V15, N37 6&1(%8/3;$=1#-$>?;$@?>? ObamaXs impact in profound While health Candidate reforms dominate, stood at Joe’s Junction Phil- the Indiana auto lips 66 station in Indianapolis industry was remade in April 2008 and vowed to By BRIAN A. HOWEY remake the U.S. FRANKLIN - Just over a auto industry. year ago - in the June 4, 2009 It is a vow that edition of Howey Politics Indi- has played out ana - we led with this dire report: !"#$"\&'$()*+ “General Motors and Chrysler are on Hoosier in bankruptcy. The Chinese are soil impact- buying Hummer. An Indianapolis ing scores of GM plant is closing. Indiana has Indiana workers gone through turbulence with and towns. (HPI the auto industry it helped forge Photo by Brian before, with names like Stutz, A. Howey) Studebaker and Dusenberg fall- ing by the wayside in past rough patches. But there has never been a week like this.” government.” With the jobless rate hovering around 10 percent, HPI would report on the “peculiar silence” of Gov. State Treasurer Richard Mourdock would unsuccessfully and U.S. Sens. Evan Bayh and Dick Lugar as battle U.S. Solicitor General Elena Kagan in the U.S. Su- the Hoosier auto sector numbering between 111,000 and preme Court over the Chrysler/Fiat merger, saying “Indi- ana retirees and Indiana taxpayers have suffered losses Continued on page 4 because of unprecedented and illegal acts of the federal Frontrunning caucus vets By BRIAN A. HOWEY INDIANAPOLIS - The two frontrunners for Sat- urday’s 3rd CD Republican caucus are products of similar caucuses. In 2001, Randy Borror won a seven-candidate !"#!#$%&'%()*%[,$(%-"..&(%O01()%23% U"#$%&'()$*)$a,-%$)&-$.-/0%$*#$ percent of the vote” after the death of State Rep. Gloria Goeglein. '1($-#-(23$%3%)-45$6&-(-$*%$#'$ In 2008 following the retirement of State Sen. Bob Meeks, Marlin Stutzman 7*88*#2$9(':-%%$/4'#2$%)/)-%;$ won a four-candidate race on a third - -"..&(%1'%"%[*.4%()"(%1'!.#4*4%5("(*%6*78% (-2*'#%;$9'.*)*:/.$/..*/#:-%;$*# Matt Bell and former legislator Brad 81%)(*-%$/#8$%9-:*/.$*#)-(-%)%5V Fox. “I came up one vote short on the second ballot,” Stutzman said of the ! a"Y" Yw†" Duƒ R“ys HOWEY Politics Indiana

A/2-$@ Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

Howey Politics Indiana is a non-partisan newsletter based in Indianapolis and published on the campus of Franklin College. It was founded in 1994 in Fort Wayne.

Brian A. Howey, Publisher Mark Schoeff Jr., Washington Jack E. Howey, editor Beverly K. Phillips, associate editor Brittany Brownrigg, intern !"#!#$%0)*,*%<3%&P%<>%*.1L1-.*%7,*!1'!(% '1*,%&'%W&'4"G%'1L)(E%;2X:%&B*,%N&, - committeemen showed up. ror just hours after Noble County Re- % O'%5"(#,4"G%01()%?;<%:,4%9Q% publican Chairman Randy Kirkpatrick Subscriptions 7,*!1'!(%&P[!1".$%"(%9&.#R-1"%91(G%S&1'(% and Prosecutor Steve Clouse revealed $350 annually HPI Weekly High School, Borror and Stutzman will a bizarre Facebook email from for- $550 annually HPI Weekly and -*%()*%7*,!*1B*4%P,&'(,#''*,$%1'%"%[*.4% mer congressman Mark Souder, who HPI Daily Wire. of 15 candidates. predicted Stutzman would win, but at !9"..%:;28<=28<2>< !"#$%&"'()"'["+, is so the same time alleged that Stutzman large, almost every observer HPI has R1L)(%)"B*%!"R7"1L'%['"'!*%7,&- - talked to believe it is impossible to tell lems related to air travel with Kos- Contact HPI who will win. ciusko County Commissioner Brad Howey Politics Indiana “We are incredibly optimistic,” Jackson, husband of the congress- <=??%@8%AB"'$(&'%CB*8 Borror said, while acknowleding, “We man’s mistress. That affair ignited the don’t have a hard vote count. People Souder resignation and this caucus. D'41"'"7&.1$E%D@%%><==3 will tell you yes and mean no. Cau- “Yeah, that made a big splash www.howeypolitics.com !#$*$%",*%B*,G%41P[!#.(%(&%7,*41!(8P for whatever reason,” Stutzman of the [email protected] Borror has put 2,000 miles Souder email. “Most of the reaction !F&0*GR$%!*..I%:;28?3<83JJ: on his car over the past week, call- has been, ‘Why would he do that?’” !K"$)1'L(&'I%23:8=>J83M3M ing every precinct committeeman and Stutzman believes he has ! doing a door-to-door style campaign in lined up solid support in LaGrange, N#$1'*$$%OP[!*I%:;28<=28<2>< four counties outside of his home base Noble, Steuben and parts of Kos- of Allen, where more than half of the ciusko counties, along with decided 2010, Howey Politics Indiana. voters live. He said he is “laser fo- support in Allen County. An event in All rights reserved. Photocopy- !#$*4P%&'%(".U1'L%(&%7,*!1'!(%&P[!1".$8% Fort Wayne brought out 300 includ- ing, Internet forwarding, fax- Veteran lobbyist Gretchen Gutman is 1'L%J<%7,*!1'!(%&P[!1".$E%?>%P,&R%C..*'% helping the Borror campaign and he County. “Not all were fully commit- ing or reproducing in any form, has captains from each of the eight ted,” Stutzman said. “We feel real whole or part, is a violation of counties. good about Allen County - better than federal law without permission Stutzman won a straw poll of anticipated.” from the publisher. ! @&-.*%9&#'(G%7,*!1'!(%&P[!1".$%"(%V1L& - Both Borror and Stutzman HOWEY Politics Indiana

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01..%-*%[L)(1'L%P&,%$#77&,(%1'%()*1,%7*,!*1B*4%$(,&'L)&.4$8% Saturday. The vote will take place on machines and there State Rep. Wes Culver is carving off western support in will be about 20 minutes in between votes. Elkhart County. Borror is battling for support against Fort Borror predicted that it might take “three, four, K"G'*%9&#'!1.0&R"'%V1Y%N,&0'E%0)&%5*,%14*'(1[*4%"$% [B*%-"..&($8P% a potential darkhorse, WPTA-TV anchorman Ryan Elijah, C..*'%9&#'(G%01..%)"B*%=<3%&P%()*%?;<%7&$$1-.*% attorney Richard Thonert and other local candidates Lonnie !"#!#$%B&(*$8%O()*,%!&#'(1*$%01()%$1L'1[!"'(%B&(*$%",*%]&$ - Powell, Bob Morris and Joe Schomburg. !1#$U&%01()%<;E%A.U)",(%01()%?J^%"'4%Q*]".-%01()%:M8%Q#*% Others in the race include May primary participates to the size of the Allen County delegation, Borror is seen Bob Thomas and Greg Dickman. to have an advantage, though Another primary candidate - Phil Stutzman and multiple GOP Troyer - dropped out to run for sources tell HPI that the Howe State Rep. Matt Bell’s soon-to-be senator has some strength within vacated House seat. that delegation. A number of GOP observ- Allen County Republican ers don’t believe Thomas will Party Chairman Steve Shine told attract much support from the the Fort Wayne Journal Gazette party regulars as he is perceived that he expects some members as an “outsider” which in Indiana – possibly about 100 – will be politics is a damning attribute. unable to attend because of vaca- Souder, who knows the tions, illness and other reasons. district and is an adroit tacti- Whitley County GOP Chair- cian, said in his bizarre Sunday man Jim Banks told the Journal evening e-mail to Kirkpatrick and Gazette in today’s editions he Clouse, “I believe Marlin will win thinks the race will be down to the caucus, possibly early ballot. _#$(%[B*%!"'414"(*$%"P(*,%()*% Ryan Elijah is pressing him (and [,$(%-"..&(I%5(#(YR"'E%N&,,&,E% newness could bring upset, but Culver, Brown and Elijah. “I think also no experience is a disadvan- the support is very consolidated ("L*Z%K*$%9#.B*,%1$%B*,G%[#".1[*4% -*(0**'%()&$*%[B*EP%)*%$"148% (but don’t know where he goes “Things will weed themselves out for votes past Elkhart) and Randy very quickly. It will be a fascinat- Borrer is limited in potential to ing exercise in government.” grow his vote. Liz Brown is a Borror likened the dynamic sleeper if all Allen got behind her, to the 2002 Indiana Republican State Rep. Randy Borror (top) and State Sen. Marlin but don’t know how she gets 10 Convention secretary of state Stutzman enter Saturday’s 3rd CD caucus as the front- percent.” \&&,%[L)(%-*(0**'%`&44%6&U1("E% ,-$$.,!/+0-(+1"(2+'+\.)3+45+67+&'$3"3'(.!+(2.,.+"!+'$+ But a few paragraphs , Richard Mourdock unpredictable element. (HPI Photo by Steve Dickerson) into his 14-point missive, Souder and John McGoff that went three cracked on his former district ballots before Rokita won. That director. “Though I am frustrated \&&,%[L)(%0"$%R",U*4%-G%P,"'(1!% "(%W",.1'E%)*R$%7,&-"-.G%-*$(%[#".1[*4%"'4%-"$1!"..G%"%B*,G% arm twisting in between votes. good man for all his over aggressive ambition.” The critical period will likely be heading into a sec- Stutzman told HPI Monday evening that Souder &'4%-"..&(%0)*'%$&R*%7,*!1'!(%&P[!1".$%01..%-*%P,**4%P,&R% “did yell at me; he got mad at me” over the 2008 confron- their commitments to losing candidates who don’t reach tation and added, “That’s why he let Tracy go.” Stutzman, the 25 vote threshhold. Others will look at jumping on the who worked on Souder’s staff, said that the congressman most conspicuous bandwagon.” later “brought her back.” Our take? The Souder email doesn’t appear to have Both Stutzman and Borror downplayed the sig- )"4%"%$1L'1[!"'(%1R7"!(8%5(#(YR"'%"77*",$%(&%)"B*%$&R*% '1[!"'!*%&P%()*%5*,%*R"1.8%OD%4&'R(%U'&0%1P%1(R$%)"4%"'G% support in the Allen delegation and so we give him an ever impact whatsoever,” Borror said. Prosecutor Clouse who so slight advantage in what could be a very unpredictable released the email is backing Borror. caucus. Stutzman termed it as a “distraction.” Horse Race Status: Tossup/Leans Stutzman N&()%N&,,&,%"'4%5(#(YR"'%01..%)"B*%\&&,%(*"R$%&'% HOWEY Politics Indiana A/2-$C Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

4*'(%N#$)%,&$*%(&%b;8<%(,1..1&'%-*P&,*%1(%0"$%$!".*4%-"!U%(&% D7/4/$"#8*/#/; from page 1 where it was when Obama took the oath in Januiary 2009. Indiana expects to receive about $4.3 billion in 140,000 workers stood at the brink. Daniels praised Japa- stimulus formula funding. Here are categories with the larg- nese companies saying they “get it.” est amounts of projected funding: , $1.4 billion; And we reported: “The gamble of Obama’s presi- *4#!"(1&'E%b;8:%-1..1&'^%,&"4$%"'4%-,14L*$E%bOhio nutrition, $400 million; weatherization, $100 million; water and Michigan. All three states ended up in the blue column quality, $100 million; housing, $100 million; public transit, last November. For that reason, Obama faced ugly choices. bJ3%R1..1&'^%*'*,LGE%b23%R1..1&'^%*R7.&GR*'(%$*,B1!*$E%b23% If he let GM and Chrysler liquidate, he would become the million; child care, $40 million; and justice, $40 million. man who ‘lost’ the American auto industry. The ripple effect In essence, the Obama stimulus money kept on the U.S. economy would be severe and politically unten- Indiana from instituting draconian budget and education able.” cuts as well as a potential tax increase, given the fact that And President Obama would say, “The GM of Indiana’s current biennial budget is now $1 billion short the future will be different than the GM of the past. I am and the reserves are depleted. "-$&.#(*.G%!&'[4*'(%()"(%1P%0*..%R"'"L*4E%"%'*0%aW%01..% % `)*%9&'L,*$$1&'".%N#4L*(%OP[!*%'&(*4%()"(%1'%()*% emerge that can provide a new generation of Americans [,$(%[#",(*,%&P%!".*'4",%G*",%=3;3E%C66CR$%7&.1!1*$I with the chance to live out their dreams, that can out- % e%6"1$*4%()*%.*B*.%&P%,*".%f1'\"(1&'X compete automakers from around the adjusted) gross domestic product (GDP) world.” -G%-*(0**'%;82%7*,!*'(%"'4%>8=%7*,!*'(E The president’s optimism * Lowered the unemployment rate found skeptics from Gov. Daniels -G%-*(0**'%382%7*,!*'("L*%7&1'($%"'4% to New York Times columnist David 1.5 percentage points, Brooks, who warned of the “quagmire * Increased the number of people ahead” saying, “The end result is that employed by between 1.2 million and 2.8 GM will not become more like success- million, ful car companies, it will become less * Increased the number of full- like them. The federal merger will not time-equivalent (FTE) jobs by 1.8 million accelerate the company’s viability. It to 4.1 million compared with what those will impede it. We’ve seen this before, Candidate Obama shoots hoops at amounts would have been otherwise. albeit in a different context: An over- Riverview Elementary School in Elkhart. (Increases in FTE jobs include shifts from !&'[4*'(%L&B*,'R*'(%(),&0$%1($*.P%1'(&% part-time to full-time work or overtime a dysfunctional culture it really doesn’t and are thus generally larger than in- understand. The result is a quagmire. creases in the number of employed workers.) The costs escalate. There is no exit strategy.” The affects of the Congressional American Recov- In that June 4 edition of HPI, we concluded: “Hoo- ery and Reinvestment Act on output and employment are siers were treated to an epic campaign that Obama won. expected to increase further during calendar year 2010 but Now we have another front row policy seat.” then diminish in 2011 and fade away by the end of 2012.

A year later Health reforms Today, President Obama’s approval rating in Indi- On the health reforms, Indiana taxpayers would ana stands at 43 percent in a May Rasmussen Reports poll, ("U*%"%0&,$(X!"$*%$!*'",1&%b:8<%-1..1&'%)1(%1'%()*%'*g(%4* - 01()%<=%7*,!*'(%&P%F&&$1*,$%$(,&'L.G%P"B&,1'L%,*7*".%&P%)1$% cade if 1.5 million Hoosiers join the Medicaid rolls, accord- signature initiative: the health care reforms. ing to a Milliman Inc. report to the State Budget Commit- The state’s jobless rate stood at 9.9 percent in May. tee. Milliman said 522,000 Hoosiers would be added to Perhaps the most controversial aspect of the Obama presi- ()*%,&..$E%L&1'L%P,&R%;<82%7*,!*'(%(&%=>8>%7*,!*'(%&P%()*% dency from the Indiana perspective is the bailout continu- population. um that actually began under Republican President George “The bottom line is, the estimates that Milliman K8%N#$)8%D(%-*L"'%01()%()*%b2J3%-1..1&'%P&,%K"..%5(,**(%()"(% produced are contradictory. If you’re assuming 100 percent extended to the $800 billion stimulus package that Obama participation in Medicaid, you can’t assume that the costs 7,*$$*4%P&,%1'%)1$%[,$(%7,*$14*'(1".%(,17%(&%A.U)",(%1'%c*- - are going to be as high as the costs that the Healthy Indi- ruary 2009 and $80 billion to prop up the domestic auto ana Plan experienced. It just doesn’t hang together,” said 1'4#$(,G8%`)*%b;8=%(,1..1&'%4*[!1(%)*%1')*,1(*4%P,&R%d,*$1 - January Angeles, a health policy analyst for the Center on HOWEY Politics Indiana A/2-$E Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

Budget and Policy Priorities (Bradner, Evansville Courier & Manpower Employment Outlook Survey said companies Press). in Indiana expect to hire at a “healthy pace” during the The analysis includes some cost savings as well. third quarter. “From July to September, 20 percent of the The federal government will increase its share of the Chil- companies interviewed plan to hire more employees, while dren’s Health Insurance Program, shifting $195 million in 9 percent expect to reduce their payrolls,” said Mary Ann costs from the state. The report did not analyze another V"$UGE%"%W"'7&0*,%$7&U*$0&R"'8%OC'&()*,%2J%R1..1&'%"'4% the U. S. of A,” as he put it. up to $899 million between 2014 and Elkhart County’s jobless rate stood 2019. “In any scenario, the cost of fed- "(%;<%7*,!*'(%()*'8%D(%1$%;>8<%7*,!*'(%'&08% eral health care reform will create an “A brighter future for Elkhart, a brighter enormous new burden for the taxpay- future for Indiana and for the ers of Indiana,” Gov. Daniels observed. &P%CR*,1!"8%`)"(R$%0)"(%0*R,*%[L)(1'R%P&,EP% What we don’t know is how Obama said. -1L%-#4L*(%4*[!1($%"(%#,-"'%)&$71(".$% Since then, what could have been like Wishard in downtown Indianapo- a cratered center piece in the Indiana lis might be mitigated after running economy appears to be on the rebound. -1..1&'X4&..",%4*[!1($%1'%()*%7"$(8%D(% % a*'*,".%W&(&,$E%0)1!)%1$%<;%7*, - deals with episodic health crises with cent owned by the federal government in populations as much as 200 percent of return for a $50 billion bailout, has paid poverty level. -"!U%;3%7*,!*'(%fb<82%-1..1&'Z%[B*%G*",$% President Obama announces $2.4 bil- In March, shortly after Obama *",.G8%N#(%()*%!&R7"'G%)"$%"44*4%233%_&-$% )"4$+"$+5-.)+.5\&".$&*+#,'$(!+"$+8'9' - signed the health reforms into law, and an entire third production shift at its ,-!'+"$+:-#-!(+;<<=>+?8@ABCDE+F24(4G Indiana Attorney General Greg Zoeller Fort Wayne truck plant; 245 jobs and $111 said he would sue to stop them. “I be- million in investment at the Bedford power lieve that it’s in the best interest of all (,"1'%7."'(^%"'4%:33%_&-$%"'4%b:<>%R1..1&'% and that includes those people who support the new leg- "(%()*%W",1&'%$("R71'L%7."'(8%D(%01..%!.&$*%"%?;$@?>?

Kokomo Tribune. (),&#L)%()*%*!&'&R1!%R",U*($%P,&R%()1$%",-1(,",G%,*4*['1 - % 5&%()*,*%",*%=E;2J%aW%"'4%9),G$.*,%_&-$E%"'4%"$% tion of ‘secured creditors’ rights was profound. Could cen- R"'G%"$%+?BF@+F24(4+0*+:>+8')9.,+ the dollars for what they invested Institute called a “depression” in the Shaw) 1'%()*%!&R7"'G8%%`)*,*%0"$%b<8M% state. Clearly, Indiana dodged a bul- billion worth of secured credit in let. Had this part of the auto sector Chrysler at the time of the deal. collapsed, Indiana’s jobless rate might have approached b<8<%-1..1&'%0"$%&0'*4%-G%-"'U$%"'4%()*%,*R"1'1'L%b:33% the 12 to 15 percent range. million was owned by private pension funds, which covered ()&#$"'4$%&P%,*(1,*4%$("(*%7&.1!*%&P[!*,$%"'4%(*"!)*,$8%% The Mourdock suit “Twenty-nine cents on the dollar for people like Perhaps the most surreal part of the auto crisis that is not ‘just compensation’ at all, but the government was Treasurer Mourdock’s suit seeking to prevent the Fiat says they have to abide by it,” said Mourdock, spelling out merger with Chrysler. Had it succeeded, Chrysler and some ()*%-"$1$%P&,%D'41"'"R$%."0$#1(E%O`)1$%1$%()*%[,$(%(1R*%1'%()*% 5,000 jobs with a huge ripple going through the auto sup- history of American bankruptcy law when secured credi- plier network would have been liquidated. tors received less than unsecured creditors. And that ain’t In normal times, a state would have pulled out all right!” stops to attract or preserve an auto plant - the crown jewel Mourdock lost his case before the U.S. Supreme of economic development for the past two generations, as Court. The Supreme Court, in a brief order, said that the 0*%$"0%01()%()*%a,**'$-#,L%F&'4"%7."'(%1'%=33<8 funds had not “carried the burden” of proving that their But there had been hostility coming from Gov. grievances merited the court’s attention. The Wall Street Daniels with regards to the Big 3 Detroit automakers, with Journal reported that the Supreme Court issued a stay of Daniels at one point saying they should take their cues the Fiat deal a few days prior to its June 9, 2009 decision from the Japanese automakers in the pre-Toyota braking to have more time to decide whether to hear the case. In controversy environment. the end, the high court pulled back from the matter. “Our In a Wall Street Journal op-ed published last Friday, assessment of the stay factors here is based on the record Daniels noted the “silent anniversary” of an “assault of free and proceedings in this case alone,” the Supreme Court institutions.” said. Daniels wrote, “In order to provide preferential Mourdock’s Democratic challenger, Peter Buttigieg (,*"(R*'(%(&%1($%!,&'1*$E%()*%O-"R"%"4R1'1$(,"(1&'%!&'[$ - of South Bend, took issue with the legal challenge and Gov. cated the property of those creditors who had lent money Daniels charactierization of it this week. “One year ago this to Chrysler in good faith, believing that their interest was week, Richard Mourdock almost legally secured and that they stood at the head of the line single-handedly destroyed thousands of Hoosier jobs in the event of the auto company’s failure. The shock wave in a politically motivated lawsuit intended to take down HOWEY Politics Indiana A/2-$G Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

the American automotive industry while making a name bankruptcy court, a plaintiff is not entitled to bring a case for himself,” Buttigieg said in an op-ed article distributed actually demanding less money than he is already receiv- to Indiana newspapers this week. “In an opinion article ing. For this reason, the lawsuit itself would seem to con- published in newspapers around the country this weekend, \1!(%01()%W&#,4&!UR$%[4#!1",G%,*$7&'$1-1.1(G%"$%(,*"$#,*,8P Gov. Mitch Daniels is marking that anniversary by attempt- “So, to recap,” Buttigieg wrote, “Indiana’s govern- ing to re-write history ment bought junk bonds in order to justify this for its pensioners, acted costly misadventure.” surprised when they lost Buttigieg value, ignored the judgment said, “The gover- of fellow bondholders, and nor’s selective and used taxpayer money to misleading account #'4*,!#(%[4#!1",G%(,#$(%-G% distorts or ignores all appearing in court to effec- of the important facts tively demand that money -- including the poor actually be taken away investment decisions from the pensions - nearly that led to the lawsuit, eliminating one of Indiana’s D,.' - the reasons it was re- biggest employers in the process, and surer Richard Mourdock (center) and Attorney General Greg soundingly and quickly potentially obliterating hundreds of Zoeller (right) have sued to prevent Obama auto mergers and rejected by the courts, thousands of jobs nationwide at the health reforms. Zoeller is shown here at Obama’s February and the fact that if the peak of America’s worst economic 2009 appearance at Concord HS in Elkhart. (HPI Photo by A. lawsuit had been suc- crisis since the Great Depression.” cessful, it would have actually lost money for the pensions. Worse, he completely Indiana: The Electric Car State ignores the economic devastation this would have caused But the real job bonanza stands to come in the for the thousands of Hoosier families and communities that electric sector that Obama ignited in Wakarusa. A revived depend on those jobs.” Indiana RV/Electric Vehicle industry has received $400 mil- Buttigieg noted that “Mourdock invested Indiana lion in federal grants, including $39.2 million for the Navi- pensions in Chrysler debt, Chrysler bonds were already star eStar venture in Wakarusa. New York-based Ener1 rated as junk. This is the true reason for their low price D'!8%&'%`#*$4"G%"''&#'!*4%"%b

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i5d5%\**(EP%$"14%S&)'%A8%K"(*,$E%9AO%"'4%7,*$14*'(%&P% spoken politician - Gov. Daniels - is a consistent critic of the Bright Automotive. “The adaptation of the electric drive massive overhaul that even its proponents are not entirely system from our production vehicle uniquely distinguishes sure what halos and demons lie in the details. Bright Automotive’s LLV conversion in terms of technology, The Columbus Dispatch in Ohio detailed what durability and cost. In addition, our analysis and experience could be a ticking time bomb: “Last month, the nation’s 1'%B*)1!.*%*.*!(,1[!"(1&'E%B*)1!.*%&0'*,$)17%"'4%['"'!1'LE% most prominent small-business association joined in a \**(%R"1'(*'"'!*E%$*,B1!*E%"'4%1'P,"$(,#!(#,*%4*B*.&7R*'(E% lawsuit against the health-care overhaul signed into law )"B*%$)&0'%()"(%"'%*.*!(,1[*4%\**(%01..%$"B*%()*%i5d5%R1. - earlier this year by President Barack Obama. The National lions of dollars annually, eliminate tons of emissions, and Federation of Independent Business concluded that the reduce dependence on oil.” law will be harmful to small businesses and to prospects It is unclear how many jobs will be created in this for small-business job creation. Small business is the sector. If the Carbon Motors deal comes through, it would economy’s employment powerhouse, because new jobs be in the 2,500 to 5,000 range, with industry multiplier are created disproportionately by this sector. Others have impact in the related supplier sector. There were probably pointed out that the law requires any employer with 50 skeptics a century ago that foresaw the tens of thousands or more employees either to provide health coverage or of jobs that were created in to pay a penalty. This could deter former bicycle and wagonworks small employers from increasing their shops across Indiana just as the work forces and could induce some horseless carriage entered the who are just over the 50-employee public square. threshold to cut workers in order to get under it. All of which adds Epilogue to the evidence that this was not a If you are an Obama ally rational attempt to solve the nation’s like U.S. Reps. Brad Ellsworth, Joe health-care problems but a bill forced Donnelly and Baron Hill, there is through Congress for political reasons no question this is a tough envi- "'4%_#$(1[*4%01()%P,"#4#.*'(%"!!&#'( - ronment with all sorts of uncer- ing and false promises. It is poised to tainty swirling around, ranging from the Greek debt crisis unleash massive harm on the nation’s economy.” igniting a “V” recession into a “W” double dip. If that is, indeed, a likely scenario, Obama will fol- Chrysler is certainly not out of the woods, with its low a political trajectory more akin to one-termer President new Fiat product line still 18 months away from reality. Carter who found himself mired in the Iran hostage crisis Many believe that before Obama stands for reelec- that reminds people of the BP oil spill today than President tion, he must divest the U.S. government of GM stock. Clinton, who weathered a health reform defeat and loss of The Wall Street Journal posed it this way: The big- Congress before winning a second term against a lackluster ger issue is what’s not being returned and that’s the $52 GOP challenger. billion in equity, which is 90 percent of what the taxpay- Gov. Daniels’ own national political aspirations - *,$%$)*..*4%&#(%"'4%"..&0*4%()*%L&B*,'R*'(%(&%("U*%"%<;% refueled by an epic Weekly Standard cover story this week percent stake in the company. Putting the company back - will impact Obama and Democratic prospects here in on the stock ticker would require an initial public offering Indiana over the next two years. The most likely scenario is (IPO), something GM CEO Ed Whitacre says is “a real pos- a Daniels vice presidential bid, which will return Indiana to sibility” because “the stock could be worth a lot.” the red column for certain. Others are less optimistic. Paul Ingrassia, author Having said that, it is important to know that be- of “Crash Course: The American Automobile Industry’s fore Daniels’ own reelection bid in 2008, his approval and Road from Glory to Disaster,” says, “It won’t be easy for an reelect numbers hovered in the high 30s and low 40s, giv- IPO to raise $52 billion for the government shares. That’s 1'L%)1$%7&..$(*,$%1'41L*$(1&'%1'%=33<8%`)*%P"!(%()"(%D'41"'"% more than Ford Motor’s current market capitalization, some is such a traditional Republican state makes this particular $48 billion. And Ford, the only U.S. car company to avoid scenario for Democrats even more daunting. -"'U,#7(!GE%".,*"4G%1$%7,&[("-.*E%0)1!)%aW%1$'R(8%c&,%aW%(&% And while there is an emotional and sometimes $)&0%$#$("1'*4%7,&[($%R*"'$%4&1'L%-#$1'*$$%1'%"%'*0%0"G% irrational reaction to what Obama has done in the most and breathing new life into long-moribund brands.” trying environment since the Great Depression, there is The health reforms are a huge unknown. It doesn’t little doubt that his actions within the auto sector and with help Obama allies that the state’s most popular and out- the stimulus saved Hoosiers from what could have been the most dire scenario in 80 years. ! HOWEY Politics Indiana A/2-$I Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

surrendered. Hoosiers vs. The one effort to stop the Chrysler cramdown was launched by three Indiana pension funds. Believing they were making both a wise investment and a gesture sup- crony capitalism portive of a longtime state employer, Hoosier retired teach- ers and state policemen had purchased some $19 million in By MITCH DANIELS Chrysler’s secured debt. The market consensus at the time INDIANAPOLIS - June 10 will be a silent anniver- was that, at 43 cents to par, the bonds were well below sary, but one worth noting by those alarmed at the past their value if bankruptcy ultimately came. year’s assault on free institutions. It was last June 10 when Bankruptcy came, all right, but in a new, extra- the federal government tossed aside the option of proven, legal form run by the federal government. The United Auto workable bankruptcy procedures in order to nationalize Workers, who owned no interest in the company, were Chrysler on behalf of its union allies. simply handed a 55 percent interest, a gift valued then at In order to provide b>8?%-1..1&'8%K)*'%'&%&'*%*.$*%0"'(*4%(&%-#G%()*%[,RE%c1"(% preferential treatment to was given a 20 percent stake for free to take it over. After its cronies, the Obama this looting, the legitimate creditors were told to be happy "4R1'1$(,"(1&'%!&'[$ - with the remnants. For Indiana’s retired teachers and state cated the property of policemen, this amounted to 29 cents on the dollar, a loss those creditors who had &P%b<%R1..1&'%B*,$#$%()*%7#,!)"$*%7,1!*%"'4%R1..1&'$%R&,*% lent money to Chrysler below the expected value in a standard Chapter 11 pro- in good faith, believing ceeding. that their interest was When, alone among the victims, Indiana retir- legally secured and that ees went to court, they caused a lot of discomfort but no they stood at the head change in the outcome. The Second District U.S. Court of of the line in the event Appeals declined to overturn the cramdown, but the judges of the auto company’s refused to go within a mile of the merits. How could they? failure. The law calls certain instruments “secured” credit for a The shock wave reason, and there was absolutely zero precedent for the through the economic 9),G$.*,%!&'[$!"(1&'8 markets from this In an article by Zach Lowe published last fall in ",-1(,",G%,*4*['1(1&'%&P% the Am Law Daily and the American Lawyer magazine, “secured creditors” rights was profound. Could centuries of UCLA Law School Prof. Lynn LoPucki said of the cramdown: !,G$(".X!.*",%."0%,*"..G%-*%&B*,(),&0'%-G%*g*!#(1B*%["(h%C7 - “What happened . . . was so outrageous and illegal that parently, yes. The Supreme Court declined to intervene in until March of this year [2009], nobody even conceptu- the takeover. The cost of corporate borrowing was clearly alized it.” The Second Circuit opinion, like the Supreme )*"4*4%#70",4%"$%()*%i858%P&,%()*%[,$(%(1R*%1R1("(*4%()&$*% Court’s refusal to stay the nationalization, went out of its Third World despotisms where economic rules can be way to state that the ruling did not reach the substantive changed without warning at the ruler’s whim and conve- issues raised. nience. Aided by incensed counsel donating much Equally profound was the message sent to the of their time pro bono, Indiana returned to the Supreme legal community, which quickly began to cite the “Chrysler Court with a slim hope of recovering its pensioners’ assets, precedent” as the now-acceptable judicial model for strip- reinstating traditional American property rights and making ping secured creditors’ rights in the name of expediency. secured credit secure once more. It seemed to some an Just days after the decision, the Phoenix Coyotes of the exercise in futility: The judge in the Coyotes case com- National Hockey League invoked the Chrysler case in an mented from the bench that the “poor pension manager attempt to undermine secured creditors’ rights and hasten from Indiana . . . was kind of like the gentlemen in Tianan- bankruptcy. men Square when the tanks came rolling.” Those brave few who protested the brute force On Dec. 14, 2009, in the under-reported news taking of their money were attacked by administration ap- story of the year, the Supreme Court granted the request 7","(!)1U$%P&,%()*%$1'%&P%4&1'L%()*1,%[4#!1",G%4#(G%(&%()*1,% of Indiana pensioners and took the case. The Court imme- investors and shareholders. Calls went out from the White diately ruled from the bench to strike down the decision of House, encouraging submission and warning of the con- the Second Circuit Court of Appeals, eliminating it as a pos- sequences of opposition. One by one, potential plaintiffs HOWEY Politics Indiana A/2-$>? Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

sible precedent in any future proceeding. Our retirees are But thanks to a quiet correction by the Supreme $(1..%&#(%()*%b<%R1..1&'%-#(%*'_&G*4%()*%$R"..%B1'41!"(1&'%&P% Court — and a little Hoosier stubbornness — the rule of law being awarded the court clerk’s costs at Chrysler’s expense. )"$%-**'%,*X*$("-.1$)*48%`)*%L,*"(*$(%-*'*[($%01..%"!!,#*% The nation is not safe from crony capitalism. In not to lenders and borrowers but to all those whose jobs the past year we’ve experienced the nationalization of the are created because investors once again can trust that the student loan industry and the passage of national health- money they’ve risked is safe from seizure by the state. ! !",*%"'4%['"'!1".X$*,B1!*$%,*L#."(1&'E%*"!)%&P%0)1!)%1$% rife with new opportunities for government favoritism and The op-ed article by Gov. Daniels appeared in the preferential handouts to favored corporations like Chrysler. Wall Street Journal on June 4.

"'4%9"'"41"'%L&B*,'R*'($%[B*%G*",$%")*"4%&P%$!)*4#.*8% D7/4/X%$7*22-%) 9,1(1!$%$!&PP%"(%()*%$1L'1[!"'!*E%-#(%()*G%",*%!,1(1!$%()"(%$"14% nothing ever would be repaid. %1::-%%$K/%$%/L*#2 Rick Wagoner, the hapless CEO of GM who was in *PP*!(%[,*4%-G%O-"R"E%)"4%-**'%$"G1'L%-"'U,#7(!G%0"$%'&(% an option because nobody would buy a car from a bank- M-)('*)$N*2$B rupt corporation. He was as wrong about that as he was about reliance on gas guzzlers. By JACK COLWELL While management has improved, so has SOUTH BEND - Hauling the American auto industry labor. The United Auto Workers, once hailed for obtaining from the ditch and enabling General Motors and Chrysler to 0"L*$%"'4%-*'*[($%()"(%$7#,,*4%"%R144.*%!."$$%7,&$7*,1(G% get back on the road, when failure could have sent the na- for “the Greatest Generation,” became a target of criticism tion into the abyss of a second Great Depression, is Presi- for obtaining so much that American automakers were not dent Barack Obama’s biggest success. competitive. Obama haters, of course, ac- The UAW, however, made a turnaround possible knowledge no success on anything with unprecedented concessions on everything from plant anywhere. And even many of his sup- closings to no-strike pledges, from freezing wages to sur- porters, expecting an instant return ,*'4*,1'L%,*(1,*R*'(%"'4%)*".()%!",*%-*'*[($8 to prosperity, grouse about a slow If GM had gone belly-up, the ripple effect of the recovery from recession rather than massive job losses in production and in automotive-related celebrating that there is some recov- sectors, from suppliers to dealers, would have had cata- ery, not that abyss. strophic effect on the staggering economy, especially in the Just a year ago, with Obama forc- Midwest, but nationally, too, with that abyss a likely result. ing General Motors and Chrysler to ac- The highly successful Cash for Clunkers, also cept bankruptcy and leaner operations scoffed at by critics when it was enacted, brought more in return for government loans, nobody sales than even its supporters anticipated, helping at a was predicting the auto industry turnaround that has oc- critical time. curred. But Obama’s popularity sinks as oil rises in the Back then, politicians from the South with little Gulf. His landmark health care reform is unpopular with concern for the Midwest economy – and some Hoosier poli- many Americans. While Democratic progressives say the ticians, too – sought to scuttle the bankruptcy agreement president dawdled and compromised on health care as he and let Chrysler face liquidation. Now Chrysler, though still sought naively to reach bipartisan ground with Republicans, troubled, announces more investment and jobs in Kokomo Republican critics say he went too far and never considered and elsewhere. their objections. If Chrysler had been liquidated, with all the Unhappiness with the direction of the country is automotive-related jobs gone, Kokomo and other parts of shown in all the polls, with Obama’s job approval slipping, Indiana would indeed have experienced unemployment though not quite plummeting as has esteem for Congress. reminiscent of depression. Whether it is fair to blame Obama for the BP In May, the four major GM brands – Chevrolet, gusher, for being “too cool,” for his siding with “drill, baby, Buick, GMC and Cadillac - posted a double-digit sales gain drill,” for the health care wrangling and wheeling and deal- P&,%()*%[P()%!&'$*!#(1B*%R&'()8%9&R-1'*4%$".*$%0*,*%#7%:=% ing in Congress, for lack of bank bailout requirements or for percent over the prior May. lack of success in areas such as illegal immigration are mat- GM repaid $8.1 billion in loans it got from the U.S. HOWEY Politics Indiana A/2-$>> Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

ters of legitimate debate. economic ruin for much of the Midwest was unsuccessful or He certainly has made mistakes. One of the worst unneeded. politically was his team’s unrealistic prediction that unem- Obama’s problem with this is that nobody can ployment would max out at 8 percent with a stimulus pack- prove that letting Chrysler and General Motors crash age, but hit 9 percent without stimulus. Most economists would have brought a national economic crash. Remem- saw double-digit unemployment even with the stimulus ber, though, that economists a year ago still warned of an effort, but with economic chaos without some government awaiting abyss. ! stimulus effort. It is unfair, however, to argue that the effort to -.+/"++')$&'#.0"1",'23,4$3$'5.+4(4#&'.0"1'[0"'," - haul the American auto industry out the ditch and stave off cades for the South Bend Tribune.

excitement that D%*.*;$O:P-##/$/(-#X)$ we can do some great things.” (-/83$)'$8-:./(-$)&-3 McK- enna, like Osili, has been travel- &/L-$-#'12&$8-.-2/)-% ing and mak- ing phone calls By BRITTANY BROWNRIGG across the state FRANKLIN - Tom McKenna and Vop Osili could face to gain support "%\&&,%[L)(%P&,%()*%Q*R&!,"(1!%'&R1'"(1&'%P&,%$*!,*(",G%&P% for his cam- $("(*%"(%()*%S#'*%=<%Q*R&!,"(1!%9&'B*'(1&'8%@*1()*,%!"'41 - paign. 4"(*%0&#.4%41$!.&$*%"%4*.*L"(*%!&#'(E%0)1!)%R*"'$%"%\&&,% “I feel [L)(%!&#.4%&!!#,8 very good,” % `)*%D'41"'"%6*7#-.1!"'%9&'B*'(1&'%P"!*4%"%\&&,% McKenna said. [L)(%&B*,%()*%$*!,*(",G%&P% “I’d characterize state position in 2002 with my feeling as walking away quietly optimis- with the nomination. He tic. It’s been a won the nomination after long and enjoy- an intense convention and I.J4&,'("&+A.&,.(',*+45+A('(.+&'$3"3'(.+E4H+ able campaign , campaign against Richard Osili has visited all 92 Indiana counties (and and we’re very Mourdock, Mike Delph and Mount Rushmore). excited about Dr. John McGoff. S#'*%=<8P Although neither McKenna said that he believes the key to success is candidate would provide solid delegate numbers, Osili and getting his messages out. McKenna said they are looking forward to the upcoming “It’s all about communicating with the delegates,” convention. Osili and McKenna have been working through- he said. out the state to gain support. McKenna said district leaders and county chairs “We hit a goal, which was to get to all 92 counties,” also are important contacts to communicate with through- Osili said. “Each county is unique.” out the campaign. He said he remains focused on making According to Osili, the two major concerns that sure that those people know who he is and the issues that people had throughout the state were the need for jobs he is concerned with. and the concern for election management. Osili’s website “We’ve been out there (traveling) literally for addresses these two issues and says that he will do all he months … and people are very excited about the fall,” McK- can to provide jobs within the state. The website also says enna said. Osili, would listen to the people and meet the needs of vot- McKenna’s website focuses on the act of voting, ers. Another portion of the website says that Osili will help saying he will stand up for the right to vote and support 1'P&,R%B&(*,$%&'%)&0%(&%R"U*%01$*%['"'!1".%4*!1$1&'$8 citizens who take the opportunity to exercise that right. His Osili said that the most important part of his cam- website also mentions that he has worked for three differ- paign strategy right now is focusing on delegates. “It has ent Democratic governors throughout his career. "! been an amazing year and I am incredibly excited about the convention coming up,” he said. “There is this general HOWEY Politics Indiana A/2-$>@ Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

The Democratic Convention, coming up on June Q..%K'()&X%$)*4-$*%$ =2X:>%7*,!*'(8%`)*%L&&4%'*0$%P&,%A..$0&,()%1$%()"(%9&"($% Coats is moving across the slipped from 51 percent in an April Rasmussen poll. This state at an active pace. latest drop comes after Coats released the list of lobbying Ellsworth’s job in groups that support him and his campaign. Congress has kept him The Coats campaign released its long-awaited tied up throughout the lobbying report last weekend, revealing that his clients did campaign thus far. not include radioactive rogues like BP, Halliburton, Goldman Although Ells- Sachs, Yemen or Hugo Chavez. worth’s itinerary is busy Indiana Democrats led by Chairman Dan Parker with congressional duties scheduled a press conference today to discuss what he his schedule has been called the “so-called disclosure provides Hoosiers with light even in times when Congress was not in session. The absolutely no new information.” Parker has been the most week following Memorial Day Congress did not meet. In consistent and conspicuous campaign spokesman for Ells- spite of this opening, the only Ellsworth event HPI could worth. ['4%$!)*4#.*4%0"$%()*%c.&G4%9&#'(G%Q*R&!,"(1!%Q1''*,%&'% Pete Seat, press secretary for Coats, said that the June 4. Republican’s campaign is excited for the Republican Con- A similar situation occurred in 2000 when U.S. vention, scheduled Rep. David McIntosh ran for governor but for June 19, and the 0)1.*%(,G1'L%(&%P#.[..%)1$%,*$7&'$1-1.1(1*$%1'% campaigns travels Congress. When McIntosh missed votes throughout the state. in Congress, the Democrats under Chair- “Dan looks for- man Robin Winston unleashed a daily ward to having the chronical. McIntosh found himself trailing opportunity to speak Gov. Frank O’Bannon by double digits to the Republican that summer and he never recovered. delegates,” Seat said. Not only has Ellsworth kept a Coats continues light schedule throughout his campaign to travel across the thus far but he has also been the target state, including re- of the Committee for Truth in Politics cent trips to Colum- television ads. bus, Seymour and La- The Truth in Politics ad char- fayette, hearing from acterizes Ellsworth as a tool of House Hoosiers on issues that Speaker Nancy Pelosi. In addition, Howey Politics Indiana matter to them. A recent trip took Coats and his campaign has not received an Ellsworth campaign press release since to a meeting with Hoosier doctors on the discussion of May 18. health care. In spite of the lack of appearances, Ellsworth’s “We’re listening,” Seat said. campaign gained the support of more than 40 Indiana law The Coats’ campaign believes that the double-digit *'P&,!*R*'(%&P[!1".$%."$(%0**U8%%`)*%!"R7"1L'%_#$(%414'R(% lead is good information but that their work continues. put out a press release on the endorsements and didn’t “It’s encouraging news but it doesn’t mean we get much play beyond a story in the Times of Northwest won’t keep going full speed ahead … reaching out to as Indiana. many folks as we can,” Seat said. ! HOWEY Politics Indiana A/2-$>B Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

and predictable framework for use of energy sources and Lugar offers cap & trade technologies. There is no bidding process among states, regions, political alliances industries and special interests. It would accomplish nearly half the president’s 2020 green- alternative on energy house gas emissions goal – while saving money and boost- ing the economy.” By MARK SCHOEFF JR. The proposal comes at a time when the BP oil WASHINGTON - With the nation riveted on the $71..%1$%$(&U1'L%".,*"4G%,"0%7",(1$"'%!&'\1!(%&'%9"71(&.%F1..E% burgeoning oil spill in the Gulf of Mexico and the Senate with members of Congress seeking ways to punish BP while poised to take up energy legislation this summer, U.S. Sen. taking advantage of the opening the Gulf disaster provides has offered an alternative to measures that to push climate legislation. seek to curb carbon emissions while allowing companies to Senate Majority Leader Harry Reid, D-Nevada, has trade pollution permits. $"14%)*%0"'($%(&%7#(%"'%*'*,LG%-1..%&'%()*%\&&,%()1$%$#R - Lugar’s idea got a boost with support from a Re- mer. The Senate Democratic caucus has scheduled a meet- publican who had been working with Democrats on cap- ing on energy issues for next week. and-trade bills, Sen. Lindsey Graham, R-South Carolina. % d&.1(1!".%(*'$1&'E%0)1!)%)"$%4*['*4% Graham abandoned the Democratic most congressional activity since the efforts and signed on as a co-spon- beginning of the Obama administra- sor of Lugar’s bill the night before tion, has put a premium on Repub- Lugar introduced it. licans who are willing to cross party In a Wednesday Capitol lines to support Democratic initiatives. Hill press conference, Lugar said With the addition of Sen. Scott Brown, that House and Senate bills based R-Massachusetts, in January, the GOP on the cap-and-trade idea are out caucus totals 41 – exactly the number of touch with American sentiment required to sustain a parliamentary because they would raise business maneuver to block a bill. !&$($%"'4%$"!,1[!*%_&-$8 Many had looked to Graham as % O`)*G%!&#.4%"44%$1L'1[!"'(% ()*%7&(*'(1".%<3()%B&(*%(&%)*.7%*'*,LG% – and perhaps debilitating – ex- .*L1$."(1&'%&B*,!&R*%"%[.1-#$(*,8%a," - pense to our already fragile economy and they would be an ham said Lugar’s bill now offers the best hope for Senate invitation to special interest protectionism,” Lugar said. “By approval. placing carbon reductions ahead of solving energy vulnera- % O`)1$%)"$%"%!)"'!*%&P%L*((1'L%<3%B&(*$%-*((*,%()"'% bilities, the cap and trade bills situate the energy debate on any proposal I’ve seen,” Graham said. “Senator Lugar has the most controversial and unsustainable political ground.” found a way forward that will be attractive to the business Lugar’s proposal, the Practical Energy and Climate community, Democrats and Republicans alike. If you really d."'E%P&!#$*$%&'%1'!,*"$1'L%*'*,LG%*P[!1*'!G%1'%B*)1!.*$E% care about the pollution caused by carbon, this is a practi- buildings, appliances and industrial processes. For instance, cal approach that helps get us started.” it calls for an annual 4 percent improvement in fuel mile- The importance of Graham’s endorsement was age for passenger vehicles. It also would require minimum evident following the press conference. He was engulfed by targets for the use of energy-savings materials in buildings. a press scrum while Lugar held court with seven reporters. % `)*%b:82?%-1..1&'E%[B*XG*",%7."'%".$&%0&#.4%-&&$(% Lugar has succeeded in previous attempts to forge the use of bio-based fuels, encourage electric power di- -17",(1$"'%!&'$*'$#$%&'%"'%1$$#*%P"!1'L%"%41P[!#.(%7&.1(1!".% B*,$1[!"(1&'E%,*(1,*%()*%&.4*$(%"'4%41,(1*$(%!&".%7."'($%"'4% atmosphere – most notably when he and then-Sen. Sam expand loan guarantees for nuclear power. Nunn, D-Georgia, shepherded a landmark nuclear reduction Lugar said his plan would by 2030 cut U.S. de- bill through a Senate in 1991 that was preoccupied with a pendence on foreign oil by more than 40 percent, decrease special election in Pennsylvania that revolved around health national energy consumption by 11 percent, cut green- care. house gas emissions by more than 20 percent and reduce He acknowledged, though, that anger over the average household electrical bills by 15 percent. The sta- Gulf oil spill undermines the prospects for cooperation on tistics are based on models developed by Climate Works, a energy policy. “All of us pray every night, but none of us group comprised of Stanford University scientists. knows when the BP situation will end,” Lugar said. “Even if % OD'%$)&,(E%1(%[g*$%()*%.*"U$%1'%&#,%*'*,LG%$G$(*REP% (his energy bill) is more of a long shot, it seems to me to V#L",%$"14%&P%)1$%7,&7&$".8%O`)*%7."'%"..&0$%"%\*g1-.*% be responsible to raise it.” ! HOWEY Politics Indiana A/2-$>C Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

%% W1(!)%Q"'1*.$%!"R*%(&%&P[!*%7.*4L1'L%(&%ON#G%D' - FSSA debacle a result diana” and telling state employees “help was on the way.” `#,'$%&#(%)*%4*X!*,(1[*4%$("(*%*R7.&G**%#'1&'$%&'%)1$% $*!&'4%4"G%1'%&P[!*E%7,1B"(1Y*4%"%B",1*(G%&P%$("(*%$*,B1!*$% of all government is bad "'4%$&.4%&PP%fG*$E%"%2?XG*",%.*"$*%1$%"%$".*kZ%&#,%`&..%6&"4% to Spanish and Australian conglomerates, before awarding philosophy the billion dollar FSSA contract to Armonk, New York-based IBM. So much for “Buying Indiana”! By SHAW R. FRIEDMAN 6"'3"",'"+"#(",'.7[#4$+&' in both parties who LaPORTE - Blind faith in a discredited ideology. are interested in standing up for the little guy and who are What else can one say about a Governor who ignored all not beholden to corporate interests or seeking employment the warnings and the failed efforts at welfare privatization or lobbying jobs with those same corporate interests after in states like Texas and who took Indiana ()*1,%$(1'($%1'%7#-.1!%&P[!*8%%A.*!(*4%&P[!1".$%0)&%#'4*, - deep into a mine – past the dead canary – stand that there are certain functions that government – if where there was no escape, no light, no air ,#'%*P[!1*'(.G%"'4%(,"'$7",*'(.G%M%R#$(%4*.1B*,%P&,%()*% and no possible means of recovery? “common good” as opposed to leasing off or selling public Recent news that the state is seek- assets to the corporate sector whose very mission is serv- ing over a billion dollars in damages in a ing the “private good” and delivering a dividend to share- lawsuit against IBM and that IBM raced to holders. ()*%!&#,()&#$*%(&%[.*%1($%&0'%$#1(%"L"1'$(% Fortunately, most Hoosiers know that we must be ()*%$("(*%)"B*%!&'[,R*4%()*%0&,$(%P*",$%&P% vigilant when private, corporate power is substituted for the those who warned that welfare privatiza- public interest. Beware the opportunist campaigning for tion was bound to fail. &P[!*%0)&%(,1*$%(&%!"R7"1L'%"L"1'$(%OL&B*,'R*'(P%0)1.*% The Indianapolis Star reminded readers that Gov. giving a wink-and-a-nod to corporate interests and inviting Q"'1*.$%O!"R*%(&%&P[!*%1'%=33?%"$%"%!)"R71&'%&P%7#((1'L% them to mind the store. Mitch Daniels has cynically used public business in private hands whenever it seemed to the recession and lower state revenues as an excuse to go make economic sense.” Yet huge problems arose when after local government targeting already struggling school IBM took face-to-face contact out of the equation forc- corporations, strapped cities and counties and downsized ing Medicaid and food stamp recipients to use distant call law enforcement agencies and trying to make demons centers, computerized intake and faxing of key applica- &#(%&P%.&!".%L&B*,'R*'(%&P[!1".$%"$%)*%$**U$%(&%,*R"U*% (1&'$8%%Q&!#R*'($%*'4*4%#7%.&$(E%-*'*[($%0*,*%4*'1*4%"'4% government as nothing but a servant and handmaiden for in the end no cost savings resulted nor did the system do corporate interests. (Notice that our Governor never once anything to increase fraud prosecutions. It was an abysmal talks about stopping corporate tax cheats from evading failure. their state tax obligations, which could bring in hundreds Even the state’s lawsuit admits that under IBM, of millions of dollars in badly needed tax revenues to state the “as-is” parts of the state were consistently outperform- coffers.) ing the so-called “modernized” parts of the state that used Mitch Daniels and his ideological brethren have IBM-run call centers for faxing, scanning (and many times been in thrall to Wall Street, the oil companies, and insur- losing) key documents. Truth is, turning over our state’s ance industry for years and see tactical advantage in simply 7#-.1!%-*'*[($%$G$(*R%M%,*.1*4%&'%-G%;8;%R1..1&'%F&&$1*,$%M% “beating up” on government or selling it off or leasing it to 0"$%'*B*,%()*%"'$0*,%(&%[g1'L%0)"(%0"$%0,&'L%&,%-#1.41'L% the corporate sector. on what was right. Common sense Democrats and moderate Re- Common sense Democrats and moderate Re- publicans have to make the case that government – when publicans need to do a better job of highlighting when gov- 7,&7*,.G%P#'4*4E%0*..%R"'"L*4E%"'4%U*7(%*P[!1*'(%"'4%"! - ernment is doing things right. Ideologues like Mitch Dan- countable - is key to building bridges, roads, sidewalks and iels tried to justify welfare privatization by saying Indiana’s sewers, to providing decent schools and parks and helping 0*.P",*%$G$(*R%0"$%O!&,,#7(P%"'4%O1'*P[!1*'(P%G*(%P*4*,".% (&%7,&(*!(%()*%"L*4E%()*%1'[,R%"'4%41$"-.*48%%a&B*,'R*'(% statistics showed FSSA employees actually performed bet- must also be the cop on the beat to insure that while busi- ter than the national average in 2005. Employees also cut ness thrives and helps produce jobs, those same corpora- the error rates in half and our state welfare system earned tions must also pay their fair share of taxes and products -&'#$%"0",4$%P,&R%()*%P*4*,".%L&B*,'R*'(%*"!)%[$!".%G*",% must be made safety, employees protected, savings and from 1999-2004 receiving $9 million in 1999 and $10.3 mil- pensions guarded and Hoosier communities must be able lion in 2004. to count on clean air and clean water. HOWEY Politics Indiana A/2-$>E Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

There’s a proper balance to be struck and right Shaw R. Friedman is a regular contributor to HPI. now, our largest, most powerful corporations have too 8"'51$#(4#"&'+$/'43'9$:.1("'$3,'[+",'&%4('43';%<%&(=' many friends in government like Mitch Daniels who believe 2008 on behalf of eight LaPorte County public ben- in turning over the levers of power to Wall Street rather "[(&'1"#454"3(&'&"">43<'(.'?+.#>'()"'1.++.%('.7'/"+ - than making sure that folks on Main Street get a fair shake. fare privatization to northwest Indiana. !

English is a language with many traps. Words may Appropriate English sound alike yet their meanings may depend on their spell- ings. Or they may be spelled the same and mean very 41PP*,*'(%()1'L$8%`"U*%()"(%0&,4I%R*"'8%`),**%4*['1(1&'$% needed for success come to mind immediately (to signify, to be cruel, and to be an average). Context is important, if a person is willing By MORTON J. MARCUS to make the effort to understand your speech or writing. INDIANAPOLIS - Recently a friend sent me a Even if I am willing and do try, your accent, your thoughtful article entitled “Heads I Win, Tales You Lose”. I jargon, your lingo, your slang. your ignorant or sloppy indif- skimmed the piece; I could not read it with the seriousness ference to the conventions of communication can be imper- it deserved because of the spelling error in the title. meable barriers to understanding. Yet, in today’s world, we If you did not see that error (tales for tails), you are excessively permissive about the use of language. MUST continue to read this column. At home, in school, and in the work place we You may choose to call me a snob or an obsessive tolerate violations of simple rules of English usage. Some- perfectionist. You may disagree with my insistence that times we think these errors are cute or trendy. Sometimes appropriate spelling and good we think them unfortunate or too personal and that it is grammar are vital components impolite for us to comment and correct. Often we don’t of effective communications. know what is correct. Some anarchists spinelessly accept Yet, unless you have extraordi- anything as “language change”. nary assets, your communica- Why is this topic important in a column devoted tion skills will go a long way to Indiana’s economy? When we go ourselves or send our to determining your social and children into the world with our/their garbled speech and economic standing. fractured writing, we reduce our/their chances for social There are many ways to and economic success. Good language skills have no color, express an idea or an emotion. no religion, and no ethnicity; they do have a payoff. However, good communica- How do we improve? When you hear errors tion is not sloppy or careless. 1'%()*%!&'B*,$"(1&'%&P%!)1.4,*'E%!&,,*!(%()*R8%DP%G&#%['4% A favorite story in my family errors by adults, ask if you can give some advice. If they concerned a rainy day when my consent, correct them. Do not let errors in this newspaper parents were to meet at a certain corner pharmacy. From or on radio/TV go unnoticed. You will not be popular, but there they would take the bus home together. you will be doing something good for yourself and Indiana. Because of the heavy rain, each took refuge in a However, do not correct a spouse too frequently pharmacy doorway. My mother was in the eastern doorway or you will require the services of a skilled surgeon and an and my father in the northern entrance. They did not see eloquent attorney. ! each other. Each stood there, fuming about the other being late. Then, in that era before cell phones, they began to Mr. Marcus is an independent economist, speaker, worry about each other. Finally, after two buses had gone and writer formerly with IU’s Kelley School of Busi- by, my father emerged from his north side shelter and ran ness. to the next bus as it stopped on the east side of the build- ing. Seeing him, my mother, greatly relieved, ran through the rain and joined him on the bus. Neither of them saw this as humorous at the time. As the years passed forgiveness set in, but the story remained a morality tale for us as children. Be precise, $7*!1[!E%"'4%"!!#,"(*k HOWEY Politics Indiana

A/2-$>F Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

cratic votes in the Senate on a critical conference commit- Remembering tee vote and Lt. Gov. Bob Orr cast the deciding vote. Rizzo said that Burrous also played a key role in O!&'4*'$1'LP%()*%(1R*%1(%(&&U%(&%-#1.4%()*%DX>G Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

Rich James, Post-Tribune: The Lake County pletely explain behavior because deep down people have Democratic Party may not know it, but it’s got a problem. passions and drives that don’t lend themselves to systemic C'4%1(R$%L&1'L%(&%("U*%"%.&(%R&,*%()"'%Q,8%d)1.%(&%[g%1(8%9&#.4% modeling. They have yearnings and fears that reside in ()*%7",(G%-*%&'%()*%B*,L*%&P%.&$1'L%1($%[,$(%!&#'(G014*% an inner beast you could call The Big Shaggy. You can see election since the Republicans snatched away the prosecu- The Big Shaggy at work when a governor of South Carolina (&,R$%&P[!*%P&,%&'*%(*,R%1'%()*%."(*%;M>3$h%9&#.4%-*8%`)*% suddenly chucks it all for a love voyage south of the equa- problem is Carol Ann Seaton, who was a surprise winner tor, or when a smart, philosophical congressman from Indi- in the Democratic primary for county assessor. But shortly "'"%,1$U$%*B*,G()1'L%P&,%"'%1'X&P[!*%"PP"1,8%m&#%!"'%$**%`)*% after winning, she began to implode. The question seemed N1L%5)"LLG%"(%0&,U%0)*'%$*.PX4*$(,#!(1B*%&B*,!&'[4*'!*% to be whether she was a resident of Gary or lives just over overtakes oil engineers in the gulf, when go-go enthusi- the state line in Union Pier, Mich. Creating the confusion is asm intoxicates investment bankers or when bone-chilling the fact that she holds driver’s licenses from both states. distrust grips politics. Those are the destructive sides of And she has titled more than one car -- including the one The Big Shaggy. But this tender beast is also responsible she now drives -- in Michigan. It was fairly quickly resolved P&,%()*%RG$(*,1&#$%-#(%[*,!*%4*(*,R1'"(1&'%()"(%4,1B*$%]&-*% that she does, in fact, live in Gary. That’s got to be the Bryant, the graceful bemusement the Detroit Tigers pitcher case since the address she gave the Michigan Bureau of Armando Galarraga showed when his perfect game slipped Motor Vehicles apparently is a vacant lot. And "0"GE%()*%$*.\*$$%!&#,"L*%$&.41*,$%1'%CPL)"'1$("'%$)&0% to make matters worse, she doesn’t even own when they risk death for buddies or a family they the lot. And the woman who does own it never may never see again. The observant person goes has heard of Seaton. What a tangled web she through life asking: Where did that come from? weaves. This all begs the question as to why Why did he or she act that way? The answers are she would need a Michigan license if she lives hard to come by because the behavior emanates 1'%D'41"'"8%C'4%0)G%0&#.4%$)*%[-%"-&#(%0)*,*% from somewhere deep inside The Big Shaggy. ! she said she lived in Michigan. Granted, Michi- gan is a nice state, but this is going too far. Russ Pulliam, Indianapolis Star: Legacy Seaton renewed her Michigan license in February. Indi- candidates from both political parties could make the "'"%NWl%&P[!1".$%)"B*%$"14%5*"(&'%R"G%)"B*%!&RR1((*4% 2012 race for governor a historic battle. There’s a pull on perjury by completing license renewal applications that ask both U.S. Rep. and Sen. Evan Bayh to at least if the applicant has a license issued by another state. But consider a race for the top spot in state government. If Seaton’s attorney, Trent McCain, rose to her defense in true Bayh were to re-enter politics after he leaves the Senate lawyer style. McCain said Seaton couldn’t have commit- ()1$%G*",E%"%,*(#,'%(&%()*%L&B*,'&,R$%&P[!*%0&#.4%[(%0*..8% ted perjury in her most recent Indiana license application “Bayh is more prone to be an executive than a legisla- because she didn’t enter a response to some questions on tor. He likes to call the shots,” says state Rep. Phil Hinkle, the application, including one that asked whether she had R-Indianapolis. “The governor’s race is the perfect place a license in another state. In other words, how could she for him to step back in.” Bayh, however, may not want have done anything wrong if she avoided the question? back in. After two four-year terms as governor and two Now, that’s justice. ! six-year terms in the Senate, Bayh says he’s tired of the hardball nature of national politics. His party also doesn’t David Brooks, New York Times: Studying the appreciate his moderate perspective on most issues. And humanities will give you a wealth of analogies. People think he’s already been passed over twice as a vice presidential by comparison — Iraq is either like Vietnam or Bosnia; your candidate and faltered in one presidential attempt. Pence boss is like Narcissus or Solon. People who have a wealth has a more complex dilemma. If he aspires to make a of analogies in their minds can think more precisely than serious run for president one day, he may need to prove those with few analogies. If you go through college without )1$%*g*!#(1B*%$U1..$%"$%L&B*,'&,%[,$(8%F1$%,1$*%(&%'"(1&'".% reading Thucydides, Herodotus and Gibbon, you’ll have prominence has had more to do with his skill in offering a been cheated out of a great repertoire of comparisons. Fi- conservative perspective than any testing of his administra- nally, and most importantly, studying the humanities helps tive ability. Although Pence might have a shot at speaker of you befriend The Big Shaggy. Let me try to explain. Over the U.S. House, no House speaker ever moved directly to the past century or so, people have built various systems to the presidency. James K. Polk was speaker and then served help them understand human behavior: economics, political as governor of Tennessee before he became president in science, game theory and evolutionary psychology. These 1845. ! systems are useful in many circumstances. But none com- HOWEY Politics Indiana A/2-$>H Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

Ds†w„‘ W“†† uw„wts’w I„„s†s LANSING, Ill. - LANSING, Illinois (June 9, 2010) – Governor Mitch Daniels and Illinois Governor Pat Quinn today committed to moving forward with the proposed Illiana Ex- pressway now that laws have been ap- proved in both states to pursue public- 7,1B"(*%['"'!1'L%&7(1&'$%(&%-#1.4%1(8% The governors signed a Memorandum of Understanding that says the states agree to work together to construct the Expressway, which would con- '*!(%D'(*,$("(*%+?D"J.!+45+N4,(21.!(+@$3"'$'+F24(4G Illinois. “In Indiana, we believe great $7*!1[!%,&#(*%P&,%()*%Ag7,*$$0"G8%Q"' - million annual operating budget and infrastructure iels also said the states will simultane- $500 million annual capital budget. He means more ously begin to explore marketplace was an engineering consultant from jobs. We’re in 1'(*,*$(%1'%!,*"(1B*%['"'!1'L%P&,%()*% ;MMM%(&%=33

Ag7,*$$0"G%0&#.4%-,1'L%$1L'1[!"'(% Xwwv s’ ITDU` tered professional engineer in Indiana INDIANAPOLIS - Gov. economic development, safety and "'4%"%-&",4%!*,(1[*4%7,&P*$$1&'".% Mitch Daniels said today that he has R&-1.1(G%-*'*[($%(&%()*%,*L1&'8%D(%1$%*$ - (,"P[!%&7*,"(1&'$%*'L1'**,8%`)*%D@QO`% accepted the resignation of Indiana timated the Illiana would prevent 350 transition will occur on June 13. Department of Transportation (IN- to 400 vehicle crashes annually. Quinn DOT) Commissioner Mike Reed. Reed also signed new Illinois legislation, intends to return to employment in similar to Indiana’s Senate Enrolled Yƒ„„ s† vw„wys’‡† the private sector. Daniels has named C!(%:J=E%"77,&B1'L%7,1B"(*%['"'!1'L% Michael B. Cline, INDOT’s deputy com- for the project. “Today is a milestone a"#$%&'%#"(&)*#+ missioner of operations, as the new BEIJING - Lt. Governor Skill- in our efforts to build the Illiana Ex- INDOT commissioner. Reed has been man and the Indiana agriculture, jobs pressway,” said Governor Quinn. “The INDOT commissioner since February and investment delegation is headed new expressway will open an era of 2009. He also served as executive home after a successful trade mis- bi-state collaboration and provide a director of the Indiana Utility Regula- sion to China. This morning, Lt. Gov. crucial economic boost for both states. (&,G%9&RR1$$1&'%fDi69Z%P,&R%=33<% Skillman and select members of the `)1$%1$%"%$1L'1[!"'(%"!)1*B*R*'(%P&,% (&%=33M8%9.1'*%_&1'*4%D@QO`%1'%=332% 4*.*L"(1&'%!&'!.#4*4%()*1,%&P[!1".% northeast Illinois, which will create and has 21 years of management business with a meeting with the Chi- thousands of jobs and bring economic and engineering experience in the nese Minister of Agriculture. After the 4*B*.&7R*'(%-*'*[($%(&%()1$%",*"8P% surface transportation industry. In meeting, all delegates departed Beijing The next step will be completion of his current role, he is responsible for to Newark, NJ, where they will make a environmental studies that ultimately 3,200 employees and manages a $290 !&''*!(1'L%\1L)(%-"!U%(&%D'41"'"7&.1$8% will result in a recommendation for a HOWEY Politics Indiana A/2-$>I Weekly Briefing on Indiana Politics 6&1(%8/3;$=1#-$>?;$@?>?

The delegation is scheduled to arrive ,-#*.&)/&%0(1 V‡„uw t“‘’ I†v— at Indianapolis International Airport shortly after 10:00 p.m. today. “Hoo- Dw„s•sw Dw ‘ x‡‡v‘’s ˆ ‘us sier farmers deserve our respect for MUNCIE - n remarks made putting food on the table and provid- Wednesday shortly before he was INDIANAPOLIS - Indianapolis ing innumerable goods for us to use in elected as Delaware County’s new 7&.1!*%$"G%[B*%7*&7.*%P"!*%()*P(E%P,"#4% Indiana,” Lt. Governor Skillman said. Democratic Party chairman, Mike Quirk and other preliminary charges for an “But they also work to meet needs was evocative of President Obama in alleged food stamp fraud scam that around the world. China is growing at his call to “get more people involved” netted up to $10,000 a month (Associ- an incredible pace and we know that and “engage young people” in the po- ated Press). Police said Wednesday F&&$1*,$%!"'%)*.7%P#.[..%()*1,%L,&0 - litical process. For a brief moment, the the arrests followed a two-year probe ing needs.” This is Lt. Gov. Skillman’s at-times outspoken Muncie attorney that began as an investigation of ciga- fourth international trade mission since was also evocative of the late come- rette bootlegging but uncovered food "$$#R1'L%&P[!*%1'%=33?8%F*,%(,17$%(&% dian Moe Howard of Three Stooges stamp fraud and the sale of counter- Central America in 2005, Taiwan and fame, calling Republican Mayor Sharon feit merchandise. When Indianapolis l1*('"R%1'%=33

‘’s’ ‡† P“†w &2 liams Sr., withdrew at the outset of the Thursday for initial hearings. Police say EAST CHICAGO - The caucus, and asked his supporters to a sixth suspect who’s still being sought federal fraud trial for East Chicago back Lutton. R"G%)"B*%\*4%(&%m*R*'8 Mayor George Pabey and Jose Cama- cho will remain set for June 28 (Times of Northwest Indiana). Federal Judge 23#)%&)/&%0(1 Q‡ƒ‡ ‡ GUV James Moody, who recently took over the case, this week denied a motion 4#5#6&*#7%)$&+("06 6/$0&8#66&2(%3 by Camacho to delay the trial because INDIANAPOLIS - Indiana Gov. KOKOMO - When Bill Sahm he had just retained new counsel. Mitch Daniels has named Jamal Smith moved to the Kokomo community in Moody denied the request by Cama- of Indianapolis to be the new leader of ;M?<%"$%"'%*R7.&G**%&P%Q*.!&%A.*! - cho attorney Nick Thiros, saying, “it the state’s Civil Rights Commission. He tronics, he took an active role in bet- could set a precedent by which defen- succeeds Commissioner Tony Kirkland, tering the community. He died Monday dants could repeatedly ask to continue an Evansville native who resigned to "(%5(8%S&$*7)%F&$71(".8%F*%0"$%2?8%F*% trial dates by adding on additional, take a job in business. Smith has been was active with the Howard County periphery co-counsel.” The Camacho Daniels’ senior advisor on minority Republican Party, Elks Lodge 1910, and Pabey trial recently was moved up affairs. He joined Daniels’ staff two the John Purdue Club and numerous from July 12 to June 28 and was reas- years ago and has been responsible local organizations, including Meals on signed to Moody. They are charged for minority outreach and served as Wheels and The Salvation Army. Craig with conspiring to embezzle city the governor’s liaison to Indiana Black Dunn, chairman of the Howard County money and illegally using city workers Expo, the Indiana Minority Health Republican Party, said Sahm worked to remodel a house Pabey bought in Coalition and other community organi- behind the scenes and served on a Gary’s Miller neighborhood in Decem- zations. He began his new duties this committee in recent years to restruc- ber 2008. Camacho, a former engi- week. Smith previously was the direc- ture the party organization. “He was a neering supervisor who now works at tor of membership services for the true professional and reliable person,” the city’s marina, also is charged with Black Coaches Association for three Dunn said. “If Bill said he would help, trying to persuade other city workers years and was a graduate recruiter of you could count on his showing up.” to lie to federal investigators. diversity for Purdue University.