and financial mismanagement. A recent report raised concerns about the inner workings of IEDC’s nonprofit foundation and its venture capital arm, Elevate Ventures.
Indiana Commerce Secretary David Adams announced that current funds designated for Elevate Ventures are now frozen. Expenditures for the non-profit IEDC Foundation, which solicits funds from corporate and private donors to finance economic development trips and other activities, have also been placed on hold. “We are going to bring transparency to this agency and its partners, and it’s only going to make us overall much stronger,” Adams said.
These announcements come more than a decade after investigations first exposed dubious statistics and a lack of transparency from IEDC.
Forensic audit to ensure transparency
Reports detailed how IEDC was taking credit for creating tens of thousands of jobs that never materialized.
Investigations revealed many sites where job-creation projects had failed to materialize. Lawmakers have repeatedly introduced IEDC transparency bills since 2012, but these efforts have met resistance. The legislature initially exempted IEDC from many state Open Records laws and passed additional measures allowing IEDC and its affiliates to keep many of their activities and spending secret.
When asked if granting that secrecy was a mistake, Gov. Braun responded, “I would say they didn’t do an excellent job there. Lawmakers should have erred on the side of full transparency.”
Once an independent audit firm is selected, IEDC leadership expects the forensic audit to take between six and 12 months.
The state agency will pay the bill for the audit under investigation. Elevate CEO Christopher Day responded to the audit announcement, stating: “Elevate Ventures was established 15 years ago to serve the entrepreneur and innovation ecosystem in Indiana through venture development services and venture capital investments. We will continue to operate with transparency and are eager to participate in the forensic audit as directed by the Governor to correct the record on factual inaccuracies and misrepresentations made by anonymous sources.”