Sunday, September 17, 2006

"Sweet Start For Lab" With Political Connections

The Indianapolis Business Journal's Tom Murphy takes a look at how well Strand Analytical Laboratories is doing. The company expects $2 million in revenues in 2006, and it expects to double those revenues in 2007. Does that make CEO Scott Newman a business genius? Or is it just another example of how political insiders can get rich quick trading off insider knowledge? Murphy thinks the political connections have much to do with the company's succcess, and I agree wholeheartedly. Murphy writes:

Even so, Newman and Strand's laboratory director, Mohammad Tahir, possess a valuable edge. Both men have political connections [a competitor tells Murphy].

Newman, 46, is a Republican who served as Marion County prosecutor from 1994 to 2002. Tahir, 57, served on a DNA advisory board for the FBI and was a technical manager of the Marion County Forensic Services Agency's DNA section.

Those connections helped lay the foundation for their southwest side company.

Strand began operations in July 2005 after about 18 investors--including furniture retailer Jim Kittle and former Conseco Inc. executive Mark Lubbers--spent more than $1 million to build and equip the lab . . .

After certification arrived. Strand became the only privately owned lab in Indiana accredited for both forensic work and paternity testing.

It's now built a wide-ranging network of government contracts, which account for most of its business.

It works with state police in Indiana and Illinois. It also handles paternity testing for several Indiana courts.

Okay, so we now know that former state GOP chairman and multi-millionaire furniture retailer Jim Kittle is getting a piece of the action, along with Mark Lubbers, who apparently moonlighted while supposedly working full-time for Gov. Mitch Daniels last year as a $126,000 a year taxpayer-paid consultant. The Governor's tougher ethics rules must not have applied to Lubbers with respect to efforts by Strand to win a contract with the Indiana State Police. We'd like to see the entire list of 18 investors in Strand. I suspect it will prove as interesting as the list of investors in 300 East at the Julia Carson Government Center.

In my opinion, political insiders who enrich themselves by trading off insider knowledge and connections to government decision-makers are no better than the Martha Stewarts of the business world who illegally trade on insider trade knowledge to make money investing in a company's stock. While the former is often deemed technically legal, both involve ill-gotten gains in my judgment. The latter gets prosecuted, while the former gets rewarded for being "business geniuses." And they wonder why the public has so little confidence and respect for their public officials.


Wilson46201 said...

after Ken Starr, Carl Brizzi and the national GOP used the infamous Blue Dress and the slogan "Leave NO DNA Behind!" --- some local GOP insiders realized there's quite money to made there.

for what it's worth, I've never been involved in a paternity suit ...

Anonymous said...

LOL Wilson.

This doesn't surprise me at all.

Only slimbucket missing from this list who's usually close by is Al Hubbard.

I always liked Newman, though. Seems like a decent, hard-working guy.

But Lubbers....that'a a completely different story.

Anonymous said...

Does Scott Newman have a contract with the Prosecuor's office? Was it bid out if so? AI, Do you know?

Gary R. Welsh said...

Anon 2:34, I'm not sure, but I thought a separate agency contracted for those services.