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Showing posts with label FSSA. Show all posts
Showing posts with label FSSA. Show all posts

Wednesday, June 26, 2019

IBM Ordered to Pay $78 Million to the State Ending Decade Long Lawsuit

Good afternoon friends! Well it appears that the decade long shit show IBM-FSSA lawsuit has come to an end. IBM has been ordered by the Indiana Supreme Court to pay $78 Million to the state over the bungled welfare privatization performed during Mitch Daniels “reign of error” as Governor. Olivia Covington over at The Indiana Lawyer gives the lowdown on this case:

In its second opinion issued in the years-long dispute between Indiana and IBM Corp. over the failed contract to create a new Hoosier welfare system, the Indiana Supreme Court has allowed IBM to collect post-judgment interest on its $49.5 million damages award. However, that interest will date back only to a 2017 judgment on remand, not the original judgment entered in the company’s favor in 2012, and only serves as an offset to the greater sum IBM owes the state.

Justice Steven David wrote for the court in the Wednesday opinion in International Business Machines Corporation v. State of Indiana, acting on behalf of the Indiana Family & Social Services Administration19S-PL-19. The justices, excluding Justice Mark Massa, heard their second round of arguments in the case in February.

At issue in the litigation is a contract between IBM and the state requiring IBM to develop a new welfare system that utilized a centralized call center to handle customer requests. The new system, colloquially known as “modernization,” was meant to be a shift away from the prior welfare system that emphasized face-to-face contact with customers.

But the state terminated the IBM contract in 2009 after modernization began experiencing problems. Instead, the state created its own welfare system, known as “hybrid,” that combined the call center with the former face-to-face model.

Both parties filed breach complaints, and the Marion Superior Court initially determined modernization’s failure was not a breach of IBM’s contract. Instead, the state was ordered in 2012 to pay IBM $49.5 million for the costs of equipment and assignment fees.

Barnes & Thornburg attorneys John Maley and Peter Rusthoven, counsel for the state in the IBM litigation, released a statement Wednesday afternoon saying they are pleased with the court’s ruling.

“Hoosiers will finally benefit from IBM’s multi-million-dollar payment of this judgment,” the statement said, referring to the $78 million owed to the state.

The article does mention the ruiling was 3-1 in favor of the state. Justice Mark Massa did not participate in the ruling since he worked as General Counsel for Governor Mitch Daniels who had ordered the IBM contract canceled. We have blogged previously on this issue once or twice before. Personally we feel that IBM was royally shafted by the state and should have not been forced to pay the state anything. On the other hand though IBM should have realized that doing business with the state was a bad idea. Especially since after IBM was given the heave ho, Affiliated Computer Systems (ACS) was put in to do the work. This was a big problem because then FSSA Secretary Mitch Roob had previously worked for ACS. Why this matter was never investigated by the US Attorneys Office in Indianapolis is a mystery to this day. Barnes and Thornburg’s role in representing the state is particularly troubling because as Paul Ogden pointed out back in 2012 that Barnes and Thornburg had lobbied the state to get ACS put in charge of the states welfare privatization project. Paul Ogden said at the time:

According to Judge Dreyer, the services provided by ACS were the major source of the complaints, Nonetheless, IBM ended up being discharged from the while ACS remained on as part of a "hybrid system."  Conveniently for ACS, a former executive theirs, Mitch Roob, headed FSSA, when IBM-ACS won the original privatization contract and yet another ACS executive, Mike Gargano, headed FSSA during the litigation over IBM's discharge.

The State, i.e. FSSA, ended up suing IBM to recover under the contract.  IBM countersued, claiming that the State breached the contact through its termination.  But who does the Daniels' administration insist the State hire to represent the State?  None other than Barnes & Thornburg the very law firm that represented ACS in lobbying to get the contract and still represents ACS to this day.  

Let me summarize what appears to have happened. ACS lobbies state officials to oust IBM so ACS can have the lucrative Medicaid privatization contract to itself.  ACS eventually succeeds.  The State sues IBM, perhaps to counter the inevitable breach of suit IBM was about to file.  After, IBM sues, the State hires Barnes & Thornburg, ACS's attorney to represent the state.

The State appears to be nothing more than a proxy for ACS. This case is essentially ACS v. IBM, yet we taxpayers are on the hook to pay Barnes & Thornburg, ACS' attorneys, $9.6 million.  That is uttterly outrageous.

Given that federal money here is involved, I too wonder why there has not been a federal investigation opened up by the FBI into this matter.  There certainly should be now that the facts here expose troubling, if not illegal, conduct by government officials and private lobbyists.

Between attorneys fees and the cost of the original contract with IBM. We estimate that the state has easily put us taxpayers on the hook for well over $500 Million. This whole mess could have been avoided if the Daniels administration had just listened to what some of his own people told him and given FSSA caseworkers new computers. Instead “Little Man” Mitch was determined to privatize food stamp delivery no matter what. Daniels and his bagman Governor “High Tax” Holcomb seem content knowing they slit the wrists of us taxpayers to feed the vampire looters and moochers who have helped through their demonic means to advance their political careers. 

Some of INDY REPUBLICANS allies in the cultural war against President Trump. Have tried to assuage our concerns about Holcomb by saying he is not on the side of Trumpian tribalism and authoritarianism. Don’t be fooled. Former Governor Mitch Daniels his boss whose legacy Holcomb carries out. Mitch Daniels created the tribalism, authoritarianism, and waste and theft of taxpayers money that would have been an embarrassment even in Tsarist Russia. We the men and women of truth, the guardians of freedom and justice for all will continue to fight until the Daniels-Holcomb Syndicate is a distant memory. 

Sunday, October 28, 2018

When Will The IBM-FSSA Debacle Ever End?

As many of our readers are undoubtedly aware. For the better part of the last decade now. We Hoosiers have been on the hook for well over a half billion dollar debacle because “Godfather” Governor Mitch Daniels and his stooge Mitch Roob had to enter into a boneheaded contract with IBM/ACS to privatize Indiana’s welfare system. We blogged about this last year and about a month became aware of some new developments in this case.


Callahan also reported:

The three-judge court also found that IBM is entitled to interest on nearly $50 million in state fees that Welch ruled Indiana owes the company. 

Judge Heather Welch had rejected IBM’s request for interest on those fees, but the appellate court reversed the decision and sent the matter back to Welch to determine the amount of interest IBM is owed. The court specified that the interest be calculated for the more than six years that have elapsed since another Marion County judge found in 2012 that Indiana owed IBM $49.5 million in state fees.

John Maley, one of the private attorneys representing Indiana in the case, called Friday’s ruling “a significant victory for Hoosier taxpayers.” He said the state’s attorneys believe Welch ruled correctly on the interest issue and that they will be conferring with state officials “regarding that narrow legal issue and possible further review.”

IBM spokesman Doug Shelton said the New York-based company is disappointed by the ruling and plans to appeal.

“IBM invested significant resources in its partnership with the state to help turn around a welfare system described at the time by Indiana’s governor as one of the worst in the nation,” he said in a statement.

Indiana and IBM sued each other in 2010 after then-Gov. Mitch Daniels, a Republican, cancelled the $1.3 billion contract that his administration reached with the company to privatize and automate the processing of Indiana’s welfare applications.

Under that deal, an IBM-led team of vendors worked to process applications for food stamps, Medicaid and other benefits. Residents could apply for the benefits through call centers, the internet and fax machines. But the contract was pulled in late 2009, less than three years into the 10-year deal, following complaints about long wait times, lost documents and improper rejections.

Not mentioned in the article is that former Assistant State House Assistant Leader Eric Turner had owned a building which was then leased by ACS to be used as a welfare call center. IR and the late great Gary Welsh have blogged about Turners legal and ethical issues.

It’s extremely frustrating to the IR crew and those of us on the front lines of fighting the most corrupt state government in the nation that this whole shit show over at FSSA is still going on. But as long as it is we and others like us will continue to report it. Don’t worry Gary. Your crusade will continue and intensify. Until our state is rebuilt. Good night and God Bless!

Thursday, May 31, 2018

Tribalist Mitch Daniels urges Graduates to Reject Tribalism

Three weeks ago David Bangert of the Lafayette Courier & Journal reported that former Indiana Governor now Purdue University President Mitch Daniels in a speech he gave to this years graduating class a call for people to resist political tribalism.

From Bangert's report:

The biggest challenge facing this graduating class, Daniels said, “will involve the repair and renewal of trust among ourselves as a people.” Daniels’ speech was set along themes similar to his commencement addresses from recent springs. (Purdue tradition holds that the president gives most commencement speeches, rather than calling on guest speakers.) He called the class of 2018 new aristocrats, privileged elites “of a knowledge economy” who might well be tempted “unintentionally to segregate from their less blessed, less well educated fellow citizens.” 

Daniels had some other things to share with this year's graduating class:

“As we trust each other less, trust in the institutions of our society has eroded in parallel.  Almost no sector – government, business, the media, even higher education – has escaped a steep drop in public confidence.  Some constant vigilance and skepticism about centers of authority is a healthy, all-American instinct.  But ultimately, to function effectively as a free and self-governing people, we must maintain some degree of faith that our institutions and those leading them have our best interests at heart, and are performing their duties with sincerity and integrity.  And today, we plainly lack such faith.

“There are plenty of culprits here, starting with too many who have misused positions of authority.  The so-called social media – I have come to think of it as ‘antisocial media’ – enables and encourages hostility from the insulated enclave of a smartphone or a laptop.  People say things to and about each other that they would never say face to face, or maybe even think, if they knew each other personally. 

“Our various modern media lead us to, and feed us from, information sources that reinforce our existing biases.  They put us in contact with other tribe members, but rarely those who see things differently.  We’re starting to resemble ominously our primitive forbearers, trusting no one outside the tribe.
Daniels has no business lecturing anybody about the dangers of tribalism. During his eight year "Reign of Error" as Governor he was the ultimate tribalist and political hack insider. His ego is so enormous that he had his face plastered throughout every state agency and government building. His bungling of FSSA, DCS, the BMV, and his creation of the IEDC the ultimate tool in which to give away taxpayer money to those who bow before this pathetic runt of a man. Daniels misuses his authority everywhere he goes. Who can forgot the still questionable conduct of the Department of Child Services years ago involving the tragic death of Tajanay Bailey? A sad story which we, Paul Ogden and Gary Welsh have all written about. Mitch Daniels may preach about unity, and individualism when it suits him. Don't be fooled! He is an evil nasty little troll who deserves nothing less then the excoriation not the following of Hoosiers.

An old friend of IR's who  has detailed knowledge of the inner workers of the Daniels Cartel had this reaction to Daniels speech:

Haha...he would know all about tyranny...his first step everywhere he goes is to consolidate agencies/divisions under lt. Governor under him, try to end more local Gov’t to help him consolidate power into fewer local offices so he can have B&T push their folks to control easier and then move all the Purdue of Purdue foundation money into a new entity so it was easier for him to control...would say the Mitch Mafia could be characterized as a tribe...or a personality cult

Unfortunately the high priest of the Cult of Mitch, Eric "High Tax" Holcomb is now our Governor. Hold onto your wallets and liberties before old Eric takes them all away. Our sources tell us there is more trouble brewing for DCS. Will let you know if we hear anything. Once again this is IR and the Gang wishing you all a good night!