Wednesday, November 10, 2010

Outrage: ACS Consultant Named New Head Of FSSA

If you thought the stench of political corruption in the Daniels and Ballard administrations couldn't get worse, it just did. Unbelievably, Gov. Mitch Daniels, who is on a trade mission to Japan and China, has announced Michael Gargano, a former paid consultant for ACS, is the new Secretary of the Family and Social Services Administration. Until now, he has been the chief of staff to Anne Murphy, who took over for Mitch Roob, another former ACS executive before he joined the Daniels administration. Gargano became chief of staff after Murphy took charge of the agency. It was Roob's decision to enter into a controversial privatization agreement with IBM and its partner, ACS, for FSSA's welfare services. After the privatization failed so badly, Gov. Daniels terminated the contract after Roob had left the agency to run IEDC and Murphy had taken over the agency. The state and IBM have traded lawsuits against each other, and some estimates calculate the state's losses on that deal as high as $500 million. The state oddly decided to retain ACS as the lead contractor for welfare services despite its role in the failed privatization effort.

Adding to the controversy was the Daniels' administration's insistence that Barnes & Thornburg represent the state in that lawsuit, notwithstanding the fact that the firm has served as ACS's paid lobbyist in the State of Indiana in matters before the Daniels' administration and the Indiana General Assembly, as well as the City of Indianapolis. An engagement agreement signed by the law firm with the state detailed the conflicts of interest anticipated by the firm's representation of the state because of its representation of ACS.

I first reported on Gargano's gigantic conflict of interest on October 15 after Murphy announced she was leaving her position. I noted Gargano's role as the owner of the Watertown Group, which at that time still had an active website on the Internet that boasted of its role as a consultant for a number of state agencies, including FSSA, as well as his role as a consultant for ACS. Shortly after I posted that bit of information, the link to the firm's website went dead. Gargano's appointment takes effect on November 15 according to the press release issued by the Governor's office. The Governor's press release conveniently omits the fact that Gargano once worked as a consultant to ACS.

Gargano is married to Ann Lathrop, the president of the CIB and a former ACS executive, who succeeded Barnes & Thornburg's Bob Grand in that role. Prior to that, she served as the CIB's treasurer. She was appointed to the CIB at the recommendation of Grand. Grand's service on that board raised serious conflict of interest concerns because he and his law firm had represented Simon family interests, including the Indiana Pacers. The CIB just recently under Lathrop's leadership agreed to give a $33.5 million additional subsidy to the Pacers, which use Conseco Fieldhouse rent-free under a lease arrangement that makes the team responsible for the operating and maintenance expenses of the facility, but allows the team to pocket all revenues it generates from both game and non-game events.

CCC President Ryan Vaughn triggered controversy when this blog disclosed he was a registered lobbyist for ACS but was participating in the Ballard administration's controversial 50-year privatization agreement for the city's parking meter assets with ACS. Vaughn insisted the state lobbying reports were filed in error by a paralegal of his firm and should not have indicated he was a registered lobbyist for ACS. Vaughn's boss at Barnes & Thornburg, Joe Loftus, who is a paid personal adviser to Mayor Greg Ballard at the same time he is registered to lobby for ACS, insists he has not participated in any discussions concerning the parking meter lease on behalf of his client. I just earlier reported on Vaughn removing Councilor Christine Scales from the Public Safety Committee after she told him and her fellow councilors she could not support the ACS parking meter lease deal Vaughn is pressing members of his caucus to support.

My question is how much more of this crap do we have to tolerate before a federal prosecutor or the Marion County Prosecutor, who are supposed to be representing the public's interest, steps in and starts an investigation into these tangled webs of conflicts that are raping the taxpayers of this state and city. Enough is enough already. Where is the outrage? Where is the news media? Absolutely unbelievable.


Downtown Indy said...

Maybe when the new prosecutor takes over... Just maybe. But I'm not sure enough to put money on it.

Anonymous said...

Outraged I am.

Bradley said...

I just found this, too:

I had not heard any media stories, but apparently Haverstick Consulting (formerly and perhaps still of Stephen Hilbert relations), which you have mentioned before AI for how the state gave money for them to move from Carmel to the northwest side of Indianapolis, is now the lead contractor for portions of the FSSA welfare modernization contract (in this case in Lake and Grant counties). The price tag until 2016 is over $18 million.

Meanwhile, Haverstick continues to botch another modernization - that of the unemployment insurance at Workforce Development - and that contract is now increased from $23.9 million to $35.8 million and is over two years late in being implemented.

So Haverstick has done such a crappy job with DWD's modernization that Indiana will give them another long-term, high-priced contract to botch there, too.

Haverstick is not doing as well as ACS in completely taking-over the state government (or city for that matter) when it comes to getting nice contracts for political connections, but I still believe there is something off about a company who has done so poorly with one contract that the state wants to continue doing business with another contract.

Jim said...

Seriously? Your problem is that he used to consult for ACS? Does this disqualify him from public service? Didn't you use to consult for EDS? They get millions from state and federal contracts, maybe you should be disqualified too. I'd bet money this won't make it through your censorship.

Gary R. Welsh said...

I'm not running the largest agency in state government (or any government agency for that matter) and managing a multi-million dollar contract for my former client.

pacerfan said...

I would guess that other contractors like HMA are making a pretty good sum with their contracts as well.

Unknown said...

Jim and others,I do not think the problem is that he previously consulted for ACS. I think the concern here is why was he named Head of FSSA and why does ACS still have a contract with the state? Maybe you can inform me, I hope. It appears the conversation here has become, because he/she consulted for, you consulted for, they consulted for...HMA, EDS or ACS, or any other contractor, that is receiving/received millions or multi millions from the government and taxpayers along with whoever has donated the most campaign contributions, that seems to dictate the "Consultant" that gets the contract or government position.
Well I have not consulted with such organizations,I do not and have not had any contracts for any dollar amounts and have not lobbied, donating/receiving generous donations. That being said, I obviously am not a consultant or a politician, maybe I should be, because I find it very disturbing and upsetting how out of touch and greedy Democrats/Republicans and Consultants/Contractors have become. Maybe the people need to have some Quality Control Assurance overseeing the consultant/contractor/politician that are spending and receiving their tax dollars! Has the ones in charge of paying HMA, EDS or ACS, or any other government consultant/contractor asked or listened to the input, concerns or praises of the people these government employees are servicing? If so I would love to see their posts on here or on the news or in the newspapers! I would like to see and listen to any QA calls and reports for any of the consultants/contractors any government official pays using Hoosier tax money! Feel free to email me with any input.
Thank you,