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.