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Nearly $450,000 in state money went to a shelter for women in East
Chicago that was supposed to spread "hope to the hopeless."
It doesn't exist.
Almost $100,000 from this same fund went straight to one lawmaker's post office box for an organization he runs. Other money brought new business to another lawmaker's company.
At least $40 million from the Build Indiana Fund went to proj ects that violate the law, The Indianapolis Star found after reviewing records from the 1997 and 1999 budget years.
This fund, created from gambling revenues in 1989, is all checks and no balances. It was designed to pay for local government projects -- such as town halls, firetrucks and sewers -- and lawmakers have distributed more than $240 million. They just allotted $78 million more for Build Indiana projects in the two-year budget approved in April.
Lawmakers hand out Build Indiana money to whomever they want -- and no one is monitoring how this money is spent.
Not the legislators, who crafted the law. Not the governor, whose office is supposed to approve these projects. And not the state auditor, who doesn't even have the authority to audit the millions going to nonprofit groups -- which are getting the money in violation of the law.
However, Democrats and Republicans alike defend the fund as a way to pay for much-needed local projects. Lawmakers get their own share of the total pool of money to spend, from $300,000 to $900,000.
House Speaker John Gregg, D-Sandborn, says the process works great.
Robert Garton, a Columbus Republican who is leader of the Senate, said, "If you step back, these projects are pretty doggone important to some local communities."
Rep. B. Patrick Bauer, the South Bend Democrat in charge of crafting the state's two-year budget, said a few questionable projects aren't any big deal.
"Anyone can nitpick anything," he said. "If there might be $1 million or so over the last 10 years that might be subject to some review, then that's a pretty small percentage."
The money is supposed to help hold down local property taxes by paying for bricks-and-mortar proj ects but instead is going to those like the nonexistent Baptist Women's Shelter in East Chicago or the American Legion post in Brook, which spent $1,200 on 16 new jackets.
"If you look deep enough, you'll find all sorts of crazy stuff," said Bill Styring of the Hudson Institute, a conservative think tank based in Indianapolis.
"I believe it," said Sen. Larry Borst, the Greenwood Republican who serves as Senate Finance chairman. "There is no oversight. It's up to the individual lawmaker. One of these days, someone is going to get in trouble." Sidebar: Following the Money
Build Indiana money went to projects that raised questions about how lawmakers are spending state dollars.
$445,000 -- Baptist Women's Shelter
Spent on: Unclear
Year: 2000
Lawmaker: Sen. Sam Smith, D-East Chicago
At issue: There is no Baptist Women's Shelter in East Chicago, even though a description of it accompanied the proposal to the State Budget Agency. These checks were mailed to different church addresses. Paster Lee Gilliam said the money was spent to buy and remodel a men's shelter.
$149,886 -- Etna/Troy Township Community Center
Spent on: Renovations to the community center
Years: 1998 and 1999
Lawmaker: Sen. Harold "Potch" Wheeler, R-Larwill
At issue: In giving money to the community center, Wheeler benefited financially. His construction firm, M.C. Wheeler and Sons, was paid at least $39,221 from the state fund for work done on the center, including water heaters and air conditioning.
$93,288 - African-American Achievers
Spent on: Repairs to a roof on a performing arts building.
Years: 1999, 2000 and 2001
Lawmaker: Rep. Vernon Smith, D-Gary
At issue: Smith is founder and president of the organization, a mentoring group for young men. The checks were sent to his own post office box. And Build Indiana money is supposed to be awarded only to government entities.
$70,000 - Town of Argos
Spent on: New police cars, radios, radar unit and stop sticks
Years: 1999 and 2000
Lawmaker: Rep. Gary Cook, D-Plymouth
At issue: Though the project is called "Town of Argos," the money really went to pay for new equipment and cars for the Argos Police Department, of which Cook is chief.
$50,000 - Cathedral High School
Spent on: Science lab renovations
Year: 2000
Lawmaker: Rep. Paul Mannweiler, R-Indianapolis
At issue: Cathedral High School is a parochial high school. This raises questions about whether state money given to the school violates the constitutional separation of church and state. Build Indiana money is supposed to be given out only to governmental entities and public universities and schools.
$2,150 - American Legion Post 364
Spent on: 16 new blue-and-gold button-up jackets for the post, 16 new embroidered emblems, a safe and the cost of shipping old rifles to an Alabama Army base.
Year: 2000
Lawmaker: Rep. Claire Leuck, D-Fowler
At issue: New jackets for the Legion members likely don't fall under approved expenses under the law, which requires money to be spent on capital projects.
$1,074,834 - Science Central
Spent on: Improvements to a science museum in Allen County
Years: 1996 and 1998-2001
Lawmaker: Rep. Gloria Goeglein, R-Fort Wayne
At issue: Build Indiana money also paid for a trip to Georgia with three nights' hotel and meals at The Town Tavern and Bennigan's.
$50,000 allocated - Indiana Museum of African American History
Spent on: To be determined
Year: Included in 2001 budget
Lawmaker: Rep. William Crawford, D-Indianapolis
At issue: There is no such museum yet. The name was reserved with the secretary of state's office but expired in March 2000.
$100,000 - Fish Lake Conservancy District
Spent on: Community building for Fish Lake area
Year: 2000
Lawmaker: Sen. Anita Bowser, D-Michigan City
At issue: Found in the State Budget Agency files was an e-mail from a member of the Senate Democratic caucus staff to Jo Harber, who received the money. The caucus staffer indicated Bowser planned to contact Harber about doing some campaign work.
$100,000allocated - National Civil Rights Museum
Spent on: To be determined
Year: Included in 2001 budget
Lawmaker: Rep. Charlie Brown, D-Gary
At issue: Lawmakers continue to allocate money for this museum, which has not progressed beyond the planning stages. In all, $550,000 has been allotted.
The one simple reporting requirement for nonprofits isn't even followed, as many nonprofit groups that receive Build Indiana money haven't turned in a two-page report of their revenue to the State Board of Accounts as required by law.
The Baptist Women's Shelter -- a project coordinated by Second Baptist Church of East Chicago and put in the budget by Sen. Sam Smith, D-East Chicago -- shows everything that's wrong with how the Build Indiana Fund works.
The money -- $445,000 -- went to a church group, not a government entity as specified in the law.
The women's shelter was never built, even though four checks for the Baptist Women's Shelter were sent out in January and March 2000. That violated the terms of the grant agreement, which requires recipients to use the money for an approved project.
The first check, for $300,000, was mailed to Second Baptist Church of East Chicago and endorsed by that church's pastor, Lee Gilliam. The three other checks -- totaling $145,000 -- went to Mount Hermon Baptist Church, where Smith is a member.
The organization never filed a report with the State Board of Accounts, as required by law.
Gilliam acknowledges that there is no women's shelter, saying the money was instead used for a men's shelter.
Smith, who secured the money in the 1999 budget, said he agreed with changing the project because he realized there was a greater need for a men's shelter in East Chicago. "If we uplift the men first, then we can reach the women. The man is the head. You've got to reach the head first."
But Gilliam has made contradictory statements about the location of the men's shelter and how the money was used. According to invoices that Gilliam turned in to the state, construction work on a shelter took place in 1999.
Gilliam initially told The Star that the money was used to buy and fix up a warehouse that formerly housed a soda pop distributor. When pressed for the exact location of the shelter, he gave the address of a house on a residential street near his church. But Lake County tax records show that house is owned by a couple not affiliated with the church.
Gilliam then acknowledged that the address was false, saying he didn't want the location to appear in the newspaper because he was concerned about gang activity.
Gilliam now says the Build Indiana money was used to buy a run-down office building and a two-story house where there now are a dozen beds for men who need help. He added that the office building will become a men's shelter once he and a neighborhood group obtain a $4 million federal grant to renovate the building, which has boarded windows, dead pigeons on the floor, and debris and old furniture strewn in the hallways.
The pastor declined to name the two federal agencies that are supposed to be awarding the grant, saying he feared he would jeopardize the project.
A woman who has run a men's shelter in Gary for 13 years said she knows of no center for homeless men in East Chicago.
And Mary Edwards of the Brother's Keeper shelter is in a position to know, because she works with other shelter operators in Lake County to meet the needs of the region's homeless. Men from East Chicago are routinely referred to Gary shelters like hers because of the lack of resources in East Chicago, she said.
Brother's Keeper, too, has gotten Build Indiana money, even though it is not a government agency. But the amount is small compared with the East Chicago shelter -- $77,793.
Edwards said her group spent the money to try to keep its 75-year-old building in repair and to refurbish a nearby building for their growing needs.
"I wish there was a Build Indiana Fund for operations, because we have so many needs here that we can use all the money we can get," she said.
Right now, they've had to move some of the beds because part of the roof is leaking. Because there's so little storage, every cranny of the shelter is packed with used clothing and shoes, boxed food and Ovaltine. The shelter can't have all the lights on at once because the circuits might blow.
Several Lake County lawmakers have allocated money for Brother's Keeper. Two of them -- Reps. Vernon Smith and Charlie Brown, Democrats from Gary -- serve on the shelter's board of directors.
Beneficiary: Mary Edwards works for the Brother's Keeper shelter in Gary, which has received more than $75,000 from the Build Indiana Fund even though it is not a government agency.
There is supposed to be a commission that reviews all proposals for Build Indiana money.
This commission -- composed of members representing the State Budget Agency, local communities and the legislature -- is supposed to meet, review the projects and issue recommendations to lawmakers.
The members, appointed by the governor and legislature, even are supposed to draft an annual report.
None of that is happening. The group held meetings only in 1990 and hasn't met since then.
"I found out I had been appointed to the commission, and I thought it was a new thing and a great idea. But I never heard another word," said Sen. Luke Kenley, R-Noblesville, who was appointed in 2000 from the Senate.
"We're starting to stray from the law. We're getting in a position that's not good -- this is still public money, and we need to have some standards."
Not all of Kenley's portion of the Build Indiana pie will go to government entities.
He allocated money in the 2001 budget for the Noblesville Boys & Girls Club and Conner Prairie.
Borst, the Senate Finance chairman, sent a letter to the governor urging him to appoint members to the commission so they could meet and review projects.
But Gov. Frank O'Bannon has never named anyone to the commission. In fact, the last appointments from the governor came from Evan Bayh in 1989.
Bauer isn't bothered that the commission has not met, because having such a review panel isn't practical or feasible.
He said that when the review committee first met in 1990, $1.5 billion worth of projects were requested and lawmakers had only $150 million to spend.
"We were disappointing nine out of 10 people," Bauer said. "It's an advisory group, and we don't have to take their advice."
With no commission to advise them, it's up to the lawmakers to decide how to allocate the money.
Sen. Harold "Potch" Wheeler, R-Larwill, said he uses his share -- $900,000 this year -- for things that are really needed in the community. "If they don't get these things, then they'll have to raise taxes."
In 1997, he allocated $150,000 to the Etna/Troy Township Community Center for renovations. But $39,000 of that money went to his own company, M.C. Wheeler and Sons, for water heaters, reworked piping and air conditioning.
"I had nothing to do with that. It just happened that way -- my company was the only one to bid on it," Wheeler said. "I don't feel a bit bad about it. I don't buy votes with my projects. I put the money where the people really need it."
Rep. Vernon Smith, a Democrat, said the need in his Gary district was for a mentoring group for young men called African-American Achievers.
He is founder and president of that organization, which got $93,288 in Build Indiana money -- and the checks were mailed to Smith's own post office box.
"Just because we happen to be volunteers in our community doesn't mean the organization should be penalized from receiving any money," said Smith, explaining that the money was spent for a roof on a building for the group.
Rep. Gary Cook, a Democrat from Plymouth who also is police chief for neighboring Argos, called his project "Town of Argos."
He used the money to buy new police cars, radios and equipment for his own department. He agrees with Smith -- that his Police Department shouldn't be disqualified because he's a lawmaker.
And Gregg, who gets more money than his fellow Democrats because he's speaker, gave a portion to his mom, who runs the Sandborn parks.
"My mother, she has cleaned toilets and planted trees. The park deserves the money," he said.
As the most powerful member of the House, Gregg got $720,000 to distribute, compared with the $500,000 of his colleagues.
"I would hope as speaker of the House that I would get a little extra," Gregg said. "I think my constituents expect that."
For every project that raises questions, there are ones where the money is being spent as the law intended.
The 54-home neighborhood in Fishersburg in Madison County needs sewers -- a million-dollar prospect. So Rep. Scott Mellinger, D-Pendleton, put $100,000 in the budget for that community.
"In a small village of 54 homes, the residents certainly don't have the ability to raise $1 million," said Paul Wilson, a Madison County commissioner. "For all the criticism, this is a clear example of how Build Indiana works."
Legislators are defensive -- and protective -- of their piggy bank. When O'Bannon proposed dipping into it to help with the state's budget woes earlier this year, lawmakers balked.
While lawmakers are quick to claim credit for a project in their districts, they resisted releasing a list of projects in the 2001 budget. Democrats and Republicans in the House had turned over their lists, but the two caucuses in the Senate still had not done so.
Despite this reluctance to own up to the projects, lawmakers want the publicity when it benefits them. They turn the Build Indiana fund into a campaign tool.
Among the projects touted are some that have gotten the state sued by the Indiana Civil Liberties Union.
Hundreds of thousands of dollars have gone to private schools, churches and other organizations with religious missions -- and that's unconstitutional, the ICLU said in its lawsuit filed in late May.
The lawsuit is why O'Bannon won't talk about the Build Indiana Fund, since he's one of the parties being sued. Neither will Attorney General Steve Carter, who is defending the state in the lawsuit.
Some of the money has gone to projects such as the Zion Community Development Corp., formerly the Zion Missionary Baptist Church Community Development Corp. It received $25,000 in 2000 to improve an outreach center for youth. That check was mailed to the church.
The Educational Charitable Trust received $80,000 for computers and other equipment at Cardinal Ritter High School. The trust's federal employer identification number, listed on the grant application, matches that of the Roman Catholic Archdiocese of Indianapolis.
What these and thousands of other projects have in common is that some local group was able to persuade a lawmaker to allocate Build Indiana money for them. And the only thing standing between them and the money is the bipartisan State Budget Committee, which oversees state spending.
Build Indiana Fund
Sidebar: With elections on the line, legislators pured state money into pet projects.
On Friday, the five-member committee met and approved a three-page list of projects. Among them are $25,000 for Destiny Gospel Artists Showcase, a nonprofit group in Marion County that introduces at-risk youths to the performing arts, and $160,000 for a ballpark in Selma, which already has received $380,000.
In all, members of the committee approved spending $3.7 million more in state money for Build Indiana projects.
And no one questioned a single project.
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