BMV vendor fires 2 employees amid ethics probe
A BMV vendor that is fighting for survival has fired two employees who are at the center of a state ethics investigation.
Express MVA Chief Operating Officer Shawn Walters and Director of Special Operations Robert “Pete” Wood were terminated last week, said company CEO Kevin Calvert.
The two men are former officials with the Indiana Bureau of Motor Vehicles who played substantial roles in the state’s relationship with Express MVA, then went to work for the company. At issue is whether they violated a conflict-of-interest law designed to prevent state employees from using their office to help a future employer at the expense of the public.
Gov. Mike Pence last month declined to renew Express MVA’s contract with the BMV and asked Indiana Inspector General Cynthia Carrasco to launch an ethics probe. Those moves came in response to an Indianapolis Star investigation into BMV contracts and fees.
The Star found that Walters, the BMV’s former chief of staff, helped negotiate state contracts with Express MVA that granted the company access to the BMV’s computer system to process vehicle titles and registrations for a “convenience fee” whose legality has been called into question. He then took a newly created executive position at the company without seeking an ethics opinion.
Walters could not be reached for comment.
Wood, who oversaw Express MVA’s compliance with BMV policies and procedures before going to work at the company, said he has done nothing wrong. He obtained an advisory opinion from the inspector general’s office that he says cleared him to work for the company in 2012. He later left Express MVA and eventually returned to the BMV, before once again taking a job with Express MVA in May.
“It seems to me that I’m being found guilty until proven innocent,” he said on Wednesday. “It’s not normal due process.”
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Express MVA had previously placed Walters and Wood on unpaid administrative pending the results of ethics investigation. But Calvert said he decided to terminate their employment in an effort to persuade Pence to renew the company’s contract and to allow the two men to collect unemployment.
“I don’t think it was in their best interest or the company’s best interest to continue the relationship,” Calvert said.
Express MVA became the state’s largest processor of auto titles after Walters and other BMV leaders awarded the company a contract in 2010 that provided Express MVA with BMV workstations and direct access to the agency’s STARS computer system. Walters later signed an amendment to the contract allowing the company to open a new location in Evansville.
The state’s arrangement with the company diverted large volume customers such as auto dealers from crowded license branches and cost the state nothing. But the agreement also allowed the company to charge so-called “convenience fees” that can double the cost of title and registration work traditionally performed at BMV license branches. The fees are often passed on to car buyers who may not realize they could get the same service for less money at the BMV.
The legality of the convenience fees has been called into question recently because state lawmakers didn’t explicitly authorize them until this year. The BMV maintains that the fees were legal.
Express MVA’s contract with the BMV had been scheduled for automatic renewal in October, but Pence announced after The Star’s investigation that it would not be renewed.
Calvert says that’s not fair because the company has been a good partner to the state. Any ethical issues are between the BMV and its former employees, he said, and should not affect the company’s contract or its roughly 40 employees.
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Pence, however, has said the contract cancellation and ethics probe were necessary “to ensure that state government adheres to the highest levels of transparency and full disclosure.”
Similar BMV contracts with four other vendors remain in place.
The controversy is only the latest for the BMV. The agency has acknowledged overcharging motorists at $60 million in taxes and fees and faces a pending class-action lawsuit that seeks to recoup another $40 million. The convenience fees associated with the Express MVA contract are not part of the legal challenge or the refunds.
The Star’s ongoing investigation of the agency has found that BMV leaders — including Walters — knew they were likely overcharging customers for years, but chose to ignore or cover up the overcharges, rather than refund the extra money and adjust to significant budget losses.
Pence appointed a new BMV commissioner earlier this year and has promised to work with lawmakers to streamline BMV fees and make convenience fees more transparent.
Call Star reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.