Gov. Pence to sign ethics reform bill

A package of ethics reforms is headed to Gov. Mike Pence — including a last-minute addition that would require lawmakers to disclose businesses in which they have a particularly large financial stake.

The House voted unanimously Monday in favor of House Bill 1002, which is intended to increase transparency and accountability in state government after a number of high-profile ethics scandals.

Pence's office announced late Monday that he would sign the bill.

House Speaker Brian Bosma, who authored the legislation in consultation with Senate and Democratic leaders, said it introduces "unprecedented transparency and disclosure."

It would require lawmakers to disclose more information about their personal financial interests and the lobbying activities of their family members. It also would close several loopholes that allow state employees to take lucrative jobs with businesses they regulate or to whom they award contracts.

"We always have to engage the public trust," House Minority Leader Scott Pelath said. "That is a mission that is ongoing — it never ends."

The legislation is a reaction to recent controversies at the Statehouse involving a high-ranking GOP lawmaker, the former state schools chief and a top Indiana highway official. Each of those cases exposed shortcomings or loopholes in the state's ethics laws.

But correcting those problems has not been easy.

Even as the legislation worked its way through the General Assembly, questions about conflicts of interest continued to surface.

House Education Chairman Bob Behning, R-Indianapolis, made plans to lobby outside the state for an educational testing company that does business with Indiana. He later backed off those plans.

Then House Energy Chairman Eric Koch, R-Bedford, proposed legislation that would have banned local drilling regulations, despite his involvement in more than 20 gas and oil companies. Koch later withdrew that bill.

Even Bosma and Ethics Chairman Greg Steuerwald, R-Avon, came under scrutiny when they disclosed they had done legal work for the owner of the Indy Eleven professional soccer team, which is seeking permission from the General Assembly to use tax revenues to help finance a new stadium. Neither lawmaker voted on that bill, though Steuerwald voted on a similar measure last year.

The reform package ran into another hurdle last week, when Sen. Brent Waltz, R-Greenwood, introduced a last-minute change to the bill that would require lawmakers to separately list on their annual disclosure forms any business in which they own a $500,000 stake or more.

Lawmakers currently are not required to disclose the size of their business interests, making it difficult to gauge the importance of potential conflicts between their personal financial interests and their legislative work.

The change caused angst among some lawmakers and prompted Bosma to put the brakes on the bill. But he said Monday he decided to proceed with the amended bill after consulting fellow Republican and Democratic leaders.

If the $500,000 threshold had been in place last year, it would have exposed then-House Speaker Pro Tem Eric Turner's significant interests in the nursing home construction industry.

Turner worked behind the scenes last year to successfully kill a moratorium on nursing home construction, setting off an ethics investigation and prompting Bosma to promise reform this session.

HB 1002 also would prevent state employees from skirting a one-year cooling-off period before they can go to work for a company they regulated or to whom they awarded work.

That became an issue when Troy Woodruff, then-chief of staff at the Indiana Department of Transportation, sought a job with an engineering firm to whom he had helped award $500,000 worth of state work.

When the state ethics commission suggested it would not grant him a waiver, he exercised a loophole that allows employees to work as consultants rather than as employees. The new rules would prevent such consulting work.

They also would stop supervisors from granting waivers to the cooling-off rule, a practice that The Indianapolis Star found had become common. Instead, the new rules would require employees to get permission from the ethics commission.

The new rules also would prevent agency heads from writing and approving their own policies on personal and political use of state resources. Instead, the ethics commission would have to approve those policies.

That issue came to the attention of lawmakers after former Superintendent of Public Instruction Tony Bennett was fined $5,000 for using state equipment for campaign purposes. The state inspector general noted that Bennett could have avoided the fine if he had simply written a policy allowing such use.

Julia Vaughn, policy director for Common Cause Indiana, a government accountability group, said the new rules are a "significant step forward."

Still, she said the primary improvement is in the area of transparency, not enforcement.

"The onus is on legislators themselves to behave ethically. The enforcement process is still internal," she said. "What I'm hoping the bill does is instill a new status for ethics inside the General Assembly."

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