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News-Sentinel.com Your Town. Your Voice.

Improved accountability, oversight of economic development entities needed

Mark Hagar
Mark Hagar
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Tuesday, September 03, 2013 08:43 am
In recent years, Indiana, a state with higher than average unemployment, has put a strong emphasis on economic development. More jobs for Hoosiers is a goal shared equally by taxpayers and legislators at every level of government, and it is an issue that deserves particular attention. However, in the rush to attract more and better employment, Indiana has contracted with and/or created myriad organizations, using tax dollars to fund the effort and, in the process, preparing fertile ground for corruption and cronyism.

Recent reporting by The Indianapolis Star demonstrates the ease with which tax dollars are misdirected under the control of these entities.

In a July article, the Star reported on a pending investigation of one economic development contractor in the process of being audited by both the state of Indiana and the U.S. Treasury Department for directing $800,000 to executives within the organization.

In another unrelated case widely reported in May, two Indianapolis city employees and three of their associates were arrested after accepting kickbacks and bribes in dealings with the Indianapolis Land Bank program — an economic development program designed to improve distressed properties.

Both of these cases clearly demonstrate the need for improved accountability and increased oversight of economic development entities in Indiana.

These organizations routinely make the claim that their work must be conducted confidentially for fear of being undercut by competition from other states and/or speculation driving up real estate costs of a potential site. While each of these arguments has merit, the need for confidentiality does not excuse their lack of accountability to tax paying Hoosiers.

By design, economic development entities are organized in such a way as to distance taxpayers from tax dollars. Generally, ED Boards are appointed by a variety of sources including city council, county council, mayors and commissioners. Likewise, funding comes from a number of budgets — city, county, special assessments and private investors — all may contribute to any one organization. These arrangements only add to the lack of transparency and eliminate any opportunity for taxpayer recourse via the election process.

Taxpayers deserve the same type of representation when our money is being spent as we do when it is collected, and all Hoosiers should be concerned with their distinct lack of voice in this process.

To be sure, it is unfair to suggest that all entities involved in economic development are guilty of misuse of public resources or unworthy of public trust. However, it is equally unjust to allow the successes of some organizations to obscure the misdeeds of others or to deny the potential for abuse when the groundwork clearly has been laid for corruption all across the state.

Those individuals and organizations who execute well have nothing to fear from additional scrutiny and should, in fact, embrace the opportunity to validate their success through public reporting.

Most economic development entities are created by state statute, and the Indiana Legislature has a critical role in the stewardship of the public treasure by demanding transparency in the everyday dealings of and accountability to the results of the tax dollars consumed by these organizations before the weeds of corruption take permanent root in Indiana.


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