Indiana Lawmakers Performing Consulting Side Hustles Come Under Scrutiny

A report by the Indiana Capital Chronicle reveals that a number of Indiana state legislators are working on the side as consultants, with only a few revealing their clients, leaving the door open for potential conflicts of interest.

The group of at least 15 legislators in the Indiana General Assembly work for a variety of clients in the insurance and healthcare industries, with others focusing on communications work and digital marketing for various businesses in the state. Other legislators operate outside LLCs that do not specifically reference consulting work but could potentially provide such services. As Indiana’s lawmakers only work part-time, many legislators claim consulting engagements as a crucial part of how they make a living.

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At issue is the Statement of Economic Interest (SEI), which must be filed annually by each legislator and is largely run on an honor system, with various levels of compliance and little oversight of the forms beyond what is performed by watchdog groups and journalists. Lawmakers are not required to list individual clients in these disclosure forms unless they are a significant income source, leaving few details available to the public about who they serve outside of the statehouse.

“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.”

While some legislators make the decision to recuse themselves from situations where their business connections may come into conflict with their public service duties, the rules that govern their financial disclosure have mostly been unchanged since the 1990s and there appears to be little appetite for reform, with neither of the assembly’s GOP leaders committing to change. As larger consulting businesses such as McKinsey & Company continue to come under greater scrutiny for their own alleged conflicts of interest, it seems inevitable that greater attention will be given to smaller operators – especially when they are responsible for crafting the laws that govern a state.