UPDATE: Report clears ex-state official, finds gaps in law

Troy Woodruff knew his family's sale of nearly 3 acres of prime land near an Indiana highway project he oversaw as a top state transportation official would raise eyebrows. He did not disclose the sale even though the agency's ethics director recommended he do so.

His secrecy about the land deal did not break Indiana law, the state's top ethics watchdog said Friday after a 19-month investigation. But Inspector General David Thomas said it went "right up to the line."

The Woodruff case is the third investigation of a high-profile state official this year. In all three cases, ethics watchdogs and good government advocates have reached the same conclusion: Indiana's ethics law is riddled with gaps that need to be closed.

"He's cleared of being a criminal or violating the code of ethics," Thomas said at a news conference announcing the results of the Woodruff investigation. "But here's the thing, and I guess it's another takeaway — when you engage in conduct that goes right up to that line and then you dance away from the line and say it wasn't violated, that's OK. But this is what happens," he said referring to the drawn out controversy.

Woodruff was aware enough of the flak he could face over the land deal that he asked for an ethical ruling and was advised to be open about it.

The probe was launched after more than 10 complaints about his family's sale of land around Interstate 69 to the agency he was overseeing.

An investigation by The Indianapolis Star found that the Woodruff family received payments totaling more than $1.8 million for the land, a rate 43 percent above the average the agency paid per acre for other farmland.

Another complaint alleged that Woodruff improperly ordered a new highway ramp built after family members complained that they could not see from their farm equipment. One agency employee dubbed it the "Troy Woodruff re-do."

The investigation found that several residents and county officials had also complained about the bridge. Then-Department of Transportation Commissioner Michael Cline determined that more work was needed to make the approach to the bridge safer. The bridge was rebuilt at a cost of $750,000.

Woodruff didn't request the changes himself although the perception of his influence was a problem, the investigation found. Woodruff should have been barred from any work related to the bridge, the ethics watchdog said.

The Woodruff investigation follows two other recent cases involving top state figures. House lawmakers determined Republican House Speaker Pro Tem Eric Turner, whose family owns a nursing home business, violated no laws when he beat back legislation that would have barred construction of new facilities, such as those his family builds.

Former Republican Schools Superintendent Tony Bennett was fined $5,000 for using state resources in his 2012 election campaign. State investigators said Bennett could have avoided the fine altogether if he had rewritten his agency's policy to allow for moderate campaigning with state resources.

Members of Indiana's House ethics committee said the Turner case exposed deep flaws in their internal House ethics code. Democratic candidates for office in a state where Republicans hold the governor's office and majorities in both legislative chambers, have proposed a series of ethics reforms in the wake of the Bennett and Woodruff cases.

Thomas suggested in his report on Friday that Woodruff be banned from doing any work with the state for a year and that the state transportation agency adopt better transparency rules, particularly in land purchases involving its staff.

Woodruff did not respond to a voice mail or Twitter message seeking comment Friday.

He had expressed confidence that he would be exonerated in an email to his staff Wednesday that announced he was departing the transportation agency.

"I wanted to shout from the roof top that the people of this agency are owed an apology. Even as the media accused me of so many things, what they were actually implying is that this agency is corrupt. You don't deserve that," the Star quoted the email as saying.

Stuart Yoak, executive director of the Association for Practical and Professional Ethics at Indiana University, said the case shows that there are many times when the law isn't suited for handling ethics issues.

"What does that mean, 'It came very close?' Well, that means it's an ethical violation," he said.