LAWRENCEBURG, IN (FOX19) - The FBI is investigating following a subpoena served on leaders in the city of Lawrenceburg.
"The FBI is asking for all documents pertaining to any loans and grants," said Councilman Mike Lawrence.
"You get a subpoena from the federal government and that kind of opens your eyes and you just want to make sure everything is good," added another councilman, Doug Taylor.
When asked what he thinks it is about, Lawrence answered, "Honestly, I don't know, I really don't. If it was done legitimately and legally or illegally, I don't know."
Over the last five years, city officials have given Lawrenceburg businesses several million dollars worth of grants and loans to move their businesses to the Southeast Indiana community.
"It's a good program as far as the monies out and such," said Taylor. "We go through and look at the grant applications and such, and then they are awarded out."
The FBI has asked to see a summary of all the loans and grants since January 1, 2007.
It's also asked for all application documents, all documents of approved loans and grants, all contracts awarded, promissory notes, how much money dispersed, and records of loans being paid back.
"Just because a subpoena has been issued doesn't mean that anybody's done anything wrong," said State Representative Jud McMillin, who attended Thursday's meeting. "It means that we want to take some time to look into it and see what's happening here".
However, sources with intimate knowledge of the loan/grant program tell FOX19 that they think the problem is that many businesses are not bothering to repay the loans.
They said millions of dollars in loans have been given to businesses and very little, if any, of the money has been paid back. The sources tell us the interest rate is 1 percent and even at that, loans of $500,000 up to $1.2 million have not been paid back.
At issue for council members on Thursday was whether to give out more money or wait and let a law firm hired by the city to look into the matter first.
It was a close vote. Three of the council members voted to wait, and two voted to give out more grant money.
Taylor voted to have the attorneys review the issue.
"I just wanted to have this looked into to make sure everything's okay as far as the city in regards to the subpoenas being served," he said.
The FBI has not subpoenaed any people to testify before a federal grand jury, just documents.
The Lawrenceburg City Council will meet and discuss the issue again on Jan. 7.