Tag Archives: Indiana

Major state contractor fined $500K for violating SEC rules

Source: Steve Miller, Texas Monitor, July 12, 2018

A key state contractor has been fined $500,000 by the Securities and Exchange Commission for alleged political contributions to candidates in the governor and attorney generals’ races in 2013 and 2014. Employees of Houston-based EnCap violated rules that govern donations from financial firms to candidates who, if elected, would play a role in their selection to invest public money. According to a cease-and-desist order from the SEC, the contributions include $25,000 to a gubernatorial candidate in September 2013 and a total of $60,000 to an attorney general candidate. The offending contributions were made between September 2013 and May 2014, according to the SEC. EnCap was also named for violating rules in Indiana and Wisconsin. … The SEC order contends that several state retirement systems, including the University of Texas, the Teachers Retirement System, and the Texas County and District Retirement System, collectively invested $2.27 billion in funds advised by EnCap. …

City of Fort Wayne takes fleet maintenance in house; savings expected

Source: News-Sentinel, July 11, 2018

In a move expected to improve service and reduce costs, the city of Fort Wayne will no longer outsource fleet maintenance services and will instead bring operations in-house. Ending the contract with outside vendor, First Vehicle Services, is expected to save the city nearly $350,000 a year. … The new contract will also allow the city to take advantage of federal and state cooperative agreements, reducing costs on vehicle parts. Current workers for First Vehicle were offered positions in the new arrangement and most accepted. The city will hire 26 employees and will take over the operation Sept. 30.

Paramedics Plus, Oklahoma agency settle federal kickback lawsuit

Source: Erin Mansfield, Tyler Morning Telegraph, April 3, 2018

A company with ties to the former East Texas Medical Center has settled a federal kickback lawsuit. Paramedics Plus was a subsidiary of the East Texas Medical Center health system that provided emergency medical services to an Oklahoma agency called Emergency Medical Services Authority. In January 2017, the Department of Justice filed suit against Paramedics Plus and the other defendants in the case alleging that Paramedics Plus paid more than $20 million in kickbacks to the Oklahoma agency.

… In March 2017, the East Texas Medical Center health system announced it would merge Paramedics Plus with a similar subsidiary and spin off the two emergency medical services entities into a new company. A month ago, the East Texas Medical Center health system completed a deal to sell its assets to Ardent Health Services, based in Tennessee, and the University of Texas system. The new entity is now called UT Health East Texas. Three weeks later, UT Health East Texas announced it would lay off about 400 employees, or 5 percent of its workforce, as part of a plan to bring the new health care system toward financial stability. …

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Justice Department moves forward in its case against ETMC, Paramedics Plus
Source: Roy Maynard, Tyler Morning Telegraph, May 12, 2017

The U.S. Department of Justice continues to build its case against East Texas Medical Center and its ambulance division, Paramedics Plus, in what they say is a $20 million kickback scheme to ensure Paramedics Plus retained lucrative contracts. Most recently, Justice Department attorneys filed a list of people they expect to depose in coming months. In all, more than 100 people could be deposed as this case moves forward. The government also filed a proposed schedule, which outlines when fact discovery will take place, when expert discovery will occur, deadlines for motions and trial preparation and finally, an expected timeframe for the start of the trial – summer of 2018. … In January, the Justice Department announced it would intervene in a lawsuit against ETMC and Paramedics Plus brought by a whistleblower – former employee Stephen Dean, who was Paramedics Plus chief operating officer. According to the suit, ETMC and Paramedics Plus paid more than $20 million in kickbacks and bribes, including cash payments to Oklahoma officials. …

You Paid For It: Pinellas Commissioners discuss ambulance kickback settlement Tuesday
Source: Mark Douglas, March 21, 2017

Former U.S Attorney Brian Albritton told Pinellas County Commissioners Tuesday that a federal lawsuit alleging ambulance fee kickbacks could have cost taxpayers as much as $1 billion if they lost in court. Commissioners agreed to settle the case involving Paramedics Plus Sunstar ambulance service for $92,700 and to forgo an estimated $500,000 in uncollected ambulance fees from patients. They will also have to pay legal fees to Albritton who the county secretly hired last year to resolve the case. Pinellas commissioners discussed the case publicly Tuesday for the first time since Eight On Your Side first broke the story of alleged kickbacks and a federal investigation of Pinellas County’s ambulance contract last month. That settlement, signed March 7 by Vice-Chair Kenneth Welch, requires the county to pay $92,700 to federal prosecutors, the Florida Attorney General and attorneys for the whistleblower–a former executive with Paramedics Plus. It also requires Pinellas County to turn over all documents and evidence gathered in the course of the county’s own internal investigation, and to cooperate with an ongoing federal investigation and whistleblower action filed against Paramedics Plus in Texas.

… Since 2004, Paramedics Plus has operated as Pinellas County’s exclusive ambulance provider under the county-owned brand name Sunstar. The current county contract with Paramedics Plus amounts to about $50 million a year. In 2014, a former high-ranking executive of Paramedics Plus filed a whistleblower action in Texas that alleged an ongoing ambulance fee kickback scheme that stretched from Pinellas County to Oklahoma and California for over a decade. The scheme alleged by the whistleblower and federal prosecutors in a related legal action included so-called “profit cap” rebates that essentially funneled overcharges from Medicaid and Medicare to Pinellas County and other local governments that oversee public ambulance contracts. County leaders in Pinellas insist the “rebates” or “kickbacks’ in Pinellas totaled only $35,000 or so and ended up in county bank accounts, not someone’s pockets. In Oklahoma, the whistleblower suit alleges those kickbacks amounted to as much as $20 million. Federal prosecutors in Texas have cited specific acts of corruption in Oklahoma that include kickbacks, political payoffs and self-enrichment involving Paramedics Plus executives and government overseers in Oklahoma. … Pinellas County Administrator Mark Woodard says the settlement has no impact on the county’s ongoing $50 million a year contract with Paramedics Plus because the company has not been charged criminally or been found guilty of anything.

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When Corecivic Comes to Town: Lessons From Elkhart’s Grassroots Struggle to Preserve a Vibrant Community

Source: Sydney Boles and Rowan Lynam, Medill Reports, February 27, 2018

In Pembroke, Illinois, it started in Hopkins Park; in Gary, it started right across the street from their small airport; in Crete, it was Balmoral Park. In Elkhart, Indiana, it started at the intersection of county roads 7 and 26. It was a stretch of weeds and snow next to the county’s correctional facility and its huge, methane-leaking landfill, catty-corner from the well-worked farmland of German immigrants. This unremarkable piece of nowhere, Indiana would have held over a thousand immigrants in ICE civil detention. They would have been held in a private, maximum-security facility with the capability to hold 60 in solitary confinement, encased in a total visual barrier. Would have — because Elkhart, like so many Chicagoland towns before it, said no. …

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Here’s What Happens When Trump Policy Comes to Trump Country
Source: Madison Pauly, Mother Jones, February 2, 2018

…. It all started in mid-November, when local activists including Richard Aguirre, director of corporate and foundation relations at Goshen College, learned that the private prison company CoreCivic (formerly Corrections Corporation of America) was eyeing a location near the landfill and county jail. Within weeks, CoreCivic filed a proposal to build an immigration detention center that could hold up to 1,240 people awaiting immigration court decisions or deportation.The company was seeking to fill Immigrations and Customs Enforcement’s need for detention space to hold the increasing numbers of undocumented immigrants its agents were picking up in the Midwest. ICE interior deportations in the first eight months of Trump’s presidency had ticked up 37 percent compared to the same period in 2016, and the agency wanted beds within a 180-mile radius of four cities, including Chicago and Detroit. Elkhart County, Indiana, was in range of both cities, and CoreCivic, which gets more than a quarter of its $1.8 billion annual revenue from incarcerating ICE detainees, spotted the opportunity. ….

CoreCivic has history of complaints, violations Company accused of mismanagement, abuse
Source: Caleb Bauer, South Bend Tribune, January 29, 2018

Corrections Corp. of America’s stock prices plunged in recent years when the Bureau of Prisons began phasing out private, for-profit prisons amid reports of problems with oversight, safety and security. The Nashville-based company responded by shifting its focus to housing Immigration and Customs Enforcement detainees and rebranded itself as CoreCivic. After the election of President Donald Trump, who campaigned to increase immigrant detention and deportation, CoreCivic’s stock prices jumped. Now, the private prison company is angling to open a new ICE facility in Elkhart County. Who is this firm that’s promised to bring 300 new jobs to Elkhart County? Since its foray into ICE business, CoreCivic has continued to be dogged by ongoing allegations of mismanagement and abuse at its detention facilities…..

Peorians Deserve Their Water Back

Source: Jenya Polozova, Food & Water Watch, December 14, 2017

Illinois American Water is running a complicated show in the City of Peoria. They control the water system and they’re charging residents twice as much as what customers of neighboring public systems pay and the U.S. average. Water privatization in Peoria mirrors issues that towns all across the country run into when they sell a public resource to a privately owned corporation. Each time it means: losing transparency, accountability, management, and reliability. In sum, local residents have little say over the operations of the water system. … With the deadline of fall 2018 fast approaching, it’s finally time for Peorians to take their water back – but the water company is not going to go come to the negotiation table without a fight. …

… Years of propaganda and messaging campaigns create doubt that a City has the ability to provide services. But, when it comes to water systems, public provision is the American way.
… This trend to public ownership continues today. In June, Missoula, Montana, bought its water system from a provide company to provide long-term stability and better water resource management, as well as to make necessary improvements. The system was losing more than half of its water through leaks. The city plans $30 million in investments over the next 5 years — all without raising water rates. As the mayor said: “The city of Missoula is in this business for only one reason and that’s to serve customers. Water is it.” While it is understandable that the local union in Peoria fears that jobs may be jeopardized if the city takes over the water company, the City Council can and should include recognizing the local labor union and keeping the existing workforce as part of the municipalization effort. Not a single union worker should be dropped. Furthermore, cities that take back their water systems experience incredible economic benefits as a direct result. Take the city of Evansville, Indiana, where remunicipalization from IAW was expected to save the city $14 million over a short period of five years. Or even the city of Cave Creek, Arizona, where the city took back their water from American Water and saved an astonishing $1,335,017. …

Judge: IBM Owes Indiana $78M For Failed Welfare Automation

Source: Associated Press, August 7, 2017

A judge has ruled that IBM Corp. owes Indiana $78 million in damages stemming from the company’s failed effort to automate much of the state’s welfare services. … Indiana and IBM sued each other in 2010 after then-Gov. Mitch Daniels cancelled the company’s $1.3 billion contract to privatize and automate the processing of Indiana’s welfare applications following numerous complaints. The Indiana Supreme Court ruled last year that IBM breached its contract. The justices affirmed a lower court’s award of nearly $50 million to IBM in state fees, but that ruling allowed Indiana to seek more than $172 million in damages from IBM.

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IBM contests judge’s removal petition in welfare-privatization suit
Source: Dave Stafford, Indiana Lawyer, May 25, 2016

The state’s petition to remove a trial court judge who oversaw the civil lawsuit over the canceled $1.3 billion contract with IBM to overhaul Indiana’s welfare system is “factually incorrect,” according to an attorney representing IBM. Andrew Hull of Hoover Hull Turner LLP said in a statement that Marion Superior Judge David Dreyer did nothing to merit removal and didn’t violate Indiana Trial or Appellate Rules in an order issued on remand from the Indiana Supreme Court, as Barnes & Thornburg LLP lawyers representing the state argued in briefs filed Monday. Their petitions and brief seeking writs from the Supreme Court argue Dreyer overstepped his authority by issuing the order without proceedings, called into question his impartiality in the matter, and asked the court to vacate his order on remand and bar him from issuing further orders in the case.

Indiana Seeks New Judge After No Damages Awarded in IBM Case
Source: Rick Callahan, Associated Press, May 10, 2016

Attorneys for the state are challenging a judge’s decision not to award Indiana damages in its long-running fight with IBM Corp. over the company’s failed effort to privatize state welfare services, saying a new judge should be appointed to handle the case. The Indiana Supreme Court ruled in March that IBM had breached its $1.3 billion contract to automate much of Indiana’s welfare system. The high court directed the trial court judge to determine what damages IBM owed the state, opening the door for Indiana to seek up to $175 million. But on Friday, that judge, Marion County Superior Court Judge David Dreyer, ruled that “the costs for which the State seeks reimbursement were not adequately proven, and thus cannot be recovered as damages.” The state’s private attorneys in the case quickly filed a motion seeking a new judge to oversee the case. … The resulting lawsuits between Indiana and IBM were assigned to Dreyer, who found in 2012 that Indiana had failed to prove IBM breached its state contract and awarded the New York-based company about $50 million in state fees. Indiana appealed that ruling, and the state Court of Appeals found in February 2014 that IBM had committed a material breach of its contract by failing to deliver improvements to the state’s welfare system. But it also found IBM was entitled to nearly $50 million in state fees.

Mediation coming in IBM, Indiana contract dispute
Source: Associated Press, December 10, 2014

IBM Corp. and the state of Indiana are turning to mediation in hopes of settling their dispute over IBM’s failed attempt to privatize Indiana’s welfare services. The two parties said in a Monday court filing with the Indiana Supreme Court that they have agreed to mediation and chosen John R. Van Winkle of Indianapolis-based Van Winkle-Baten Dispute Resolution to hear their differences at a Feb. 25 mediation session. The state Supreme Court heard oral arguments in the welfare-privatization contract dispute on Oct. 30. The following week, Chief Justice Loretta Rush suggested that the parties consider mediation “to seek a mutually agreeable resolution of their dispute.” Rush’s order also said that if mediation failed, the court would move ahead to reach a decision in the long-running dispute.

Appeal of IBM-deal fees heard
Source: Niki Kelly, Journal Gazette, November 26, 2013

The fallout from the failed $1.3 billion IBM welfare modernization contract continued Monday as the Indiana Court of Appeals heard arguments over $100 million in disputed fees. … Attorney Peter Rusthoven, representing the state, said the system was plagued with problems from the outset and IBM refused to hire more people to add to the “human dimension.” …. But attorney Jay Lefkowitz, on behalf of IBM, pointed out that Indiana was trying to hire IBM to run the new hybrid system up until the day the company was terminated.

IBM, state in court Monday
Source: Tim Evans, Indianapolis Star, November 20, 2013

The Indiana Court of Appeals will hear oral arguments Monday in the legal battle over a $52 million judgment the state has been ordered to pay IBM over the failed attempt to privatize public welfare services under former Gov. Mitch Daniels. …. The state is appealing a Marion Superior Court judge’s 2012 ruling awarding $52 million to IBM after the state canceled a contract Daniels had hailed in 2006 as the solution for fixing one of the nation’s worst welfare systems. …. “Neither party deserves to win this case,” he wrote in his 65-page ruling. “This story represents a ‘perfect storm’ of misguided government policy and overzealous corporate ambition. Overall, both parties are to blame, and Indiana’s taxpayers are left as apparent losers.”

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Part of food stamp website offline for two weeks
Source: Tony Cook, Indianapolis Star, November 6, 2013

Earlier this year, state contractor RCR Technology wrongly released the private information of Indiana welfare recipients. Now, part of the state’s benefits website administered by the company is broken. …. The problems come just four months after revelations that RCR wrongly revealed private data of FSSA clients, including Social Security numbers. … RCR was initially an FSSA subcontractor, but was later elevated to prime contractor after Gov. Mitch Daniels fired IBM over a botched 10-year, $1.37 billion deal to overhaul the state’s welfare system, Gavin said.

Ind. court sets hearing on IBM welfare lawsuit
Source: Associated Press, September 3, 2013

The Indiana Court of Appeals has set a November hearing in the state’s legal fight with IBM Corp. over a failed attempt to overhaul Indiana’s welfare system. The state is appealing a Marion County judge’s ruling last year awarding $52 million to IBM after then-Gov. Mitch Daniels canceled what was a 10-year, $1.37 billion contract to process applications for food stamps, Medicaid and other programs….

The Unequal State of America: Indiana’s rocky road to welfare reform
Source: David Rohde and Kristina Cooke, Reuters, December 20, 2012

In 2006, Gov. Mitch Daniels privatized the management of the welfare-benefits system with a project led by IBM. Two-thirds of Indiana’s social-service agency’s staffers became employees of IBM and its partners. In a process dubbed “welfare modernization,” recipients would apply for benefits online and by phone rather than meeting social workers face to face. It was, by Daniels’s own admission, a failure…..

JEditorial: Human toll of FSSA deal laid bare
Source: Journal Gazette, July 24, 2012

Editorial: Decision to privatize state welfare system a mistake from start
Source: Evansville Courier & Press, July 22, 2012

Judge denies Indiana claim over failed IBM project
Source: Charles Wilson, Associated Press, July 18, 2012

A judge on Wednesday spurned Indiana’s efforts to recoup roughly $170 million from IBM Corp. over its failed effort to overhaul the state’s welfare system as part of a broader privatization push that was an early hallmark of Republican Gov. Mitch Daniels’ tenure. Marion County Judge David Dreyer said in a 75-page order that neither side deserved to win the dispute, and awarded IBM only a small fraction of what it was seeking. … Dreyer blamed “misguided government policy and overzealous corporate ambition” for the failure of the system, which he called an “untested theoretical experiment.” … Dreyer said Indiana failed to prove that IBM breached its contract, and he denied the state any of the money it sought.

IBM questions Daniels’ resistance to deposition
Source: Carrie Ritchie, IndyStar.com, December 19, 2011

In court, state and IBM spar over welfare system’s design
Source: Carrie Ritchie, Indianapolis Star, March 9, 2012

IBM to begin making case in welfare trial
Source: Indianapolis Star, March 21, 2012

IBM: Indiana canceled deal because of budget woes
Source: Associated Press, April 3, 2012

IBM, state in final arguments at welfare system trial
Source: Carrie Ritchie, Indianapolis Star, April 3, 2012

Judge orders Gov. Daniels be deposed in IBM lawsuits
Source: Carrie Ritchie, IndyStar.com, December 16, 2011

A judge has ordered Gov. Mitch Daniels to share his knowledge of a canceled $1 billion contract with IBM to help resolve a legal battle between the state and the company.

Attorneys for the state had said a law protects Daniels and other high-ranking state officials from testifying….

Indiana bond sale to complete P3 takeover financing

Source: Nora Colomer, Bond Buyer, August 21, 2017 (subscription required)
 
The Indiana Finance Authority will price $180 million of highway revenue refunding bonds Wednesday to complete the financing piece of its takeover of a troubled public private partnership highway project.  The bonds will take out $210.7 million of bond anticipation notes issued by the IFA last week to redeem $246 million of private activity bonds as part of settlement agreements that terminate its contractual relationship with I-69 Development Partners LLC and put direct control of the I-69 Section 5 project under the Indiana Department of Transportation. …

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Indiana Highway Gives ‘Black Eye’ to Private Investment in Infrastructure 
Source: Cameron McWhirter, Wall Street Journal, August 9, 2017

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale.  The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it. …

If Pence Shapes Trump’s Infrastructure Plan, Who Would Profit? Who Would Pay?
Source: Lydia O’Neal and David Sirota, International Business Times, August 9, 2017
 
President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition — but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan.  As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor. …

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Towns sell their public water systems — and come to regret it

Source: Elizabeth Douglass, The Washington Post, July 8, 2017

Neglected water infrastructure is a national plague. By one estimate, U.S. water systems need to invest $1 trillion over the next 20 years. Meanwhile, federal funding for water infrastructure has fallen 74 percent in real terms since 1977, and low-interest government loans have not filled the gap. … The prospect of offloading these headaches to for-profit water companies — and fattening city budgets in the process — is enticing to elected officials who worry that rate hikes could cost them their jobs. Once a system has been sold, private operators, not public officials, take the blame for higher rates. But privatization will not magically relieve Americans of the financial burden of upgrading their water infrastructure. … One of the biggest inducements for water deals is the “fair market value” legislation that has been passed in six states — Indiana, California, Illinois, Missouri, New Jersey and Pennsylvania — and is being considered by others.  …

… Even as more cities consider selling their water infrastructure, others are trying to wrest control of their systems back from private operators, usually because of complaints about poor service or rate hikes. Since private owners are rarely willing to surrender these lucrative investments, cities usually end up pursuing eminent domain in court. That means proving that city ownership is in the public’s interest and then paying a price determined by the court. Those prices can be exorbitant. …

Indiana Dept. of Corrections Cancels Contract with Healthcare Provider

Source: WFHB, March 20, 2017

The Indiana Department of Corrections has discontinued its contract with Corizon Health, the private corporation that handles most of the state’s inmate healthcare. Corizon announced last week that it would be laying off about 700 employees in 22 locations around the state. The contract, which is worth $100 million a year, is being taken up by Pittsburg-based Wexford Health Sources. A representative from Corizon said in a letter to the state that Wexford may end up hiring many of Corizon’s former employees, though there’s no guarantee that will happen. The loss of the corrections contract is the most recent in a string of contract losses for Corizon. … An investigation by the South Bend Tribune last year revealed hundreds of inmate complaints and dozens of lawsuits against Corizon in Indiana. One severely disabled patient died after just 37 days in a state prison under the care of Corizon employees. Another died in an ambulance during a two-hour drive to a hospital, despite a much closer hospital being available. Wexford Health Sources’ record isn’t spotless, either. Wexford paid out $3.1 million to settle five years of complaints in Illinois, including delayed treatment and low-quality care.

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Prisoner Death Shines Light on Private Health Contractors
Source: The Takeaway, WNYC, March 7, 2017

Nicholas Glisson died on October 10, 2010 in Indiana State Prison. … Glisson had complicated medical needs as a result of laryngeal cancer, and was under the care of Corizon Health, a private company providing medical care to prisoners in Indiana’s Department of Corrections. His mother, Alma Glisson, says he knew how to take care of himself. Alma blames Corizon for his death. What happened to Nicholas Glisson and what it means for private prison contractors if a jury rules in his favor is the subject of this week’s Case In Point story from The Marshall Project.

Prison health-care companies eye Indiana contract
Source: Virginia Black, South Bend Tribune, October 13, 2016

Some of the country’s biggest players in the increasingly privatized business of providing medical care to inmates have expressed interest in Indiana’s expiring contract with Corizon Health. Corizon, widely cited as the largest, has faced an onslaught of negative publicity in recent years, with a growing number of lawsuits and contracts ended in other states. Corizon and its role with Indiana’s Department of Correction was the subject of a Tribune series in June called “Profits over Prisoners?” Corizon’s three-year contract, worth nearly $300 million expires at the end of the year. Bids are due Nov. 9. Several competitors attended a conference last month for possible bidders. Among them were:
• Wexford Health, based in Pittsburgh and close on Corizon’s heels in the number of contracts it holds, has itself been the subject of controversy in delivering medical care in prisons, including in neighboring state Illinois.
• Centurion, based in Vienna, Va., whose contracts include facilities in Florida, Minnesota, Vermont, Mississippi and Tennessee.
• Correct Care Solutions, based in Tennessee as is Corizon, says on its website it operates in 38 states and in Australia. It also provides health care to Indiana inmates in some county jails, such as in Elkhart, Porter and Marion counties. …

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How voucher dollars kept coming as a private school collapsed

Source: Stephanie Wang, IndyStar, March 19, 2017

The Indiana Department of Education and the attorney general’s office both had been warned. Teachers at the tiny Todd Academy weren’t getting paid. Parents complained that classes were being held in an unsafe building without heat, and the school appeared to be promoting children who weren’t ready, in an effort to secure more state money. Yet after two visits by the education department and an investigation by the attorney general’s office, the troubled Indianapolis private school still received thousands of dollars in public funds through Indiana’s school voucher program and remained eligible to receive state voucher money until it collapsed under the weight of its unpaid debts. … An IndyStar examination of Todd Academy’s experience with school vouchers exposes a serious lack of basic fiscal controls in Indiana’s highly popular school choice system. While both traditional public schools and charter schools must open their budgets to public scrutiny, voucher schools are exempt from any financial vetting — to the point that even when mismanagement has been repeatedly alleged, state officials are loath to intervene. … Despite hints of money trouble from the start, state officials approved Todd Academy to receive about $200,000 in voucher funds over three years. The school was free to keep taking public dollars, even though it had stopped filing its nonprofit tax reports. It was sued 13 times with judgments against the school in all but one case, totaling $1.8 million. … It has been six years since the state launched what has become one of the largest and broadest voucher programs, now serving more than 34,000 children at a cost of $146 million a year.

… Bolstered by the addition of vouchers, Todd Academy started to rack up hefty financial obligations the next year with the hopes of expanding to more than 50 students. … Todd Academy also had been shorting teachers’ paychecks, according to lawsuits by a dozen teachers, nine of whom eventually won judgments against the school. … The school’s finances had deteriorated to the point where Todd Academy used the promise of state voucher money to secure high-interest loans, only to be found in default of the contracts. … State law is careful to protect the autonomy of private schools participating in the voucher program. It preserves their independent curriculum, whether it be religious or not. They’re not an agent of the state, and only a portion of their revenues come from the state. The state requires financial transparency from public schools, which risk losing state funding if they’re not accountable. Schools can have their charter revoked or control taken away by the state. But voucher schools have been shielded in state law from providing any financial transparency. …