Published on August 25th, 2016 | by Jimmy Hafrey
Indiana’s new vaping law looks so sketchy that the FBI has begun investigating it as a possible case of corruption.
Motherboard is reporting that the law, which sets stringent standards for vape shops that have absolutely nothing to do with vaping, has already caught the eye of the FBI. It has so caught the attention of the agency that it has seen fit to begin an investigation into the matter. Combined with the fact that a U.S. District Court judge has already ruled against the law, it seems that things aren’t looking too good for this law.
This vaping law, known as House Bill 1432, was signed into law by the governor of Indiana in May of 2015. This was before the FDA handed down its deeming regulations. Among other state stipulations that are already federally enforced, such as banning the sale of vaping products to minors or selling a vape liquid that has been tampered with, sits a really dodgy stipulation:
Vaping companies who wish to sell their products in the state of Indiana must first apply for a manufacturing permit that must go through an Indiana securities firm.
This is an odd addition to the bill, considering that vape regulations have focused almost entirely on the health and public safety of the devices themselves, not the manufacturing facilities. In fact, it might be difficult to find any vape company that has a contract with a security firm that sits outside of their state of operation.
Adding to this bizarre law is the fact that there are regulations on what firm would be acceptable to take on contracts with vaping companies. These requirements are so strict that only one security firm in the entire state is eligible to play the role of the security firm.
Its name is Mulhaupt’s Inc., and it is based in Lafayette, Indiana.
Again, this is the only security firm that fits the description of what the Indiana General Assembly deems reasonable for this five-year permit. Among the requirements is the fact that a security firm must have employees who have worked for the company for at least a year and have different certifications for a variety of things, such as having a Rolling Steel Fire Door Technician certification.
If this seems really strange, that’s because it is. A rolling fire steel door has no impact on the quality of a vape liquid or device. It also doesn’t help that another of the requirements, which Economics21 lists as “an employee who has worked at the firm for at least one year and holds an Architectural Hardware Consultant certification from the Door and Hardware Institute,” was further damaged in court with this:
“Mulhaupt’s vice president, Michael Gibson, serves as the president-elect of the Door and Hardware Institute, which is the certifying organization identified in the statute for the Architectural Hardware Consultant certification.”
What this does for Indiana’s vaping industry is basically decimate it. Since vape shops can only carry products from approved companies, many shops have had to close up or move across state lines to stay in business. That means the state is losing business.
As for the permits, the security firm in charge of awarding them is in no way obligated to disclose why a company has been approved or denied. In fact, the approval rate for the permit is so low it’s practically nonexistent. Mulhaupt’s has only awarded 6 permits to companies and has allegedly rejected hundreds of other companies.
And the vaping companies the security firm has approved? They all happen to be based in the state.
This calls into question the validity and veracity of the law. If, as the law states, vape companies must apply for the permit, then why are only Indiana-based companies being approved? Why are so many other companies being turned down after paying the $1,000 application fee and jumping through hoops?
The FBI is considering the same question. Although the investigation has not been confirmed or denied by the agency, it is generally thought that it is conducting a probe into this law. The Indiana Business Journal has also reported that some lawmakers are refusing to say whether they’ve been contacted by the agency, but have not outright denied it.
The investigation comes on the heels of a court ruling last week. The lawsuit, which was filed in the U.S. District Court for the Southern District of Indiana, was brought by the Florida vape manufacturer GoodCat, which claimed that the law favored local vape companies by denying out-of-state companies the right to do business in Indiana. The lawsuit also challenged the law by stating it violated interstate commerce protections.
In this case, Judge Richard Young ruled in favor of GoodCat, deciding that the state must allow the company to continue to work within the state.
This is a big win for vape companies. While the court has only ruled that GoodCat can do business in Indiana, it has opened the doorway for other out-of-state companies to file lawsuits to get the right to sell their products in the state as well.
The lawsuit and the FBI investigation might just be enough to overturn the law, but more work must be done. Companies must come forward and challenge the law in order to ensure that Indiana will not be allowed to get away with a law that seems corrupt from its inception.
Indiana’s governor is Mike Pence (R), and he’s been in office since 2012. This tidbit of information is rather important, considering that Pence is currently running for the office of Vice President on the Republican ticket. And with anti-vaping and pro-local business laws like this one being passed and signed into law in his own state, one would have to wonder:
Is Mike Pence receiving any favors for this law being passed? He has steadily been receiving donations from Associated Builders and Contractors since 1989, and one can’t help but wonder if that had anything to do with the law passing his desk.
Indiana residents who are fed up with this unbelievable law, which will almost certainly be overturned, are encouraged to call Governor Pence here. Residents can also find out who their representative is in the Indiana General Assembly and contact their office using this form.