INDIANAPOLIS — Indiana lawmakers doled out at least $40 million from the lottery-supported Build Indiana Fund to pet projects whose financing violates state law, a newspaper reported Sunday.

        The Indianapolis Star reviewed records from the 1997 and 1999 budget years and concluded that lawmakers hand out Build Indiana money to whomever they want and that no one is monitoring how the money is spent.

        The Build Indiana Fund, which is supported by Hoosier Lottery profits and riverboat casino taxes, is supposed to be tapped for town halls, firetrucks, sewers and other capital projects.

        But the Star found that much of the money is going to projects like an East Chicago women's shelter — a shelter that wasn't even built with the $450,000 its sponsors received from the fund.

        And then there's the American Legion post in Brook, which spent $1,200 on 16 jackets.

        “I believe it,” added Sen. Larry Borst, the Greenwood Republican who serves as Senate Finance chairman. “There is no oversight. It's up to the individual lawmaker. One of these days, someone is going to get in trouble.”

        Since the fund was created in 1989, lawmakers have distributed more than $240 million. The two-year budget approved in April allotted $78 million more for Build Indiana projects.

        Democrats and Republicans alike defend the fund as a way to pay for much-needed local projects. Lawmakers get their own share of the total pool of money to spend, from $300,000 to $900,000.

        Yet the Star found that neither legislators, the governor, nor the state auditor has oversight over how the money is spent. And the state auditor doesn't even have the authority to audit the millions going to nonprofit groups — which are getting the money in violation of state law.

        Rep. B. Patrick Bauer, the South Bend Democrat who oversaw the crafting of the state's two-year budget, said a few questionable projects aren't any big deal.

        “Anyone can nitpick anything,” he said.

        The Star found numerous problems with the fund's administration, including the failure of many nonprofit groups receiving Build Indiana money to submit a required revenue report to the State Board of Accounts.

        The Indiana Civil Liberties Union last month sued the state, claiming that hundreds of thousands of dollars from the fund have gone to private schools, churches and other groups. The ICLU calls that unconstitutional.

        The lawsuit is why Gov. Frank O'Bannon won't talk about the Build Indiana Fund, since he's one of the parties being sued. Neither will Attorney General Steve Carter, who is defending the state in the lawsuit.

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