Indiana’s Job Numbers are a Fraud: We Need Accountability

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. There are empty fields where we are told factories exist, or are supposed to exist. 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 television’s Bob Segal that aired this week.

Frustrated by months of stonewalling on open records law requests, Segal confronted Daniels on camera, 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 won’t release any numbers to substantiate that claim. 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. 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.


It’s no secret how I feel about Indiana’s current governor, and can’t believe that Hoosiers were gullible enough to elect him. Twice.

So, having said that, I find it as no surprise that Indiana is performing economically at a rate worse than most other states. In spite of the rosy view Mitch ballyhooed in his misleading (read “lying”) ads during the campaign in ’08. All that talk about finding two jobs for every one that went away, and how other states were looking at Indiana and wishing they were in as sound a financial situation as us.

Now we can see some truth beginning to shine through and only have to guess at how much of this underperformance is the fault of Mitch and his policies. This from the Associated Press 4-6-09:
“Indiana state tax collections were down $157 million in March, with total revenues $755 million less for the first nine months of the fiscal year than lawmakers had approved for spending.
Revenues have fallen short of original projections in eight of the nine months so far in this fiscal year. They were $4.1 million ahead of initial expectations last July, but have been below projections every month since.
A revised fiscal forecast in December predicted the state would take in about $763 million less this fiscal year than lawmakers approved for spending in the budget adopted in 2007. But collections based on that forecast have fallen short of target in the four months since it came out.
Even if revenues hit the downward-revised December forecast in the last three months of the fiscal year, the state would be off an additional $325 million from the budget approved by lawmakers – close to $1 billion less in total.”

Folks, we are in dire shape in Indiana. And it’s not going to get better until we put some progressive economic plans into action. We need to generate tax revenue, and the best way to do that is to create jobs. Oh, I know, Mitch did his part by privatizing everything under the sun, giving away the Toll Road, and look at all the jobs he brought to the state by pushing Daylight Savings Time down our throats.

But wait, we’re losing jobs. At a rate faster than most other states, and certainly faster than any surrounding state with the possible exception of Michigan. How many more jobs would we be losing if we hadn’t passed DST? It boggles the mind to think of it.

I know Mitch and his posse have been talking a big game about downsizing government and all, but the results are underwhelming to say the least. It comes down to the realization that Mitch has been downsizing Indiana’s public realm since he took office, and after five years, the results have come far short of the “island of growth” we were promised.

Look for more cuts in essential public services, like health care, education, transportation, and much else. After all, we’re not bringing in enough to pay the bills. Look for more talk about cutting expenditures through more privatization. Look for gubernatorial vetoes of almost any bill coming out of the legislature that has a price tag on it. We’ll be told we can’t afford these things. That we must tighten our belts and live within our means. We won’t be told how much of the mess we are in is the result of the bad policy and terrible management of the Daniels administration. How much of the mess is steeped in his short-sighted policies and empty promises.

Remember, Mitch Daniels was the Director of the Budget during the first two years of George W.’s regime, and oversaw the destruction of a sound fiscal position left to Bush by the Clinton era. He oversaw the turn around of a $236 billion annual surplus into a $400 billion annual deficit during his 29 month tenure in that job. He oversaw the first Bush tax cuts which accelerated a projected $3 trillion Clinton-era surplus into a $5 trillion deficit. The biggest negative turn around in American budgetary history. And he justified tailoring these tax cuts to overwhelmingly benefit the rich by arguing that the government should return the bulk of “excess” revenues to those in the highest income brackets, whose total tax payments were the greatest, no matter how unabashedly anti-democratic this policy might be.

Now he’s working his magic on Indiana by using his privatization mantra, a surly know-it-all attitude, and a tight reined dictatorial hold over the running of government in the state. We can only hope that there’s enough left in this state when he leaves office for a more progressive, far-sighted administration to be able to put back right by undoing the Daniels legacy.