Wednesday, June 23, 2010

Do Daniels And Ballard Expect Us To Take Them Seriously On Their Job Claims?

Gov. Mitch Daniels and Mayor Greg Ballard must really take the people to be fools. The Daniels administration own job claims have been cast in doubt after a WTHR investigation by Bob Segall showed the more than 100,000 jobs created claims were a fraud. Ballard has broken every major campaign promise he made when he ran for office three years ago and speaks with forked tongue so often that he simply can no longer be believed. He criticized the Peterson administration for being too generous with tax abatements to businesses, which has the effect of shifting the property tax burden to other taxpayers, as a candidate. And so it is with the pair's press conference this week to try and trick us into believing they are doing yeoman's work in bringing more high tech, high paying jobs to the City. The problem is that it's too much like the movie Ground Hog Day. A big job creation announcement is made. Tax abatements and incentives awarded. Jobs promised are never created. This time, Scott Olson at the IBJ was smart enough to go look at a press release from a couple of years ago. Here's what Olson had to say about a press conference by the two announcing new jobs and new incentives and tax abatements for Indianapolis-based Fusion Alliance:

A local tech company that fell far short of its job-creation goal after reaching incentive agreements with the state and city two years ago is ready to try it again.

Indianapolis-based Fusion Alliance Inc. announced Tuesday morning that it plans to create up to 107 jobs by 2014 by investing more than $2.2 million to lease and equip additional space at its northwest-side headquarters in Park 100. The Indiana Economic Development Corp. is offering the company up to $1.5 million in performance-based tax credits based on the job-creation plans. The city of Indianapolis will consider property-tax abatement at the request of Develop Indy.

The Web site and software developer currently has 175 employees in Indianapolis and 50 in Cincinnati.

However, the company claimed to have 190 local employees and 30 in Cincinnati in January 2008 when it promised to spend $2 million and create 110 local jobs by 2010 in exchange for $250,000 in training grants from the Indiana Economic Development Corp, as well as property-tax abatement from the city.

Fusion CEO Douglas Brown said Tuesday morning that the company actually only had 157 employees when it applied for the earlier incentives. He acknowledged the company fell far short of its job-creation target, but did create 18 jobs. He said the firm received $145,000 in work force training grants from the state for existing staff and another $55,000 in grants for new staff. He said the company did not receive a tax abatement.
Both Daniels and Ballard put out press releases on the announcement made this week, but when Olson tried to track someone down who would talk about them, he had trouble getting someone to return his call. He finally reached someone at IEDC who told him the company received more than $70,000 in training grant money from the state but not the full $200,000 it originally had been qualified to receive, even though the company's CEO had already told Olson the company had received $200,000 in training grants.

I may be a life-long Republican, but I will not have any part of supporting politicians who deliberately set out to deceive the public. Increasingly, politicians' public pronouncements are carefully crafted by campaign consultants with an eye towards the next election. The veracity of the pronouncements are irrelevant as long as it fits the campaign meme. Too often the media fails to pick apart their statements. Ballard's public statements on his plan to transfer the utilities to Citizens Energy and spend hundreds of millions of dollars on pork barrel projects ahead of next year's election have been replete with falsehoods, but the media won't take him to task on any of them because they've been led to believe it's the right thing to do.  Olson needs to be applauded for doing what a reporter is suppose to do: check it out.

UPDATE: These people really can't keep their stories straight. I just ran across a separate story in today's Star. "The IEDC had offered the company up to $250,000 in training grants for new and existing workers, but Fusion used only $50,000 of that money, Brown said, and added 18 jobs, the Star reports. Which is it? $200,000, $70,000 or $50,000? Although the company insists the jobs will pay above average for the IT field, Brown would not disclose to the Star the salary range of the jobs. "This is a good day for the brain gain in Indiana," the story quotes Gov. Mitch Daniels as saying. It sounds more like the brain drain to me.


Downtown Indy said...

I thought we build stadiums for pro sports teams so that downtown will blossom, to entice companies to move here. Why do we need to give them tax abatements and credits too?

Diana Vice said...

You're spot on again, Gary. Keep up the good work. Thank goodness for journalists like Bob Segall, Kara Kenny, Russ McQuaid, and the folks at the IBJ. They're putting all the others to shame.

dcrutch said...

"Too often the media fails to pick apart their statements. Ballard's public statements...have been replete with falsehoods, but the media won't take him to task on any of them because they've been led to believe it's the right thing to do. Olson needs to be applauded for doing what a reporter is suppose to do: check it out."

You hit the motherlode. In an era when we had several local papers to pick from, it's more understandable a newspaper could take one stance versus another. That era's gone. In the typical single paper city, I desperately need Joe Friday's "Just the facts, Ma'am."

I already have the ability to make decisions based on input. I do it every day in life. An editorial page with specific stands on "the right thing to do" is helpful. But, what we really lack in Indianapolis and across America is mass media thoroughly covering the important events of the day. This requires assuming little, questioning a lot, and presenting both sides when there are two sides. I don't need "both" sides of a fire on Elm Street. Stadium funding, hospital bond issues, and water company transfers very very much DO have two sides. I want to hear BOTH- equally.

It's sad this has to be distinctly elaborated. Why is this no longer inherent with being a reporter or journalist? Somewhere- I'm not dead sure that it's in the university journalism classroom, the newspaper news office, or while the reporter sits at the computer- but somewhere, we're losing fair and balanced coverage in mass media.

I need to know what can be unearthed as to whether job claims are accurate- or not. If the Mayor, Governor, or whomever are political party A vs B doesn't matter as much as what happened. I NEED the straight scoop. I weigh this information MYSELF against what's already known, to figure-out who to vote for, who to send money to, who to protest against. That's MY business.

If your newspaper or television news coverage has an opinion- keep it in the opinion portion- PLEASE. I can certainly look there if I need input on "the right thing to do".

Marycatherine Barton said...

And it is too darn bad that Hoosiers ARE so gullible, and just HOPEFULLY eat up what Daniels and Ballard dish out, and the local media spoon feeds them, although occasionally allowing independent helpful investigations.

Bradley said...

Hey AI, the jobs "creation" bull is getting really old isn't it? This was posted on the "Capitol Watch Blog":

The author of the piece is Mike O'Brien, who worked the '04 and '08 Mitch for Governor campaigns and was on the Governor's "senior staff" (he's one year older than me [I'm 29] -- my guess is he was a major asskisser to get there so quickly. Daniels has a penchant for picking younger folks to be in high positions, even if they have little knowledge of what they are doing -- see DWD's fired Commissioner Teresa Voors who was 27 when made the General Counsel and 29 when she became commissioner -- and incompetent all the time). O'Brien was Daniels' Legislative Director and the primary liaison between the governor and the General Assembly. With his "guidance" between the two, he helped create, among other things, the Toll Road lease, the Daylight Saving Time bill, and the creation of now-Mitch Roob's Indiana Economic Development Corporation (like any of these weren't going to happen anyways when Mitch came in with a GOP General Assembly).

Mr. O'Brien now works for Bose Public Affairs Group as a "Senior Public Affairs Consultant" and is the Chair of the GOP in Hendricks County. I enjoyed how Daniels has people no longer "associated" with his office spreading drivel like this blog entry "on their own". With this "jobs" bull added-on, I have been fully convinced for months after reading your blog and others (Republican and Democrat alike), AI, that Daniels is running for president; much like you, I do not think he has a chance because of his former drug problem, the first couple's divorce and re-marriage, the governor's little temper problem, and his little height and comb-over problems (Americans have hired the more charismatic of presidents the last 30 years). If he's not running for president the way he's been acting the last year or two, then I'll be a monkey's uncle.

So to have his minions spreading this jobs crap really cracks me up (you can tell he's a Mitch plant, especially with his other posts spouting along the lines of Mitch). And of course, everyone's pal Abdul writes there as well which adds to the lustre of it all.

In his piece, did anybody notice who comes-up with the job numbers? The Indiana Department of Workforce Development does! The same folks who gave away $261 MILLION more to unemployed claimants than they should have in 2008 ($150 MILLION more than anyone else in the country folks!) is the group "collecting" the jobs numbers.

Don't forget that when DWD gave away $261 Million it shouldn't have, that's money taken from employers in Indiana or who do business with us that will never be seen again. That's a dirty little secret the Daniels' gang doesn't tell any of these businesses wanting to relocate here because of our excellent "employer-friendly environment". Just don't tell them their UI taxes will be higher due to DWD's incompetence and gross negligence of claims. And pardon me for doubting, but since I worked there, I seriously doubt the jobs creation numbers are accurate.

Even so, I read the WSJ piece that Mr. O'Brien must not have -- Mr. O'Brien forgot to say most of the created jobs were due to a rise in manufacturing positions. Working with both claimants and employers during this recession, I can say the majority of unemployed people were from manufacturing jobs (although a lot were Indiana government- related jobs -- which, by the way, taxpayers pay for their unemployment. Mitch forgets to tell people when he cuts state employment and teachers that we all pay their UI).

So, why would we be doing cartwheels for adding more manufacturing jobs when manufacturing jobs were bleeding and adding to the recession here anyways?

Bradley said...

One more thing related to "jobs creation" and tax breaks -- what about Haverstick Consulting? They were hired as contractor for DWD's UI "Modernization" project in 2005 (ran by Stephen Hilbert) for a contract of $23.9 Million and to be mostly completed by fall 2008. Although my friends/co-workers and I at DWD know Haverstick is a joke, I really became curious after recently reading an old entry right here on this blog about tax breaks to move from Carmel to the northwest side of Indianapolis next to Hilbert's wife's company (phew, what a move!) and "training money":

Here's an update: Haverstick was bought by Kratos Defense contractors of California in '07. The primary sub-contractor, Tier Technologies (who does most the work) has been bought by a company who was bought by another company, all last year; they filed with the SEC in November 2009 stating "the State, Haverstick, and RKV [the company who bought Tier] determined that the contract completion would be delayed and additional funding would be needed to complete the contract".

I do not know how much more the UI Modernization will cost (no one seems too), but already it has cost $23.9 million and will cost even more (on top of the untold hundreds of millions in missed fraud and improper claims of unemployment). The Modernization project is due to "go live" this fall (the 4th such date). 2 years overdue and yet Indiana's paying more for a crappy product that is late being completed? I sure hope that extra tax incentive/bribe money and "training" money Indiana gave Haverstick was worth it.

If more folks knew about DWD's computer problems, they would not be so surprised by the FSSA failure -- but they would be shocked that Indiana's present pace of unemployment money that's wasted (again, HIUNDREDS OF MILLIONS) will quickly approach the FSSA debacle's monetary waste value.

Advance Indiana said...

Bradley, I spoke to a long-time employee of DWD who retired after the Daniels reorganization debacle. Those long unemployment lines weren't just about the onset of recession; the administration closed down most of the offices in the state and was left scrambling when people became outraged by the distances they had to travel and the long lines. Wasn't the IT person in charge of that new computer system a former employee/owner of the company that got the contract and who had a continuing economic stake in the contract?

Bradley said...

Hi Gary, yeah the "centralization" of unemployment claims deputies in July 2005 was a total disaster to DWD and Indiana -- and the person with whom you talked that retired at the time was an unfortunate victim among many. Ron Stiver, commissioner at the time, had a conference call to all the deputies throughout the state and gave them 1 week to decide if they were going to move to Indianapolis to continue their jobs or not. Of course, many could not (since they'd lived their entire lives in Gary or Evansville, etc.) and chose to either retire or to be essentially laid-off.

So, DWD instantly lost YEARS of institutional knowledge in one fell swoop. The impetus by Stiver (with Daniels' full approval), of course, was "cost-savings" and "streamlining" of the claims process. What happened, to Stivers' and the rest of the DWD "Lead Team's" surprise was those people they canned filed for unemployment. The people in charge of unemployment didn't know they'd have to pay for their unemployment -- an unexpected expense!

As you said, claimants across the state have had a horrendous time getting to local offices and once there have problems receiving GOOD help from the mostly new, inexperienced, poorly-paid and poorly-trained staff -- which was further worsened by the recession that DWD did not see fully coming and was not prepared for. Going to a local office is still a nerve-wracking ordeal. I have heard so many complaints over the years that it's amazing and sad simulatneously.

When Mitch came to office, the number of deputies was about 80 or so spread across the state, and they had regional knowledge of claimants and businesses. The number recently, including Daniels announcing the opening of the "new" (but actually old) UI Adjudication Center in Ft. Wayne, has swollen to over 150 and is growing again. So, we have almost double the amount of people working UI claims now as we did 5 years ago, with much less experience. That discarded UI knowledge will never be replaced and it shows with the statistics -- since December 2005, Indiana's UI adjudication quality scores have dramatically dropped to where, last quarter, we had the worst in the country. DWD has not had a brain drain -- it's been a black hole loss of knowledge (and from what I've heard, this has happened all over state government under "The Blade"). We have to ask ourselves if any money is actually saved doing this when in fact much more money is probably wasted.

And I think you're talking about Roy Templeton, who was a Deputy Commissioner and "Chief Information Officer" when he helped get a contract (of $2.8 Million) with Work Solutions, Inc., with whom he still had a financial stake. His excuse was "I never had ethics training". He was cited by the US DOL's Inspector General in a report (more found here:, and afterwards Commissioner Teresa Voors said there is now stricter ethics training at DWD (har har).

My problem with her "look at me, I'm in control here!" attitude is that she was General Counsel for DWD when Templeton got the contract. Since she was the chief lawyer (which she told us any chance she could that "I'm a lawyer!"), shouldn't she have advised Templeton to not sign the contract?! I'm no lawyer, but I'd think she probably should have.

The DOL's Inspector General's Report led to the Indiana's Inspector General office launching an ethics investigation (which was not flattering), and the State Board of Accounts also did an audit (also not flattering) of DWD.

I only hope the "Reign of Error" at DWD is brought to a speedy end, but I am not overly hopeful it will any time soon.