State auditors criticize former attorney general's grants

INDIANAPOLIS -- State auditors say Indiana's former attorney general broke the law when she issued more than $700,000 in grants last year without approval from the governor and two state agencies.\nAuditors also uncovered sloppy or nonexistent record keeping and lax oversight of the grants and other spending during Karen Freeman-Wilson's 11-month tenure, The Indianapolis Star reported Wednesday.\nGov. Frank O'Bannon appointed Freeman-Wilson, a Democrat from Lake County, to the post in February 2000. She left office in January, after losing the November election to Republican Stephen Carter.\nThe State Board of Accounts filed its routine audit of the attorney general's office this month. It found that Freeman-Wilson broke the law when she issued grants from the $1.39 million payment Indiana received for work on the national tobacco settlement.\nA $500,000 grant to the Indiana Minority Health Coalition, which Freeman-Wilson called a payback for black Americans for being targeted by tobacco advertisements, was issued without approval from the governor and representatives of two state agencies under his control, as the law requires.\nFreeman-Wilson's office also gave a $213,200 grant to Ball State University to oversee a "Smoke-free Indiana" ad campaign featuring Indiana Fever players.\nThe Fever sponsorship, featuring basketball players Stephanie McCarty and Kara Wolters, began in mid-2000, six months before a state contract was ever signed.\nThe deal wasn't approved until Jan. 5, 2001, the final business day before Freeman-Wilson left office. The contract was completed in such haste that one of her top aides, Lisa R. Hayes, signed it on behalf of State Budget Director Betty Cockrum, without getting her approval.\nHayes said the budget agency refused to approve the grant after some back-and-forth discussions. Hayes, whom O'Bannon recently appointed to run the Health Professions Bureau, said she signed off on the grant because "those were essentially our funds to use at our discretion."\nCarter suggested that the anti-smoking campaign during the Fever season benefited Freeman-Wilson by boosting her name recognition among voters as she tried to keep control of the office for four years.\n Freeman-Wilson acknowledged mistakes were made in the office but said the grants went to worthwhile, health-related causes.\n "I'm not going to criticize Mr. Carter, and I don't think he should criticize me," she told The Star in a telephone interview from Arlington, Va., where she is executive director of the National Associate of Drug Court Professionals.\n State Examiner Charles Johnson, who heads the office that conducted the audit, said the attorney general is free to go after the questionable grants. However, Johnson said the violations did not rise to a level that would require his agency to ask for the public funds to be repaid.\nCarter said he doesn't think he has the authority to demand repayment.\n"We can only do so much," Carter said. "We can only clean up the office from this point forward."\nAs attorney general, Freeman-Wilson oversaw a $14.5 million budget and more than 250 employees. The attorney general's office investigates Medicaid fraud and consumer complaints against businesses and licensed professionals, returns abandoned property to its owners and defends lawsuits filed against the state.