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Report: State political leader had millions on the line

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Indiana House Speaker Pro Tem Eric Turner earned nearly $8 million selling nursing homes in the last two years and stands to earn between $1 million and $2 million on projects now being developed, thanks in part to legislation he helped block this year.

Turner worked behind the scenes during the past legislative session to kill a construction ban on new nursing homes that would have capped that flow of profits. His efforts are now the subject of a House Ethics Committee investigation.

During much of the debate during the 2014 session, it appeared Turner's son, developer Zeke Turner, had the most to lose if the five-year moratorium was enacted. But a financial document obtained by The Associated Press shows that Eric Turner had as much or more at stake because he owns 38 percent of Mainstreet Property Group, which builds nursing homes in Indiana and other states.

The information is included in a private offering from a subsidiary of Mainstreet Property Group looking to raise money for a proposed nursing home in Bloomington. The document refers to Eric Turner as a 50-percent owner of Mainstreet Capital Partners, which owns nearly 76.5 percent of Mainstreet Property Group.

Turner has consistently denied any wrongdoing. He issued a statement Thursday saying the moratorium would have had "no significant effect" on his business because investments in new facilities would simply have moved to other states. He acknowledged, as he has previously, that he holds an ownership stake in Mainstreet but did not disclose the amount.

"Consistent with the House Code of Ethics, I provided my particular expertise during discussions in caucus and disclosed I am an investor in an entity that invests in Mainstreet Property Group," Turner said.

Turner would not confirm how much he has made or how much his ownership in the company is. His spokesman declined to make Turner available for an interview.

Mainstreet makes money by building nursing homes, leasing them to an operator and then selling the facilities to HealthLease Properties in Canada, another company started by Zeke Turner.

The Associated Press reported earlier this month that each deal for a new home that Mainstreet completes with HealthLease can net investors a collective $2 million or more. Some projects have generated returns of up to 600 percent.

In the case of one nursing home, Wellbrooke of Westfield, Mainstreet built the facility for $14.1 million and then sold it to HealthLease last June for $18.6 million. Eric Turner's share of the profits was likely $1.7 million, based on his 38-percent ownership stake in Mainstreet. It's unclear whether Turner kept the proceeds or reinvested them in the company.

Mainstreet was in the process of developing five other homes in Indiana when lawmakers took up a proposal to ban construction of new homes. Supporters said the ban was needed to keep the market from being flooded, but opponents that included Mainstreet argued the ban violated free market principles.

In a press release sent during the middle of the legislative fight, Mainstreet argued that five projects underway would be blocked by the ban. According to another Mainstreet financial document, two of the projects — in Lafayette and Terre Haute — were expected to net Mainstreet $5.4 million and $4.8 million, respectively.

In the case of those two facilities, Eric Turner stood to lose nearly $3.9 million if the ban had passed.

The Cicero Republican kept his distance from the issue in public, recusing himself from votes and abstaining from comment in hearings, including one where his son testified. But he lobbied other House Republicans in private meetings during the last two days of the legislative session and was successful in helping killing the legislation, several Republicans who were in those meetings told the AP.

House Ways and Means Chairman Tim Brown, R-Crawfordsville, said earlier this week that he knew of Turner's interest in the nursing home industry.

"Eric and I are friends and have had a lot of private conversations, so I'm aware of what's going on in Eric's life, yes," Brown said.

He didn't answer directly when asked if he had any concerns about Eric Turner taking actions in caucus that could reap him millions of dollars. Instead he offered a concern many lawmakers have: that stricter ethics rules could violate the spirit of Indiana's part-time Legislature, which brings in elected officials who are not full-time politicians.

Although most lawmakers have careers outside the Statehouse, ethics rules bar them from taking direct actions in the General Assembly that would directly benefit them or their family.

It's unlikely that Turner's actions violated that rule because his discussions occurred during private meetings of the House Republican caucus, which is not considered an official forum.

A spokeswoman for House Speaker Brian Bosma, R-Indianapolis, did not respond to multiple requests for comment. A spokesman for House Minority Leader Scott Pelath, D-Michigan City, also declined comment.

Bosma tasked the ethics committee with determining whether Turner violated any ethics rules and also asked them to conduct a broader review of the rules. The committee is planning to meet next Wednesday.

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  • Turner Is the Issue
    Lets not obfuscate the issue. Turner used his public position for private gain. His actions were deceitful and corruptive. Yes, many other issues can be brought into the discussion as many of you have done but this is about unethical behavior by a legislator that needs to be checked. I do hope the voters in the Cicero area vote this crook out of office.
  • Depressing
    From reading this article, it sounds like the "Ethics" committee will rule that Turner did nothing wrong according to its rules. Wow. What a set of rules. Even Turner knew better than to speak publicly. He saved his arguments for places out of sight of the general public. It is helpful to read what the Turner apologists have to say. I'm guessing these are the arguments he made in private.
  • @Jimmy and John Ross
    Jimmy - very well said. It is obvious that most people commenting on this subject don't understand the entire story. John Ross - you have shown ignorance with an exclamation mark!
  • Attempted murder by demoncrats and others with under handed death panels by limiting supply.
    Those that wanted a ban on adding supply are attempted murders. The same people who forge huge cuts in Medicare to private providers while doubling the pay to . Gov owned facilities. They also put a ban on Medicaid for new supply of needed services and facilities. Keeping that money to horrible .gov run facilities and a few crony fascist companies who handle Medicaid patients. These death panels by rules and false laws are criminally guilty of killing people who if they had new and better facilities, and access in general to services would live a long and happy life. Now this part time legislature gets hammered by seminary media trained feral wonks at the IBJ. The IBJ should be renamed to GBJ (government business journal).. Wake up folks. And see to it all this chaos and the people fostering it end up as ashes on the ash heap of history.
  • It's not an R thing
    Oh stop acting like stuff like this only happens on the R side of the aisle. The D's are just as bad. It isn't an R or a D issue, it's a pan-political issue. Virtually every single politican is a self centered crook.
  • Not Hard to Understand
    Let me spell it out for you people who just can't seem to get it. Older nursing homes take care of low-income, elderly patients who need skilled healthcare but have not means to pay for it. Medicaid pays for the care of these low income elderly patients. Those older nursing homes rely on the short stay Medicare patients who are rehabbing from a hospital stay before they go home. Medicare pays very well and helps offset the costs of taking care of the elderly poor on Medicaid. The Turners cannot get Medicaid in their buildings (Indiana was actually wise for once and has a moratorium on Medicaid) so they build next to older nursing homes and try to suck away the Medicare patients that keep those older nursing homes financially stable enough to care for the low-income Medicaid patients. This is not a "free market" situation as the Turners continue to argue. Not only are their ethics screwed up with regard to politicking for their own financial gain, they are creating a big problem for the state's elderly Medicaid population and for the state itself.
  • The Real Scandal
    The IBJ should be printing an article a day about the Medicaid Reimbursement Issue @ http://advanceindiana.blogspot.com/2014/02/63-of-indiana-nursing-homes-now.html. Turner's profits are a mere pittance compared to the additional $312.7 million NH owners were able to pocket at taxpayer expense last year. This boondoggle provides higher reimbursement to "government owned" nursing home owners providing a competitive advantage against the private market. Is this not unethical for one government entity to provide financial benefit to another government entity? I wonder which politicians lobbied behind the scenes for this law? Interesting that Turner is republican and IBJ won't stop writing about it while Health and Hospital (one of the most active government owned entities to take advantage of the Medicaid boondoggle) is liberal and we don't hear a peep. And to pile on, it would be interesting to see an expose on HHC and their medical malpractice claims at these nursing homes. It might be interesting to see how they benchmark against the private industry.
  • Hatchet Job
    Nothing new here. IBJ retelling the same story. The Ethics Committee will review and sanction if necessary, let the process take place. And if people of Cicero don't like it they have the right to vote Mr. Turner out.
  • Look at it the other way...
    Why not do an article on how ridiculous the proposed moratorium was? Understandably there are metrics involved when talking about medicare, medicaid and private pay systems but the original bill was being passed by cash cows who already control a HUGE majority of the senior living market. Start investigating the ties existing systems have to the Indiana Republican Party and you're likely to find that they donate more money to the party's cause than just about any entity. Yes, Turner probably earned $8M because of his ownership in his son's company but in the grand scheme of this industry $8M is nothing! I commend the IBJ for another decent investigative journalism story.
    • Why?
      Why doesn't anyone ever report on who stood to gain from this bill passing? Senior citizens who would have to stay in older facilities? Construction and healthcare workers who would be out of a job? The community tax base? Every one of these people would lose out if the moratorium passed. It's the older nursing homes who are losing patients to more modern facilities, and they're the ones who lobbied for this in the first place where's your outrage at them?
    • Earned?
      "Indiana House Speaker Pro Tem Eric Turner earned nearly $8 million..."
    • Jail
      How is this not an offense worthy of prosecution? Using your influence for financial gain, what happened for working for the people for the greater good? Disgusting!
    • job killing government
      State government should focus on important issues and stop blocking job-producing construction projects.
    • ethics
      Political "ethics" is an oxymoron.
    • Ethics....haha
      The government of this state and the word "ethics" do not belong in the same story.

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