Thursday, August 06, 2015

Pence Cancels Sweetheart BMV Contract With Former Agency Executive's Company

Former BMV Chief of Staff Shawn Walters
Shawn Walters
Gov. Mike Pence has ordered the cancellation of a contract with a private, partial licence branch operator, Express MVA, after an Indianapolis Star report revealed that a top executive with the agency signed a sweetheart agreement with the company before accepting a job as the company's chief operating officer. Pence has also asked the state's inspector general to determine whether the former employee's actions violated state ethics rules.

Shawn Walters was hired as chief of staff for the BMV during the administration of former Gov. Mitch Daniels, a position he held for eight years before taking a similar job at FSSA. While working at the BMV, the BMV entered into a 5-year contract with Express MVA allowing it to operate a partial BMV branch offering vehicle title services. Walters later signed off on an amended version of that contract before leaving the BMV to accept a new job at FSSA, where he worked for a little more than a year before leaving state government to join Express MVA.

The state has an ethics rule providing a one-year cooling off period that prevents employees from accepting jobs in the private sector related to their state jobs. Walters did not request an ethics opinion before accepting his new job, but it appears his brief stint at the FSSA was done by design to avoid running afoul of the state ethics rule so it is doubtful the acceptance of the job will run afoul of Indiana's relatively weak ethics rules.

Depositions taken in class action lawsuits brought against the BMV for charging higher fees than allowed by law showed that Walters rebuffed concerns raised by another BMV employee that the agency's fees violated state law. Those lawsuits have cost the state tens of millions of dollars in refunds that the agency has been forced to issue, in addition to millions of dollars paid out to class action lawyers.

Express MVA's contract with the BMV allowed it access to the BMV's online STARS computer system for processing vehicle titles at no cost. The private company made its profits under the contract from convenience fees it was permitted to charge to its customers, which were typically high volume users like financial institutions, auction houses and automobile dealers. Those fees are generally passed on to to car buyers. Until a change was slipped into a law passed by the General Assembly this year, Indiana law did not permit such convenience fees to be collected by privatized, partial license branch operators.

While the Indianapolis Star is to be lauded for its reporting on this mess at the BMV, the newspaper has performed acrobatics to avoid laying any blame for the costly mess at the doorstep of former Gov. Mitch Daniels, who brought to state government people who saw their jobs as nothing more than a way to enrich themselves ala Daniels' mentor, Keith Bulen, no matter how much harm their self-dealing causes to the state's taxpayers.

UPDATE: Former FSSA Secretary Debra Minott posted this interesting comment defending Walters, who served as her chief of staff before she was forced out by Pence a little more than 18 months after she took the job at the beginning of his administration:
The fact that this story is the headline is a real travesty of justice. Shawn Walters is one of the most ethical people I know. Even though an IG investigation is hardly necessary, it will be a sweet day when it is shown that he has acted completely appropriately and sadly The Star has misconstrued this story royally.


Greg Wright said...

for those that have no recollection of Mr. Bulen, the following is a brief history.

L. Keith Bulen was a deputy prosecutor later fired after being accused of fixing a case implicating Indianapolis racketeer Tuffy Mitchell. Bulen hand-picked Richard Lugar and served as his mayoral campaign chairman in 1967 and 1971. Lugar’s choice for police chief was a Sargent, with close ties to the Mitchell gambling empire. Lugar’s police department appeared to have been, according to reports at the time and subsequent writings, the most corrupt in Indianapolis history. Mitch Daniels worked on Lugar's re-election campaign in 1971, and 1974 via Bulen's Campaign Communicators, Inc, a political consultancy where he served as vice president. Daniels joined Lugar's mayoral staff and, within three years, became Lugar's principal assistant. Gary, did I miss any major point?

Gary R. Welsh said...

Just the part about the alcoholic beverage license racketeering. After the implementation of Uni-Gov, Indianapolis got a bunch of new liquor licenses. The only catch was that you couldn't get a liquor license unless you cut Bulen in on the action. A remnant of Bulen's corrupt law firm is about to become a Republican city council member. That firm's offices are in the same building owned by the Turkish immigrant who purchased the local Republican Party after Tim Durham's spectacular fall from grace. Gannett employees working for the Indianapolis Star are barred from using Pulliam era archived stories which allow the dots to be connected to allow the veil to be pulled back to reveal the extent to which our local government is run by an organized crime syndicate.

Anonymous said...

and people wonder why the "average" citizen is not voting and just fed up with government officials and all their sweetheart deals with their friends and family

Gary R. Welsh said...

Oh, and the part about him being asked to step down as Republican National Committeeman during the Watergate investigations after embarrassing disclosures. Bulen was Nixon's favorite Republican leader just like Lugar was his favorite mayor. He could count on our local corrupt Republican leaders to do anything necessary for the good of the cause.

Anonymous said...

This is further proof that Pence will be a one-term Gov.

Problems with the BMV was one of many scandles that allowed Bayh to win over Orr. I can't wait to see Pence out and doing something like visiting lecture at Taylor University.

IndyF said...

All crime is Un-Organized , when compared to politics

Paul K. Ogden said...

Anon 9:27, do you not realize that this happened during the Daniels' administration.

Anonymous said...

The Bulen-Lugar payoff money found its way to a Swiss account according to a former GOP staffer now retired to Costa Rica. Some of the money then was used to pay legal expenses of the Watergate Cubans that actually broke into the Democratic HQ. Most fortunes start out with a crime. In this case it was gambling & prostitution payoffs.

Greg Wright said...

If you want to learn the ugly truth about Indianapolis during the 1960s, 1970s and 1980s, read "Deadline: Indianapolis" by Pulitzer winning author Dick Cady. Dick was arrested for telling the truth.

My copy of the book was signed by Dick Cady when we met for coffee. A good friend and member of our local fraud examiner group just purchased a paperback copy for $600. I just looked on Amazon and you can purchase a hardback copy for just under $8,000 and a Kindle for much less.

Anonymous said...


This did happen under Daniels and probably stretches back to when Ron Stiver was the BMV Commissioner. But Pence should have cleaned out the BMV the minute he took office. He has know about this for sometime and it was only now he is pretending to do anything about it! The IG will punish nobody of any importance. Pence needs to explain why he waited so long to do anything. He also needs to explain why he hired Debra Minot back from Daniels first term to run FSSA! Minot was an absolute disgrace as head of State Personnel! Daniels also needs to explain why he let the BMV scandal occur. Pence is a traitor to the Republican Party and to real conservative principles!