From the The Times of Northwest Indiana (Munster):
Q: Can a police department allow the newspaper to photograph a picture of an individual from a driver’s license the department has in its possession?
A: Yes. The confiscation of a driver’s license from an individual would occur during the course of a police investigation. That would put the license into the category of “investigatory records” for the police department.
The Access to Public Records Act gives the law enforcement agency the discretion to make public investigatory records available for inspection and copying by the public.
For example, the police department might further its investigation by releasing the photo to the media and asking citizens if they saw the individual in a certain neighborhood during a specific time frame.