Pence orders review of contractor's investments

Back to TopCommentsE-mailPrintBookmark and Share

Indiana Gov. Mike Pence has ordered an independent review of a state development agency contractor that has invested taxpayer money with companies run by its own chairman and his son.

Pence's action follows a newpaper investigation of Elevate Ventures, which the Indiana Economic Development Corp. first hired in 2011 to invest money into promising startup companies. The Indianapolis Star found that Elevate Ventures has directed $800,000 to a pair of companies connected to Elevate chairman Howard Bates and his son.

The governor wants a broad review of Elevate's investment decisions and business practices, Pence spokeswoman Christy Denault told the Star. She said Pence expected the highest ethical standards from the development agency and its contractors.

Elevate Ventures runs the Indiana Angel Network Fund, which uses federal money to spur small business development.

Bates remains chairman of Elevate and is also CEO of a startup, Smarter Remarketer. In November, Smarter Remarketer received nearly $500,000 from the Elevate-run Indiana Angel Network Fund. MaxTradeIn, a company run by Bates' son Justin, received $300,000 from the same fund a few months later.

Howard and Justin Bates said that the investments followed the federal guidelines governing the public money.

"No person connected with Smarter Remarketer or MaxTradeIn failed to satisfy the objective conflicts of interest thresholds for investment and controls established by these regulations," they said.

The governor's office didn't immediately say who would conduct the review of Elevate Ventures.

"The IEDC will present the findings of the independent review to the governor and the IEDC Directors in the near future," Denault said.

The U.S. Treasury Department has notified the state agency that it would perform an audit of Indiana's handling of the federal program that Elevate used to make the investments.

Stephen Hourigan, Elevate's CEO, said he believed the company's decisions would be cleared.

"We are confident that nothing related to these particular investment transactions violated any portion" of the federal guidelines, Hourigan said.

Elevate's contract with the state began in 2011, during Gov. Mitch Daniels' tenure. Under the contract, Elevate is paid a base fee of $125,000 per month. According to invoices, the state has paid Elevate more than $4.3 million.

The state distributed more than $29.3 million to companies during the two-year period ending June 30, 2011, according to annual reports. Under Elevate, which took over in April 2011, the state has steered around $19.9 million toward various companies to date, according to David Clark, a venture partner at Elevate.

Clark said Elevate followed its own internal conflict-of-interest policies by ensuring that Bates wasn't involved in the investment decisions involving Smarter Remarketer and MaxTradeIn.

"As we went through the process, he was not allowed to talk to anyone at Elevate about the deal," Clark said.


  • Not the whole store
    Elevate requires companies to raise matching funds from private equity investors before it invests any of the state's money. Therefore both Smarter Remarketer and MaxTradeIn were also vetted by local business savvy investors. This was not a case of Elevate giving money away. It was a case of Elevate joining other investors in funding local startups - both of which are growing rapidly. These will both return many times the original investment to the state.
  • Clear Conflict
    This was started long before Pence. This need to be cleaned up. This is a clear conflict of interest. Furthermore, Bates should not have another job other than Elevate. That is also a problem. The FEDs will also want to see how the money was used at Smarter Remarketer and MaxTradeIn.
  • Oh, Really?
    Didn't we recently have some type of review of another egregious situation (Eric Turner, are you and your children reading this?) and everything was found to be just fine. Nothing will change here, either. I can't help but wonder how much money ended up in Mike Pence's campaign chest...

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help