Thursday, May 27, 2010

Indiana's Job Claims Are A Fraud

Many of the business expansions the administration of Gov. Mitch Daniels has funded with state dollars through the Indiana Economic Development Corporation sit empty after much fanfare when they were originally announced. Do you want to know the specifics on how your tax dollars were spent? That information is strictly off limits according to the Daniels administration. Those were some of the findings of an investigative report by WTHR's Bob Segal that aired last night. Frustrated by months of stonewalling on open records law requests, Segal confronted Daniels not once but twice about the requests. The second time Daniels stormed out of the room without responding. As Segal's report discovered, the reason the administration is keeping the public information secret is because the job claims being made by the IEDC--over 100,000 jobs created--are simply not true.

A former member of Daniels' Office of Management and Budget is blowing the whistle on the fraudulent job claims of IEDC. Tad DeHaven served as Deputy Director of OMB's Government Efficiency and Planning Office. DeHaven told Segal that the administration's secrecy claims to the public records is specious. "I can tell you if they have the numbers and they were good, you'd have them by now," said Tad DeHaven. "If they don't the numbers, it means either they're bad or they don't have them," he continued "IEDC was one of those programs we consistently laughed at because we knew that their numbers were ‘wave their magic wand and, poof, up they came,'" he said. "No one in their right mind would have believed the numbers coming out of IEDC because these state agencies would just submit whatever numbers they wanted to: real, fake...who knew? We didn't audit it, and whenever we'd suggest an independent auditing process, it was always shot down."

Mitch Roob, the guy who handed the failed multi-million dollar contract to his former employer to manage the state's welfare programs while serving as Secretary of FSSA in the Daniels administration, wants you to believe him when he says 87% of the jobs are on track, even if he can't release the specific details. Segal's investigation suggests the actual percentage is below 60%. Roob conceded that his agency had no way of tracking whether all of the business firms awarded state incentives actually produced the jobs promised. Although Segal's investigation found that every other state and city that he contacted made this kind of information available to the public, Roob insists the information must remain confidential under Indiana law. "That's not a mistake," Roob said. "That is a competitive weapon that companies believe can be used against them by their competitors."

What is particularly embarrassing about Roob's claim is that his counterpart agency in Illinois, the Department of Commerce and Community Affairs, makes all of this information public. Roob served as a member of former Gov. James Thompson's administration before moving to Indiana. DCCA Director Warren Ribley was puzzled by Roob's claims. "I don't understand that philosophy, particularly if a state is using public funds and state tax dollars to pay the bill for those new jobs," Ribley said in response to Segal's inquiry. "We need to hold [companies] accountable to make sure they do create those jobs, and the public also has the right to hold us accountable" said Ribley, adding that publicly releasing corporate job numbers has not discouraged companies from bringing jobs to Illinois. "We've never had a single company express concern or raise the fact that they did not want to choose Illinois because they were going to have to report that information," he said. In the case of Illinois, they provide to the public the number of jobs promised, the actual number of jobs produced and the wages paid on those jobs, among other information.

If Gov. Daniels is planning to run for president, he had some moments in Segal's report that could come back to haunt him and don't bode well for the scrutiny presidential candidates often face. He reacted angrily when Segal first asked him about his own report's finding that less than 60% of the jobs claimed to have been produced never materialized. "You seem to have a blindingly clear view of what is perfectly obvious," the governor said of the Eyewitness News investigation. "In a recession, a lot of businesses have to change their plans." Daniels directed Segal to attend an IEDC board meeting if he wanted the specific information he requested, which are open to the public. So Segal took him up on his offer and this was what transpired:

WTHR attended IEDC's spring board meeting, where board members reviewed charts and graphs showing summary job information. But despite the governor's invitation, the board offered no job realization numbers to support specific job commitments previously promoted by Daniels and the IEDC. So after the meeting, WTHR again asked the governor to provide that information and, this time, he simply walked out.

IEDC director Mitch Roob explained the governor and IEDC will not release Indiana's detailed job numbers to anyone. While the state uses Hoosier tax dollars to help attract new jobs, Hoosier tax payers do not get to see what they're paying for.

"We don't share it with the public. We don't release it to the news media. That's confidential information," Roob said.
Political advisers to Daniels must have cringed after watching Segal's report last night. I'm sure Democratic operatives are storing away the video footage from this investigative report, particularly the part where Daniels stormed out of the room to avoid Segal's questioning. Nationally, Republicans should be having second thoughts about what kind of a candidate this guy would make. Daniels showed poor form this past week when he cancelled his own health insurance plan he muscled through the legislature a few years back, which he funded with a cigarette tax increase, blaming its demise on Obama's health insurance reform, even though it doesn't take effect fully for another three to four years. While some pundits in this state and elsewhere have played up Daniels' chances of winning the 2012 GOP presidential nomination if he chooses to run, you won't find me among those pundits. People forget that Daniels was arrested for drug dealing when he was a student at Princeton while other brave American soldiers were getting killed and wounded in Vietnam. That may be a badge of honor for a Democratic candidate, but Republican voters are far less forgiving on such transgressions. While the Indiana media may have ignored his drug arrest at Princeton during his previous gubernatorial campaigns, Republican Party voters nationally won't once that case is put under a microscope. You can bet his opponents won't let that one slip by.


dcrutch said...

All of this makes you grit your teeth if you're scanning the horizon for the Republican alternative (and boy are we)- but the bar's been dramatically lowered too.

Daniels at least still embraces free enterprise as a cornerstone of our Democratic Republic. From his actions versus his words, he also really believes there is a fiscal reality. That's just getting started. It's an enormous difference in political philosophy he (and probably any Republican candidate) have on President Obama, as reflected in the polling and elections of late in an aroused America.

Does Daniels need to get a grip and publicly concede he went over-the-top on this one, Hell yes. As taxpayers, we'd don't deserve to hear some statistics are "private", yet I can hear them in the political cesspool next door: Illinois. He turned about on the welfare privatization gone amuck, and is at least capable of an about face on this one.

I'm not happy with the IPALCO stock issue either. But for me, if he cleans up on this and isn't sitting on a couple of barnburners, Daniels has got a much, much farther fall before losing a mud-slinging match. He won't get a square deal from mainstream media, but I also don't see a downfall comparable to Ballard - yet.

Downtown Indy said...

"Jobs" has become the Holy Grail of politicians.

Voters always want more of them. They will more often than not accept the cost of creating them. And best of all, voters can't pin down where the jobs are (or aren't) so there's virtually no chance of being called out as a liar or having nasty campaign ads showing you up for having failed.

It's far and away better than Hoover's 'chicken in every pot and car in every garage' rhetoric because it sounds great and totally intangible when you talk about 'jobs we created.'

And we all know that 'I won't raise taxes' hardly ever works because people can figure that out out pretty easy.

HamiltonGOP said...

The whole premise of this article is that its governments responsibility to create jobs. If people would realize that it is the private sector that creates jobs and not government reports like this would get laughed at and these gotcha reporters would be unemployed. I am willing to look past this story because Daniels has been a good Governor who truly believes in free enterprise.

Blog Admin said...

HamiltonGOP, the premise of the article isn't that. These aren't Parks and Rec jobs, or jobs at the State House. these are private companies, likely getting some tax breaks as incentives.

It's that these public-private partnerships are signed on, take the money, then never deliver on the goods. And if the state government doesn't feel like sharing this information with us, it's not likely that anyone will utilize the clawback clause to get our money back.

interestedparty said...

I was with you until "...That may be a badge of honor for a Democratic candidate,"

At what point do folks get it that you catch more flies with honey than vinegar, as my grandma used to say. The broad brush painting just doesn't work, so please give it up.

Gary R. Welsh said...

Sorry, Interested Party, but Democrats liked the fact that the Clintons and the Gores like to smoke pot because Democrats like the drug, they want it legalized and they're standing behind the Senate candidate in Connecticut who has spent years telling stories about serving in Vietnam when he spent the war on student deferments at elitist schools probably smoking a lot of dope. And Barry was very candidate about his drug-using days in his book and they all thought he was The One.

Marycatherine Barton said...

Regarding the surly manner that Daniels used toward Bob Segal, with tv cameras rolling, when I approached the governor, a/k/a the general, respectfully asking him to reconsider a remark he made at a meeting of elected city and county officials, in front of others, he caustically derided me. No, he will never make it to the White House.