Lawsuit alleges Indiana Treasurer violated state law and paid out millions in illegal contracts

(Indiana)

FORT WAYNE, Ind. (WOWO) A False Claims Act (FCA) lawsuit recently unsealed in Marion County Superior Court has revealed a 6-year pattern of illegal contracting in the Office of the Indiana State Treasurer, the state office responsible for investing over $7 billion in state funds.

Documents filed with the suit show Treasurer Kelly Mitchell and her staff have illegally steered more than $6 million in payments to her campaign donors, in violation of state law, between 2015 and 2020. This amount now likely exceeds $12 million.

State contracting law requires all state contracts be approved by the Commissioner of the Indiana Department of Administration (DOA), the Director of the State Budget Agency (SBA), and the Attorney General (AG) (See Indiana Code 4-13-2-14.1). The law is clear that any contracts not properly approved are void and any payments made under such contracts must be immediately repaid (See Indiana Code 4-13-2-18(j)). Since taking office in 2014, Mitchell has repeatedly violated state contracting law, as none of the contracts detailed in the suit have ever been properly approved. (See highlighted statutes attached)

Jim Holden, former Chief Deputy and General Counsel in the Office of the State Treasurer, who served under three State Treasurers before Kelly Mitchell, brought the suit on behalf of Indiana taxpayers under the Indiana FCA. The FCA is modeled on a similar federal law, which can be traced back to Abraham Lincoln and the Civil War. The FCA empowers private citizens to bring suit on behalf of the government to recover fraud, waste, and abuse in public contracting. In this case, the illegal contracting scheme first came to light during a February 26, 2016, video-taped deposition in an unrelated case, in which Mitchell admitted to not following state procurement law. (See attached)

Treasurer Mitchell has signed the following contracts since 2015, in violation of Indiana law:

Ice Miller (Lobbying Contract) — $168,377 illegally paid between 2015-2019 Old National Bank — $131,941 illegally paid between 2018-2019 BMO Harris Bank – Banking Services — $334,150 illegally paid between 2017-2019 Fifth Third Bank – Banking Services — $228,704 illegally paid between 2017-2019 JP Morgan Chase Bank – Banking Services — $535,061 illegally paid between 2014-2020 PNC Bank — $1,096,104 illegally paid between 2018-2019 Bank of New York Mellon — $271,555 illegally paid between 2017-2019 Wells Fargo — $885,816 illegally paid between 2015-2019 Huntington Bank — $771,777 illegally paid between 2015-2019 Public Trust Advisors — $2,141,476 illegally paid between 2018-2019

Nearly all of the companies receiving illegal payments from Mitchell’s office are political supporters, campaign donors, or have given her personal gifts since she was elected State
Treasurer in 2014. Her campaign chairman and key fundraiser is a partner and lobbyist at Ice Miller.

“The fact that Treasurer Mitchell has spent the last six years in office handing out illegal contracts to her political supporters should be troubling to every taxpayer in the State,” said Indianapolis attorney Chris Wolcott, who represents the plaintiff in the case. “State law is very clear that these contracts are void and this money must be repaid immediately. We plan to move quickly to recover these funds for the State.”

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