Former general counsel sues Indiana state treasurer for illegal contracting, names Indy law firm as defendant

Editor’s note: This story has been updated.

The former chief deputy and general counsel in the Office of the Indiana Treasurer has filed a whistleblower lawsuit against state Treasurer Kelly Mitchell and other individuals and private entities, including Ice Miller LLP, alleging more than $6 million in state contracts have been illegally steered to her campaign donors.

The lawsuit, filed by James Holden in Marion Superior Court in July 2020, was under seal and is currently not accessible on mycase.in.gov. However, Holden’s attorney, Christopher Wolcott of The Wolcott Law Firm in Indianapolis, said the seal has been lifted and the filings should soon be public.

Holden claims Mitchell and others violated the Indiana False Claims Act, Indiana Code § 5-11-5.5 et. seq., by entering into contracts without getting approval from the commissioner of the Indiana Department of Administration, the director of the State Budget Agency and the Indiana attorney general.

Between 2015 and 2020, the plaintiff alleges, $6 million in payments were steered through the contracts to campaign donors. He is asking the court to require the defendants to reimburse the state for three times the amount of each and every false claim and pay penalties of at least $5,000 for every false claim.

“The fact that Treasurer Mitchell has spent the last six years in office handing out illegal contracts to her political supporters should be troubling to every taxpayer in the State,” Wolcott said in a press release. “State law is very clear that these contracts are void and this money must be repaid immediately.”

Ice Miller is the lone law firm among the entities that received contracts and have been named as defendants. According to the complaint, the law firm was illegally paid $168,377 through a lobbying contract between 2015 and 2019.

The firm declined a request for comment, saying it does not comment on pending litigation.

Ice Miller

Holden alleges an engagement letter between the treasurer’s office and Ice Miller was signed by John Hammond, a former partner at the firm, and Mitchell in December 2014. According to Holden’s complaint, Ice Miller would be paid $3,000 per month by the treasurer for lobbying services as part of the agreement that included a stipulation for automatic renewal year to year.

The agreement stated Ice Miller was being engaged for services that included “public affairs representation related to procurement opportunities and public policy advocacy.”

Ice Miller was to represent the treasurer’s office before the Indiana Lobby Registration Commission in audit proceedings, enforcement actions and other matters. In addition, the agreement mentions an “attorney-client relationship” and the “performance of legal work.” Holden asserts this violated I.C. 4-6-5-3, which prohibits any state agency from being represented by an attorney without the written consent of the attorney general.

Moreover, the agreement was not competitively bid and did not go through the state’s procurement process. In a video deposition, Mitchell admitted she had not obtained approval of the Ice Miller agreement as required by I.C. 4-13-2-14.1(a).

Holden claims prior to Mitchell’s election at treasurer, the treasurer’s office had never hired a lobbyist.

According to Holden’s complaint, partners and employees of Ice Miller have been “key and early supporters” of Mitchell’s political aspirations. In particular, Melissa Proffitt, partner-in-charge of client relations, is the chair of Mitchell’s “Kelly for Indiana” political committee, the complaint states. It also says Proffitt along with other partners have donated “thousands of dollars” to Mitchell’s campaigns.

Holden alleges between Feb. 10, 2015, and Sept. 16, 2019, Ice Miler submitted “at least 57 false or fraudulent invoices” to the state of Indiana. He also claims the law firm is continuing to submit “fraudulent invoices” to the treasurer’s office.

Other defendants

The other entities named as defendants are banks and the investment management firm Public Trust Advisors. Mitchell and six others are named as defendants in their individual capacities, including two attorneys, Jillean Battle and Ryan Locke.

According to the complaint, Battle, who replaced Holden as chief deputy treasurer and general counsel, oversaw the submission and payment of “at least 136 false or fraudulent claims” for at least $1.62 million.

Also, as current deputy treasurer and general counsel, Locke is accused of overseeing “219 false or fraudulent claims” totaling at least $5.56 million.

Holden alleges that like Ice Miller, nearly all of the other entities receiving “illegal payments” from Michell’s office are political supporters, campaign donors or have given her personal gifts since she became treasurer.

Wrongful termination

According to Wolcott, the Indiana attorney general and the Indiana inspector general have both declined to intervene.

The lawsuit is State of Indiana ex rel. James Holden v. Ice Miller, LLC, et al., 49D14-2007-PL-022005.

Holden worked as chief deputy treasurer and general counsel for the Indiana treasurer from 2007 to 2011 and from 2012 to 2014. According to the lawsuit, Mitchell terminated Holden after she was appointed state treasurer in November 2014.

He sued for wrongful termination and, in August 2017 reached a $92,500 settlement with the treasurer’s office and Mitchell.

Holden found the engagement letter with Ice Miller during the discovery process for his employment lawsuit.

When Mitchell announced her candidacy for Congress in 2019, Holden checked the Indiana Transparency Portal website to see if the treasurer’s office had obtained the legally-required approvals for the Ice Miller contract. He discovered the treasurer had not submitted any contracts for approval.