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Former Lawmaker Lands Job With Vaping Group

VaporB2B Dec 16, 2016
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During his final weeks as an Indiana lawmaker, Sen. Brent Steele voted in favor of a controversial vaping bill-

By Tony Cook | December 15th, 2016

that allowed only a handful of companies to make e-liquid sold in Indiana.

Now, the recently retired lawmaker has taken a new seat on the board of a council representing those companies.

Steele has been hired as executive director of the Vapor Association of Indiana, which represents the few companies licensed to manufacture electronic smoking device liquid under Indiana’s stringent new law. The Bedford Republican is scheduled to start the job Jan. 1.

Steele, who did not seek re-election in November, said he sees no ethical issues with his new position.

“My job will be to make sure the association is run professionally and that we continue to assure the public that we have a safe product out on the shelves,” he said.

But the vapor association also will be actively lobbying at the Statehouse during the upcoming legislative session, raising questions about how Steele will follow a rule that prohibits lawmakers from lobbying their colleagues for one year after leaving office.

That restriction is intended to prevent lawmakers from trading on their public service for private financial gain.

Steele said he intends to honor the rule by hiring an outside lobbying firm to represent the association at the General Assembly.

Julia Vaughn, policy director for government accountability group Common Cause Indiana, said the arrangement “reeks of impropriety.”

“It’s walking up right to the ethics laws and getting your toe just about as close as you possibly can,” she said.

Steele’s new job places him at the center of a coming showdown over the new law. Legislative leaders have pledged to revisit it in response to a storm of criticism from dozens of companies that were effectively shut out of the Indiana market after operating here for years.

But any effort to increase competition will likely mean a decrease in market share for current license holders, who Steele will now represent.

“You get a playbook handed to you by the legislature, you jump through all the hoops and then have people gripe at you,” Steele said. “That isn’t fair.”

He insists he isn’t opposed to lawmakers allowing more competition, even though he voted against amendments earlier this year that would have effectively done that.

“I’m not here to ensure protectionist turf for anybody,” he said.

But he also said he would fight for even stricter standards for e-liquid products.

“I have not seen any proposed legislation, but it would be my goal to make sure there is no weakening of any standards,” he said. “I don’t want any product made in somebody’s bathtub, and I don’t want stuff coming in from Mexico or China that hasn’t been tested.”

The new law — originally passed in 2015 and revised in March — effectively made a single security firm the gatekeeper of the industry. That security firm, Lafayette-based Malhaupt’s Inc., then approved only six companies for licenses.

The legislation drove companies that couldn’t get licenses out of Indiana, and retailers have reported sharp increases in prices. The unusual nature of the legislation prompted the FBI to open an investigation into possible wrongdoing.

Steele said his new job is unrelated to his votes in favor of that legislation.

“I think I was hired not because of my vote, but because of my reputation for honesty and integrity in the Senate,” he said. “People know I wouldn’t be associated with anything improper.”

He said the association’s director, Michelle Skaggs, first approached him about the job in August or September. The association’s board of directors — whose identities he would not disclose — made the final hiring decision and he will report to them, Steele said.

The vapor association’s members include the six companies that received licenses and Malhaupt’s. It was originally set up by Zak Laikin, whose Indiana Vapor Company was the leading force behind the legislation.

Steele said he would be replacing Laikin as the association’s leader.

Critics of the new law said they were disappointed with Steele’s new role.

“I had a lot of respect for Sen. Steele’s work over the years representing small businesses across the state,” said Evan McMahon, who leads Hoosier Vapers, a consumer and industry organization that opposes the law. “I find it alarming he would turn his back on the hundreds of small vaping businesses across the state to work on behalf of those that have sought to limit this market.”

Steele is the second lawmaker to land a job with ties to Malhaupt’s after voting in favor of the legislation.

Two months after voting in favor of the legislation, Rep. Alan Morrison began working on May 9 as sales consultant with General Alarm, a division of Malhaupt’s.

The Terre Haute Republican said he sees no conflict of interest and would consult the House Ethics Committee on whether he should recuse himself from future votes on vaping regulations.

“It’s much ado about nothing,” he said Wednesday.

But David Orentlicher, an Indiana University law professor and former Democratic lawmaker, said such employment arrangements raise questions about whether the state’s legislative ethics laws go far enough.

“You worry it creates the appearance of being rewarded for your vote,” he said. “Then you’re worried about them taking advantage of their relationships once they leave. Both of those are at stake here.”

Vaughn put it another way: “It appears this vaping law is the gift that just keeps on giving to some individual legislators in terms of employment.”

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