A little more than a month after Indiana House Speaker Todd Huston’s high-profile departure last year from a six-figure role at the College Board, the Republican leader quietly started his own private consulting firm, according to new financial disclosure records.
Huston’s latest statement of economic interest (SEI), which must be filed every year, names TMH Strategies Inc. as his private business. He listed his current clients as Fishers-based tech company Spokenote, as well as Stride, Inc. – a for-profit education management organization that provides online curriculum to homeschooled kids and other schools.
“It’s all business consulting in areas that I’ve been in and obviously have a lot of expertise,” Huston, a Republican, told the Indiana Capital Chronicle. “I listed both my clients and I will continue to do that. I understand the role I am in, and I don’t want anybody to go, ‘Well, who could his clients be?’”
Huston isn’t alone – he’s one of at least 15 legislators in the Indiana General Assembly who provides professional advice and guidance to private businesses outside of the Statehouse. Other lawmakers have outside LLC’s that do not specifically reference consulting work but still could provide that service.
Much of the consulting work is for clients in the insurance and health care industries. Others focus on communications work and digital marketing for various businesses around the state.
Numerous elected lawmakers who spoke to the Indiana Capital Chronicle about their consultancies said that – because they work part-time for the state – such entities helps provide additional income.
But while some lawmakers choose to list individual clients in their financial disclosure forms, they are not required to do so unless they’re a significant income source, leaving the public in the dark about who they’re connected with.
The SEIs also, largely, run on an honor system. Although some guidance is provided by legislative leadership, it’s up to individual lawmakers to get the forms filled out, and some members are more thorough than others.
Once turned in, there’s often little review of the forms except by journalists and watchdog groups.
State lawmakers emphasized their duty to disclose potential conflicts of interest when they arise, and to recuse themselves from voting on bills that could cause pecuniary gain, but some outside the Statehouse say the self-policing model needs to be reformed and that SEIs should require more detailed disclosures about private work.
“Consulting is a nice way to benefit financially from the relationships built inside the Statehouse and really not have to disclose that in the same way you would a campaign contribution,” said Julia Vaughn, executive director of Common Cause Indiana, a nonpartisan government watchdog. “That’s one of the big problems with the statements of economic interest – the forms don’t ask the right questions. They have lofty goals in terms of providing transparency, but they miss the mark.”
Working outside the Statehouse
Republicans and Democrats in both the House and Senate reported on their 2023 economic interest statements that they provide private consulting in some capacity.
Rep. Victoria Garcia Wilburn, D-Fishers, who owns Garcia Wilburn + Associates, said she leans on her “established expertise in mental health” that she amassed “long before” she was an elected official to help in academic and medical settings.
Republican Rep. Ann Vermilion, of Marion, has provided similar healthcare consulting services via Ann Vermilion Group LLC.
Their colleague, Rep. Blake Johnson, D-Indianapolis, uses his 13 years of prior experience doing strategic communications to provide services through his Blue Tie Strategies LLC.
“I help run social media, speech writing, video production, all of that kind of stuff. That’s what I now do on the side,” Johnson said, noting that special legislative sessions in recent years “have turned what was initially a three- or four-month commitment into a five- or six-month commitment,” making it “harder and harder and harder to have a regular job.
“I think that’s probably why many of us have decided to do things on our own, to give us a little bit greater flexibility,” he continued.
Johnson did not list his three clients – Keeping Indianapolis Beautiful, Downtown Indy, and Student Ready Strategies – on his SEI, but said he hadn’t even thought to do so, given that the forms do not prompt lawmakers to make such disclosures.
“I have no problem sharing who my clients are, and they have no problem with me sharing who they are. I think it should be strongly encouraged to share your clients,” he said. “I think I probably will in the future as an addendum. I think it’s definitely worthy of discussion as we think about the best way to make sure that the legislature is being transparent and that we can establish if there is a conflict of interest, so that everyone can act accordingly.”
Some legislators were less willing to share their specific clients, however.
Sen. Jeff Raatz, R-Richmond, said his Raatz LLC primarily deals with insurance sales and “has nothing to do with the General Assembly, whatsoever.”
In the event of a potential conflict of interest, Raatz said it’s best for lawmakers to run it by legislative legal counsel.
“I think that is the appropriate way for every representative to make sure that we’re not crossing the line – just to run it through the legal process that we have available to us through the staff to say yay or nay,” he said.
Rep. Robb Greene, R-Shelbyville, who was first elected last November, wrote on his SEI that he is self-employed by a logistics consulting firm but does not name the company. He told the Indiana Capital Chronicle in a statement that since deciding to run for state representative, he’s “chosen to take a step back from my business and focus on my role as a legislator.”
“I’ve not recused myself from any votes due to a conflict of interest as there are no interests to conflict with, and I continue to adhere to the House Code of Ethics,” he said.
An honor system
Sometimes, the potential for conflicts of interest do arise, though.
In the current session, Sen. Jack Sandlin, R-Indianapolis, said he approached the Senate Ethics Committee about a bill dealing with GPS tracking devices, which are sometimes used by private investigators.
A private investigator himself, Sandlin sits on the Senate corrections committee where numerous bills of that nature were assigned for consideration.
“I asked for the ethics committee to convene to see if they believed that I might have a conflict and to guide me on how to move through that,” he said.
The bill in question was withdrawn, Sandlin said, removing the potential for any conflict.
But on another similar measure that would make it a crime to use a GPS device to track someone without their knowledge, Sandlin offered an amendment in committee to exempt licensed investigators. His proposal failed, however, and the bill is now under consideration in the House.
At his J.S. Consulting Inc., Sandlin says he primarily does “a mixed bag” of “investigative, white collar consulting.” That includes fraud and liability work for insurance companies, as well as working with attorneys “in litigation support roles.” Sandlin said he additionally conducts pre-employment background checks for various businesses.
“I don’t feel like I’ve ever been in a position where I should have recused myself. I try to stay out of anything that would be a direct conflict. But I think it’s always fair for somebody to come up and ask you if you think you might have a conflict, and I think it’s our responsibility to stop and entertain those questions and adequately resolve if there’s an issue,” Sandlin said.
“As a citizen legislature, we the body, we the members, have a responsibility, to be careful that we don’t approach that line of an ethical violation,” he continued.
Earlier this year, Sen. Travis Holdman, R-Markle, did make the decision to recuse himself from participating in a floor vote, citing certain language pertaining to banks in Senate Bill 2.
“I work mostly with banks, and so I just didn’t want there to be any appearance that there was anything contrived there, so I just thought it was just best if I didn’t participate in voting,” said Holdman, who lists Holdman Consult LLC among his outside business endeavors in his SEI. “If there’s even an appearance of impropriety, I usually don’t vote – I get an excuse and go to the ethics committee. I think members just have to be very cognizant of the issue with some suspicion, sometimes. And sometimes I think some are more careful than others.”
In early 2020, former House Republican House Speaker Brian Bosma said it might be time to “reexamine” the reporting threshold for lawmakers’ disclosures of economic interests after the Fort Wayne Journal Gazette reported that Holdman was contracted by a virtual charter school later accused of defrauding taxpayers.
Holdman disclosed his law practice and consulting firm on his SEI that year, but not his individual clients. At the time he avoided voting on specific virtual education matters after receiving guidance from the Senate Ethics Committee.
He still does not list clients on his most recent disclosure statement. Doing so would jeopardize his legal license, he said: “Sometimes, I offer legal advice for my work, and so it would be difficult for me to separate the two.”
Bosma on several occasions proactively outed his own legal clients, and recused himself from any related legislation.
The issue over whether to disclose consultancy clients “has always been among the concerns” about the way SEIs are completed, said Ed Feigenbaum, editor of Indiana Legislative Insight.
“Legislators view these things differently. There are some that will write down every client that they’ve got and say they believe they’re obligated to report this,” he told the Indiana Capital Chronicle. “Others have affirmatively refused to disclose clients, saying that is not something that members of the public are entitled to know on that financial disclosure statement. You’ve got all kinds of different interpretations of things.”
Feigenbaum noted that rules about lawmakers’ financial disclosure have mostly remained unchanged since the 1990s, when former House Ways and Means Chairman Rep. Sam Turpin failed to disclose $46,000 in payments he received in relation to consulting for a riverboat casino project.
Turpin was forced to step down as chairman and resign his seat following news reports about the payments, and he was later indicted on bribery-related charges, though he was never prosecuted.
“If you believe that people actually looked at these things, then that’s legitimate for (lawmakers) to say that may have been something that people took into account when they voted to send them to the legislature,” Feigenbaum said. “But if people don’t know about it – if they just simply file these personal financial disclosure statements and they get stuck in a banker’s box and nobody sees them, that obviously doesn’t do a whole lot of good.”
Room for reform?
Vaughn, with Common Cause Indiana, said legislative leaders should adopt enforcement mechanisms around the SEIs, such as random audits. She also wants to see the forms more regularly updated “to better reflect the work situations that legislators increasingly have,” and to require “more specificity – asking questions that take us from this 40,000-foot view to a much more up close and meaningful disclosure.”
“There’s no enforcement other than reporters looking at these forms. They just sit electronically in a sort of virtual filing cabinet, and nobody’s checking up on them. Is this accurate? Is this complete? It’s not terribly useful,” Vaughn said.
“We’ve seen more and more legislators do work as consultants, and the problem is, the only time that these forms get much attention is when there’s a scandal, and then the legislature gets ultra sensitive,” she continued. “If we make major changes, then that’s like admitting that our ethics aren’t up to par. It needs to be something that is looked at regularly and not just when they think they’ve got a problem.”
Huston – who hasn’t had to list a consultancy before this year – said doing so in his latest SEI has sparked questions about how lawmakers might better report non-legislative work.
“How do you make sure that people have disclosure? I think that’s something we’ll probably look at moving forward,” Huston said. You’re representing yourself, you’re representing the institution – you want to make sure you’re doing things the right way, and frankly, always lean towards more disclosure.”
Republican Senate President Pro Tem Rodric Bray said there are sometimes “challenges” in a part-time legislature balancing the “expertise” lawmakers gain through their outside work with their legislative roles at the Statehouse.
“You don’t want them to be put in a position where the area of expertise that they have can’t add value in a conversation, but we also don’t want them in a position where they’re having some sort of pecuniary gain, of course,” Bray told the Indiana Capital Chronicle.
Still, he said a requirement to put clients down on SEIs “is a bit of a sensitive subject” and “would be problematic – because some clients wouldn’t want that type of publicity and just don’t want to be part of a headline.”
Instead, he proposed a requirement for members to disclose “the nature of that consulting business.”
“Maybe it needs to be tweaked to make sure that they put that nature down. I’m open to having a conversation about that,” he said. “I think that would be of interest to folks, because then when a certain bill comes up, people would realize, ‘Oh, OK, I understand that this is at least getting close to your space.’”
Neither of the GOP leaders said for certain if they plan to recommend such changes, however.
“The General Assembly seems stuck on this idea that, ‘Oh, no, it’s expertise. It’s not a conflict,’ and, ‘Why wouldn’t these legislators weigh in on things they know so much about?’” Vaughn said. “With a part time legislature, yes, conflicts of interest are inevitable, but it’s how you deal with them that is important. And part of dealing with it is transparency, because that’s how the public and everybody else becomes aware that there’s a conflict of interest.”