Republican legislative leaders say they want to unwind stiff regulations they imposed on Indiana's vaping industry, which created a stranglehold on the burgeoning market for one company and prompted an FBI investigation.
The law, which is subject to a legal challenge, was passed in 2015 ostensibly to ensure that the nicotine-laced liquid consumed through vaping met safety standards. But it was amended last year in a way that effectively gave a Lafayette-based security company sole discretion to decide who could be certified to produce "e-liquid" in Indiana.
Now, after numerous lawmakers have said they've been interviewed by the FBI, which has declined to comment on the probe, GOP leaders who control the Statehouse say eliminating those stringent regulations is a top priority. It's an about-face from last year, when Republicans ignored the handful of lawmakers who warned that the strict security and certification process required by the bill would create a monopoly.
"We don't need that much regulation to ensure safety. We don't do it for food, we don't do it for the coffee we all had this morning," said state Sen. Randy Head, R-Logansport, who is sponsoring an overhaul of the law. "The permitting process should be up to the government. We shouldn't relegate that to a private business."
Only Lafayette-based security company Mulhaupt's Inc. met the law's requirements. The company set a permit application deadline for e-liquid manufacturers one week before the bill was signed into law by former Gov. Mike Pence, the Indianapolis Business Journal reported. Mulhaupt's certified just six companies to produce the liquid, freezing out other businesses.
The company is located in the district of Republican state Sen. Ron Alting, the chairman of the Senate's Public Policy committee, who helped shepherd the legislation through the General Assembly.
A spokeswoman for the FBI would not confirm the agency was investigating, and no one has been charged. But those who have talked with the FBI say they were questioned about who was involved, what their motivations were for supporting or opposing the law and whether they knew of anyone who was offered anything in exchange for their support.
Mulhaupt's president, Doug Mulhaupt, said in a statement Friday that the company "fully cooperated with law enforcement officials."
Alting, of Lafayette, said he was interviewed by the FBI but says he did nothing wrong. The measure, he says, was vetted by state lawyers and the state's Alcohol and Tobacco Commission.
"No attorney—nobody—had any legal evidence that that bill was going to create a monopoly," said Alting. "If there would have been any evidence that it would have done that, we would have obviously changed the language."
However, state Sen. Vaneta Becker, R-Evansville, did warn last year that it would create a monopoly.
After a constituent asked her to support changes to the state's vaping law, she sponsored an eventually adopted amendment that would update the law. But after researching it more thoroughly, she realized it effectively gave Mulhaupt's the monopoly and unsuccessfully tried to strip her own wording from last year's bill.
"Everybody knew there was only one company that would be able to comply—they all knew it," Becker told The Associated Press on Friday. She said she "can't really answer" why other senators didn't listen at the time, and that she has been interviewed by the FBI.
Alting acknowledged he was a roadblock to removing Becker's amendment on the legal advice of state lawyers and the Alcohol and Tobacco Commission.
The overhaul effort sponsored by Head had not been publicly released as of Friday. But the measure is supported by leadership—including Republican House Speaker Brian Bosma—and he says it will solve the problem.
"We need … to try to make sure that we don't do what we did last year and goof and do anything silly like forming that monopoly," Alting said. "We dropped the ball on this and we have integrity to admit that. So we'll clean it up. Period."