This story was originally published by the Indiana Capital Chronicle.
By Whitney Downard
Indiana Capital Chronicle
October 3, 2025
Fallout from a damning audit of Indiana’s economic development agency could include an ethics investigation, the governor’s office told the Indiana Capital Chronicle Friday.
“Throughout the course of this audit, FTI (Consulting) worked in coordination and shared all relevant findings, including any potential ethics violations, with the Office of the Inspector General,” said office spokesperson Griffin Reid.
The 127-page report from FTI Consulting found no allegations of criminal wrongdoing, but flagged concerns about a lack of oversight at the quasi-public state agency. Thousands of dollars spent at high-end hotels for state officials were funded by anonymous donors and few staffers filed official conflict of interest disclosures — even if they had ties to the companies receiving millions in tax breaks or state contracts.
IEDC forensic analysis highlights lackluster oversight and questionable spending
Earlier Friday, a pair of Democrats said the audit was just the beginning and called for follow-up action and further scrutiny.
“The state of Indiana has managed to spend $800,000 to have an outside organization come up with identifying conflicts of interest that we should have had identified years ago,” said Rep. Ed DeLaney, D-Indianapolis. “… it’s a good start. If you wanted to do a real, thorough investigation of what happened, you start with this.”
The state contract with FTI Consulting is worth up to $800,000 and final expenses haven’t yet been tallied.
DeLaney noted that the report doesn’t publicly name any staffers, though some could be identified using context clues. Additionally, the report redacted some of the names of those who donated to the Indiana Economic Development Foundation, the nonprofit arm of the IEDC, citing state law.
Both DeLaney and Sen. Fady Qaddoura, also from Indianapolis, are part of a group of Democrats who have been especially critical of the IEDC and its “veil of secrecy” in the last few years.
Citing the $1.2 billion spent by the IEDC during the audit’s review between January 2022 and December 2024, Qaddoura lamented lost opportunities, specifically following state cuts to child care subsidies and waitlists for Medicaid services for elderly or disabled Hoosiers. He criticized Republicans for advancing bills creating tax cuts for data centers while not addressing utility costs.
“They are not fully funding the waiver for senior citizens … they are not fully funding the health and wellness waiver,” said Qaddoura. “Yet they are subsidizing multi-billion and — in one instance — multi-trillion dollar corporations in Indiana.”
In addition to tapping the State Board of Accounts, State Budget Agency and State Ethics Commission, DeLaney said he wanted a legislative panel to conduct its own investigation.
“We should have hearings and bring in people from these agencies and ask them these questions: Where did the money go? Did you overpay? What do you think about the LEAP project? Did we put too much money in that?
“I predict we won’t do that because we don’t want answers as to our failures and the failures of this agency,” concluded DeLaney.
In a statement Friday, Senate Majority Leader Rodric Bray, R-Martinsville, said the legislature would “closely” review the report and determine if it warrants further action.
“Transparency and accountability are of paramount importance when it comes to investing taxpayer dollars, and conflicts of interest need to be brought to light. The IEDC plays an important role in bringing jobs and capital investment to our state, and we need to ensure the IEDC is operating in a way that instills public trust,” Bray said.
The audit tabulated instances where IEDC staffers had conflicts of interest with companies before the agency but opted not to properly disclose that — or, if they did, it was seldom discussed before the governing board or sent to the ethics commission.
Another employee who left the IEDC for a company that benefitted from agency dollars through a lucrative contract similarly didn’t seek a post-employment waiver, according to FTI.
“It was an infested culture filled with conflict of interest designed to help and to support those who were in charge of the agency,” said Qaddoura. “These individuals purposefully and intentionally created entities and double dipped when it came to salaries from both the state of Indiana and these external entities that they control.”
Qaddoura appealed for an even higher level of legal scrutiny, calling for Attorney General Todd Rokita to investigate potential criminal wrongdoing.
“I think we would like the attorney general to get fully engaged on this to determine if there are any criminal charges to be filed and, if not, at least if there’s any dollars that can be recouped from these entities,” Qaddoura said.
Indiana’s attorney general can only file criminal charges in a limited number of circumstances, but can assist local prosecutors.
One particular concern listed in the report was spending through the nonprofit Indiana Economic Development Foundation on international travel for former Gov. Eric Holcomb and other economic development officials.
The three-year review found that 107 entities donated $6 million to the foundation, with 46 of those entities receiving $238 million in payments or tax credits from the IEDC. The foundation spent $13.4 million during that time, including:
Roughly $167,000 of that was for three family members of state officials.
Qaddoura also noted a no-bid contract awarded for $77 million, of which the company kept $18 million while passing the rest onto subcontractors, for development costs related to the Limitless Exploration/Advanced Pace District, or LEAP.
When asked if he believed Gov. Mike Braun’s newly appointed IEDC board would be more transparent and accountable, Qaddoura said, “I hope so.”
“Despite my disappointment (with) the delayed investigation — it cost taxpayers $800,000 and it’s three years delayed, but at least it’s a good first step. I want to give them credit for moving forward in that direction,” said Qaddoura.
As of Friday, the Indiana Transparency Portal documents $627,000 in processed payments to FTI.
Both Democrats questioned the effectiveness of the investments made by the IEDC and whether they would pay off.
“I’m extremely frustrated,” said Qaddoura. “The question for economists and for state leaders and for legislators: Had we invested those dollars elsewhere, would the return (on investment) be higher?”
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
