A couple of items flagged by the Indiana Law Blog in today’s newspapers make Gov. Daniels look pretty bad.
Item the first: Eric Bradner, writing for the Evansville Courier Press notes the tangled web Gov. Daniels is trying to squirm out of with respect to the welfare eligibility privatization effort that blew up on him so thoroughly.
More than six months after Daniels canceled the 10-year, $1.37 billion contract between the Family and Social Services Administration and IBM, the state wants back the more than $400 million it paid. IBM wants to keep that money and says the state owes it $50 million more.
O.k., so claim v. counter-claim in a contract dispute. No big deal. As some wag put it, “a contract is a good starting point in negotiations.” The fun part is that Gov. Daniels spent so long telling us nothing was going wrong with the privatization effort that IBM can now use his statements in its own defense against the State’s claims that IBM should have to pay back some of the gobs of money it received for making things worse.
Item the second: The Fort Wayne Journal Gazette calls out Gov. Daniels for the ridiculous doomsday projection he commissioned for Indiana’s burden under the new federal health care plan. Writing for the Evansville Courier Press, the seemingly ubiquitous Eric Bradner dissected this thing (as even handedly as possible) a few days ago. The analysis doesn’t account for the fact that the current state program and its $140 million per year will probably be dissolved in the wake of the national plan. It anticipates paying doctors more than is required under the federal law. It doesn’t account for the fact that the wider eligibility will draw in participants who are cheaper to care for than current Medicaid participants. It doesn’t account for savings from the healthcare for the indigent plan which would likely become less necessary. It assumes 24% of the population on the Medicaid rolls. And, it doesn’t account for the costs of doing nothing.
The Governor’s analysis is a political document. He is ideologically, or at least politically, opposed to healthcare reform – at least to the extent it reflects well on President Obama – and, therefore, he commissioned a report that would make it look bad. These are calculations shaped around a predetermined policy position. We know from Gov. Daniels’ prior history as director of the Bush Office of Management and Budget that he has trouble with numbers when they get in the way of his preferred policy outcomes. We’re still paying through the nose for his Iraq numbers. Maybe if we’d had calculations that were accurate within an order of magnitude we would not have gotten into that quagmire. But, of course, pretty much the entire point of the lowball numbers were to grease the skids to war.
Wait til IBM takes his deposition. Should be good for a few chuckles.
This is my first time responding Doug, but I have enjoyed reading your blog for the last few months!
I voted for Gov. Daniels the first time, and now I feel the complete fool for doing so as I should have seen for what the governor stands. Many people are very well-acquainted with the FSSA/IBM war, but most people and news agencies in Indiana (at least my impression) do not fully grasp the problems with Indiana’s Unemployment Insurance (UI) program as administered by the Department of Workforce Development (DWD) since this governor took office. And am talking over TWO BILLION DOLLAR’ worth of problems.
I keep hoping the mainstream media finally will piece the clues together:
1. Indiana’s UI Trust Fund is bankrupt since 2008, and the US government is bailing Indiana out right now with Indiana owing $1.7 BILLION to date and growing. We are, by DWD’s estimate, going to be able to pay back the debt by 2025. Although part of the fund’s insolvency is due to bad decisions by both parties, the fund spiraled into the drain in Indiana before the recession hit and has worsened rapidly since under Daniels.
2. The United States Department of Labor repeatedly cites DWD’s UI propgram for problems (including the March 2009 audit showing 74 problem areas with the administration of various areas of the UI program) and a December 2007 citation ethics violations of DWD’s IT Director signing a contract with a company where he still had a financial stake. The current commissioner, Teresa Voors (who was the DWD General Counsel in 2006 when this occurred) apparently did not feel it was a violation — although as commissioner she said it was. Too bad someone as good as her is leaving (sarcasm heavy here).
3. The Indiana Inspector General’s office cited DWD for 12 ethics and other violations in a December 2009 report. This never hit the news.
4. The State Board of Accounts cited DWD for numerous accounting errors in an August 2009 report. DWD Deputy Commissioner Scott Sanders, who styles himself instead as “Chief Financial Officer”, indicated these were simple accounting errors and are to be corrected (although had not been when the IG’s office finished its report later in the year and apparently serious enough for the IG to cite again). Sanders is the one who Daniels put in charge as his liaison with the federal government as related to the Trust Fund loan.
5. The UI Modernization project, first coming to the fore in 2003, is still in shambles. Governor O’Bannon signed on Tata (from India) in 2003 before his passing for about $15 million. Governor Kernan cancelled the contract under pressure before the upcoming election because of the foreign company aspect and paid Tata $1 million (this was even mentioned in a Thomas Friedman book). When Governor Daniels came in, he wanted to “Buy Indiana” and hired Haverstick of Carmel for about $24 million (so already $9 million more than we were paying), whose CEO was one previously failed CEO Stephen Hilbert. Haverstick was given considerable tax breaks and money to move to Indianapolis (as did Hilbert’s wife Tomisue’s company, a tanning place).
Here, now 5 years later, and Indiana’s UI modernization project is still not complete, is wasting money left and right, will cost much more than originally expected, and is now projected to be completed 2 years after it was supposed to this coming October (don’t hold your breath, it’s been late at least 4 times already). Plus, in a bit of irony, the primary subcontractor who is doing most of the work is based in…India. Marty Morrow, the Co-Commissioner and Chief Operating Officer of DWD (and former Lilly executive), abruptly left DWD at the end of February of this year. He was in charge of the modernization.
6. Since 2008, DWD has expanded its upper “Leadership Team” from 5 Deputy Commissioners/Commissioner to 9 (all earning over $85,000/year. They have created positions of “Deputy Commissioner of Unemployment Insurance” (they made the former HR Director, Mary Johnson, this job although she had no UI experience); “Deputy Commissioner of Marketing and Communication” (job went to a former Republican General Assembly policymaker, Michelle Marshel); “Deputy Commissioner of Compliance and Ethics Officer” (originally given to the last HR Director, Karen Weber, when the State Personnel Department cancelled the HR job. She has since left and was replaced by Ronnie Miller who was previously in charge of both UI Adjudication and Appeals simultaneously); and “Senior Deputy Commissioner of Policy and Agency Performance” (Gina DelSanto, who no one is for sure why she is “Senior” when she was only brought on in 2009, and who was Governor Daniels’ policy director for his 2004 campaign).
All these positions were created, and one has to wonder why, especially when regular state employees’ salaries have been frozen during these “tough economic times”, these folks get new jobs and big pay raises.
7. Since 2006, DWD has had one of the bottom 3 worst UI programs in the country. Although benefits are paid mostly in a timely fashion, the quality of the UI adjudication decisions are terrible. This could be related to the lack of training, the absence of seasoned claims deputies to assist with training (they were mostly run-out DWD when everyone was shoved to Indianapolis in 2005 — the loss of institutional knowledge has no $ attached, but is huge). Whatever the case, when quality of any UI decision is bad, businesses and claimants who deserve to have their UI charges relieved and benefits paid, respectivley, are severely affected — especially in a time of economic hardship.
8. In 2007, Indiana’s DWD was at fault with overpaying claimants by $81 MILLION (the most in the country). In 2008, Indiana’s DWD was at fault for overpaying claimants by $261 MILLION (far and away the worst in the country). By the way, the next closest state was New York, which overpaid by a comparitively paltry $110 million. Indiana paid $994 million in benefits, but 26% of those payments were not supposed to have occurred. Is it any surprise 2008 was also the year Indiana’s UI Trust Fund went insolvent?
I have said plenty here, and what I have said here is only the very, very tip of the iceburg of the problems, deceit and outright incompetence of DWD under this governor. I only wish more people knew and started to do something about it.
By the way, the next Unemployment Insurance Board meeting is Wednesday, May 19 at 10 AM in the South Government Center, DWD Building, Room 301-A and open to the public if anyone has questions.
Wow Louis!! Sounds like what mitch and tony did to the staff at the department of ed. Alot of people from the campaign staffs and other gop operatives found high paying “policy” positions in the doe even though they have no experience other than political policy, which in mitch’s case, means just keep saying the same words over and over again, no matter how false they are.
So much backroom dealing going on and only mitch and his ilk benefit at the cost of Indiana taxpayers. And yet the idiot gopers wrap their arms around mitch cause he worked with reagan and bush and bush. Everyone knew mitch was a backstabber and was not interested in improving anything in Indiana except for his and his partners in crime wealth. He said he would shut down public schools and destroy teachers unions and he is trying his best to do so. He is selling state assets and now Indy mayor ballard is trying to do the same with the water company. We will take a bath, literally.
As for DWD, they seem to never know what one hand is doing while the other claps for mitch.
Wow, fraud and abuse and incompetence in government. Is that not what mitch claimed was going on and needed fixed? Where is the Star in all of this?
That’s a very informative lesson Louis. That’s exactly the kind of scuttlebutt that used come out on Jennifer Wagner’s Taking Down Words blog (which I might add led me here in the first place). Thank goodness Doug and his blog are still here so we can continue to find these kind of things out.
In regards to the study done on the burden of the healthcare bill on Indiana – have you folks done any reading on the new numbers released by the CBO on the actual cost of the bill? How about claiming folks that receive Medicare will benefit by cutting Medicare by millions of dollars? (Does that really make sense?) How about the 16,000 or so IRS agents being hired whose salaries weren’t taken into account? How about the cost of the additional Gov agencies that will be set up? And the cost of the offices, IT, and everything that goes with it? How about the rise in health care premiums for anyone currently paying for healthcare since nothing was in the bill to control costs? How about the Gov credits for healthcare for folks that make under a certain amount of income? (BTW – the Gov doesn’t have any money to give away, it has to come from us taxpayers.) This is going to be a huge fiasco, mark my words. As one who has worked for the Fed Gov for almost 40 years, this is going to be a huge cluster……Imagine a huge oil spill that is now over 40 days old and the Gov can’t do anything about it. Do you really want the Gov to make your health choices for you?