According to a federal indictment handed down last December, Bales and Spencer were working both sides of an exclusive real estate brokerage agreement the firm entered into with the Daniels administration to lease office space for state buildings. Bales and his firm were barred from having a financial interest in any real estate it leased on behalf of the state, but the indictment alleges that's exactly what happened with the lease of an Elkhart building from a company co-owned by Indianapolis attorney Paul Page and former Marion Co. Prosecutor Carl Brizzi. The building was purchased shortly before Bales' company negotiated a lease for the Elkhart building for the Department of Child Services. A company controlled by Bales wired money into an account controlled by Page to make the acquisition with a promise of a 25% share of the profits realized from any resale of the building according to the indictment. The indictment claims the state of Indiana shelled out nearly $2 million in real estate leasing commissions to Bales' Venture Real Estate. Bales is also one of Gov. Daniels largest campaign contributors according to campaign finance reports, contributing tens of thousands of dollars to his past campaigns.
The IBJ's Cory Schouten has reported claims of state whistle blowers that the Daniels administration rigged the original bid that awarded Bales' firm with an exclusive real estate leasing agreement for all state agencies. The IBJ has also reported on e-mail exchanges between Bales, employees of his company and state officials suggesting Bales was given preferential treatment by the Daniels administration, even when state employees expressed concern that he was not acting in the best interest of the state at times in negotiating leases for state agencies. None of those reports suggested any wrongdoing by Obst, who was not named in the multi-count indictment that accused Bales and Spencer of defrauding the state of Indiana and a bank that provided financing for the purchase of the Elkhart property. Nonetheless, there are concerns Pence's use of a former executive with Bales' company as his chief fundraiser could become a problem for him during this year's gubernatorial campaign given the attention that will come from Bales' upcoming public corruption trial. There are concerns the Democrats and John Gregg's campaign will seek to tarnish Pence's image because of Obst's former work for Bales through guilt by association.