IBJNews

IBM: Daniels' email shows he had key role in deal

Back to TopCommentsE-mailPrintBookmark and Share

Gov. Mitch Daniels had such a keen interest in the state's $1.37 billion contract with IBM Corp. to automate welfare intake in Indiana that he asked an aide if an unexpectedly high number of telephone calls to a call center was a ploy by a state employees union, an IBM attorney said Monday.

IBM wants to depose Daniels soon because it's concerned he will announce he's running for president and would be too busy on the campaign trail to give a deposition, said IBM attorney Steven McCormick, who also wants to depose Daniels' chief of staff.

Daniels has said he won't decide on a White House run until after the General Assembly adjourns later this month.

"He made the key decisions all the way," McCormick said. "We're concerned that any delay will be met with, 'Well, now it's too late.'"

However, Peter Rusthoven, an attorney for the state, said a state law exempts certain high-level state officials including the governor, from court subpoenas and that other current and former state officials who are expected to testify will provide the same information Daniels and chief of staff Earl Goode were privy to.

Marion Superior Court Judge David Dreyer told the attorneys he expected to rule on the depositions within two weeks.

The Indiana Family and Social Services Administration is suing IBM for $437 million, the money it paid the Armonk, N.Y.-based technology giant to introduce call centers, document imaging and other automation to applications for food stamps, Medicaid and other public assistance programs before Daniels fired IBM for breach of contract in October 2009.

IBM wants the state to pay more than $50 million in deferred payments and equipment costs.

The oral arguments lasting more than two hours revealed the level of Daniels' involvement in one of the biggest outsourcing contracts in state history. McCormick displayed on the IBM attorney's table four thick binders containing what he said were 930 email messages to and from Daniels that the state has surrendered so far.

"They're here to illustrate the cradle to grave, preconception to afterlife" level of Daniels involvement in the deal, McCormick said.

Daniels received detailed reports on the number of calls welfare clients made to a call center created with IBM technology, and after one report showed an unusually large number of calls, he asked an aide if it was a union ploy, McCormick said. McCormick didn't identify the union, but a state employees union, the American Federation of State, County and Municipal Employees, vociferously opposed the outsourcing deal.

Another e-mail message instructed recipients "the governor was to be familiarized with all aspects of modernization," McCormick said, using the term the state used for the IBM project.

"The governor was not only the chief decider, he was the chief cook, he was the chief bottle washer," McCormick said.

Rusthoven said the level of Daniels' interest in the project did not trump a state law dating to the 1900s that protects the governor and certain other state officials from answering subpoenas. Rusthoven said it protects them from depositions as well, so well that there has never been an exception.

"It's never happened. The governor has never been called to testify," Rusthoven said.

IBM set out to depose Daniels on his knowledge of the deal before it had deposed anyone else in the case, Rusthoven said.

"There's been no attempt to get it by less intrusive means," Rusthoven said.

McCormick said IBM hopes to depose Goode and former FSSA secretaries Mitch Roob and Anne Murphy before Daniels.

The state's initial complaint in the case against IBM sought three times the amount of actual damages, or more than $1.3 billion, from IBM, but Rusthoven said the state has amended the lawsuit to drop the request for triple damages.

ADVERTISEMENT

  • Little Feller with Long Reach
    One of sooo many examples of our governor, a small guy with a long reach...but slippery as snot. The IBM fiasco reminds me of one of Daniels' minions introducing a bill to give him the power to appoint a replacement for our illustrious Secretary of State, Charlie White, instead of following current law that provides otherwise. Or, how about his thumbing his nose at the suggestion that he return somewhere around $200,000 of political donations from the disgraced Durham saying that the money had been spent while one of his many PAC's show him going into the recent elections with over $1 million in the bank? Or, how about his hand in the state's leasing practices that has drawn the attention of federal authorities, his attacks on the unions, public education, defund Planned Parenthood, etc. Ah what a guy, a clever and small guy at that. I an almost as disgusted with myself as I am at the little guy as I think we Hoosiers would follow folks like this to the gallows thinking that we just might survive.
  • Great Publicity Stunt
    LOoks like IBM is attempting to gain attention and throw some high-level mud. Just another large scale IT project gone bad.
  • Our Man!
    Daniels, what a stand up guy.....as long as you don't read into him.
  • Anything to dispose of Danienls
    Anything at all--------------
  • Facts Are Facts
    I believe our 32nd Governor Ed Jackson was indicted and provided testimony in 1920's during his trial.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

ADVERTISEMENT