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Treasurer Elliott explains his plans to keep the new ESG policy from becoming a ‘witch hunt’
He calls himself the “nerdy cowboy” — wearing boots with his suit and winning his election, in part, by driving his truck to far, less-populated corners of the state.
State treasurer Daniel Elliott, a farm owner from Morgan County, took over the Indiana Treasurer of State office at the start of the year, but he’s been involved in politics for about a dozen years. First as a precinct committeeman and then as a GOP county chair, county councilman and president of the local redevelopment commission.
Still, he viewed himself as an underdog when seeking the Republican nomination for treasurer last year against three other candidates because he came from a less-populated area, just outside of Morgantown.
During his first legislative session in office, Elliott has drawn attention for his more controversial focus on cracking down on environmental, social and governmental investing — known as ESG — in the state, but he’s also spent some time highlighting issues important to Hoosiers from rural parts of the state.
State Affairs sat down with Elliott to talk about his first few months in office, how the state’s new ESG policy will work and his 2018 fight against party insiders regarding the GOP’s platform.
The conversation has been edited for clarity, brevity and length.
Why should the average Hoosier care about what the state treasurer does? It sounds fairly wonky.
It is. I jokingly call myself the nerdy cowboy because I am.
You look at the main role of the treasurer, chief investment officer. Some of the issues that are going on right now in the nation, in the world and in our country really require someone who's willing to dig into the details. Being a software engineer by trade, that is my nature. I find elegance in numbers.
[One example that benefits Hoosiers is we work with] 911. I’m the only treasurer in the country that chairs the 911 system.
[Another example is] the Indiana Bond Bank. Coming from rural Indiana, big communities don't worry about financing. You take Hamilton County, my friends over there, great people. They have such great credit. They have so much revenue coming in. They are very well suited to work on what they need to get done.
Rural small towns need resources like the Indiana Bond Bank to help them be able to accomplish some of their goals, whether it be trying to get broadband into their communities or trying to fix a water supply situation.
Can you explain what the Indiana Bond Bank is?
Bonds are loans for municipalities and local governments. The Indiana Bond Bank is oftentimes the lender of last resort. One of my goals is to make the bond bank one of the first tools that local governments come to.
When session started, I naturally assumed my role was to go and talk to legislators about the issues that my office found important. I found people telling me, wait a minute, you're not supposed to do that. You're supposed to go through lobbyists. I’m like, ‘Why? Why can’t I?’ And that's something I tend to always ask is, ‘Why?’ So I started saying, ‘Well, these are the issues that I find important.’
One of the things I was concerned about when it comes to rural Indiana was not just the rural communities, but also hospitals. Health care is a big issue these days, and rural hospitals have a hard time competing with the big monopolistic nonprofits. So I started saying, ‘How can we help rural communities through the Bond Bank?’ The Bond Bank only had the ability to do bonds or loans for 10 years. Most big projects need a much larger runway— 20 or 25 years. So I presented that idea to the leadership. That bill passed.
You wouldn’t think the treasurer’s office would be involved in finding solutions for health care problems.
That's what's fascinating about this job, and now you see why I'm having so much fun.
[We also offer] 529 plans, helping kids go to college. To me that's really important because I grew up in Nebraska, Indiana. I'm the first one in my family ever to go to college and I grew up really poor. I didn't get the chance to do Little League or swim practice or [Boy] Scouts like other kids, like my own kids got to do.
I spent my weekends and my summers helping my dad, who was a laborer. I remember one day, pushing a wheelbarrow of cement. I was 11 years old, the age of my youngest son right now, and I remember thinking, this stinks. There's no way I want to do this the rest of my life. I need to go to college. Now 529 plans give kids an opportunity and parents an opportunity to actually start saving for that.
You see there's a Millennium Falcon [model on my desk]. So if I'm not pointing out how geeky I am, I am 100% a geek. The reason I have that is we're a small office and we say we're a ragtag group of rebels. Our mission is to blow up Death Stars because we're smaller, more nimble.
There was a community in Fulton County; they spent all this money on a new 911 center, but they couldn't get it to work. We got ATT and Motorola and everybody in the same room and said, ‘What's going on?’ In two weeks, they got it resolved. I want to say it was because our office is super smart. All we did was get people who weren’t talking to each other, and kind of cut through the red tape.
That's the blowing up of the Death Stars.
What's been the most surprising part so far of your role five months in?
Honestly, it surprised me how much bureaucracy and red tape there is. I always ask, ‘Why?’ since I grew up in poverty. Why can't I do this? And as a software engineer, you learn to ask why. You'll have 15 mistakes before you get to the right solution, but that's part of the process.
I find that in state government, people are not always comfortable when a statewide elected official says, ‘Why are we doing it this way? Is there a reason?’ Sometimes there's a very good reason, but if not, why can’t we do it differently? It's gotten me in trouble a little bit. But we've also gotten some things done.
When you say that's gotten you in trouble, what do you mean?
What I mean, is people [say] that's not the way you're supposed to do this. I think people expect me to sit behind that desk and then go to a few dinners and shake some hands. That's not my style. I wear the suit because I want to be respectful to the state of Indiana, but generally if you want to see how Daniel normally dresses right there in jeans and cowboy shirt, me on my horse. When I’m not doing interviews, I'm usually wearing jeans. This weekend I spent my time brush hogging a field, because that's just who I am.
One new law you haven't touched on yet was the law limiting environmental, social, and corporate governance (ESG) investing. Why do you think it was important for House Bill 1008 to pass?
I truly believe in that issue. If we look at the markets you have a lot of investment fund managers who have been pushing policy, not just looking at the fiduciary reasons for why to invest. I am uncomfortable with that. Since I grew up in poverty you don't ever escape that even though it's not my experience now. You always know that’s in the back of your mind. I see family members, I see relatives, they're surviving on pensions, that's if they're lucky. Many of them are surviving on just Social Security.
If you're a wealthy person, you can afford to say, ‘I'm going to invest in such a way that maybe I won't make as much money, but that's okay because I'm going to feel good about my investments. I want to invest in the environment.’ That's a great, absolutely worthy goal. I'm an outdoorsman. I love taking care of our planet, but at the same time, when you're looking at somebody who has driven a highway truck for the county, someone who's been a teacher, someone who has worked in these halls. I've got people in my office who have worked here for 30 years that are hardworking, great people. But they're not millionaires. They're not rich.
If they had to choose between paying for a mortgage and paying for medicine, then we're doing something wrong. So in my mind, we all need to focus on what is the best return on investment; anything beyond that, then we're not doing our duty.
Unfortunately, that's been a trend the last decade or so, where there have been a lot of these ESG funds focusing on other issues, and I'm not saying those issues aren't worthy. And if an ESG-focused fund makes money, it’s still the best return on investment.
That's my role. I'm the chief investment officer, and I should be out there advocating for bringing the best return to the state of Indiana, and best return to [the Indiana Public Retirement System] as one of the board members.
Can you explain how this will work? What will the state do differently?
We have to be looking first and foremost at what's the best return.
I always use a figurative ACME investment fund manager. If they say, ‘Hey, we have an ESG commitment. We're part of XYZ ESG Alliance.’ They want to be carbon neutral by 2030 or something like that, we're going to say since you've made that commitment, what you're saying is you're not looking at the financial [aspect]. You're willing to take a hit on the return because of your political views. Your political views are, hey, we don't like coal, or we don't like fossil fuels. Okay, that's fair. Lots of people have that philosophy, but the reality is, that means you're going to get less of a return on your overall investment.
What we're going to simply do is we're going to present that to the [Indiana Public Retirement System] board members. Now, INPRS will look at who are the other companies that get similar returns and have similar fees. So let's say ACME has a 6.2% return on their investment, but we can find a company that is similar that has a 6.8% return. That's a better return. So we're going to stop using ACME and we're going to use the new company.
Now it could be that ACME company may actually have the best return and we say, ‘Sorry, we can't find anybody comparable.’ That's perfectly legitimate. So since we are focusing only on the financial return, then we're going to say, ‘Well, we're going to continue with ACME.’
Have you started compiling a list of investment fund managers the state shouldn’t be using?
We're working on the process first. The law doesn’t take effect until July 1, so we can't do anything until then. I don't want it to be a witch hunt. I want to say here's the policy, and then this is how we're executing the law. I want it to be fair across the board.
In 2018 you led the fight to keep the language in the Indiana Republican platform saying that marriage should be between a man and a woman. Is there a place for you to voice your opinion on social matters while serving in the treasurer's office?
The office itself doesn't get into social issues as much. It is a lot of numbers. But at the same time, I am who I am. I'm the first Latter Day Saint to hold statewide office.
I'm definitely not afraid to talk about my faith. I chose my faith. In fact, if you look in my office, there are lots of things about my faith here. That leatherbound book right there is a Book of Mormon in Spanish, the one that I used as a missionary in South America. I'm still bilingual which really freaks people out a lot. The last thing they expect is the cowboy from Morgan County to be bilingual.
Yes, I have my beliefs that I feel very strongly about. And I do believe that marriage is important. I do believe that just as a regular citizen I have the right, and I will exercise that right, to speak what I believe in.
Now, I also believe that while I have the right to speak about what I believe in, so do other people. One of the things that people especially talk about in 2018 that they forget is my whole point was advocating for having the discussion because there wasn't going to be a discussion. Let's have that conversation out in public.
There's no doubt I'm a conservative. I'm not going to hide that.
That was a pretty bold push back then because you were fighting against party leadership on a controversial issue.Were you worried that it was going to impact any future political aspirations?
I wasn't and here's why. Obviously I want to try to serve. I want to try to be involved.
Honestly, I don't expect to be in politics my whole life. This is my first time ever having politics as a full-time role. This might be the first and last moment I ever do that. If I go back to my farm, ride my horses and I start a new business when I'm done doing this, I'm perfectly content doing that. I'm not making any plans for the future either. I just want to be a really good treasurer right now. I'm having fun with this.
You’ve talked in detail about your rural Indiana roots. How important do you think it is to have an elected state official that comes from rural Indiana to give a voice to those portions of our state?
I think that's really important. People who get elected, usually it's a numbers game. They're from Fort Wayne or Evansville or Indianapolis. They come from these areas where there are a large amount of people. We didn't have anybody from rural Indiana.
That gives me the opportunity to be a voice for issues that folks who don't live in rural Indiana or haven't lived in rural Indiana since they were children [may not understand]. Like rural broadband, that is one of the most important things we as a state can be doing. Fortunately, we are working really hard at that. Take a child like me who grew up in rural Indiana, if they have broadband and they have the dreams to go to college someday, the tools are there. But if they don't have broadband they're already starting behind.
I look at it like electricity was 100 years ago. Can you imagine people living without electricity now? Of course not.
Everyone can now work from home. You could work for Google and live in Posey County and think about how that also is an amazing opportunity for small businesses to get started. When I started my business as a software engineer in Martinsville, Indiana, people were like nobody in Martinsville needs you. Well of course. My clients weren't in Martinsville.
But at the same time, what did I get out of Martinsville? I got the ability — I remember when my wife and I picked our little farm 21 years ago — to raise my children. I always wanted my kids to be able to drive an old pickup truck to school and nobody would look at them sideways. My older son got to do that. He thought it was the coolest thing in the world to drive the old farm truck. It was rusty. It was loud. But he would drive that and he was just proud as punch. I will talk about horses all day long. My kids all got to show in 4H. My 11-year-old still shows in 4H.
Those of us who enjoy and choose a rural lifestyle, there's no reason we can't also be able to provide and have successful careers.
We obviously have a gubernatorial election coming up. Do you plan to endorse anyone?
Honestly, so far, the people running, I know them. They’re friends. So I'm going to let them have all the fun that I did and just focus on their races; and me, I'm going to focus on being state treasurer. At this point in time, I am not looking at getting involved in any races right now because I'm frankly kind of busy doing this.
INDIANAPOLIS — Last August, Anne Hathaway’s phone lit up with a call from Gov. Eric Holcomb. Nearly a quarter-century before, Hathaway had recruited the future governor to run for an Indiana House seat in the only race he lost.
With the resignation of Indiana Republican Chairman Kyle Hupfer in hand, Holcomb asked Hathaway to lead the Indiana Republican Party, and in doing so was tapping the first women to hold the role.
For the past 15 years, Hathaway had led the Richard G. Lugar Excellence in Public Service Series, an organization inspired by U.S. Sen. Richard Lugar and created by Teresa Lubbers and Judy Singleton to develop a gender bench for the GOP.
“I encourage women every day to take a risk, be willing to lose; go out of their comfort zones and run for office or serve on a board or commission,” said Hathaway, who serves as Indiana’s national committeewoman on the Republican National Committee, during a recent, exclusive Howey Politics/State Affairs interview.
“I couldn’t continue to do that unless I was willing to do that myself, willing to take the risk, willing to lead by example,” she said, adding, “When the call came for me, I jumped. Yeah, I’m in. Let’s go.”
Holcomb said in making this historic nomination: “Here are several key reasons I believe Anne is the right person at the right time for this role. Anne’s resume of service to the Republican Party is as extensive as just about anyone’s in the country, having served with distinction at the local, state and national levels throughout her entire career. Furthermore, with experience in running campaigns at every level of government, she has the knowledge and relationships to not only keep our party moving forward, but to continue to take it to the next level.”
Hathaway’s roots are in the tiny Illinois town of Galva just north of Peoria. After graduating from high school with a class of 77, and then from the University of Illinois, she decided to spend a year in Washington, D.C., where she began as a typist at the Department of Treasury.
Hathaway served in the White House as assistant and director of scheduling for former Vice President Dan Quayle, was program director for the 2012 Republican National Convention, and was executive director of the Indiana House Republican Campaign
Following Hathaway’s resume is a lesson in stewardship and power.
“Sen. Lugar would be more excited about me being state chair than I am just because, Judy Singleton and Teresa Lubbers were ecstatic,” said Hathaway.
She now helms the party at (or nearing) its historic apex. The Indiana GOP holds all the state constitutional offices, nine of 11 congressional seats, maintains General Assembly super majorities, more than 90% of county offices, and as of the municipal elections earlier this month, 76 mayors. If a Republican is elected governor in 11 months, the party will increase its historic dominance to five consecutive terms.
Hathaway will lead the party through the five-way gubernatorial primary. Following next June’s Indiana Republican Convention, she will head to Milwaukee, where Republican National Chairwoman Ronna McDaniel tabbed her to head the RNC’s Arrangements Committee.
Hathaway has committed to serve only through the May primary. “At that time, she will work together with the gubernatorial nominee and you all to decide who is best to finish out the remainder of the term,” said Holcomb.
Asked if there was a chance to continue as chair beyond the May election, she said, “That’s a conversation to be had.
“I have agreed to stay at least through the state convention. I believe the gubernatorial nominee should have his or her own political partner here. I’m just focused on the time between now and then, she said.
Senior reporter and columnist Brian Howey sat down for a 45-minute, wide-ranging interview with Hathaway where she discussed what it means to make history as the first female state Republican chair, how her work at the Lugar Series prepared her for this new role, the Republican party’s diversity programs and other topics. Read the full conversation on State Affairs Pro here.
Gov. Holcomb taps Boone County Council president to serve out remainder of Comptroller Tera Klutz’s term
Republican Elise Nieshalla, president of the Boone County Council, will serve out the remaining three years of State Comptroller Tera Klutz’s term.
Gov. Eric Holcomb announced the appointment of Nieshalla, a real estate investor, on Tuesday. As state auditor, Nieshalla will oversee the balancing of Indiana’s checkbooks and payment of all state employees.
“My appreciation runs deep for the strong financial standing of our state and the integrity in which the State Comptroller’s Office is run,” Nieshalla said in a statement. “It is truly my privilege to receive Gov. Holcomb’s appointment to serve our great state and local units of government by upholding the highest standards of fiscal responsibility and offering tremendous Hoosier service.”
Earlier this year Klutz announced she would resign Nov. 30, roughly a year after she was reelected. Klutz, who was first appointed by Holcomb in 2017, is the fourth state auditor in a row to not finish their term, enabling the sitting governor to choose a replacement.
Nieshalla was already well-known within Republican circles. She previously ran for treasurer in 2022 against three other Republicans, losing to current Treasurer Daniel Elliott at the state Republican convention. At the time, the convention loss of Nieshalla and other Republicans more closely aligned with the party establishment was seen as a rebuke of the Holcomb wing of the party.
Nieshalla, who lives in Zionsville, is also president of the Indiana County Councils Association and the chairwoman of the Association of Indiana Counties’ 2023 Legislative Committee. She has a bachelor’s degree from Oral Roberts University and a master’s degree from Indiana University.
She’ll be sworn in on Dec. 1 and will serve until at least the 2026 election when voters will have the option to choose the next state comptroller.
Holcomb praised Nieshalla in an emailed statement.
“Elise is a dedicated and proven public servant who has committed much of her professional life to bettering her community through service,” Holcomb said. “She has shared her financial expertise to help steer and shape the bright future of Boone County which gives me great confidence she’ll do the same serving Hoosiers as our next State Comptroller.”
On Tuesday, Indiana lawmakers returned to the Statehouse for Organization Day, the ceremonial start to the legislative session, ahead of what legislative leaders are saying should be a low-key, short session.
“We’ll probably take a pretty measured approach on what we address … , maybe fine tune some things,” House Speaker Todd Huston, R-Fishers, said during an Indiana Chamber of Commerce legislative panel on Monday. “Short sessions are supposed to be for emergency items only.”
Not only will 2024 be a non-budget-writing legislative session mandated to end by mid-March, but this session also falls in the midst of a heated Republican gubernatorial primary. There’s no obvious assumed winner who can lead policy discussions ahead of the election, nor has Gov. Eric Holcomb laid the groundwork for any major policy changes in his last legislative session.
Plus, recent criminal corruption charges against a former lawmaker — and the potential for other lawmakers to be charged in connection with the case — has put a cloud over the Indiana General Assembly.
Still, some minor bills are expected to move, and something can always pop up. Here’s a breakdown of some of the issues State Affairs expects to be debated, and three that probably won’t move.
Both Huston and Senate President Pro Tem Rodric Bray, R-Martinsville, said they want to limit the situations in which schools allow third graders to advance to fourth grade when they fail the IREAD-3, the state’s reading comprehension test.
During the 2021-2022 school year, more than 18% of students failed the test because they were not reading at a third grade level.
“When you pass that kid on, and they aren’t prepared to succeed, you’re not doing that kid a favor,” Huston said, following his Organization Day speech in which he laid out his caucus’ priorities.
Huston’s goal is to make Indiana the No. 1 state in the nation for third grade reading proficiency by 2027.
Democrats cautioned that it may be too soon to make major changes to how IREAD scores are handled in Indiana. During the 2023 legislative session, lawmakers passed a science of reading bill.
“We need to make sure that schools have the opportunity to train their teachers, to implement these strategies across the board before we start throwing new legislative hurdles in the way,” said Sen. Andrea Hunley, D-Indianapolis. “We have to give [new recommendations] time to work before we start, say, failing all children or retaining a whole class of children.”
Continuing to re-think K-12 education
Last legislative session, lawmakers passed a bill seeking to expand work-based learning in high school, but Huston emphasized during his Organization Day speech that legislators can still do more to transform the K-12 school system.
Huston said House Republicans will push to allow state money typically set aside for students pursuing a college education to be used to obtain certificates and certifications for “high demand, high wage jobs.”
“We must continue to adjust the way we think about K-12 education in order to meet the needs of all students, including those who aren’t interested in pursuing a two-or four-year degree,” Huston said. “Let’s use this session to build on skill and work-based learning, and let’s align our funding to this goal.”
This fall the Indianapolis Chamber of Commerce took a delegation of Indiana lawmakers and others to Switzerland to see how the country’s apprenticeship program operates. Expect more changes in the coming years that would enable Indiana’s K-12 system to more closely mirror that of Switzerland’s.
Child care access
During his own Organization Day speech, Bray emphasized a need to expand affordable child care options for young children.
“Day care is a constant challenge from the Ohio River to the Michigan line, trying to find day care at all if you can find it and whether it’s affordable,” Bray said.
He pointed to a legislative study committee on the topic which recommended some minor reforms to the system, such as lowering the age requirement for working unassisted in an infant or toddler classroom to age 18 from 21 and requiring the state to review how it can streamline child care regulations to increase availability.
Don’t expect lawmakers to throw more money at the child care system since 2024 isn’t a budget-writing year.
Health care costs
Lawmakers passed multiple bills during the 2023 legislative session aimed at cutting health care costs, ranging from limiting physician noncompete agreements to creating benchmarks for how high hospital prices in the largest hospital systems should be.
But Bray said he expects lawmakers to offer more legislation on the topic this year in order to help drive down costs long term.
A legislative study committee on the topic backed recommendations to require more disclosures by insurance companies on their “prior authorization” process for medical care, as well as require medical providers to give lawmakers a six-month notice for mergers or acquisitions.
It’s unclear whether legislation on water access will actually pass either chamber, but the topic is almost certain to come up in discussions.
Earlier this year, the Indiana Economic Development Corp. announced plans to pump water from the Wabash River aquifer to the LEAP district in Lebanon. Tippecanoes citizens have been vocal in their opposition to the plan, and just this week the Tippecanoe County Commissioners voted to put a moratorium on high volume water exports.
Legislative leaders say they want to avoid legislating on the issue until they get more data. The Indiana Finance Authority and the Indiana Chamber of Commerce are studying the issue.
“We’re not going to take any other steps until we have an opportunity to study to make sure that there’s ample water for the projects that we’re trying to bring into the state of Indiana,” Bray said, “and we understand just how much is too much to take away from a particular community.”
But, even if leadership would rather wait to address the elephant in the room, lawmakers are almost certain to file legislation.
Issues that won’t move: Gaming
For at least the past two legislative sessions, lawmakers have filed bills to legalize internet casino gaming, or iGaming. It appeared momentum was on proponents’ sides. Until this month.
Earlier this month former state Rep. Sean Eberhart agreed to plead guilty to criminal fraud charges that federal prosecutors say stem from influencing casino legislation in return for the promise of a $350,000-a-year job.
Both Bray and Huston said Monday they don’t expect any gaming legislation to move in 2024.
During Monday’s Chamber panel, Bray said the federal investigation “makes gaming extremely hard to engage in.”
“It taints the Statehouse, it diminishes the confidence that people have in the integrity of the Statehouse, it causes an awful lot of problems and it makes it particularly difficult to engage in that kind of policy,” Bray said.
Issues that won’t move: Marijuana
Lawmakers studied the impact legalizing marijuana would have on the workforce and youth in an interim committee this fall, but the committee never issued any recommendations for legislation.
Both legislative leaders and Holcomb have emphasized their reluctance to legalize marijuana until at least after the federal government reschedules it. Huston reiterated his hesitation on Monday.
“No one has made a compelling case to me yet on why legalizing marijuana or having more people use cannabis in the state of Indiana is a positive thing,” Huston said. “So until I hear that answer, I wouldn’t expect a whole lot of change.”
Likewise, Bray said its passage “seemed unlikely.”
The ceremonial start of the legislative session is just that. Lawmakers won’t start moving bills until they return to the Statehouse in January.
The gist Destiny Wells, the 2022 Democratic secretary of state nominee, announced she is running for the Indiana attorney general’s office next year, hoping to oust Republican incumbent Todd Rokita. Earlier this year Rokita, a vocal supporter of social conservative causes, announced he was seeking reelection. This race could be among the more competitive races …