FBI Probing Foul Play in Indiana

Posted 19th September 2016 by Dave Cross
There was uproar when the Indiana passed new legislation to force eliquid manufacturers to apply for a five-year permit to produce juices. The issue went beyond the cost as most companies were locked out of the market because Mulhaupt’s (the single company appointed) can reject without explanation.

Senator Vaneta Becker said at the time: “If you want to sell e-liquid in Indiana, it doesn’t even matter if you are from another state, you have to go through Mulhaupt’s. To me, that is an antitrust issue.”

We covered the story of how the new law has resulted in a situation where the single private company has been given a monopoly on deciding who gets to do business and places a barrier on any new entrant to market. To date the firm has only given out six permits. It is anybody’s guess as to how many have been refused, as Mulhaupt’s don’t have to offer reasons – or even confirm an application has been declined. It means that a swathe of the market has been cleared out for the benefit of a handful of remaining businesses.

The whole process in appointing Mulhaupt’s could best be described as grubby, and led to Hoosier Vapers filing a legal challenge. It was rebuffed by a county judge earlier this month, unsurprisingly, leading some to question what influence had gone on.

It is reported that the FBI are now involved, looking into what has taken place behind the controversial arrangement. Special Agent Wendy Osborne was unable to corroborate this: “the agency does not confirm or deny investigations.”

Confirmation that an inquiry is underway does come from Senator Phil Boots (which isn’t a made-up name). After meeting with Osborne, Boots was made for talking: “They asked me if I knew of anything anyone might have gotten out of this legislation. I think that’s what they’re looking at — Did someone in the legislature gain from the legislation?”

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The FBI also interviewed Hoosier’s owner Evan McMahon, he said: “They didn’t say who they were investigating, but they said they were looking at antitrust and corruption. The agents wanted to know which legislators and lobbyists were cheerleaders of the legislation.”

Unlike Hoosier, Goodcat Eliquids was successful in court “in its claim that the security requirement violated the U.S. Constitution's commerce clause, which implicitly prohibits states from enacting laws that excessively burden interstate commerce.”

Senator Carlin Yoder is reported to have been behind the legislation’s push through senate, he has made no comment about his involvement or the investigation. Likewise, Zak Laikin (who owns the Indiana Vapor Co. that contracted lobbyists to support the legislation) is staying tight-lipped. Laikin’s new Vapor Association of Indiana represents four of the six companies that have been approved.


 Dave Cross
Article by Dave Cross
Freelance writer, physicist, karateka, motorbikes, and dog walker
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