Indiana Economic Development Foundation Releases Audits Per Gov. Braun’s Demand
Former Indiana Gov. Eric Holcomb, former IEDC leader David Rosenberg and the Hoosier State’s delegation meet with Flanders Minister-President Jan Jambon on June 4, 2024 in Belgium. The agency’s foundation footed the bill for this and other economic development trips. Photo from Holcomb’s official Flickr.
By Leslie Bonilla Muñiz
Indiana Capital Chronicle
INDIANAPOLIS — The Indiana Economic Development Foundation has poured more than $13 million into travel, administrative and other expenses across six years, according to financial reports released under Gov. Mike Braun’s orders.
The foundation is charged with raising private funds to boost the Indiana Economic Development Corp. But the nonprofit is on a spending freeze.
Indiana had a traditional commerce department until 2005. That’s when, under former Gov. Mitch Daniels, lawmakers created the IEDC: “a body politic and corporate, not a state agency but an independent instrumentality exercising essential public functions,” per Indiana Code. They allowed its board to create a subsidiary: the foundation.
“There’s a lot of money coming back from nonprofits to subsidize government activities,” said Indiana University Professor Beth Gazley, a nonprofit management specialist, noting that the federal definition of a 501(c)(3) tax-exempt nonprofit includes “lessening the burdens of government.”
The IEDC’s furtive efforts to secure water, land and more for a contentious technology park have made it plenty of enemies since 2022.
Braun said Thursday, April 24 that he’s ordered a forensic audit and reported “impropriety, or even the appearance of it” to Indiana’s Office of Inspector General amid allegations of self-dealing and more, first reported by Indiana Legislative Insight. The organization had not filed six years of required audited financial reports with the State Budget Committee. Two weeks later, the lapses were cured and the reports available online.
Reports Reveal Spending’s Focus
The newly released reports show that the foundation spent $13.2 million from the 2019-2024 fiscal years, which begin July 1 and end June 30.
The bulk of that, $10.9 million, went to travel, meals and entertainment. News releases indicate the foundation has paid for virtually all international economic development trips taken by prior governors.
The independent auditor used for the most recent three reports — Indianapolis’ Katz, Sapper & Miller — also included conferences in this category, while the previous one did not.
“Is that a lot of money to be spending on conferences, travel, meals and entertainment? That really depends,” Gazley said. “And only the board can decide: is that the best use of our funding?”
Six years of newly released audited financial reports reveal how the foundation focused its spending. News releases further indicate it paid for virtually all of the international economic development trips taken by prior governors.
The IEDC and its foundation share the same staff and 12-member board.
Gazley also said it’s “best practice” to change auditors over time to avoid the auditor “not being honest anymore about the financial status of the organization.”
Another $1.8 million was logged for administrative expenses, plus more than $200,000 for sponsorships. Nearly $300,000 was categorized as “other” spending.
Donor Information Remains Largely Under Wraps
The reports also disclose about $11.7 million in donations. But they offer no clues as to the identity of those donors. Indiana Code forces the foundation to redact donor names out of public records if they request anonymity at any point in time.
Most do.
The groups behind 14 of 16 transactions from 2020 through 2022 were shielded from records obtained in 2023 by the Capital Chronicle. Two didn’t request anonymity: District of Columbia-based think tank The Urban Institute donated $5,000 in 2021, and the Battery Innovation Center in Newberry gave $12,000 in 2022. Between 2015 and 2025, the center nabbed six incentive contracts that total $18 million, according to the IEDC’s transparency portal.
At the time, spokeswoman Erin Sweitzer wrote that private donations “allow more flexibility in how we use the funds and how quickly we’re able to access them.”
For Gazley, that doesn’t add up.
But there are indications of who other foundation givers may be — and evidence several have dealings with the IEDC.
A webpage for the foundation identifies the state’s “big five” investor-owned utilities — AES Indiana, CenterPoint Energy, Duke Energy, Indiana Michigan Power and the Northern Indiana Public Service Company — as “contributors.”
AES logged $10 million in professional services contracts that expired in 2023 and about $2.8 million in incentive contracts from 2014, according to the portal, while Duke earned about $150 million in an incentive contract from 2010. Incentives are performance-based, so a recipient may not earn the full amount if its targets aren’t met.
Nine other “sponsor” organizations are on the webpage. They include Old National Bank, Pure Development, Rolls-Royce, Hoosier Energy, Solv Energy, Doral Renewables, railroad giant Norfolk Southern, workforce development consultant TPMA, and Indiana University’s Ventures startup affiliate.
Pure Development holds a $94.4 million contract for development work. Rolls-Royce received $21,000 after co-sponsoring a Northwest Stadium suite with IEDC for an Army-Navy football match in December and racked up 14 incentive contracts — worth $74.6 million — between 2011 and 2022.
Doral Renewables, meanwhile, is the recipient of two pending incentive contracts totaling $1.5 million. TPMA was recorded as having three service contracts — for almost $190,000 — expiring between 2019 and 2025, and two 2015 incentive contracts worth nearly $400,000.
More information is on the way.
Though the foundation secured an IRS exemption in 2012 for future Form 990 filings, Braun has directed it and other state-affiliated nonprofits to file them annually, regardless of any exemptions. The form describes funding sources and amounts, and what was spent on programming versus administrative expenses.
All required reports going back 10 years are due by 2025’s end under his executive order. They must also be “clearly posted” online “for Hoosiers to read for themselves.”