Mitch Daniels Caught in Legal Fallout from Canceled Outsourcing Contract

Ann All

Some folks, including conservative pundits George Will and David Brooks, are hailing Indiana Gov. Mitch Daniels as the GOP's most electable potential presidential candidate, touting Daniels' focus on economic rather than social issues. The Wall Street Journal recently ran a somewhat fawning profile of the man it called "The Governor Who Cut His State Down to Size," complete with a photo of Daniels astride a Harley. (The photo tips us to the WSJ's apparent belief that Daniels is a logical bet to inherit the GOP "maverick" title from former presidential candidate Sen. John McCain.)

Like Sarah Palin, another Republican hailed by some as a possible presidential candidate, Daniels isn't saying whether he intends to run in 2012.

Unlike Palin, who starred in a reality show, people don't know that much about Daniels. That could change if Indiana democrats have anything to do with it. As The Huffington Post reports, the Democratic Legislative Campaign Committee is running a negative television ad that accuses Daniels of "hurting middle class families."

Technology giant IBM is also doing its best to cast Daniels in a negative light.

According to TPM, IBM wants Daniels to give a sworn deposition in the $100 million lawsuit it filed against the state of Indiana. Big Blue filed that suit after the state canceled its 10-year, $1.37 billion contract with IBM to update its social services system and sued IBM to recover over $400 million it had already paid.


An IBM spokesman said the company fears it will become even more difficult to get a deposition from Daniels if he decides to run for president. Daniels' refusal to be deposed "casts doubt on his credibility," the spokesman said.

Peter Rusthoven, a lawyer defending the state, told TPM that Indiana statutes and federal law shield the governor and key staff members from testifying in most lawsuits. Daniels has no unique knowledge that makes his deposition necessary, he added.

As I wrote, Indiana's decision to cancel the contract with IBM was one of the more high-profile state government outsourcing failures in recent memory.



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