POLITICS

Ethical dilemma? House Speaker Brian Bosma has ties to Indy Eleven

Tony Cook and Mark Alesia
  • Two Indiana lawmakers have business ties to Indy Eleven soccer team owner
  • House Speaker Brian Bosma did not publicly disclose his work for the team until after House vote
  • Rep. Greg Steuerwald voted for soccer stadium deal last year while doing legal work for team’s owner
  • Bosma and Steuerwald have led ethics reform efforts this year

When a proposal to fund a new stadium for the Indy Eleven soccer team surfaced unusually late in last year’s legislative session, it raised questions about the influence wielded by the team’s well-connected owner at the Statehouse.

That proposal flew through the House and was later panned by the Senate. But it’s back again this year — along with new questions about business ties between the team’s owner, Ersal Ozdemir, and two prominent House lawmakers.

House Speaker Brian Bosma, R-Indianapolis, revealed last week that he has done legal work for the team for the past two years. But he didn’t publicly disclose that work until after the House voted last week in favor of the $82 million stadium funding proposal — and even then, he did so only after being pressed by reporters to comment on the measure.

Julia Vaughn, policy director of Common Cause Indiana, praised Bosma for pushing ethics reforms in the legislature. But she criticized the timing of the disclosure.

“If it’s going to be meaningful to the process it has to be timely,” Vaughn said. “I think it would have been more transparent if he had put his cards on the table beforehand.”

Bosma defended himself by saying he has never voted on the issue or advocated for it privately.

“I feel like I handled it perfectly correctly with advice from legal counsel on how to do it,” Bosma said. “It was appropriate for me not to make any public statements about it and just to distance myself as much as possible so the normal legislative process could take place.”

Bosma is not the only lawmaker with business ties to Ozdemir, a frequent donor to Republican campaigns whose construction company has been involved in several publicly financed projects, including a new parking garage in Broad Ripple and a major rehabilitation of the State Fair Coliseum.

House Ethics Chairman Greg Steuerwald, another key player in crafting the new ethics rules, has done legal work for Ozdemir’s Keystone Construction Corp.

Unlike Bosma, who left the chamber before the Feb. 25 vote and was simply listed as “not voting,” Steuerwald was formally excused on the House floor, making his potential conflict of interest public.

But Steuerwald did vote in favor of the stadium deal last year, even though his legal work for the team began in 2012.

Steuerwald, R-Avon, said the new ethics rules — which include language discouraging “the appearance of impropriety” — were the primary factor in his decision to abstain from voting this year.

“That is a higher standard, so even though I had no pecuniary interest, no financial interest in the bill of any kind, I thought it would be best to avoid the appearance of impropriety,” he said.

Vaughn, however, said consistency is important, as well as timeliness, in disclosing conflicts.

“If you’ve got a conflict this year,” she said, “then you probably had a conflict last year as well.”

Paul Okeson, a vice president of Ozdemir’s construction company, said hiring Bosma and Steuerwald was not an attempt to curry favor in the legislature.

“This is Indianapolis,” Okeson said. “We’re sort of a big small city. It’s perfectly reasonable that at some point you might interact on a business transaction with someone who may be an official at the Statehouse. But, it’s not like we do that exclusively. It’s not like we look to that for any undue gain. It’s part and parcel of doing business in Indianapolis.”

Bosma said he works on trademarks, contracts and sponsorship agreements for the team. Steuerwald serves as local counsel for Keystone Construction in a Hendricks County lawsuit. Both lawmakers declined to say how much they were paid.

“Compared to our total (legal) spending, it’s not a significant amount with either of those two lawyers,” Okeson said.

Okeson said the lawmakers didn’t give advice on the proposed stadium and that the company uses 13 law firms. He said Ozdemir does not have a business relationship with any other legislators.

Still, Vaughn called it “a curious coincidence, given the thousands of attorneys here in Indianapolis that they’d end up with not just one, but two, who are members of the General Assembly.”

The revelations come as Bosma and Steuerwald lead a push for ethics reforms in the wake of several high-profile scandals involving state officials. But Bosma’s lack of disclosure highlights the limits of those new reforms. Those measures wouldn’t require public disclosure in such situations and they would still allow lawmakers to keep secret the clients of their private businesses.

Bosma said he didn’t try to hide his relationship with the team. He said that last year he privately told Gov. Mike Pence and Senate President Pro Tempore David Long he couldn’t discuss the stadium issue because of his work for the team.

Bosma never publicly disclosed his work for the team until reporters pressed him for an opinion on the measure after Wednesday’s vote. Initially, he said he didn’t have an opinion on the bill. Only when a reporter told him that seemed unlikely did he explain he had done “some work with the team” and has “not been a public or private advocate” for the project.

He later voluntarily provided a copy of his Feb. 13 letter to the House ethics committee, although such letters are not public record.

Conflicts of interest have taken center stage at the Statehouse after an ethics controversy last year involving former Rep. Eric Turner, the second-highest ranking Republican in the House. Turner helped kill legislation last year that would have harmed his family’s nursing home development business. He later resigned.

In response, Bosma and Steuerwald have co-authored with their Democratic counterparts a package of ethics reforms. Those include requiring lawmakers to list more information about their personal financial interests. The House also adopted new internal rules that prohibit lawmakers from voting, and discourage them from advocating, on measures that would have a “unique, direct and substantial” impact on their incomes or businesses.

Despite the more stringent rules, Bosma and Steuerwald insisted they could have voted on the stadium deal — even as their law firms made an undisclosed amount of money working for the team or its owner’s other businesses. Nothing in the stadium bill would result in a direct financial benefit to them, they said.

But Hana Callaghan, director of government ethics at Santa Clara University’s Markkula Center for Applied Ethics, said any payment produces “a duty of loyalty” to the client.

The business ties between lawmakers and the team are just the latest controversy to surface around the proposed stadium deal.

The idea of a publicly backed stadium first surfaced during last year’s legislative session, when it was suddenly inserted into a Senate bill during a House Ways and Means Committee meeting. That move upset some in the Senate because they never had an opportunity to hold a hearing on the issue. The stadium proposal was later stripped out of the bill amid concerns that tax revenue from the stadium would be insufficient to service the debt.

This year’s proposal would use taxes from the stadium and from a Downtown hotel being built by Ozdemir to pay the debt.

Ozdemir has been a generous contributor to mostly Republican campaigns, giving $260,000 over the past 10 years. He has spent at least $50,000 on lobbyists, including Joe Loftus, a former House Republican adviser.

That reflects the amount of money at stake with the stadium bill, which can put a lot of pressure on legislators, even at a time when ethics reform is on the front burner.

“We have a saying here,” Callaghan said. “Just because it’s legal doesn’t necessarily mean it’s ethical.”

Contact Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony. Contact Mark Alesia at (317) 444-6311. Follow him on Twitter: @markalesia.