IndyStar reporting recently revealed how entities connected to three men known by some in the Indiana startup world as The Three Kings received more than $180 million in taxpayer-funded grants and contracts from the Indiana Economic Development Corp.
Here are the main takeaways to know from our investigation, which comes amid a Gov. Mike Braun audit of the finances at the quasi-governmental agency.
Read the full story here.
Who are The Three Kings?
The Three Kings refers to the moniker given by some startup founders to a group of three influential men in the Indiana economic development world: former IEDC executive Dave Roberts, Purdue Research Foundation President Chad Pittman and Paul Mitchell, a former economic development policy guru for Gov. Mitch Daniels.
The moniker was given to the men from startup founders who said they believed the men’s influence had the power to make or break some startups’ chances to access state economic development contracts and grants.
Three companies told IndyStar they believed they were squeezed out of state initiatives intended to help Indiana startups when their activities were interpreted as being at odds with or in competition with the men.
How much in taxypayer funds did The Three Kings receive?
Entities controlled at least in part by the Three Kings received more than $180 million over less than six years in taxpayer-funded grants and no-bid professional service contracts.
Sometimes, former IEDC executive Dave Roberts himself was involved in the IEDC’s decision to dedicate millions of dollars worth of taxpayer dollars to the organizations.
An IndyStar analysis found that more than $100 million worth of awards were doled out to those organizations while Roberts played an instrumental role in choosing funding recipients at the IEDC. But the awards to the entities kept coming after Roberts left the IEDC, too.
Roberts denied that he had the final say on IEDC contracts which were all approved by the IEDC board and is adamant he never personally benefited.
“There were always checks and balances and there were always guardrails in place,” Roberts said.
Which entities got IEDC awards?
IndyStar reporting tracked funds from the IEDC, which is funded by taxpayers, to more than a handful of entities controlled at least in part by at least one or sometimes all of the three men.
Those entities include: Next Level Manufacturing Institute, Applied Research Institute, Battery Innovation Center, NineTwelve, Indy Autonomous Challenge, The SportsTech HQ and the Semiconductor Innovation Center.
Some of the awards were essentially pass-through grants, with money going from the IEDC to an entity controlled by one of the men, which would later distribute a portion of it to other companies.
Perhaps the most obvious example of Roberts’ overlapping roles was laid out in a 2022 request for more IEDC funding from the Battery Innovation Center, where federal nonprofit filings show Roberts was serving as board chair.
The letter — from Roberts’ organization — was addressed to Roberts in his capacity as IEDC’s chief innovation officer.
Shortly before Roberts left IEDC to become CEO of the Applied Research Institute, which he is no longer leading as of earlier this month, that entity received a grant from the IEDC that would eventually grow to become worth $17.5 million for ARI, part of nearly $34 million from IEDC that the group has received since late 2022.
Were any potential conflicts of interest disclosed?
Roberts said he disclosed any perceived conflicts of interest using an internal process at the IEDC instead of the public process at the inspector general’s office used by other state employees.
He told IndyStar he couldn’t think of a time where an IEDC official submitted a disclosure form to the inspector general’s office unless they were leaving. The inspector general’s public database shows that dozens of IEDC employees have submitted ethics disclosures over the years.
There are certainly different levels of disclosure, Braun’s office said. That’s one thing the audit plans to explain.
“You might fill out a form that then goes and sits in a file cabinet,” the person from the governor’s office said. “Technically, it’s been disclosed, but it never comes up.”
Did taxpayers benefit from the awards?
There are mixed opinions here. The men are vigorously championing their records creating innovation here in Indiana and say that the state has benefited from its investment in their groups.
Holcomb also defended his IEDC colleagues.
“Because of this collaborative pro-growth partnership approach, Indiana was able to cut taxes while making investments in transformational local community projects, health initiatives, and key educational and work force development programs,” Holcomb spokesman Joe Elsener said.
But some startup leaders are upset about the grants.
“We wanted to do a lot of business in Indiana, but because of the way they were acting, we don’t,” the startup founder, who requested anonymity for fear of retribution, told IndyStar.
What happens next?
Braun, who has replaced the IEDC’s entire board since taking office in January, is getting ready to unveil the results of an audit into the IEDC’s past spending he launched earlier this year. The office also has been referring findings to the Office of the Inspector General.
The governor’s office confirmed some of the no-bid awards and potential conflicts of interest are among what’s being examined by the probe.
Contact senior government accountability reporter Hayleigh Colombo at hcolombo@indystar.com or follow her on X @hayleighcolombo.
Contact state government and politics reporter Kayla Dwyer at kdwyer@indystar.com or follow her on X @kayla_dwyer17.
Contact politics reporter Marissa Meador at mmeador@gannett.com or follow her on X @marissa_meador.
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This article originally appeared on Indianapolis Star: How $180M in IEDC awards flowed to ‘The Three Kings’