Woodruff, who oversaw 500 employees at the INDOT district through which I-69 passed, denies any wrongdoing and says a 2010 report by the inspector general, the state's top ethics policeman, cleared him in the deal.
"I had no involvement whatsoever with property purchases on I-69 other than the parcel I owned with my brother and father," said Woodruff, a former state representative.
In a story published Tuesday in the Star, Pence spokeswoman Christy Denault said the governor asked his general counsel to contact the inspector general's office "to make certain that the latest allegations are being thoroughly investigated."
Inspector General David Thomas had investigated Woodruff's sale of about three acres in Daviess County to the state and cleared him of wrongdoing, but legal and ethics experts who reviewed his report were troubled by his legal reasoning and questioned how thorough the investigation was.
"This whole thing smells to high heaven," said Julia Vaughn, of Common Cause Indiana.
The Star found Woodruff, his father and brother sold INDOT a 2.97-acre parcel carved from a 33-acre Daviess County field in January 2010, shortly after Woodruff took over INDOT's Vincennes office. The total sale price including incentives was 30 percent more per acre than they had paid three years earlier.
The inspector general's report found Woodruff didn't profit from the deal. But experts say the legal opinions Thomas cited in clearing Woodruff were "flat-out wrong," ''inappropriate" and "odd."
"Any lawyer or member of the public that looks at this report would be concerned," said Joel M. Schumm, a professor and criminal law expert at the Indiana University Robert H. McKinney School of Law. "If you read the report, it doesn't dispel this idea that something wrong happened here."
Thomas' report didn't address whether Woodruff's failure to disclose the sale violated the state's conflict-of-interest statute. That law says a public official can be charged with a felony for knowingly having a financial interest in or profiting from a contract or purchase tied to the governmental agency for which he works.
Woodruff said he didn't think he needed to seek an opinion from the state's Ethics Commission.
"I wasn't in violation of any ethics laws — or any other laws, for that matter," he said.
The Star also found that in the spring and summer of 2010, Woodruff's uncle and cousins sold six properties to the state for $1.86 million, or about $14,300 an acre. That was 43 percent more than the average per-acre payout to other Daviess County landowners for the I-69 project, according to data provided by INDOT.
A company owned by Woodruff's uncle and cousins later bought 30 acres of land Woodruff, his brother and father still owned, paying them well above the price top farmland in the area was selling for.
That has raised questions about whether Woodruff helped his relatives receive higher compensation for the land they sold to INDOT and then was repaid when they purchased the land he co-owned with his family.
In light of the Star's findings, Thomas said he would open a new investigation and refer the case to a prosecutor for an independent evaluation when it was complete.