Will Corruption Kill Vaping in Indiana?

    Vapers challenge a law that will destroy vape businesses on July 1

    Welcome to Indiana

    Welcome to Indiana, where state legislators toss away their free-market principles to create a monopolistic empire for connected businesses. If you’ve tried to follow the bizarre saga of vaping legislation in the Hoosier State, you know it’s a hard story to pin down. And now most of the lawmakers responsible for the laws aren’t talking. But the hidden truth that Indiana vapers have known for a long time is starting to get some public attention, as mainstream press is finally looking more closely. But it could be too late.

    Here’s the short version. The law that was passed last year (HB 1432), and amended earlier this year, requires any e-liquid maker who wants to sell products in Indiana to be certified as compliant with a series of complex requirements by a security firm. This was billed as consumer protection — preventing dangers from harmful constituents in the e-liquids, and from poor lab conditions – even though there are no such requirements for drug companies or food manufacturers, which often do have issues with allowing dangerous products to go to market. Placing stricter standards on businesses whose products have never caused ill health than on ones that quite often do is of, well…questionable worth.

    Any e-juice company not certified by June 30 is out of luck, because there is no path to approval by the state Alcohol and Tobacco Commission later. Meanwhile, only one security company in the entire country — Mulhaupt’s of Lafayette, Indiana —  meets the equally byzantine guidelines to supply services and certify e-liquid manufacturers, and that company has only accepted business with six juice makers. Of course, they also have financial connections to the people who lobbied for the law to begin with.

    “Conflicts of interest are routine”


    Both houses of the Indiana legislature are Republican-controlled. Gov. Mike Pence is a Republican too. So why did these supposed believers in small business and economic competition create this slimy chunk of crony capitalism that looks like something out of Tammany Hall? Were they paid off by Big Tobacco, or were they influenced – as happens in so many states — by pharma-financed “public health” groups like the Campaign For Tobacco-Free Kids or the American Heart Association?

    Actually, although the legislators exempted closed-system products like the tobacco companies’ cigalikes from the law’s strict standards, that was probably just a ploy to keep tobacco lobbyists from interfering with the real game being played. Tobacco and pharmaceutical interests had nothing to do with this law. None of the usual clueless vaping opponents had anything to do with it.

    It’s just a case of local greed and influence, and it’s nothing new in Indiana.

    Indianapolis Star political columnist Matthew Tully wrote about corruption in the Indiana legislature two years before HB 1432 was even introduced. What Tully found was that influence peddling and backroom deals were a bipartisan enterprise, and that they were common, accepted and shockingly casual.

    Walk the Statehouse corridors when the General Assembly is in session and among the most common sights is the presence of former lawmakers and legislative staffers, now working as paid lobbyists. They fill the halls outside the House and Senate chambers, looking for help from lawmakers with whom they once served. The lobbying industry spends millions to shape public policy; the state’s casino industry alone spent at least $5.8 million to lobby 150 lawmakers over the past five years at the same time it repeatedly sought legislative changes that would save the industry far more money. High-ranking operatives in both major political parties also work as Statehouse lobbyists, seeking to influence the same members they help get elected. And many lawmakers…don’t shy from participating in debates over bills despite having close ties to the businesses or industries affected by the legislation.

    Conflicts of interest are as routine in the General Assembly as partisan spats, and the atmosphere of coziness between lawmakers and special interests is both deeply entrenched and widely accepted.

    Perhaps the most perplexing aspect of the culture of coziness is that it is often not a secret — it’s tolerated and even applauded.

    No comment, no comment, no comment


    That’s the atmosphere that encouraged this law. Writing sweetheart legislation for cronies is just the norm in Indiana. The ins and outs of this convoluted story have been covered well recently by Indianapolis Business Journal reporter Hayleigh Colombo. Her June 18 story explains some of the backroom intrigue and unsavory lobbying that allowed a well-connected few to get this monstrosity of a law crafted to suit their interests. It’s not a pretty story, but I recommend it highly. Of course, if the local papers had paid closer attention before the law was passed, we might never have gotten to this point.

    The Indianapolis Star also ran a story on June 18. Reporters Tony Cook and Sara Salinas  reached out to lawmakers involved in the passage of the law for comment, but got no answers. “ Sen. Carlin Yoder, R-Middlebury, listed as a sponsor on the original 2015 bill…could not be reached. Rep. Thomas Dermody, a LaPorte Republican listed as the author of this year’s bill, declined to comment.”

    Indiana vapers fight back, but can they beat the system?


    Meanwhile, vapers have been fighting back. Two separate lawsuits have been filed, one in state court and one federal. Evan McMahon, owner of Liberation Vape and chairman of Hoosier Vapers — a hybrid consumer/vendor advocacy organization — has led the state effort. He thinks the plaintiffs will succeed with the motion they filed on June 9.

    According to McMahon, the implementation of the deeming rule on August 8 — which makes vapor products subject to the provisions of the Family Smoking Prevention and Tobacco Control Act — preempts the Indiana law and makes it invalid. According to Sec. 916 of the Tobacco Control Act, “No State or political subdivision of a State may establish or continue in effect with respect to a tobacco product any requirement which is different from, or in addition to, any requirement under the provisions of this chapter relating to tobacco product standards, premarket review, adulteration, misbranding, labeling, registration, good manufacturing standards, or modified risk tobacco products.”

    Hoosier Vapers is still accepting donations to fund the legal effort. The Indiana chapter of SFATA also supports the Hoosier Vapers suit, and encourages vapers and vendors to donate. You can read all of the legal documents related to this suit in Hoosier Vapers’ public Dropbox file.

    The federal lawsuit was brought by the Right to be Smoke-Free Coalition, and is being pursued by Washington, DC, legal firm Keller and Heckman. Keller partner Azim Chowdhury is a recognized expert on e-cigarette and vapor products regulatory law. A decision in the federal suit is expected maybe as early as late June. (The Right to be Smoke-Free Coalition is also preparing a lawsuit challenging the FDA regulations, and is supported in that effort by every major US advocacy group. Vapers can contribute to both efforts on the R2B website.)

    Today it’s Indiana? Who will be next?

    Maybe the Indiana press will expose the crony capitalism and temporarily embarrass the lawmakers. But unless this law is thrown out by one of the judges presiding over the lawsuits, a lot of small businesses will fail or fold this year – before the next session of the General Assembly has a chance to repeal or repair the law. After July 1, the six e-liquid companies and one security firm that joined in this corrupt bargain become monopoly owners or the vape industry in Indiana. It’s just sickening.

    And while the institutional corruption in Indiana may be shocking, it’s no real surprise to vapers at this point to see our life-saving technology – and indeed our lives — treated with such casual contempt. There’s nothing new about legislators (and regulators) using smokers as cash cows, and putting tobacco tax income before lives over and over again. Now they see vaping as an easy target. If we aren’t organized and prepared, these vultures will keep coming back for more until there’s no financial benefit left for smokers to quit smoking or for vendors to do business. Today it’s Indiana. Where will it happen next?

    Jim McDonald
    Smokers created vaping without any help from the tobacco industry or anti-smoking crusaders, and vapers have the right to keep innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I recently joined the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy