IBM In All-Out War With Mitch Daniels Over Indiana Legal Dispute

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The toughest rhetoric against potential presidential candidate Mitch Daniels so far isn’t coming from his rivals. Computer giant IBM is launching a scathing attack on the Indiana governor over a pair of high-stakes lawsuits concerning a contract with the state that he cut short in 2009.

Daniels canceled a 10-year $1.37 billion contract with IBM to update the state’s social services system three years in after numerous complaints and critical articles about its effectiveness. Indiana then sued IBM to recover over $400 million it had already paid.

IBM responded with its own suit demanding the state pay about $100 million for equipment already provided to Indiana. Now the company is demanding Daniels and his chief of staff give sworn depositions in the case and claiming that Daniels is betraying his campaign promises about transparency in government by refusing to comply.

“It’s been hypocrisy from the beginning,” IBM spokesman Clint Roswell told TPM.Roswell added that Daniels’ “refusal to be deposed and his attempt to hide public documents casts doubt on his credibility” and that he “expects transparency and openness from everybody but himself.”

According to Roswell, IBM is concerned that Daniels will push the legal fight into 2012 and if he’s running for President then it will be even harder to secure his testimony.

IBM claims that Daniels’ testimony is necessary because he was the central figure behind signing and then terminating the contract, citing press conferences he delivered announcing both events. A lawyer defending the state, Peter Rusthoven, told TPM that Indiana statutes and federal law shield the governor and key staff from testifying in most suits and that the Daniels and his chief of staff have no unique knowledge that makes their deposition necessary.

“People make these efforts a lot, they just don’t go anywhere,” he said. “If we start letting people subpoena the governor for testimony he’ll end up spending his life testifying anytime anyone sues the state.”

Daniels’ political opponents within the state are all too happy in the meantime to follow IBM’s lead to criticize his handling of the failed contract.

“Mitch Daniels has no right — absolutely no right — to hide behind immunity when he came up with the privatization idea, awarded the contract to his buddies and then watched them drive the bus off a cliff at a tremendous cost to our neediest citizens,” Indiana Democratic Party Chair Dan Parker said in a statement this week. “The court needs to understand that there’s a huge difference between a Governor being dragged into every lawsuit and a Governor single-handedly creating the basis for the lawsuit through his reckless actions.”

A spokeswoman for Daniels’ office declined to comment for this article.

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