Inside IndyStar’s investigation into ‘The Three Kings’ of the IEDC
IndyStar reporter Hayleigh Colombo breaks down the way more than $150M of taxpayer money funneled through three key players.
An Indiana business owner is suing the Indiana Economic Development Corp. and some of its affiliates, including former race car driver Michael Andretti, for breach of contract, defamation and intellectual property theft.
Carmel-based Barbara Bessolo, founder of software company DynamoEdge, filed a lawsuit in Marion County on March 5 claiming that she shared her intellectual property with a number of these connected individuals and entities, who then allegedly used the ideas to launch other business ventures without her.
Several of the defendants in the lawsuit ― David Roberts, former chief innovation officer at the IEDC; Paul Mitchell of the Indy Autonomous Challenge; and 9-12, a frequent and lucrative contractor of the IEDC ― were also subjects in IndyStar’s previous investigation showing a large concentration of IEDC money flowing among a few powerful and connected individuals.
Bessolo has previously accused 9-12 of unfairly terminating a contract with her, leading to reputational damage, IndyStar reported in September.
Those defendants also appeared in a forensic review of the IEDC commissioned by Gov. Mike Braun, which found inadequate management and potential conflicts of interest that “raises concerns about the potential for favoritism and misuse of public funds.” Though Braun replaced the IEDC board members early in his tenure and has pledged to increase transparency, scrutiny of the quasi-public agency continues.
Some defendants who spoke to IndyStar about the situation with Bessolo last year denied ever wronging her company. Only one of the defendants could be immediately reached for comment after the lawsuit was filed.
“The lawsuit is based on a fundamental lack of knowledge of the facts,” Paul Jefferson, a lawyer for Roberts, told IndyStar. “We are confident in our position, and look forward to educating the Plaintiff. Mr. Roberts performed his duties in alignment with his legal and ethical obligations, and the Plaintiff’s claims are wholly misplaced.”
The allegations
In her complaint, Bessolo argues the IEDC used millions in public funds to promote entities she claims stole her technology.
Several of her assertions appear to involve promises with businesses that weren’t contractually agreed upon. Though less common as a legal argument, plaintiffs can attempt to recover damages for breached promises if certain conditions are met. Bessolo’s lawyer could not immediately be reached.
In the lawsuit, Bessolo claims she had discussions with Andretti about forming a company together in 2020, and enough promises were made that Bessolo rebranded her company as AndrettiEdge and invited Andretti to pitch meetings with potential investors.
But by 2024, Bessolo claims Andretti had launched an AI company using her vehicle performance prediction technology and slogan “Predicting the Unpredictable.” At the time, Bessolo was pursuing a patent for the technology, but it was not yet active.
She also accuses Andretti and “inducing” some of her business partners to “breach” their contracts with her original business, DynamoEdge, and then using her intellectual property as part of a different project with 9-12. She accuses Roberts, then at the IEDC, of failing to protect her intellectual property and defaming her by making false statements about the viability of her company and technology to third parties, thereby hurting her business prospects.
The lawsuit references a subcontract that DynamoEdge had with 9-12 that was terminated in September 2021, shortly after 9-12 launched a transportation project with AT&T and Purdue, which she says used DynamoEdge’s intellectual property. Her subcontract was related to an IEDC project.
In emails, representatives for 9-12 told Bessolo her contract, where she was asked to develop a mobile 5G technology proof-of-concept for the Indy Autonomous Challenge, was being terminated because her company hadn’t delivered on technical plans. Bessolo says that isn’t true.
Paul Mitchell, founder of the IAC and a defendant in the lawsuit, told IndyStar last year that he found out about the agreement with Bessolo after it was signed. But IAC had already made an agreement with another company to exclusively operate the same technology, he said. He could not be immediately reached for further comment.
Collectively, she accuses these parties of commercially profiting off her technology, or in the case of the IEDC, receiving millions in public money to deploy elements of it.
In all, more than a dozen people and companies were named as defendants in the lawsuit, including out-of-state entities such as the controversial tech company Palantir, which she alleges duplicated her intellectual property. Bessolo is asking the court to award both exemplary and punitive damages and “order an accounting” of IEDC contracts involving the defendants since 2016.
A lack of transparency
Bessolo’s DynamoEdge isn’t the only company whose leaders say has been harmed by the IEDC and the organizations it funded.
Two other small business owners told IndyStar last year they felt squeezed out by state-powered entities like the IAC, even as the initial funding agreement between the IEDC and the IAC charged it with fostering start-ups.
One business owner likened the IAC and its close circle of business partners to kings whose relationship to the IEDC allowed them to secure continuous funding for their projects.
An audit of the agency appears to show that those who curried favor with the agency were rewarded. Indiana Economic Development Foundation donors received $238 million worth in tax credits from the IEDC while dozens of conflicts of interest went undisclosed publicly.
Contact state government and politics reporter Kayla Dwyer at kdwyer@indystar.com or follow her on X @kayla_dwyer17.
Contact breaking politics reporter Marissa Meador at mmeador@gannett.com or find her on X at @marissa_meador.
