State lawyer calls IBM bid to depose Daniels 'meritless'

September 7, 2011

If Indiana Gov. Mitch Daniels can promote his book and lead a motorcycle tour, he isn't too busy to testify about his decision to cancel a contract with IBM Corp. to automate welfare applications, the technology giant contends in a court filing.

Armonk, N.Y.-based IBM has sued over the dismissal of a $1.37 billion state contract. Judge David Dreyer ruled in April that Daniels need not testify then, but left open the possibility he might be ordered to later.

The 23-page motion filed Tuesday asks that the governor be compelled to testify, and it suggests he has the time. IBM points out that Daniels led 500 motorcyclists on a trip through southern Indiana on Aug. 12, an event that raised money for the Indiana National Guard Relief Fund.

Daniels also made at least seven appearances on national television in August, mostly to talk about the 2012 presidential campaign, his job as governor and his new book, "Keeping the Republic."

"Recent events further confirm that the primary excuse the state has offered in resisting the governor's deposition — that he is 'too busy' to testify in this case — is meritless," IBM's motion argues.

Peter Rusthoven, an attorney for the state, said in an e-mail message that it was IBM's bid to depose the governor that is "meritless." He said there would be a legal response but didn't provide details.

IBM's motion argues Daniels has unique, firsthand information unavailable elsewhere. It contends his testimony is "essential" because he was the "chief player" for the state in designing Indiana's automated welfare application system and the efforts to fix it when it ran into problems. Among them was lost documents, long call center hold times, and bungled face-to-face appointments for welfare clients to meet with case workers.

The filing also presents a new scenario for IBM's dismissal: It says Daniels wanted IBM to change direction and implement what would later become known as the "hybrid system" that combined the automation with more face-to-face contact with case workers, but the company said that would cost Indiana more money.

The money the state saved by firing IBM is being used to finance the hybrid system currently being rolled out across Indiana, the motion said.

IBM spokesman Clint Roswell noted FSSA Secretary Michael Gargano told lawmakers last month that 59 percent of new welfare applications were being submitted online.

"The state's dirty little secret about Indiana's newfound success with managing its online, more accessible, hybrid welfare system is that it's using IBM technology to make it happen," Roswell said.

Judge Dreyer's April ruling said IBM had not presented enough evidence to overcome a state law protecting certain state officials from testifying in lawsuits, but the order noted that he could be required to testify under conditions that had not been met at that time.

The case is currently scheduled to go to trial in February.


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