Fact check: What the candidates for governor got right or wrong during this week's debates

Senate candidate Braun pushed legislation benefiting his industry as a state lawmaker

Senatorial candidate Mike Braun responds to a question during the Indiana Republican Senate Primary Debate between Braun, Luke Messer and Todd Rokita at Emmis Communications in Indianapolis on Tuesday, Feb. 20, 2018.

As a U.S. Senate candidate, Republican businessman Mike Braun has promised to "drain the swamp" in Washington D.C.

But during his short tenure as a state lawmaker, Braun worked to reduce taxes and regulations on an industry in which he holds a significant personal financial interest — a connection that raises ethical concerns, critics say.

Braun owns more than 5,000 acres of timber land in southern Indiana valued at more than $5 million. He harvests the trees on that land for hardwood, yielding tens of thousands of dollars in income each year.

At the same time, he successfully pushed legislation at the Statehouse that provided millions of dollars in tax breaks for the timber industry and cut regulatory costs for hauling logs. He also tried unsuccessfully to put new limits on logging in state forests, potentially forcing more logging onto private timber lands like his.

Braun defended his actions and denied that the legislation benefited him financially, despite his status as one of Indiana's largest timber land owners.

His goal, he said, was to put tree farming on equal footing with traditional crop farming, while conserving public forests for recreational use.

"I viewed it as something I was simply familiar with by association, but didn’t have any direct economic benefit from it," he said. 

But industry experts say the legislation certainly benefited private timber land owners, and government watchdogs say Braun's actions raise serious ethical concerns, blurring the line between public policy and personal gain. 

"Clearly this is having a direct impact on his bottom line," said Julia Vaughn, policy director for Common Cause Indiana. "Certainly in some states it would be considered a statutory conflict of interest."

Indiana House ethics rules prohibit lawmakers from authoring, advocating or voting on legislation that could "reasonably be expected to have a unique, direct, and substantial effect on the non-legislative income of the member."

Braun said he doesn't believe he violated the rule because the legislation did not have a "direct" or "substantial" impact on his income. 

Braun is one of the largest private timber land owners in the state, with holdings valued at $5.2 million to $30.5 million, according to his Senate financial disclosure report.

While most of Braun's wealth comes from his auto parts distribution business, Meyer Distributing, his timber land represents a significant portion of his $37 million to $95 million net worth and yielded $72,000 to $170,000 in income from January 2016 to November 2017, according to the report. 

Braun said he expects his timber income to increase in coming years.

"It’s a significant sideline occupation," he recently said.

An IndyStar review of Braun's record during his three years in office shows that he was a prolific supporter of legislation that financially benefited the timber industry. Among the bills he co-authored:

  • A tax break in 2015 that exempted tree harvesting equipment from state sales tax. The measure saved the industry $1.8 million to $2.7 million a year, according to a fiscal note. 
  • Looser regulations on logging trucks, allowing them to carry more weight. The 2017 law effectively cut the cost of hauling timber from forests to saw mills.
  • Limits on logging in state forests, which compete with private timber land as a source of hardwood. The 2016 legislation would have prohibited the state forestry division from cutting down trees on at least 10 percent of the land in each state forest. The proposal put Braun at odds with the administration of then-Gov. Mike Pence and the bill failed to advance.

Despite his involvement in the industry, Braun said he never sought an ethics opinion regarding the propriety of his work on timber legislation. 

He said the tax exemption and timber hauling regulations didn't have a financial impact on him because he doesn't cut down the trees or haul the logs himself. Instead, he sells the wood to saw mills and then hires logging companies to do the work. 

He saw the tax exemption and trucking issues as fairness issues, he said, given that other agricultural products already enjoyed the sales tax and weight limit exceptions. 

 "The big reason I thought it was a good piece of legislation is that it simply put growing trees on equal footing with growing soybeans and corn," he said.

As for logging in state forests, he said hunters and other constituents in his district were concerned that the state forestry division was becoming too aggressive in its timber management. 

But those involved in the industry say there's no doubt timber land owners stood to gain financially from all three pieces of legislation. 

"Obviously there is a benefit to the landowner," said Ray Moistner, executive director Indiana Hardwood Lumbermen’s Association, which represents hardwood manufacturers and saw mills.

The sales tax exemption and lower hauling costs allow logging companies to reduce their bids when competing to harvest timber land, increasing the land owner's profits at the saw mill, he said. 

"If you can get it in two loads instead of three, you’re going to be able to pay that land owner a little more for his timber," he said. "Obviously any reduced cost for loggers is a reduced cost for land owners."

The ethical questions surrounding Braun's work on timber legislation could undermine one of his top campaign pitches in Indiana's bruising Republican Senate primary, where he is facing congressmen Luke Messer and Todd Rokita.

Braun, who is largely self-funding his campaign, has sought to turn his relative lack of experience into an asset, painting himself as an independent businessman and outsider who can clean up Washington.

He recently announced an ethics plan that included congressional term limits, a lifetime ban on lobbying by members of Congress and a promise to "uphold the earmark ban to stop the wealthy, well-connected politicians, and insiders from scratching each other’s backs instead of putting us first."

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter and Facebook.

Call IndyStar reporter Kaitlin Lange at (317) 432-9270. Follow her on Twitter: @kaitlin_lange.

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter and Facebook.