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

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.