Lawmakers consider job accountability law
Bob Segall/13 Investigates
There is more fallout from an Eyewitness News investigation into Indiana's inflated job numbers. The speaker of the Indiana House of Representatives plans to fight for a new law to prevent state government from issuing "bogus" job statistics. Critics say they are prepared to fight back.
Earlier this year, the Indiana Economic Development Corporation boasted it had helped secure more than 100,000 new jobs for Hoosiers.
Kerry Hall doesn't believe it.
"They're not around here, so where are they?" he asked.
Hall lost his longtime job as a swimming pool installer 18 months ago and has been looking for another job ever since.
His wife, Amber, is unemployed, too. She has been laid off from two separate jobs in the past five months.
Without work, the Halls say paying their bills and feeding their five children is a daily struggle, and optimism is waning. The unemployment rate in Scott County tops 11% and several companies in the Scott's hometown of Austin have recently closed.
"It's rough and it's not just us, it's everybody," Hall said. "Not more than a month ago, the only grocery store that we had in this town closed down. Just having to choose between a gallon of milk and a gallon of gas is getting pretty rough, and we just don't know where to turn anymore and what to do … If there's all those jobs [announced by IEDC], I haven't seen ‘em."
House Speaker Pat Bauer is skeptical, too.
He says he long suspected Indiana's job numbers did not add up, and his suspicions were confirmed by 13 Investigates.
This spring, WTHR exposed abandoned factories and empty cornfields where IEDC claimed tens of thousands of Hoosiers are supposed to be working. The Eyewitness News investigation showed the state's economic development agency has been inflating job numbers by promoting jobs commitments that never came. Approximately 40,000 jobs promoted by the state have not materialized years after they were announced.
"It was pretty obvious that these numbers were bogus," Bauer said. "By saying they created a job and they didn't, that's fraud. It's a problem we have to be able to get the truth."
Bauer tells WTHR he will be drafting legislation that would require IEDC to be more transparent about its job numbers. Right now, IEDC director Mitch Roob says he cannot back up his agency's jobs statistics with specific details because that information is secret.
"We don't share it with the public. We don't release it to the news media. That's confidential information," he said.
But other states, including neighboring Illinois, Ohio and Michigan, do release detailed economic development information to the public. Following WTHR's investigation, economists, policy advisors and labor leaders are now calling on Indiana to do the same.
"They've got to be a lot more transparent," said Tom Lewandowski, president of the Northeast Central Labor Council in Fort Wayne. "It seems like a lie, and I'm always suspicious if people don't want to be transparent."
"We need to be founded in reality," agreed Morton Marcus, an economist who served as director of Indiana University's Business Research Center for more than 30 years. "The problem is we have no public record and we don't have good information about what's really going on in business in Indiana because the state insists that all of this information is confidential. The state has not been forthright in providing information … and I think it would be very beneficial for us to understand reality."
Bauer says the way to accomplish that is with a new law that prohibits secrecy surrounding Indiana's real job numbers.
"That's the kind of information I think the public is entitled to," he said.
But the assembly's most powerful Democrat says, historically, Republicans in the state senate have blocked efforts to mandate more corporate accountability.
"We send it over to the senate, it's either diluted or killed," said Bauer, shrugging his shoulders.
Republicans see it differently.
"That's a very political statement that I think isn't a really fair assessment of what's going on here," said senate president pro tempore David Long. "I'm for openness in government. I just want to be realistic and smart about it, as well, so our number one goal which is creating good jobs in this state isn't lost."
Long believes Bauer and his Democratic colleagues are motivated by politics – not transparency – in calling for a job accountability law.
"Democrats are just trying to attack Governor Daniels," Long said. "If you want good government, transparency and accountability, I'm happy to talk about it. The problem is, the House keeps sending us bad legislation."
Asked if he and Senate Republicans would consider a job accountability law if one were passed by the House, Long told WTHR he would keep an open mind.
"We'll take a look at it, absolutely. If you're saying what's the harm in being a little more specific with company A's jobs versus company B's, you may have an argument there and we can certainly look at that," Long replied.
But if Indiana does pass a job accountability law, some fear it could drive away business and jobs.
"We gotta be careful with what we let the public know because it would hurt our efforts, it would hurt the state of Indiana," explained attorney and businessman Mickey Maurer.
Maurer helped create IEDC as the agency's first president. He favors transparency within IEDC, as long as it does not jeopardize the agency's ability to negotiate deals with companies. Maurer also told WTHR he believes IEDC should routinely and publicly update its overall job statistics to more accurately reflect the number of job commitments that materialized, as well as the number that fell through. (IEDC announced at its last board meeting that it will begin to do that.)
But he says IEDC's top priority is attracting jobs -- not giving out information -- and he strongly believes forcing companies to admit their real jobs numbers could be bad for business.
"If you're running [a] company and I'm saying you failed to meet your commitments, headlines being what they are, folks who deal with that company may come up with an adverse opinion of that company, and that's not what we're trying to do here in Indiana," Maurer said.
But can the state attract job and be honest about job numbers at the same time?
It's an issue lawmakers will debate well into the fall. A job accountability law has already turned into a political football leading up to a crucial general election that will determine whether Democrats retain control of the Indiana House of Representatives.
Kerry Hall says, to him, the issue is not about politics; it's about jobs and about state government not keeping secrets.
"It's our community it's affecting, and I think they should be more open and more honest," he said.
Update: A recent legal decision in Marion County could weaken the state's ability to keep job and salary data confidential. Circuit court judge Louis Rosenberg has ruled that a company's payroll records do not qualify as "confidential financial information" and "trade secrets" that are exempt from public disclosure under Indiana's Access to Public Records Act. In his ruling, Rosenberg wrote "the Court finds as a matter of law that the payroll records in this case, devoid of identifying personal information such as name, address or social security number are not trade secrets within the meaning of Ind. Code 5-14-3-1." Attorney Bill Groth, who successfully argued for the release of the salary information, said the ruling contradicts IEDC's position regarding "confidential" job and labor data that other states already provide to the public. "The decision would appear to undermine the state's claim that wage information submitted by employers to a State agency is privileged from disclosure," Groth said.