Indiana lawmaker resigns from casino panel

Under the glare of an FBI investigation into a southeast Indiana grant program, a state lawmaker has resigned from a committee that recommends how to dole out millions of dollars in public riverboat casino funds.

Rep. Jud McMillin submitted his resignation from the Lawrenceburg Regional Grant Committee on Monday.

His action follows revelations in The Indianapolis Star that he and other government officials supported grants for companies to which they had close family or financial ties. In most cases, those connections were not disclosed.

The committee, which is composed of state and local officials, recommends how to spend $10 million a year in revenue from Hollywood Casino in Lawrenceburg. The grant program is intended to stimulate economic development in economically challenged Southeast Indiana

McMillin, R-Brookville, said in his resignation letter that he wanted to spend more time with his four-month-old child and felt he could better advance Southeast Indiana’s economic development efforts as a business owner and lawmaker.

“In those roles,” he wrote, “I will work to help foster this new era of economic development by attracting new partners in addition to promoting transparency and integrity in the grant approval process to ensure that southeastern Indiana as a whole will have a strong and united future.”

He told The Star last month he planned to sponsor a bill during the upcoming legislative session to increase oversight and accountability for the grant program. He declined an interview request Monday through a spokeswoman, saying he was tied up with meetings.

City officials told a local radio station that McMillin’s successor will be appointed by Mayor Dennis Carr.

That represents a departure from past practice — and highlights an effort by Gov. Mike Pence to distance his office from the controversial program.

Traditionally, the governor has appointed a representative to the seven-member committee. McMillin was appointed by then-Gov. Mitch Daniels in late 2011.

Pence’s decision to cede control of McMillin’s seat to the city’s mayor may be politically expedient, but it’s also a missed opportunity, according to Barry Rubin, an expert on economic development at Indiana University’s School of Public and Environmental Affairs.

McMillin’s resignation afforded Pence the chance to put his own stamp on the committee by appointing an outsider who could buck perceptions of self-dealing or conflicts of interest.

“It’s almost like they are washing their hands of this situation instead of grasping it by the horns,” Rubin said.

The governor’s office has repeatedly declined to comment on the grant program and would not talk about McMillin’s resignation.

The grant program has played a role in some of the biggest economic development projects in Southeast Indiana, including a new Honda plant in Greensburg that employs about 2,000 workers today.

But a Star investigation in May found that millions of dollars have been wasted on risky start-up companies, many of them with ties to government officials. The FBI has confirmed it has launched a criminal investigation, but has not named a target.

In one case, $5 million was awarded to Carbon Motors, a would-be maker of high-tech police cars in Connersville. The company promised 1,550 jobs, but later filed for bankruptcy. In the meantime, hundreds of thousands of dollars was spent on executive salaries and travel expenses — including $11,500 for a Connersville city councilman who worked as a “contract employee” even as he voted on issues related to the company.

In another case, the city of Greendale received $400,000 for a restaurant project involving the mayor and city attorney.

In McMillin’s case, he advocated for a $600,000 grant last year for a project involving Destination Brookville, a company he started in August 2010. The grant would have helped restore a local theater and develop a restaurant in a building owned by the company.

McMillin removed himself from the company before pushing for the project in front of the grant committee. While he did not vote on it, some committee members say he failed to disclose the fact that his mother and family friends had control of the company.

In another instance, McMillin voted for a $500,000 grant for a company called Zimmer Tractor without disclosing that his law firm was representing the company. Invoices show McMillin’s firm received about $3,200 for title work and other legal services related to the project.

McMillin has said he wasn't aware of his law firm’s involvement in the project, even though he and his father are the firm’s only attorneys. He also acknowledged that his firm has represented Zimmer on various legal matters for years.

McMillin’s resignation from the committee is only the latest development related to the grant program. After the Star’s initial investigation in May, the FBI expanded its investigation, subpoenaing grant and loan records from the city of Greendale.

Earlier this month, another lawmaker who had business ties with Zimmer announced that he would not seek re-election in November. That lawmaker — Sen. Johnny Nugent — had sold his own tractor business to Zimmer in February and continues to collect rent from Zimmer. Nugent, who is not a member of the committee, has said those financial ties had nothing to do with his support for Zimmer’s grant application.

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