A recently released forensic audit of the Indiana Economic Development Corp. (IEDC) has uncovered significant spending on travel and entertainment that was indirectly supported by public funds. Conducted by FTI Consulting Inc. and spanning activities from 2022 to 2024, the 127-page review highlights how taxpayer-backed resources flowed into luxury expenditures despite being channeled through the nonprofit Indiana Economic Development Foundation (IEDF). n nThe report found that $4.5 million, or 38% of the foundation’s funding during the review period, originated from the IEDC and was used to cover travel and event-related reimbursements. Over those three years, the foundation spent $4.3 million on airfare, $2.8 million on accommodations, $2 million on event hosting, $1 million on travel agencies, and $800,000 on meals and catering—amounting to 82% of its total outlays. n nSome expenses were flagged as unusually high, including premium airline tickets priced between $5,000 and $10,000, stays at upscale hotels such as the Four Seasons, VIP airport services, and travel costs for family members of officials, not all of which were repaid. These trips, often tied to international economic development efforts under former Governor Eric Holcomb, totaled 38 journeys to countries like Japan, Brazil, and Egypt. n nThe audit also identified a close relationship between donors to the IEDF and recipients of state-backed financial benefits. Donors contributed $2.8 million collectively but received over $238 million in tax incentives, contracts, or grants—a return that has raised questions about potential favoritism. While auditors described this as a mutually beneficial arrangement aimed at boosting Indiana’s economy, critics have questioned the ethics of such exchanges. n nAdditionally, the review uncovered weak internal oversight. Thirty organizations receiving IEDC funding had ties to board members or employees, yet only one disclosed a potential conflict of interest. At least ten staff members failed to submit required conflict-of-interest disclosures. In one case, Dave Roberts, former chief innovation officer, took a role at the Applied Research Institute (ARI), where 82% of his salary came from an IEDC-funded contract, without formally declaring the connection or obtaining a post-employment waiver. n nElevate Ventures, tasked with managing state investment funds, was found to lack proper reporting mechanisms and failed to consistently track returns on public investments. The organization also manages private funds, creating a structural conflict of interest. Furthermore, compensation agreements allowed fund managers to earn interest from state funds—a financial incentive not disclosed during contract negotiations. n nAlthough the audit avoids assigning direct blame, lawmakers including State Rep. Ed Delaney and Sen. Fady Qaddoura are calling for formal investigations. The Office of the Inspector General has received some findings, and the attorney general’s office is assessing next steps. Senate leaders say legislative reforms may be necessary to improve transparency. n nUnder Governor Mike Braun, changes are already underway. The IEDF has stopped accepting new donations and is preparing to wind down operations. While Braun has not commented on specific findings, his administration emphasizes a shift toward greater accountability. The long-term impact on Indiana’s economic development strategy remains uncertain. n— news from IndyStar
— News Original —
Taxpayers helped pay for IEDC’s ‘excessive’ travel bills, and other audit takeaways
Gov. Mike Braun ‘s audit of the Indiana Economic Development Corp. pulled back the curtain on the quasi-public agency that ‘s been criticized for years over its lack of transparency, revealing luxury travel excesses, undisclosed conflicts of interest and multimillion-dollar no-bid contracts. n nThe 127-page “forensic review” by FTI Consulting Inc. published Oct. 2 dove deep into IEDC dealings between 2022 and 2024, during Eric Holcomb ‘s term. It also dug into associated projects and entities such as the Indiana Economic Development Foundation, Elevate Ventures Inc., Applied Research Institute, the LEAP district and more. n nOverall, the audit found a lack of internal controls, inadequate management and the presence of conflicts that “raises concerns about the potential for favoritism and misuse of public funds.” n nThe audit says reforms are necessary to address weaknesses revealed in the report and ensure that “state funds are used in an transparent and accountable manner.” n nHowever, defenders of the IEDC’s approach during the Holcomb administration have said behind closed doors that they believe the audit is at least partially politically motivated. For one, most of the time period investigated was when Braun ‘s primary rival Brad Chambers, former Indiana commerce secretary, led the IEDC. Braun also railed about IEDC’s lack of transparency on the 2024 campaign trail. n nHere are six eyebrow-raising takeaways from the audit. n nIndyStar investigation: Top IEDC official and his partners received $180M in IEDC contracts n nTaxpayers funded millions worth of travel and entertainment costs n nA defining feature of the Holcomb administration was his many travels abroad for economic development purposes, jetting everywhere from Brazil to Egypt to Japan in a total of 38 trips paid by the Indiana Economic Development Foundation, the IEDC ‘s nonprofit arm. n nBut the audit found these trips incurred “frequent and high costs,” and that though the expenses passed through the foundation, Hoosier taxpayers footed at least part of the travel and entertainment costs. n nIt noted $4.5 million, or 38% of the foundation’s funds between 2022 and 2024, came from the IEDC for travel and entertainment reimbursements. n nBetween 2022 and 2024, the foundation spent $4.3 million on flights, $2.8 million on hotels, $2 million on event planning and hosting, $1 million on travel agencies, and $800,000 on meals and catering, accounting for 82% of all the money it spent. n nSome of the spending seemed “excessive in nature,” the audit found, with the foundation paying thousands for VIP airport services, high-end hotels like the Four Seasons, $5,000 to $10,000 plane tickets, and travel expenses for family members, not all of which were reimbursed. n nDonors often received contracts and grants n nNearly half the donors to the Indiana Economic Development Foundation, the private fundraising arm of the IEDC, also received payments or tax credits from the IEDC. n nThe return-on-investment for them was significant: These donors collectively gave $2.8 million to the IEDF, and they collectively received more than $238 million in tax incentives or payments through contracts or grants. n nAuditors attributed this “symbiotic relationship” to their mutual interest in advancing the economy in Indiana. Democrats like state Rep. Ed Delaney of Indianapolis look at this with suspicion. n n“Are they washing each other’s hands?” he asked. n nPrevious IEDC coverage: Audit finds undisclosed conflicts, contracts with donors, lavish travel n nLots of potential conflicts – with little oversight n nAuditors revealed dozens of potential conflicts of interest, though not all of the details of those instances were spelled out. n nThirty entities that received money from the IEDC had connections to an IEDC board member or employee, but only one actually reported their relationship as a potential conflict of interest to the Indiana State Ethics Commission. n nOverall, auditors noted that internal controls at the IEDC and some of its related entities were weak: While auditors reviewed conflict of interest forms for more than 150 people employed by the IEDC between 2022 and 2024, they also identified at least 10 instances where employees did not submit conflict of interest forms as required. n nWith the Applied Research Institute, auditors noted that Dave Roberts, the former IEDC chief innovation officer, did not formally disclose his potential employment at ARI to the state ethics commission or receive a post-employment waiver, even when approximately 82% of his salary at ARI was related to the IEDC contract the group received. n nRoberts has pushed back on the idea he had control over that contract. n n“I did not have signatory authority for either entity,” he said in a statement. n n ‘Inherent conflict ‘ at Elevate Ventures n nElevate Ventures, the nonprofit the IEDC selected to manage its investment funds, “has not reliably tracked” the returns on its investments of state dollars, the auditors say, nor was it providing regular financial reports to the IEDC as its loan agreements required. n nFurther, the same managers who oversee investment of state funds also manage two other private funds, which the auditors say presents an “inherent conflict” because Elevate has financial incentive for those private funds to perform well, potentially at the expense of state funds. n nThe offer letters for Elevate’s managers of the state Growth Fund also say that the managers can earn interest off the Growth fund as part of their compensation, the audit states, but this potential financial gain was not disclosed to the IEDC during the negotiations over the Growth Fund. n nCritics say audit warrants further investigation n nThe audit is careful not to name names and to couch its findings with words like “potential.” Though the governor’s office has told IndyStar that some findings have been referred to the Office of the Inspector General, there is no mention in the report of intentions to further investigate any of the findings. n n“It’s a good start; that’s all it is,” Delaney said. n nDelaney believes the General Assembly should hold hearings and formally investigate the matters in the report. Sen. Fady Qaddoura, D-Indianapolis, said he is asking the attorney general to step in. n nSenate President Pro Tempore Rodric Bray said the legislature will review the audit and “determine whether legislative action is needed to achieve more transparency and accountability.” n nThe attorney general ‘s office is also reviewing the audit to determine next steps, a spokesperson said. n nIEDC ‘s future is uncertain n nWhat’s the future for the IEDC under Braun and future administrations? n nThe audit’s release certainly seems like a turning point, with Braun breaking ranks with three previous Republican governors who have all championed an approach to economic development that heavily deferred to the IEDC. n nThere are already changes afoot. The Indiana Economic Development Foundation, for example, has ceased accepting new contributions and is moving toward winding down its operations, according to Braun ‘s Commerce Secretary David Adams. n nBraun himself hasn’t weighed in on specific audit findings yet, but his administration seems keen to position itself as overhauling the IEDC to become more transparent and accountable to taxpayers. n nIt remains to be seen how much that will come to pass ― and what it will mean for economic development going forward. n nContact state government and politics reporter Kayla Dwyer at kdwyer@indystar.com or follow her on X @kayla_dwyer17. n nContact senior government accountability reporter Hayleigh Colombo at hcolombo@indystar.com or follow her on X @hayleighcolombo.