The state’s monthslong forensic audit of the Indiana Economic Development Corporation includes details about potential conflicts of interest and lack of oversight. The audit pointed to “the potential for favoritism and misuse of public funds” — but also detailed reforms already taking place.
The forensic audit, conducted by FTI Consulting, was prompted by a series of internal investigations conducted by the Braun administration and a report from the Hannah News Service published in April — it detailed allegations of ethics violations and self-dealing by staffers employed by IEDC-affiliated organizations, including Elevate Ventures.
The 127-page forensic audit detailed no criminal allegations. And it called the ongoing reform efforts a “positive step towards enhancing transparency and accountability.”
Indiana Economic Development Corporation
The audit highlighted specific issues in the IEDC’s policies on confidentiality and conflicts of interest, as well as transparency and accountability for the management of state funds by IEDC-affiliated organizations.
When FTI Consulting cross-checked conflict-of-interest forms with employment history, it found at least 10 instances that went unreported. The audit also found 30 entities that received IEDC funding and were connected to an IEDC board member or employee. Only one was reported to the Indiana State Ethics Commission.
One example of a potential conflict of interest involved the IEDC’s former chief innovation officer. Dave Roberts left to become CEO of the Applied Research Institute in 2022. Upon his departure, the audit said Roberts did not obtain a post-employment waiver from the state ethics commission.
The audit said more than 80 percent of Roberts’s salary was related to an IEDC contract and indicates a “potential violation of post-employment restrictions.” Roberts was replaced as CEO during the review.
FTI Consulting also found the IEDC “does not consistently apply due diligence procedures or competitive bidding processes to assess third-party vendors prior to contracting.” It highlighted Pure Development’s selection for the state’s controversial LEAP district.
Indiana Economic Development Foundation
The audit also found a “symbiotic relationship” between the IEDC and donors to its nonprofit arm, the Indiana Economic Development Foundation. Of the foundation’s 107 donors during the review period, 46 received payments or tax credits from the IEDC.
The audit found that IEDC staff had a waiver process “to ensure there is no quid pro quo” — but was provided no documentation of that process during the audit.
The audit also highlighted travel expenses it calls “excessive in nature.” All travel for the foundation and the IEDC were paid by the foundation and reimbursed by the IEDC. During the review period, that totaled more than $13.4 million.
The foundation paid more than $86,000 for international car race tickets and events. An IEDC trip to the COP27 conference in Egypt in 2022 budgeted $90,000 in airfare costs. The audit reported “the credit card expenses suggest actual airfare costs incurred for the trip were at least $200,000.”
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Elevate Ventures
When announcing the forensic audit, Gov. Mike Braun also announced funds allocated to Elevate Ventures would be frozen “until further evaluation.”
The audit said “the IEDC’s limited communication with and governance of EV, along with a lack of transparency into EV investment level details, contributed to an environment that increased the risk that state and federal funds were being used in a manner that was inconsistent with their stated purpose.”
It also said Elevate Ventures had “already taken significant steps” to address the issues identified in the audit, including a comprehensive investment return reconciliation project for the state’s 21 Fund. The fund was created by the Indiana legislature in 1999 to “stimulate the transfer of research and technology into marketable products, diversify Indiana’s economy by focusing investment in high technology industry clusters, and encourage an environment of innovation and cooperation among universities and businesses.”
Lauren is our digital editor. Contact her at lauren@ipbnews.org or follow her on Bluesky at @laurenechapman.bsky.social.